Federal · Act · 1882

Transfer of Property Act, 1882

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THE TRANSFER OF PROPERTY ACT, 1882

THE SCHEDULE

THE TRANSFER OF PROPERTY ACT, 1882 1ACT No. IV OF 1882 [17th February, 1882] An Act to amend the law relating to the Transfer of Property by act of Parties. Preamble. WHEREAS it is expedient to define and amend certain parts of the law relating to the transfer of property by act of parties; It is hereby enacted as follows:__

CHAPTER I

PRELIMINARY

Section 1. Short title

This Act may be called the Transfer of Property Act, 1882. Commencement. It shall come into force on the first day of July, 1882. 2[* * * * * * *] Extent. 3[ 2[This] Act or any Part thereof may by notification in the official Gazette be extended to the whole or any part of 2[a Province] 4[by the Provincial Government]]. 5[And any 6[Provincial Government] may, 7[* * * ] from time to time, by notification in the 6[official Gazette], exempt either retrospectively or prospectively, any part of the territories administered by such 5[Provincial Government] from all or any of the following provisions, namely:__ Sections 54, paragraphs 2 and 3, 59, 107 and 123.]

1This Act has been extended with effect from 1st January, 1915, to the Province of Sindh, see Bom. R. & O.

Ss. 54, 107 and 123 have been extended from 6th May, 1935, to all Municipalities in the Punjab and all notified areas declared and notified under s. 241 of the Punjab Municipal Act, 1911, see Punjab Gazette Extraordinary, 1925, p. 27.

S. 54, paras, 2 and 3, and ss. 59, 107 and 123 extend to every cantonment in the Provinces, etc., see s. 287 of the Cantonments Act. 1924 (Act No. II of 1924). It has been rep. as to Crown Grants by the Crown Grants Act, 1895 (Act No. XV of 1895), and amended in Sind by Sind Act No. XIV of 1939, s.2. This Act shall be deemed to have been amended in its application to the Province of Sind, see Sind Act No. XIV of 1939. The Act has been extended, in respect of nonagricultural lands, to Baluchistan States Union and the Khairpur State by G.G.Os. 4 and 5 of 1953, as amended respectively. The Act has been and shall be deemed to have been brought into force in Gwadur with effect from the 8th Septemter, 1958, by the Gwadur (Application of Central Laws) Ordinance, 1960 (Ordinance No. XXXVII of 1960), s. 2. The Act, as in force in the NorthWest Frontier Province immediately before the commencement of N.W.F.P. Regulation No. 2 of 1974, has been applied to the Provincially Administered Tribal Areas of Chitral, Dir, Kalam, Swat and Malakand protected Area, by N.W.F.P. Regulation, No. 2 of 1974, s. 3. 2Omitted and subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Sch.

3Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch.

4Subs. by A. O., 1964, Art. 2 and Sch.

5Subs. by Act No. III of 1885, s. 1.

6Subs. by A. O., 1937.

7Rep. by the Devolution Act, 1920 (Act No. XXXVIII of 1920), s. 2 and Sch. 1.

Section 2. Repeal of Acts. Saving of certain enactments, incidents, rights, liabilitie s, etc

In the territories to which this Act extends for the time being the enactments specified in the schedule hereto annexed shall be repealed to the extent therein mentioned. But nothing herein contained shall be deemed to affect__

(a) the provisions of any enactment not hereby expressly repealed :

(b) any terms or incidents of any contract or constitution of property which are consistent with the provisions of this Act, and are allowed by the law for the time being in force:

(c) any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability: or

(d) save as provided by section 57 and Chapter IV of this Act, any transfer by operation of law or by, or in execution of, a decree or order of a Court of competent jurisdiction:

and nothing in the second chapter of this Act shall be deemed to affect any rule of 3[*], 4[Muslim] 3[* *]law.

Section 3. Interpretation clause

In this Act, unless there is something repugnant in the subject or context,__ “immoveable property” does not include standing timber, growing crops or grass: “instrument” means a nontestamentary instrument : 5[“attested”, in relation to an instrument, means 6[and shall be deemed always to hav e meant] attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument, or has seen some other person sign the instrument in the presence and by the direction of the executant, or has received from the execu tant a personal acknowledgement or his signature or mark, or of the signature of such other person, and each of whom has signed the instrument in the presence of the executant; but it shall not be necessary that more than one of such witnesses shall have been present at the same time, and no particular form of attestation shall be necessary:] “registered” means registered in 7[a province] under the law for the time being in force regulating the registration of documents:

1Ins. by Act No. III of 1885; it is to be deemed to have been added from the date on which Act 4 of 1882 came into force.

2Subs. by Act No. XX of 1929, for 1877.

3Rep. by Act No. XX of 1929, s. 3.

4Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.

5Ins. by Act No. XXVII of 1926, s. 2.

6Ins. by the Repealing and Amending Act, 1927 (Act No. X of 1927), s. 2 and Sch. 1.

7Subs. by A. O., 1949, Sch.

“attached to the earth” means__

(a) rooted in the earth, as in the case of trees and shrubs ;

(b) imbedded in the earth, as in the case of walls or buildings ; or

l[“Actionable claim” means a claim to any debt, other than a debt secured by mortgage of immoveable property or by hypothecation or pledge of moveable property, or to any beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant, which the Civil Courts recognize as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent:] 2[“a person is said to have notice” of a fact when he actually knows that fact, or when, but for wilful abstention from an inquiry or search which he ought to have made, or gross negligence, he would have known it. Explanation I.__ Where any transaction relating to immoveable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such property shall be deemed to have notice of su ch instrument as from the date of registration or, 3[where the property is not all situated in one subdistrict, or where the registered instrument has been registered under subsection (2) of section 30 of the Registration Act, 1908 (XVI of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any SubRegistrar within whose subdistrict any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated] :

Provided that__

(1) the instrument has been registered and its registration completed in the manner prescribed by the Registration Act, 1908(XVI of 1908), and the rules made thereunder,

(2) the instrument 3[or memorandum] has been duly entered or filed, as the case may be, in books kept under section 51 of that Act, and

(3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under section 55 of that Act. Explanation II.__ Any person acquiring any immoveable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof. Explanation III.__ A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material:

Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.]

1Ins. by Act No. II of 1900, s. 2.

2Subs. by Act No. XX of 1929, s. 4.

3Ins. by Act No. V of 1930, s. 2.

Section 4. Enactments relating to contracts to be taken as part of Contract Act

The chapters and sections of this Act which relate to contracts shall be taken as part of the Contract Act, 1872 (IX of 1872). 1[And sections, 54 paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the Registration Act, 2[1908 (XVI of 1908)].]

CHAPTER II

OF TRANSFERS OF PROPERTY BY ACT OF PARTIES

(A) Transfer of Property, whether moveable or immoveable

Section 5. “Transfer of property” defined

In the following sections “transfer of property” means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, 2[or to himself] and one or more other living persons; and “to transfer property” is to perform such

act. 2[In this section “living person” includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.]

Section 6. What may be transferred

Property of any kind may be transferred, except as otherwise

provided by this Act or by any other law for the time being in force.

(a) The chance of an heira pparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred.

(b) A mere right of reentry for breach of a condition subsequent cannot be transferred to any one except the owner of the property affected thereby.

(d) An interest in property restricted in its enjoyment to the owner personally cannot be transferred by him. 2[(dd) A right to future maintenance, in whatsoever manner arising, secured or determined, cannot be transferred.]

(e) A mere right to sue 3[* * *] cannot be transferred.

(f) A public office cannot be transferred, nor can the salary of a public officer, whether before or after it has become payable.

(g) Stipends allowed to military 4[, naval], 5[airforce] and civil pensioners of 6[the Government] and political pensions cannot be transferred.

1Ins. by Act No. III of 1885, s. 3.

2Subs. and ins. by Act No. XX of 1929, ss. 5-7.

3Rep. by Act No. II of 1900, s. 3 (i).

4Ins. by Act No. XXXV of 1934, s. 2 and Sch.

5Ins. by the Repealing and Amending Act, 1927 (Act No. X of 1927), s. 2 and Sch. I.

6Subs. by the Central Laws (Adaptation) Order, 1961 (President’s Order No. 1 of 1961), Art. 2. (with effect from the 23rd March, 1956).

Section 7. Persons competent to transfer

Every person competent to contract and e ntitled to transferable property, or authorized to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner allowed and prescribed by any law for the time being in force.

Section 8. Operation of transfer

Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is th en capable of passing in the property, and in the legal incidents thereof. Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth; and, where the property is machinery attached to the earth, the moveable parts thereof; and, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent use therewith; and, where the property is a debt or other actionable claim, the securities therefor (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer; and, where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect.

Section 9. Oral transfer

A transfer of property may be made without writing in every case in which a writing is not expressly required by law.

Section 10. 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: Provided that property may be transferred to or for the benefit of a woman (not being a Hindu, 3[Muslim] or Buddhist), so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein.

1Subs. by Act No. II of 1900, s. 3 (ii).

2Ins. by Act No. III of 1885, s. 4.

3Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.

Section 11. Restriction repugnant to interest created

Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction.

1[Where any such direction has been made in respect of one piece of immoveable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof.]

Section 12. Condition making interest determinable on insolvency or attempted alienation

where property is transferred subject to a condition or limitation making any interest therein, reserved or given to or for the benefit of any person, to cease on his becoming insolvent or endeavouring to transfer or dispose of the same, such condition or limitation is void.

Nothing in this section applies to a condition in a lease for the benefit of the lessor or those claiming under him.

Section 13. Transfer for benefit of unborn person

Where, on a transfer of property, an interest therein is created for the b enefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.

Illustration

A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A’s second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A’s remaining interest in the property.

Section 14. Rule against perpetuity

No transfer of property can operate to create an interest which is to take effect after the lifetime of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.

Section 15. Transfer to class some of whom come under sections 13 and 14

If, on a transfer of property, an interest therein is created for the benefit of a class of persons with regard to some of whom such interest fails by reason of any of the rules contained in sections 13 and 14, such interest fails 1[in regard to those persons only and not in regard to the whole class].

[1] Section 16. Transfer to take effect on failure of prior interest

Where, by reason of any of the rules contained in sections 13 and 14, an interest created for the benefit of a person or of a class of persons fails in regard to such person or the whole of such class, any interest created in the same transaction and intended to take effect after or upon failure of such prior interest also fails.

Section 17. Direction for accumulation

(1) Where the terms of a transfer of property direct that the income arising from the property shall be accumulated either wholly or in part during a period longer than__

(a) the life of the transferor, or

(b) a period of eighteen years from the date of the transfer,

such direction shall, save as hereinafter provided, be void to the extent to which the period during which the accumulation is directed exceeds the longer of the aforesaid periods, and at the end of such lastmentioned period the property and the income thereof shall be disposed of as if the period during which the accumulation has been directed to be made had elapsed.

1Subs. by Act No. XX of 1929, ss. 8-10.

(2) This section shall not affect any direction for accumulation for the purpose of__

(i) the payment of the debts of the transferor or any other person taking any interest under the transfer, or

(ii) the provision of portions for children or remoter issue of the transferor or of any other person taking any interest under the transfer, or

(iii) the preservation or maintenance of the property transferred; and such direction may be made accordingly.

Section 18. Transfer in perpetuity for benefit of public

The restrictions in sections 14, 16 and 17 shall not apply in the case of a transfer of property for the benefit of the public in the advancement of religion, knowledge, commerce, health, safety, or any other object beneficial to mankind.]

Section 19. Vested interest

Where, on a transfer of property, an interest therein is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen , such interest is vested, unless a contrary intention appears from the terms of the transfer. A vested interest is not defeated by the death of the transferee before he obtains possession. Explanation.__ An intention that an interest shall not be vested is not to be inferred merely from a provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same property is given or reserved to some other person, or whereby income arising from the property is directed to be accumulated until the time of enjoyment arrives, or from a provision that if a particular event shall happen the interest shall pass to another person.

Section 20. When unborn person acquires vested interest on transfer for his benefit

Where, on a transfer of property, an int erest therein is created for the benefit of a person not then living, he acquires upon his birth, unless a contrary intention appear from the terms of the transfer, a vested interest, although he may not be entitled to the enjoyment thereof immediately on his birth.

Section 21. Contingent interest

Where, on a transfer of property, an interest therein is created in favour of a person to take effect only on the happening of a specified uncertain event, or if a specified uncertain event shall not happen, such person thereby acquires a contingent interest in the property. Such interest becomes a vested interest, in the former case, on the happening of the event, in the latter, when the happening of the event becomes impossible. Exception.__Where, under a transfer of property, a person becomes entitled to an interest therein upon attaining a particular age, and the transferor also gives to him absolutely the income to arise from such interest before he reaches that age, or directs the income or so much thereof as may be necessary to be applied for his benefit, such interest is not contingent.

Section 22. Transfer to members of a class who attain a particular age

Where, on a transfer of property, an interest therein is created in favour of such members only of a class as shall attain a particular age, such interest does not vest in any member of the class who has not attained that age.

Section 23. Transfer contingent on happening of specified uncertain event

Where, on a transfer of property, an interest therein is to accrue to a specified person if a specified uncertain event shall happen, and no time is mentioned for the occurrence of that event, the interest fails unle ss such event happens before, or at the same time as, the intermediate or precedent interest ceases to exist.

Section 24. Transfer to such of certain persons as survive at some period not specified

Where, on a transfer of property, an interest therein is to accrue to such of certain persons as shall be surviving at some period, but the exact period is not specified, the interest shall go to such of them as shall be alive when the intermediate or precedent interest ceases to exist, unless a contrary intention appea rs from the terms of the transfer. Illustration A transfers property to B for life, and after his death to C and D, equally to be divided between them, or to the survivor of them. C dies during the life of B. D survives B. At B’s death the property passes to D.

Section 25. Conditional transfer

An interest created on a transfer of property and dependent upon a condition fails if the fulfilment of the condition is impossible, or is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of any law, or is fraudulent, or involves or implies injury to the person or property of another, or the Court regards it as immoral or opposed to public policy. Illustrations

(a) A lets a farm to B on condition that he shall walk a hundred miles in an hour. The lease is void.

(b) A gives Rs. 500 to B on condition that he shall marry A’s daughter C. At the date of the transfer C was dead. The transfer is void.

void.

(d) A transfers Rs. 500 to his niece C if she will desert her husband. The transfer is

void.

Section 26. Fulfilment of condition precedent

Where the terms of a transfer of property impose a condition to be fulfilled before a person can take an inter est in the property, the condition shall be deemed to have been fulfilled if it has been substantially complied with. Illustrations

(a) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of C, D and E. E dies. B marries with the consent of C and D. B is deemed to have fulfilled the condition.

(b) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of C, D and E. B marries without the consent of C, D and E, but obtains their consent after the marriage. B has not fulfilled the condition.

Section 27. Conditional transfer to one person coupled with transfer to another on failure of prior disposition

Where, on a transfer of property, an interest therein is created in favour of one person, and by the same transaction an ulterior disposition of the same interest is made in favour of another, if the prior disposition under the transfer shall fail, the ulterior disposition shall take effect upon the failure of the prior disposition, although the failure may not have occurred in the manner contemplated by the transferor. But, where the intention of the parties to the transaction is that the ult erior disposition shall take effect only in the event of the prior disposition failing in a particular manner, the ulterior disposition shall not take effect unless the prior disposition fails in that manner. Illustrations

(a) A transfers Rs. 500 to B on condition that he shall execute a certain lease within three months after A’s death, and, if he should neglect to do so, to C. B dies in A’s lifetime. The disposition in favour of C takes effect.

(b) A transfers property to his wife; but, in case she shou ld die in his lifetime, transfers to B that which he had transferred to her. A and his wife perish together, under circumstances which make it impossible to prove that she died before him. The disposition in favour of B does not take effect.

Section 28. Ulterior transfer conditional on happening or not happening of specified event

On a transfer of property an interest therein may be created to accrue to any person with the condition superadded that in case a specified uncertain event shall happen such interest s hall pass to another person, or that in case a specified uncertain event shall not happen such interest shall pass to another person. In each case the dispositions are subject to the rules contained in sections 10, 12, 21, 22, 23, 24, 25 and 27.

Section 29. Fulfilment of condition subsequent

An ulterior disposition of the kind contemplated by the last preceding section cannot take effect unless the condition is strictly fulfilled. Illustration A transfers Rs. 500 to B, to be paid to him on his attaining his majority or marrying, with a proviso that, if B dies a minor or marries without C’s consent, the Rs. 500 shall go to D. B marries when only 17 years of age, without C’s consent. The transfer to D takes effect.

Section 30. Prior disposition not affected by inva lidity of ulterior disposition

If the ulterior disposition is not valid, the prior disposition is not affected by it. Illustration A transfers a farm to B for her life, and, if she do not desert her husband, to C. B is entitled to the farm during her life as if no condition had been inserted.

Section 31. Condition that transfer shall cease to have effect in case specified uncertain event happens or does not happen

Subject to the provisions of section 12, on a transfer of property an interest therein may be created with the condition superadded that it shall cease to exist in case a specified uncertain event shall happen, or in case a specified uncertain event shall not happen.

Illustrations

(a) A transfers a farm to B for his life, with a proviso that, in case B cuts down a certain wood, the transfer shall cease to have any effect. B cuts down the wood. He loses his lifeinterest in the farm.

(b) A transfers a farm to B, provided that, if B shall not go to England within three years after the date of the transfer, his interest in the farm shall cease. B does not go to England within the term prescribed. His interest in the farm ceases.

Section 32. Such condition must not be invalid

In order that a condition that an interest shall cease to exist may be valid, it is necessary that the event to which it relates be one which could legally constitute the condition of the creation of an interest.

Section 33. Transfer conditional on per formance of act, no time being specified for performance

Where, on a transfer of property, an interest therein is created subject to a condition that the person taking it shall perform a certain act, but no time is specified for the performance of the act, the condition is broken when he renders impossible, permanently or for an indefinite period, the performance of the act.

Section 34. Transfer conditional on performance of act, time being specified

Where an act is to be performed by a person either as a condition to be fulfilled before an interest created on a transfer of property is enjoyed by him, or as a condition on the nonfulfilment of which the interest is to pass from him to another person, a nd a time is specified for the performance of the act, if such performance within the specified time is prevented by the fraud of a person who would be directly benefited by nonfulfilment of the condition, such further time shall as against him be allowed for performing the act as shall be requisite to make up for the delay caused by such fraud. But if no time is specified for the performance of the act, then, if its performance is by the fraud of a person interested in the nonfulfilment of the condition rendered impossible or indefinitely postponed, the condition shall as against him be deemed to have been fulfilled. Election

Section 35. Election when necessary

Where a person professes to transfer property which he has no right to transfer, and as part of the same transaction confers any benefit on the owner of the property, such owner must elect either to confirm such transfer or to dissent from it; and in the latter case he shall relinquish the benefit so conferred, and the benefit so relinquished shall revert to the transferor or his representative as if it had not been disposed of, Subject nevertheless, where the transfer is gratuitous, and the transferor has, before the election, died or otherwise become incapable of making a fresh transfer, and in all cases where the transfer is for consideration, to the charge of making good to the disappointed transferee the amount or value of the property attempted to be transferred to him.

Rs. 800 to B. The rule in the first paragraph of this section applies whether the transferor does or does not believe that which he professes to transfer to be his own. A person taking no benefit directly under a transaction, but deriving a benefit un der it indirectly, need not elect. A person who in his one capacity takes a benefit under the transaction may in another dissent therefrom. Exception to the last preceding four rules .__ Where a particular benefit is expressed to be conferred on the owner of the property which the transferor professes to transfer, and such benefit is expressed to be in lieu of that property, if such owner claim the property, he must relinquish the particular benefit, but he is not bound to relinquish any other benefit conferred upon him by the same transaction. Acceptance of the benefit by the person on whom it is conferred constitutes an election by him to confirm the transfer, if he is aware of his duty to elect and of those circumstances which would influence the judgment of a reasonable man in making an election, or if he waives enquiry into the circumstances. Such knowledge or waiver shall, in the absence of evidence to the contrary, be presumed, if the person on whom the benefit has been conferred has enjoyed it for two years without doing any act to express dissent. Such knowledge or waiver may be inferred from any act of his which renders it impossible to place the persons interested in the property professed to be transferred in the same condition as if such act had not been done. Illustration A transfers to B an estate to which C is entitled, and as part of the same transaction gives C a coalmine. C takes possession of the mine and exhausts it. He has thereby confirmed the transfer of the estate to B. If he does not within one year after the date of the transfer signify to the transferor or his representatives his intention to confirm or to dissent from the transfer, the transferor or his representatives may, upon the expiration of that period, require him to make his election; and, if he does not comply with such requisition within a reasonable time after he has received it, he shall be deemed to have elected to confirm the transfer.

1Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch. (with effect from the 14th October, 1956).

In case of disability, the election shall be postponed until the disability ceases, or until the election is made by some competent authority. Apportionment

Section 36. Apportionment of periodical payments on determination of interest of person entitled

In the absence of a contract or local usage to the contrary, all rents, annuities, pensions, dividends and other periodical payments in the nature of income shall, upon the transfer of the interest of the person entitled to receive such payments, be deemed, as between the transferor and the transferee, to accrue due from day to day, and to be apportionable accordingly, but to be payable on the days appointed for the payment thereof.

Section 37. Apportionment of benefit of obligation on severance

When, in consequence of a transfer, property is divided and held in several shares, and thereupon the benefit of any obligation relating to the property as a whole passes from one to several owners of the property, the corresponding duty shall, in the absence of a contract to the contrary amongst the owners, be performed in favour of each of such owners in proportion to the value of his share in the property, provided that the duty can be served and that the severance does not substantially increase the burden of the obligation; but if the duty cannot be severed, or if the severance would substantially increase the burden of the obligation, the duty shall be performed for the benefit of suc h one of the several owners as they shall jointly designate for that purpose:

Provided that no person on whom the burden of the obligation lies shall be answerable for failure to discharge it in manner provided by this section, unless and until he has had reasonable notice of the severance. Nothing in this section applies to leases for agricultural purposes unless and until the l[Provincial Government] by notification in the official Gazette so directs. Illustrations

(a) A sells to B, C and D a house situat e in a village and leased to E at an annual rent of Rs. 30 and delivery of one fat sheep, B having provided half the purchasemoney and C and D onequarter each. E, having notice of this, must pay Rs. 15 to B, Rs. 71/2 to C, and Rs. 71/2 to D, and must d eliver the sheep according to the joint direction of B, C and D.

(b) In the same case, each house in the village being bound to provide ten days' labour each year on a dyke to prevent inundation, E had agreed as a term of his lease to perform this work for A. B, C and D severally require E to perform the ten days’ work due on account of the house of each. E is not bound to do more than ten days’ work in all, according to such directions as B, C and D may join in giving. (B)Transfer of Immoveable Property

Section 38. Transfer by person authorized only under certain circumstances to transfer

Where any person, authorized only under circumstances in their nature variable to dispose of immoveable property, transfers such property for consideration, alleging the existence of such circumstances, they

1Subs. by A.O., 1937.

Section 39. Transfer where third person is entitled to maintenance

Where a third person has a right to receive maintenance, or a provision for advancement or marriage, from the profits of immoveable property, and such property is transferred 1[* * *], the right may be enforced against the transferee, if he has notice 1[thereof] or if the transfer is gratuitous; but not against a transferee for consideration and without notice of the right, nor against such property in his hands. 1[* * * * * * *]

Section 40. Burden of obligation imposing restriction on use of land, or of obligation annexed to ownership but not amounting to interest or easement

Where, for the more beneficial enjoyment of his own immoveable property, a third person has, independently of any interest in the immoveable property of another or of any easement thereon, a right to restrain the enjoyment 1[in a particular manner of the latter property], or Where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immoveable property, but not amounting to an interest therein or easement thereon, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation, nor against such property in his hands. Illustration A contracts to sell 2[Ulipur] to B. While the contract is still in force he sells 2[Ulipur] to C, who has notice of the contract. B may enforce the contract against C to the same extent as against A.

Section 41. Transfer by ostensible owner

Where, with the consent, express or implied, of the persons interested in immoveable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorized to make it: provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith.

1Rep. and subs. by Act No. XX of 1929, ss. 11-12.

2Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s.3 and 2nd Sch. (with effect from the 14th October, 1956).

Section 42. Transfer by person having authority to revoke former transfer

Where a person transfers any immoveable property reserving power to revoke the transfer, and subsequently transfers the property for consideration to another transferee, such transfer operates in favour of such transferee (subject to any condition attached to the exercise of the power) as a revocation of the former transfer to the extent of the power. Illustration A lets a house to B, and reserves power to revoke the lease if, in the opinion of a specified surveyor, B should make a use of it detrimental to its value. Afterwards A, thinking that such a use has been made, lets the house to C. This operates as a revocation of B’s lease subject to the opinion of the surveyor as to B’s use of the house having been detrimental to its value.

Section 43. Transfer by unauthorized person who subsequently acquires interest in property transferred

Where a person 1[fraudulently or] erroneously represents that he is authorized to transfer certain immoveable property and professes to transfer such property for consi deration, such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire in such property at any time during which the contract of transfer subsists. Nothing in this section shall impair the right of transfer ees in good faith for consideration without notice of the existence of the said option. Illustration A, a Hindu, who has separated from his father B, sells to C three fields, X, Y and Z, representing that A is authorized to transfer the same. Of these fields Z does not belong to A, it having been retained by B on the partition; but on B’s dying A as heir obtains Z. C, not having rescinded the contract of sale, may require A to deliver Z to him.

Section 44. Transfer by one coowner

Where one of two or more coowners of immoveable property legally competent in that behalf transfers his share of such property or an y interest therein, the transferee acquires, as to such share or interest, and so far as is necessary to give effect to the transfer, the transferor’s right to joint possession or other common or part enjoyment of the property, and to enforce a partition of the same, but subject to the conditions and liabilities affecting, at the date of the transfer, the share or interest so transferred. Where the transferee of a share of a dwellinghouse belonging to an undivided family is not a member of the family, nothing in this section shall be deemed to entitle him to joint possession or other common or part enjoyment of the house.

Section 45. Joint transfer for consideration

Where immoveable property is transferred for consideration to two or more persons, and such consi deration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and, where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interest in such property in proportion to the shares of the consideration which they respectively advanced.

1Ins. by Act No. XX of 1929, s. 13.

Section 46. Transfer for consideration by persons having distinct interests

Where immoveable property is transferred for consideration by persons having distinct interests therein, the transferors are, in the absence of a contract to the contrary, entitled to share in the consideration equally, where their interest in the property were of equal value, and, where such interests were of unequal value, proportionately to the value of their respective interests. Illustrations

(a) A, owning a moiety, and B and C each a quarter share, of mauza 1[Ulipur], exchange an eighth share of that mauza for a quarter share of mauza 1[Mithapukur]. There being no agreement to the contrary, A is entitled to an eighth share in 1[Mithapukur], and B and C each to a sixteenth share in that

mauza.

(b) A, being entitled to a lifeinterest in mauza 1[Jalkothi] and B and C to the reversion, sell the mauza for Rs. 1,000. A’s lifeinterest is ascertained to be worth Rs. 600, the reversion Rs. 400. A is entitled to receive Rs. 600 out of the purchasemoney, B and C to receive Rs. 400.

Section 47. Transfer by coowner of share in common property

Where several coowners of immoveable property transfer a share therein without specifying that the transfer is to take effect on any particular share or shares of the transferors, the transfer, as among such transferors, takes effect on such shares equally where the shares were equal, and, where they were unequal, proportionately to the extent of such shares. Illustration A, the owner of an eightanna share, and B and C, each the owner of a fouranna share, in mauza 1[Ulipur], transfer a twoanna share in the mauza to D, withou t specifying from which of their several shares the transfer is made. To give effect to the transfer oneanna share is taken from the share of A, and half an anna share from each of the shares of B and C.

Section 48. Priority of rights created by transfer

Where a person purports to create by transfer at different times rights in or over the same immoveable property, and such rights cannot all exist or be exercised to their full extent together, each later created right shall, in the absence of a special contract or reservation binding the earlier transferees, be subject to the rights previously created.

Section 49. Transferee’s right under policy

Where immoveable property is transferred for consideration, and such property or any part thereof is at the date of the transfe r insured against loss or damage by fire, the transferee, in case of such loss or damage, may, in the absence of a contract to the contrary, require any money which the transferor actually receives under the policy, or so much thereof as may be necessary, to be applied in reinstating the property.

1Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), ss. 3-4 and 2nd Sch. (with effect from the 14th October, 1956).

Section 50. Rent bonafide paid to holder under defective title

No person shall be chargeable with any rents or profits of any immoveable property, which he has in good faith paid or delivered to any person of whom he in good faith held such property, notwithstanding it may afterwards appear that the person to whom such payment or delivery was made had no right to receive such rents or profits. Illustration A lets a field to B at a rent of Rs. 50, and then transfers the field to C. B, having no notice of the transfer, in good faith pays the rent to A. B is not chargeable with the rent so paid.

Section 51. Improvements made by bonafide holders under defective titles

When the transferee of immoveable property makes any improvement on the property, believing in good faith that he is absolutely entitled thereto, and h e is subsequently evicted there from by any person having a better title, the transferee has a right to require the person causing the eviction either to have the value of the improvement estimated and paid or secured to th e transferee, or to sell his interest in the property to the transferee at the then market value thereof, irrespective of the value of such improvement. The amount to be paid or secured in respect of such improvement shall be the estimated value thereof at the time of the eviction. When, under the circumstances aforesaid, the transferee has planted or sown on the property crops which are growing when he is evicted therefrom, he is entitled to such crops and to free ingress and egress to gather and carry them.

[1] Section 52. Transfer of property pending suit relating thereto

During the 2[pendency] in any Court having authority in 3[Pakistan], or established beyond the limits of 3[Pakistan] by 4[the 5[Federal Government] 6[* * *], of 7[any] suit or proceeding 7[which is not collusive and] in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose. 7[Explanation.__ For the purposes of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding in a Court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a final decree or order and complete sa tisfaction or discharge of such decree or order has been obtained, or has become unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force.]

[7] Section 53. Fradulent transfer

(1) Every transfer of immoveable property made with intent to

1Section 52 has been amended in Sindh by the Transfer of Property and the Indian Registration (Sindh Amdt.) Act, 1939 (XIV of 1939), s. 2.

2Subs. by Act No. XX of 1929, s.14.

3Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch. (with effect from the 14th October, 1956).

4Subs. by A.O., 1937.

5Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.

6Omitted by A. O., 1949, Sch.

7Subs. and ins. by Act No. XX of 1929, s. 14.

(2) Every transfer of immoveable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee. For the purposes of this subsection, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made.]

[1] Section 53A. Part performance

Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the tr ansfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract:

Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.]

CHAPTER III

OF SALES OF IMMOVEABLE PROPERTY

Section 54. “Sale” defined

“Sale” is a transfer of ownership in exchange for a price paid or promised or partpaid and partpromised.

1Ins. by Act No. XX of 1929, s. 16.

Section 55. Rights and liabilities of buyer and seller

In the absence of a contract to the contrary, the buyer and the seller of immoveable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following, or such of them as are applicable to the property sold:

(1) The seller is bound—

(a) to disclose to the buyer any material defect in the property 2[or in the seller’s title thereto] of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover;

(b) to produce to the buyer on his request for exam ination all documents of title relating to the property which are in the seller’s possession or power;

(c) to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto;

(d) on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place;

(e) between the date of the contract of sale and the delivery of the property, to take as much care of the property and all documents of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents;

(f) to give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits;

(g) to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all incumbrances on such property due on such date, and, e xcept where the property is sold subject to incumbrances, to discharge all incumbrances on the property then existing.

(2) The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same: 1As to limitation to the territorial operation of paragraphs 2 and 3 of s. 54, see s. 1, supra. These paragraphs extend to every cantonment in the Provinces, etc., see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924).

2Ins. by Act No. VI of 1929, s. 17.

(3) Where the whole of the purchasemoney has been paid to the seller, he is also bound to deliver to the buyer all documents of title relating to the property which are in the seller’s possession or power:

Provided that, (a) where the seller retains any part of the property comprised in such documents, he is entitled to retain them all, and, (b) where the whole of such property is sold to different buyers, the buyer of the lot of greatest value is entitled to such documents. But in case (a) the seller, and in case (b) the buyer, of the lot of greatest value, is bound, upon every reasonable request by the buyer, or by any of the other buyers, as the case may be, and at the cost of the person making the request, to produce the said documents and furnish such true copies thereof or extracts therefrom as he may require; and in the mean time, the seller, or the buyer of the lot of greatest value, as the case may be, shall keep the said documents safe, uncancelled and undefaced, unless prevented from so doing by fire or other inevitable accident.

(4) The seller is entitled__

(a) to the rents and profits of the property till the ownership thereof passes to the buyer;

(b) where the ownership of the property has passed to the buyer before payment of the whole of the purchasemoney, to a charge upon the property in the hands of the buyer 1[any transferee without consideration or any transferee with notice of the nonpayment], for the amount of the purchasemoney, or any part thereof remaining unpaid, and for interest on such amoun t or part 1[from the date on which possession has been delivered].

(5) The buyer is bound__

(a) to disclose to the seller any fact as to the nature or extent of the seller’s interest in the property of which the buyer is aware but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest;

(b) to pay or tender, at the time and place of completing the sale, the purchasemoney to the seller or such person as he directs: Provided that, where the property is sold free from incumbrances, the buyer may retain out of the purchasemoney the amount of any incumbrances on the property existing at the date of the sale, and shall pay the amount so retained to the persons entitled thereto;

1Ins. by Act No. XX of 1929, s. 17.

(c) where the ownership of the property has passed to the buyer, to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller;

(d) where the ownership of the property has passed to the buyer, as between himself and the seller, to pay all public charges and rent which may become payable in respect of the property, the principal moneys due on any incumbrances subject to which the property is sold, and the interest thereon afterwards accruing due.

(6) The buyer is entitled__

(a) where the ownership of the property has passed to him, to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof;

(b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, 1[* * *] to the extent of the seller’s interest in the property for the amount of any purchasemoney properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission. An omission to make such disclosures as are mentioned in this section, paragraph (1), clause (a), and paragraph (5), clause (a), is fraudulent.

[1] Section 56. Marshalling by subsequent purchaser

If the owner of two or more properties mortgages them to one person and then sells one or more of the properties to another person, the buyer is, in the absence of a contract to the contrary, entitled to have the mortgagedebt satisfied out of the property or properties not sold to him, so far as the same will extend, but not so as to prejudice the rights of the mortgagee or persons claiming under him or of any other person who has for consideration acquired an interest in any of the properties.]

Discharge of Incumbrances on Sale

Section 57. Provision by Court for incumbrance and sale freed therefrom

(a)Where immoveable property subject to any incumbrance, whether immediately payable or not, is sold by the Court or in execution of a decree, or out of Court, the Court may, if it thinks fit, on the application of any party to the sale, direct or allow payment into Court,—

(1) in case of an annual or monthly sum charged on the property, or of a capital sum charged on a determinable interest in the pr operty__ of such amount as, when invested in securities of the 2[Federal Government], the Court considers will be sufficient, by means of the interest thereof, to keep down or otherwise provide for that charge, and

1Rep. and subs. by Act No. XX of 1929, ss. 17-18.

2Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.

(2) in any other case of a capital sum charged on the property__ of the amount sufficient to meet the incumbrance and any interest due thereon.

(b) Thereupon the Court may, if it thinks fit, and after notice to the incumbrancer, unless the Court, for reasons to be recorded in writing, thinks fit to dispense with such notice, decla re the property to be freed from the incumbrance, and make any order for conveyance, or vesting order, proper for giving effect to the sale, and give directions for the retention and investment of the money in Court.

(c) After notice served on the persons interested in or entitled to the money or fund in Court, the Court may direct payment or transfer thereof to the persons entitled to receive or give a discharge for the same, and generally may give directions respecting the application or distribution of the capital or income thereof.

(d) An appeal shall lie from any declaration, order or direction under this section as if the same were a decree.

(e) In this section “Court” means (l) a High Court in the exercise of its ordinary or extraordinary original civil jurisdiction, (2) the Court of a District Judge within the local limits of whose jurisdiction the property or any part thereof is situate,

(3) any other Court which the l[Provincial Government] may, from time to time, by notification in the official Gazette, declare to be competent to exercise the jurisdiction conferred by this section.

CHAPTER IV

OF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES

Section 58. “Mortgage,” “mortgagor,” mortgagee,” “mortgagemoney” and “mortgagedeed” defined

(a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by wa y of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The transferor is called a mortgagor, the transferee a mortgagee ; the principal money and interest of which payment is secured for the time being are called the mortgagemoney, and the instrument (if any) by which the transfer is effected is called a mortgagedeed.

1Subs. by A. O., 1937.

Simple Mortgage. (b) Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgagemoney, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgagemoney, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.

l[Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale;] Usufructuary mortgage. (d) Where the mortgagor delivers possessio n 1[or expressly or by implication binds himself to deliver possession] of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgagemoney, and to receive the rents and profits accruing from the proper ty 1[or any part of such rents and profits and to appropriate the same] in lieu of interest, or in payment of the mortgagemoney, or partly in lieu of interest 1[or] partly in payment of the mortgagemoney, the transaction is called an usufructuary mortgag e and the mortgagee an usufructuary mortgagee. English Mortgage. (e) Where the mortgagor binds himself to repay the mortgagemoney, on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will retransfer it to the mortgagor upon payment of the mortgagemoney as agreed, the transaction is called an English mortgage. Mortgage by deposit of title deeds. 1[(f) Where a person 2[* * *] delivers to a creditor or his agent documents of title to immovea ble property, with intent to create a security thereon, the transaction is called a mortgage by deposit of titledeeds 2[:] 2[Provided that, where a mortgage by deposit of title deeds is to be created in favour of a banking company as defined in the Banking Tribunals Ordinance, 1984 (LVIII of 1984), the same may also be created by an entry in the record of rights against the entry relating to such immovable property.] Anomalous mortgage. (g) A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of titledeeds within the meaning of this section is called an anomalous mortgage.]

1Ins. and subs. by Act No. XX of 1929, s. 19.

2Omitted, subs. & added by the Finance Act, 1986 (Act No. 1 of 1986), s. 2.

[1] Section 59A. References to mortgagors and mortgagees to include persons deriving title from them

Unless otherwise expressly provided, references in this Chapter to mortgagors and mortgagees shall be deemed to include references to persons deriving title from them respectively.] Rights and Liabilities of Mortgagor

Section 60. Right of mortgagor to redeem

At any time after the principal money has become 1[due], the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgagemoney, to require the mortgagee (a) to deliver 1[to the mortgagor the mortgagedeed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee], (b) where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to retransfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished:

Provided that the right conferred by this section has not been extinguished by the act of the parties or by 1[decree] of a Court. The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption. Nothing in this section shall be deemed to render invalid any provision to the effect that, if the time fixed for payment of the principal money has been allowed to pass or no such time has been fixed, the mortgagee shall be entitled to reasonable notice before payment or tender of such money. Redemption of portion of mortgaged property. Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own shar e only, on payment of a proportionate part of the amount remaining due on the mortgage, except 1[only] where a mortgagee, or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of a mortgagor.

[1] Section 60A. Obligation to transfer to third party instead of retransference to Mortgagor

(1) Where a mortgagor is entitled to redemption, then, on the fulfilment of any conditions on the fulfilment of which he would be entitled to require a retransfer, he may require the mortgagee, instead of retransferring the property, to assign the mortgagedebt and transfer the mortgaged property to such

*As to limitation to the territorial operation of s. 59, see s. 1, supra. Section 59 extends to every cantonment in the Provinces, etc.—see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924). 1Ins., omitted and subs. by Act No. XX of 1929, ss. 20-23.

2Subs. by Act No. VI of 1904, s. 3.

third person as the mor tgagor may direct; and the mortgagee shall be bound to assign and transfer accordingly.

(2) The rights conferred by this section belong to and may be enforced by the mortgagor or by any encumbrancer notwithstanding a n intermediate encumbrance; but the requisition of any encumbrancer shall prevail over a requisition of the mortgagor and, as between encumbrancers, the requisition of a prior encumbrancer shall prevail over that of a subsequent encumbrancer.

(3) The provisions of this section do not apply in the case of a mortgagee who is or has been in possession.

Section 60B. Right to inspection and production of documents

A mortgagor, as long as his right of redemption subsists, shall be entitled at all reasonable times, at his request and at his own cost, and on payment of the mortgagee’s costs and expenses in this behalf, to inspect and make copies or abstracts of, or extracts from, documents of title relating to the mortgaged property which are in the custody or power of the mortgagee.]

[1] Section 61. Right to redeem separately or simultaneously

A mortgagor who has executed two or more mortgages in favour of the same mortgagee shall, in the absence of a contract to the contrary, when the principal money of any two or more of the mortgages has become due, be entitled to redeem any one such mortgage separately, or any two or more of such mortgages together.]

Section 62. Right of usufructuary mortgagor to recover possession

In the case of a usufructuary mortgage, the mortgagor has a right to recover possession of the property 1[together with the mortgagedeed and all documents relating to the mortgaged property which are in the possession or power of the mortgage],__

(a) where the mortgagee is authorized to pay himself the mortgagemoney from the rents and profits of the property,__when such money is paid;

(b) where the mortgagee is authorized to pay himself from such rents and profits 1[or any part thereof a part only of the m ortgagemoney]—when the term, if any, prescribed for the payment of the mortgagemoney has expired and the mortgagor pays or tenders to the mortgagee 1[the mortgagemoney or the balance thereof] or deposits it in Court as hereinafter provided.

Section 63. Accession to mortgaged property

Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, received any accession, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled as agains t the mortgagee to such accession. Accession acquired in virtue of transferred ownership. Where such accession has been acquired at the expense of the mortgagee, and is capable of separate possession or enjoyment without detriment to the principal property, the mortgagor desiring to take the accession must pay to the mortgagee the expense of acquiring it. If such separate possession or enjoyment is not possible, the

1Subs. and ins. by Act No. XX of 1929, ss. 24-25.

[1] Section 63A. Improvements to mortgaged property

(1) Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, been improved, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled to the improvement ; and the mortgagor shall not, save only in cases provided for in subsection (2), be liable to pay the cost thereof.

(2) Where any such improvement was effected at the cost of the mortgagee and was necessary to preserve the property from destruction or deterioration or was necessary to prevent the security from becoming insufficient, or was made in compliance with the lawful order of any public servant or public authority, the mortgagor shall, in the absence of a contract to the contrary, be liable to pay the proper cost thereof as an addition to the principal money with interest at the same rate as is payable on the principal, or, where no such rate is fixed, at the rate of nine per cent. per annum, and the profits, if any, accruing by reason of the improvement shall be credited to the mortgagor.]

Section 64. Renewal of mortgaged lease

Where the mortgaged property is a lease 1[* * *], and the mortgagee obtains a renewal of the lease, the mortgagor, upon redemption, shall, in the absence of a contract by him to the contrary, have the benefit of the new lease.

Section 65. Implied contracts by mortgagor

In the absence of a contract to the contrary, the mortgagor shall be deemed to contract with the mortgagee__

(a) that the interest which the mortgagor profes ses to transfer to the mortgagee subsists, and that the mortgagor has power to transfer the same;

(b) that the mortgagor will defend, or if the mortgagee be in possession of the mortgaged property, enable him to defend, the mortgagor’s title thereto;

(c) that the mortgagor will, so long as the mortgagee is not in possession of the mortgaged property, pay all public charges accruing due in respect of the property ;

(d) and, where the mortgaged property is a lease 1[* * *], that the rent payable under the lease, the conditions contained therein, and the contracts binding on the lessee have been paid, performed and observed down to the commencement of the mortgage; and that the mortgagor will, so long as the security exists and the mortgagee is not in possession of the mortgaged property, pay the rent reserved by the lease, or, if the lease be renewed, the renewed lease, perform the conditions contained therein and observe the contracts binding on the lessee,

1Subs., ins. and omitted by Act No. XX of 1929, ss. 26-29.

and indemnify the mortgagee against all claims sustained by reason of the nonpayment of the said rent or the nonperformance or nonobservance of the said conditions and contracts;

(e) and, where the mortgage is a second or subsequent incumbrance on the property, that the mortgagor will pay the interest from time to time accruing due on each prior incumbrance as and when it becomes due, and will at the proper time discharge the principal money due on such prior incumbrance. 1[* * * * * * *] The benefit of the contracts mentioned in this section shall be annexed to and shall go with the interest of the mortgagee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested. 1

Section 65A. Mortgagor’s power to lease

(1) Subject to the provisions of subsection (2), a mortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases thereof which shall be binding on the mortgagee. (2)(a) Every such lease shall be such as would be made in the ordinary course of management of the property concerned, and in accordance with any local law, custom or usage.

(b) Every such lease shall reserve the best rent that can reasonably be obtained, and no premium shall be paid or promised and no rent shall be payable in advance.

(d) Every such lease shall take effect from a date not later than six months from the date on which it is made.

(e) In the case of a lease of buildings, whether leased with or without the land on which they stand, the duration of the lease shall in no case exceed three years, and the lease shall contain a covenant for payment of the r ent and a condition of reentry on the rent not being paid within a time therein specified.

(3) The provisions of subsection (1) apply only if and as far as a contrary intention is not expressed in the mortgagedeed; and the provisions of subsection (2) may be varied or extended by the mortgagedeed and, as so varied and extended, shall, as far as may be, operate in like manner and with all like incidents, effects and consequences, as if such variations or extensions were contained in that subsection.]

Section 66. Waste by mortgagor in possession

A mortgagor in possession of the mortgaged property is not liable to the mortgagee for allowing the property to deteriorate ; but he must not commit any act which is destructive or permanently injurious thereto, if the security is insufficient or will be rendered insufficient by such act.

1Omitted., ins. and subs. by Act No. XX of 1929, ss. 29-30..

Section 67. Right to foreclosure or sale

In the absence of a contract to the contrary, the mortgagee has at any time after the mortgagemoney has become 1[due] to him, and before a decree has been made for the redemption of the mortgaged property, or the mortgagemoney has been paid or deposited as hereinafter

provided, a right to obtain from the Court 1[a decree] that the mortgagor shall be absolutely debarred of his right to redeem the property, or 1[a decree] that the property be sold. A suit to obtain 1[a decree] that a mortgagor shall be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure. Nothing in this section shall be deemed— 1[(a) to authorise any mortgagee other than a mortgagee by conditional sale or a mortgagee under an anomalous mortgage by the terms of which he is entitled to foreclose, to institute a suit for foreclosure, or an usufructuary mortgagee as such or a mortgagee by conditional sale as such to institute a suit for sale; or]

(b) to authorize a mortgagor who holds the mortgagee’s rights as his trustee or legal representative, and who may sue for a sale of the property, to institute a suit for foreclosure; or

(c) to authorize the mortgagee of a railway, canal or other work in the maintenance of which the public are interested, to institute a suit for foreclosure or sale; or

(d) to authorize a person interested in part only of the mortgagemoney to institute a suit relating only to a corresponding part of the mortgaged property, unless the mortgagees have, with the consent of the mortgagor, severed their interests under the mortgage.

[1] Section 67A. Mortgagee when bound to bring one suit on several mortgages

A mortgagee who holds two or more mortgages executed by the same mortgagor in respect of each of which he has a right to obtain the same kind of decree under section 67, and who sues to obtain such decree on any one of the mortgages shall, in the absence of a contract to the contrary, be bound to sue on all the mortgages in respect of which the mortgagemoney has become due.]

[1] Section 68. Right to sue for mortgagemoney

(1) The mortgagee has a right to sue for the mortgagemoney in the following cases and no others, namely:__

(a) where the mortgagor binds himself to repay the same;

(b) where, by any cause other than the wrongful act or default of the mortgagor or mortgagee, the mortgaged property is wholly or partially destroyed or the security is rendered insufficient within the meanin g of section 66, and the mortgagee has given the mortgagor a reasonable opportunity of providing further security

1Subs. and ins. by Act No. XX of 1929, ss. 31-33.

enough to render the whole security sufficient, and the mortgagor has failed to do so ;

(c) where the mortgagee is deprived of the whole or part of his security by or in consequence of the wrongful act or default of the mortgagor;

(d) where, the mortgagee being entitled to possession of the mortgaged property, the mortgagor fails to deliver the same to him, or to secure the possession thereof to him without disturbance by the mortgagor or any person claiming under a title superior to that of the mortgagor:

Provided that, in the case referred to in clause (a), a transferee from the mortgagor or from his legal representative shall not be liable to be sued for the mortgagemoney.

(2) Where a suit is brought under clause (a) or clause (b) of subsection (1), the Court may, at its discretion, stay the suit and all proceedings ther ein, notwithstanding any contract to the contrary, until the mortgagee has exhausted all his available remedies against the mortgaged property or what remains of it, unless the mortgagee abandons his security and, if necessary, retransfers the mortgaged property.]

Section 69. Power of sale when valid

1[(1)] 1[ 2[* * *] 2[A] mortgagee, or any person acting on his behalf, shall, subject to the provisions of this section, have power to sell or concur in selling the mortgaged property, or any part thereof, in default of payment of the mortgagemoney, without the intervention of the Court, in the following cases and in no others, namely :__]

(a) where the mortgage is an English mortgage, and neither the mortgagor nor the mortgagee is a Hindu, 3[Muslim] or Buddhist 4[or a member of any other race, sect, tribe or class from time to time specified in this behalf by 5[the Provincial Government], in the 5[official Gazette]]; 6[(b) where the mortgagee is the Federal Government or a Provincial Government or a banking company as defined in the Banking Tribunals Ordinance, 1984 (LVIII of 1984).]

(c) where 1[a power of sale without the intervention of the Court is expressly conferred on the mortgagee by the mortgagedeed and] the mortgaged property or any part thereof 1[was, on the date of the execution of the mortgagedeed], situate within the 7[town of] Karachi, 8[* * * ]or in any other town 1[or area] which the 8[Provincial Government] may, by notification in the 8[official Gazette], specify in this behalf.

1Numbered, subs. and ins. by Act No. XX of 1929, s. 34. 2Omitted and subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (Ordinance No. XXVII of 1981), s. 3 and 2nd Sch.

3Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.

4Ins. by Act No. III of 1885, s. 5.

5Subs. by A. O., 1937.

6Subs. by the Finance Act, 1986 (Act No. 1 of 1986), s. 2.

7Subs. by A. O., 1949, Sch.

8Rep. and subs. by A. O., 1937.

1[*] 1[(2)] 2[A power under subsection (1) shall not] be exercised unless and until__ 1[(a)] notice in writing requiring payment of the principal money has been served on the mortgagor, or on one of several mortgagors, and default has been made in payment of the principal money, or of part thereof, for three months after such service; or 1[(b)] some interest under the mortgage amounting at least to five hundred rupees is in arrear and unpaid for three months after becoming due 2[:] 2[Provided that the power of a scheduled bank under clause (b) of subsection (1) shall further be subject to such conditions as may be prescribed in this behalf by notification in the official Gazette by the 3[Federal Government] in consultation with the State Bank of Pakistan.] 1[(3)] When a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorize the sale, or that due notice was not given, or that the power was otherwise improperly or irregularly exercised; but any person damnified by an unauthorized or improper or irregular exercise of the power shall have his remedy in damages against the person exercising the power. 1[(4)] The money which is received by the mortgagee, arising from the sale, after discharge of prior incumbrances, if any, to which the sale is not made subject, or after payment into Court under section 57 of a sum to meet any prior incumbrance, shall, in the absence of a contract to the contrary, be held by him in tru st to be applied by him, first, in payment of all costs, charges and expenses properly incurred by him as incident to the sale or any attempted sale; and, secondly, in discharge of the mortgage money and costs and other money, if any, due under the mortga ge; and the residue of the money so received shall be paid to the person entitled to the mortgaged property, or authorised to give receipts for the proceeds of the sale thereof. 4[* * * * * * *] 1[* * * * * * *]

[1] Section 69A. Appointment of receiver

(1) A mortgagee having the right to exercise a power of sale under section 69 shall, subject to the provisions of subsection (2), be entitled to appoint, by writing signed by him or on his behalf, a receiver of the income of the mortgaged property or any part thereof.

(2) Any person who has been named in the mortgagedeed and is willing and able to act as receiver may be appointed by the mortgagee.

1Rep., numbered, lettered and ins. by Act No. XX of 1929, ss. 34-35.

2Subs. and added by Act No. V of 1966, s. 2.

3Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.

4Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (Ordinance No. XXVII of 1981), s. 3 and 2nd Sch.

(3) A receiver appointed under the powers conferred by this section shall be deemed to be the agent of the mortgagor; and the mortgagor shall be solely responsible for the receiver’s acts or defaults, unless the mortgagedeed otherwise provides or unless such acts or defaults are due to the improper intervention of the mortgagee.

(4) The receiver shall have power to demand and recover all the income of which he is appointed receiver, by suit, execution or otherwise, in the name either of the mortgagor or of th e mortgagee to the full extent of the interest which the mortgagor could dispose of, and to give valid receipts accordingly for the same, and to exercise any powers which may have been delegated to him by the mortgagee in accordance with the provisions of this section.

(5) A person paying money to the receiver shall not be concerned to inquire if the appointment of the receiver was valid or not.

(6) The receiver shall be entitled to retain out of any money received by him, for his remuneration, and in sat isfaction of all costs, charges and expenses incurred by him as receiver, a commission at such rate not exceeding five per cent. on the gross amount of all money received as is specified in his appointment, and, if no rate is so specified, then at the rate of five per cent. on that gross amount, or at such other rate as the Court thinks fit to allow, on application made by him for that purpose.

(7) The receiver shall, if so directed in writing by the mortgagee, insure to the extent, if any, to which the mo rtgagee might have insured, and keep insured against loss or damage by fire, out of the money received by him, the mortgaged property or any part thereof being of an insurable nature.

(8) Subject to the provisions of this Act as to the application of insurance money, the receiver shall apply all money received by him as follows, namely:__

(i) in discharge of all rents, taxes, land revenue, rates and outgoings whatever affecting the mortgaged property;

(ii) in keeping down all annual sums or other payments , and the interest on all principal sums, having priority to the mortgage in right whereof he is receiver;

(iii) in payment of his commission, and of the premiums on fire, life or other insurances, if any, properly payable under the mortgagedeed or under this Act, and the cost of executing necessary or proper repairs directed in writing by the mortgagee;

(iv) in payment of the interest falling due under the mortgage;

(9) The provisions of subsection (1) apply only if and as far as a contrary intention is not expressed in the mortgagedeed; and the provisions of subsections (3) to (8) inclusive may be varied or extended by the mortgagedeed, and, as so varied or extended, shall, as far as may be, operate in like manner and with all the like incidents, effects and consequences, as if such variations or extensions were contained in the said subsections.

(10) Application may be made, without the institution of a suit, to the Court for its opinion, advice or direction on any present question respecting the management or administration of the mortgaged property, other than questions of difficulty or importance not proper in the opinion of the Court for summary disposal. A copy of such application shall be served upon, and the hearing thereof may be attended by, such of the persons interested in the application as the Court may think fit. The costs of every application under this subsection shall be in the discretion of the Court.

(11) In this section, “the Court” means the Court which would have jurisdiction in a suit to enforce the mortgage.]

Section 70. Accession to mortgaged property

If, after the date of a mortgage, any accession is made to the mortgaged property, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes of the security, be entitled to such accession. Illustrations

(a) A mortgages to B a certain field bordering on a river. The field is increased by alluvion. For the purposes of his security, B is entitled to the increase.

(b) A mortgages a certain plot of building land to B and afterwards erects a house on the plot. For the purposes of his security B is entitled to the house as well as the

plot.

Section 71. Renewal of mortgaged lease

When the mortgaged property is a lease 1[* * * ], and the mortgagor obtains a renewal of the lease, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes of the security, be entitled to the new lease.

Section 72. Rights of mortgagee in possession

1[A mortgagee] may spend such money as is necessary— 1[* * * * * * *]

(b) for 1[the preservation of the mortgaged property] from destruction, forfeiture or sale;

1Rep. and subs. by Act No. XX of 1929, ss. 36-37.

(d) for making his own title thereto good against the mortgagor ; and,

(e) when the mortgaged property is a renewable leasehold, for the renewal of the lease; and may, in the absence of a contract to the contrary, add such money to the principal money, at the rate of interest payable on the principal, and where no such rate is fixed, at the rate of nine per cent. per annum:

l[Provided that the expenditure of money by the mortgagee under clause (b) or clause (c) shall not be deemed to be necessary unless the mortgagor has been called upon and has failed to take proper and timely steps to preserve the property or to support the title.] Where the property is by its nature insurable, the mortgagee may also, in the absence of a contract to the contrary, insure and keep insured against loss or damage by fire the whole or any part of such property; and the premiums paid for any such insurance shall be 1[added to the principal money with interest at the same rate as is payable on the principal money or, where no such rate is fixed, at the rate of nine per cent. per annum]. But the amount of such insurance shall not exceed the amount specified in this behalf in the mortgagedeed or (if no such amount is therein specified) two thirds of the amount that would be required in case of total destruction to reinstate the property insured. Nothing in this section shall be deemed to authorize the mortgagee to insure when an insurance of the property is kept up by or on behalf of the mortgagor to the amount in which the mortgage e is hereby authorized to insure.

[1] Section 73. Right to proceeds of revenue sale or compensation on acquisition

(1) Where the mortgaged property or any part thereof or any interest therein is sold owing to failure to pay arrears of revenue or other charges of a public nature or rent due in respect of such property, and such failure did not arise from any default of the mortgagee, the mortgagee shall be entitled to claim payment of the mortgagemoney, in whole or in part, out of any surplus of the sale proceeds remaining after payment of the arrears and of all charges and deductions directed by law.

(2) Where the mortgaged property or any part thereof or any interest therein is acquired under the Land Acquisition Act, 1894(I of 1894), or any other enactment for the time being in force providing for the compulsory acquisition of immoveable property, the mortgagee shall be entitled to claim payment of the mortgagemoney, in whole or in part, out of the amount due to the mortgagor as com pensation.

(3) Such claims shall prevail against all other claims except those of prior encumbrancers, and may be enforced notwithstanding that the principal money on the mortgage has not become due.]

74. 1[* * * * * * *]

75. 1[* * * * * * *]

1Ins., subs. and rep. by Act No. XX of 1929, ss. 37-39.

Section 76. Liabilities of mortgagee in possession

When, during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property,—

(a) he must manage the property as a person of ordinary prudence would manage it if it were his own;

(b) he must use his best endeavours to collect the rents and profits thereof;

(c) he must, in the absence of a contract to the contrary, out of the income of the property, pay the Government revenue, all other charges of a public nature l[and all rent] accruing due in respect thereof during such possession, and any arrears of rent in default of payment of which the property may be summarily sold;

(d) he must, in the absence of a contract to the contrary, make such necessary repairs of the property as he can pay for out of the rents and profits thereof after deducting from such rents and profits the payments mentioned in clause (c) and the interest on the principal money;

(e) he must not commit any act which is destructive or permanently injurious to the property;

(f) where he has insured the whole or any part of the property against loss or damage by fire, he must, in case of such loss or damage, apply any money which he actually receives under the policy or so much thereof as may be necessary, in reinstating the property, or, if the mortgagor so directs, in reduction or discharge of the mortgagemoney;

(g) he must keep clear, full and accurate accounts of all sums received and spent by him as mortgagee, and, at any time during the continuance of the mortgage, give the mortgagor, at his request and cost, true copies of such accounts and of the vouchers by which they are supported ;

(h) his receipts from the mortgaged property, or, where such property is personally occupied by him, a fair occupationrent in respect thereof, shall, after deducting the expenses l[properly incurred for the management of the property and the collection of rents and profits and the other exp enses] mentioned in clauses (c) and (d), and interest thereon, be debited against him in reduction of the amount (if any) from time to time due to him on account of interest 1[* * *] and, so far as such receipts exceed any interest due, in reduction or dis charge of the mortgagemoney; the surplus, if any, shall be paid to the mortgagor;

(i) When the mortgagor tenders, or deposits in manner hereinafter provided, the amount for the time being due on the mortgage, the mortgagee must, notwithstanding the provisions in the other clauses of this section, account for his 1[*] receipts from the mortgaged property from the date of the tender or from the earliest time when he could take such amount out of Court, as the case may be 1[and shall not be entitled to deduct any amount therefrom on account of any

1Ins. and rep. by Act No. XX of 1929, s. 40.

Section 77. Receipts in lieu of interest

Nothing in section 76, clauses (b), (d), (g) and (h), applies to cases where there is a contract between the mortgagee and the mortgagor that the receipts from the mortgaged property shall, so long as the mortgagee is in possession of the property, be taken in lieu of interest on the principal money, or in lieu of such interest and defined portions of the principal. Priority

Section 78. Postponement of prior mortgagee

Where, through the fraud, misrepresentation or gross neglect of a prior mortgagee, another person has been induced to advance money on the security of the mortgaged property, the prior mortgagee shall be postponed to the subsequent mortgagee.

Section 79. Mortgage to secure uncertain amount when maximum is expressed

If a mortgage made to secure future advances, the performance of an engagement or the balance of a running account, expresses the maximum to be secured thereby, a subsequent mortgage of the same property shall, if made with notice of the prior mortgage, be postponed to the prior mortgage in respect of all advances or debits not exceeding the maximum though made or allowed with notice of the subsequent mortgage. Illustration A mortgages Sultanpur to his bankers, B & Co., to secure the balance of his account with them to the extent of Rs. 10,000. A then mortgages Sultanpur to C, to secure Rs. 10,000, C having notice of the mortgage to B & Co., and C gives notice to B & Co. of the second mortgage. At the date of the second mortgage, the balance due to B & Co. does not exceed Rs. 5,000. B & Co., subsequently advance to A sums making the balance of the account against him exceed the sum of Rs. 10,000. B &

Co. are entitled, to the extent of Rs. 10,000, to priority over C.

Section 80. [Repealed] Marshalling and Contribution

1[* * * * * * *] Marshalling and Contribution

[1] Section 81. Marshalling securities

If the owner of two or more properties mortgages them to one person and then mortgages one or more of the properties to another person, the subsequent mortgagee is, in the absence of a contract to the contrary, entitled to have the prior mortgagedebt satisfied out of the property or properties not mortgaged to him, so far as the same will extend, but not so as to prejudice the rights of the prior mortgagee or of any other person who has for consideration acquired an interest in any of the properties.]

Section 82. Contribution to mortgagedebt

1[Where property subject to a mortgage belongs to two or more persons having distinct and separate rights of ownership therein, the different shares in or parts of such property owned by such persons are, in the absence of a contract to the contrary, liable

1Rep. and subs. by Act No. XX of 1929, ss. 41-43.

to contribute rateably to the debt secured by the mortgage, and, for the purpose of determining the rate at which each such share or part shall contribute, the value thereof shall be deemed to be its value at the date of the mortgage after deduction of the amount of any other m ortgage or charge to which it may have been subject on that date.] Where, of two properties belonging to the same owner, one is mortgaged to secure one debt and then both are mortgaged to secure another debt, and the former debt is paid out of the former property, each property is, in the absence of a contract to the contrary, liable to contribute rateably to the latter debt after deducting the amount of the former debt from the value of the property out of which it has been paid. Nothing in this section ap plies to a property liable under section 81 to the claim of the 1[subsequent] mortgagee. Deposit in Court

Section 83. Power to deposit in Court money due on mortgage

At any time after the principal money 1[payable in respect of any mortgage has become due] and before a suit for redemption of the mortgaged property is barred, the mortgagor, or any other person entitled to institute such suit, may deposit, in any Court in which he might have instituted such suit, to the account of the mortgagee, the amount remaining due on the mortgage. Right to money deposited by mortgagor. The Court shall thereupon cause written notice of the deposit to be served on the mortgagee, and the mortgagee may, on presenting a petition (verified in manner prescribed by law for the ve rification of plaints) stating the amount then due on the mortgage, and his willingness to accept the money so deposited in full discharge of such amount, and on depositing in the same Court the mortgagedeed 1[and all documents in his possession or power relating to the mortgaged property], apply for and receive the money, and the mortgagedeed 1[and all such other documents] so deposited shall be delivered to the mortgagor or such other person as aforesaid. 1[Where the mortgagee is in possession of the mo rtgaged property, the Court shall, before paying to him the amount so deposited, direct him to deliver possession thereof to the mortgagor and at the cost of the mortgagor either to retransfer the mortgaged property to the mortgagor or to such third person as the mortgagor may direct or to execute and (where the mortgage has been effected by a registered instrument) have registered an acknowledgement in writing that any right in derogation of the mortgagor’s interest transferred to the mortgagee has been extinguished.]

Section 84. Cessation of interest

When mortgagor or such other person as aforesaid has tendered or deposited in Court under section 83 the amount remaining due on the mortgage, interest on the principal money shall cease from the date of the tender or 1[in the case of a deposit, where no previous tender of such amount has been made] as soon as the mortgagor or such other person as aforesaid has done all that has to be done by him to enable the mortgagee to take such amount out of Court, 1[and the notice required by section 83 has been served on the mortgagee:

Provided that, where the mortgagor has deposited such amount without having made a previous tender thereof and has subsequently withdrawn the same or any part thereof, interest on the principal money shall be payable from the date of such withdrawal].

1Subs. and ins. by Act No. XX of 1929, ss. 43-45.

85. 3[* * * * * * *] 2Foreclosure and Sale [86 to 90.] 3[* * * * * * *] Redemption

[1] Section 91. Persons who may sue for redemption

Besides the mortgagor, any of the following persons may redeem, or institute a suit for redemption of, the mortgaged property, namely :__

(a) any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same;

(b) any surety for the payment of the mortgagedebt or any part thereof; or

(c) any creditor of the mortgagor who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property.]

[1] Section 92. Subrogation

Any of the persons referred to in section 91 (other than the mortgagor) and any comortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee. The right conferred by this section is called the right of subrogation, and a person acquiring the same is said to be subrogated to the rights of the mortgagee whose mortgage he redeems. A person who has advanced to a mortgagor money with which the mortgage has been redeemed shall be subrogated to the rights of the mortgagee whose mortgage has been redeemed, if the mortgagor has by a registered instrument agreed that such persons shall be so subrogated. Nothing in this section shall be deemed to confer a right of subrogation on any person unless the mortgage in respect of which the right is claimed has been redeemed in full.

Section 93. Prohibition of tacking

No mortgagee paying off a prior mortgage, whether with or without notice of an intermediate mortgage, shall thereby acquire any priority in respect of his original security; and, except in the case provided for by section 79, no mortgagee making a subseque nt advance to the mortgagor, whether with or without notice of an intermediate mortgage, shall thereby acquire any priority in respect of his security for such subsequent advance.

1Ins. and subs. by Act No. XX of 1929, ss. 45-47.

2For the repealed provisions, as reenacted, see the Code of Civil Procedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV.

3Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V.

Section 94. Rights of mesne mortgagee

Where a property i s mortgaged for successive debts to successive mortgagees, a mesne mortgagee has the same rights against mortgagees posterior to himself as he has against the mortgagor.]

[1] Section 95. Right of redeeming comortgagor to expenses

Where one of several mortgagors redeems the mortgaged property, he shall, in enforcing his right of subrogation under section 92 against his co mortgagors, be entitled to add to the mortgagemoney recoverable from them such proportion of the expenses properly incurred in such redemption as is attributable to their share in the property.

Section 96. Mortgage by deposit of titledeeds

The provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to a mortgage by deposit of titledeeds.]

Section 97. [Repealed]

2[* * * * * * *] Anomalous Mortgages

Section 98. Rights and liabilities of parties to anomalous mortgages

In the case of 1[an anomalous mortgage] the rights and liabilities of the parties shall be determined by their contract as evidenced in the mortgagedeed, and, so far as such contract does not extend, by local usage.

Section 99. [Repealed] Charges

3[* * * * * * *] Charges

Section 100. Charges

Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained 1[which apply to a simple mortgage shall, so far as may be, apply to such charge]. Nothing in this section applies to the charge of a trustee on the trustproperty for expenses properly incurred in the execution of his trust, 1[and, save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge].

[1] Section 101. No merger in case of subsequent encumbrance

Any mortgagee of, or person having a charge upon, immoveable property, or any transferee from such mortgagee or chargeholder, may purchase or otherwise acquire the rights in the property of the mortgagor or owner, as the case may be, without thereby causing the mortgage or charge to be merged as between himself and any subsequent mortgagee of, or person having a subsequent charge upon, the same property; and no such subsequent mortgagee or chargeholder shall be entitled to foreclose or sell such property without redeeming the prior mortgage or charge, or otherwise than subject thereto.]

1Subs. and ins. by Act No. XX of 1929, ss. 48-51.

2Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. For the repealed provisions as reenacted, see the Code of Civil Procedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV, rules 12 and 13.

3Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. For the repealed provisions as reenacted, see Act V of 1908, Sch. I, Order XXXIV, rule 14.

Notice and Tender

Section 102. Service or tender on or to agent

Where the person on or to whom any notice or tender is to be served or made under this Chapter does not reside in the district in which the mortgaged property or some part thereof is situate, service or tender on or to an agent holding a general power ofattorney from such person or otherwise duly authorized to accept such service or tender shall be deemed sufficient. 1[Where no person or agent on whom such notice should be served can be found or is known] to the person required to serve the notice, the la tter person may apply to any Court in which a suit might be brought for redemption of the mortgaged property, and such Court shall direct in what manner such notice shall be served, and any notice served in compliance with such direction shall be deemed sufficient:

1[Provided that, in the case of a notice required by section 83, in the case of a deposit, the application shall be made to the Court in which the deposit has been made.] 1[Where no person or agent to whom such tender should be made can be found or is known] to the person desiring to make the tender, the latter person may deposit 1[in any Court in which a suit might be brought for redemption of the mortgaged property] the amount sought to be tendered, and such deposit shall have the effect of a tender of such amount.

Section 103. Notice, etc., to or by person incompetent to contract

Where, under the provisions of this Chapter, a notice is to be served on or by, or a tender or deposit made or accepted or taken out of Court by, any person incompetent to contract, such notice may be served 1[on or by], or tender or deposit made, accepted or taken, by the legal curator of the property of such person; but where there is no such curator, and it is requisite or desirable in the interests of such person that a notice should be served or a tender or deposit made under the provisions of this Cha pter, application may be made to any Court in which a suit might be brought for the redemption of the mortgage to appoint a guardian ad litem for the purpose of serving or receiving service of such notice, or making or accepting such tender, or making or t aking out of Court such deposit, and for the performance of all consequential acts which could or ought to be done by such person if he were competent to contract; and the provisions of 1[ Order XXXII in the First Schedule to the Code of Civil Procedure, 1 908(V of 1908)] shall, so far as may be, apply to such application and to the parties thereto and to the guardian appointed thereunder.

Section 104. Power to make rules

The High Court may, from time to time, make rules consistent with this Act for carrying out, in itself and in the Courts of Civil Judicature subject to its superintendence, the provisions contained in this Chapter.

CHAPTER V

OF LEASES OF IMMOVEABLE PROPERTY

Section 105. Lease defined

A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value , to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

1Subs. and ins. by Act No. XX of 1929, ss. 52-53.

Section 106. Duration of certain leases in absence of written contract or local usage

In the absence of a contract or local law or usage to the contrary, a lease of immoveable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice expiring with the end of a year of the tenancy; and a lease of immoveable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice expiring with the end of a month of the tenancy. Every notice under this section must be in writing signed by or on behalf of the person giving it, and l[either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to su ch party], or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.

2107. Leases how made.—A lease of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. 3[All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.] 1[Where a lease of immoveable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee:] 3[Provided that the 4[Provincial Government] may, 4[* * *] from time to time, by notification in the 4[official Gazette], direct that leases of immoveable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.]

Section 108. Rights and liabilities of lessor and lessee

In the absence of a contract or local usage to the contrary, the lessor and the lessee of immoveable property, as against one another, respectively, possess the rights and are subject to the liabilities mentioned in the rules next following, or such of them as are applicable to the property leased :—

1Subs. and ins. by Act No. XX of 1929, ss. 54-55.

2As to limitation to the territorial operation of s. 107, see s. 1, supra. S. 107 extends to every cantonment in the Provinces, etc., see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924).

3Subs. and ins. by Act No. VI of 1904, ss. 5.

4Subs. and rep. by A. O., 1937.

(A) Rights and Liabilities of the Lessor

(a) The lessor is bound to disclose to the lessee any material defect in the property, with reference to its intended use, of which the former is and the latter is not aware, and which the latter could not with ordinary care discover:

(b) the lessor is bound on the lessee’s request to put him in possession of the property:

(c) the lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the lease and performs the contracts binding on the lessee, he may hold the property during the time limited by the lease without interruption.

(d) if during the continuance of the lease any accession is made to the property, such accession (subject to the law relating to alluvion for the time being in force) shall be deemed to be comprised in the lease:

(e) if by fire, tempest or flood, or violence of an army or of a mob or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void:

Provided th at, if the injury be occasioned by the wrongful act or default of the lessee, he shall not be entitled to avail himself of the benefit of this provision:

(f) if the lessor neglects to make, within a reasonable time after notice, any repairs which he is bound to make to the property, the lessee may make the same himself, and deduct the expense of such repairs with interest from the rent, or otherwise recover it from the lessor:

(g) if the lessor neglects to make any payment which he is bound to make, and which, if not made by him, is recoverable from the lessee or against the property, the lessee may make such payment himself, and deduct it with interest from the rent, or otherwise recover it from the lessor:

(h) the lessee may l[even after the determination of the lease] remove, at any time 1[whilst he is in possession of the property leased but not afterwards] all things which he has attached to the earth: provided he leaves the property in the state in which he received it :

(i) when a lease of uncertain duration determines by any means except the fault of the lessee, he or his legal representative is entitled to all the crops planted or sown by the lessee and growing upon the property when the lease determines, and to free ingress and egress to gather and carry them:

1Ins. and subs. by Act No. XX of 1929, s. 56.

(j) the lessee may transfer absolutely or by way of mortgage or sublease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it. The lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease:

nothing in this clause shall be deemed to authorize a tenant having an untransferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or th e lessee of an estate under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee:

(k) the lessee is bound to disclose to the lessor any fact as to the nature or extent of the interest which the lessee is about to tak e, of which the lessee is, and the lessor is not, aware, and which materially increases the value of such interest:

(l) the lessee is bound to pay or tender, at the proper time and place, the premium or rent to the lessor or his agent in this behalf:

(m) the lessee is bound to keep, and on the termination of the lease to restore, the property in as good condition as it was in at the time when he was put in possession, subject only to the changes caused by reasonable wear and tear or irresistible force, and to allow the lessor and his agents, at all reasonable times during the term, to enter upon the property and inspect the condition thereof and give or leave notice of any defect in such condition, and, when such defect has been caused by any act or default on the part of the lessee, his servants or agents, he is bound to make it good within three months after such notice has been given or left:

(n) if the lessee becomes aware of any proceeding to recover the property or any part thereof, or of any encroac hment made upon, or any interference with, the lessor’s rights concerning such property, he is bound to give, with reasonable diligence, notice thereof to the lessor:

(o) the lessee may use the property and its products (if any) as a person of ordinary prudence would use them if they were his own; but he must not use, or permit another to use, the property for a purpose other than that for which it was leased, or fell 1[or sell] timber, pull down or damage buildings 1[belonging to the lessor, or] work mines or quarries not open when the lease was granted, or commit any other act which is destructive or permanently injurious thereto:

(p) he must not, without the lessor’s consent, erect on the property any permanent structure, except for agricultural purposes:

(q) on the determination of the lease, the lessee is bound to put the lessor into possession of the property.

Section 109. Rights of lessor’s transferee

If the lessor transfers the property leased, or any part thereof, or any part of his interest therein, the transferee, in the absence of a contract to the contrary, shall possess all the rights, and, if the lessee so elects, be subject to all the liabilities of the lessor as to the property or part transferred so long as he is the owner of it; but the lessor shall not, by reason only of such transfer, cease to be subject to any of the liabilities imposed upon him by the lease, unless the lessee elects to treat the transferee as the person liable to him:

Provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if

1Ins. by Act No. XX of 1929, s. 56.

the lessee, not having reason to believe that such transfer has been made, pays rent to the lessor, the lessee shall not be liable to pay such rent over again to the transferee.

The lessor, the transferee and the lessee may determine what proportion of the premium or rent reserved by the lease is payable in respect of the part so transferred , and, in case they disagree, such determination may be made by any Court having jurisdiction to entertain a suit for the possession of the property leased.

Section 110. Exclusion of day on which term commences

Where the time limited by a lease of immoveable property is expressed as commencing from a particular day, in computing that time such day shall be excluded. Where no day of commencement is named, the time so limited begins from the making of the lease.

Duration of lease for year. Where the time so limited is a year or a number of years, in the absence of an express agreement to the contrary, the lease shall last during the whole anniversary of the day from which such time commences.

Option to determine lease. Where the time so limited is expressed to be terminable before its expiration, and the lease omits to mention at whose option it is so terminable, the lessee, and not the lessor, shall have such option.

Section 111. Determination of lease

A lease of immoveable property determines__

(a) by efflux of the time limited thereby:

(b) where such time is limited conditionally on the happening of some eventby the happening of such event:

(c) where the interest of the les sor in the property terminates on, or his power to dispose of the same extends only to, the happening of any eventby the happening of such event:

(d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right:

(e) by express surrender; that is to say, in case the lessee yields up his interest under the lease to the lessor, by mutual agreement between them:

(f) by implied surrender:

(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that on breach thereof the lessor may reenter 1[* * *]; or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; 1[or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may reenter on the happening of such event]; and in 1[any of these cases] the lessor or his transferee 1[gives notice in writing to the lessee of] his intention to determine the lease:

(h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other.

Illustration to clause (f)

A lessee accepts from his lessor a new lease of the prop erty leased, to take effect during the continuance of the existing lease. This is an implied surrender of the former lease, and such lease determines thereupon.

1Rep., ins. and subs. by Act No. XX of 1929, s. 57.

Section 112. Waiver of forfeiture

A forfeiture under section 111, clause (g), is waived by acceptance of rent which has become due since the forfeiture, or by distress for such rent, or by any other act on the part of the lessor showing an intention to treat the lease as subsisting:

Provided that the lessor is aware that the forfeiture has been incurred:

Provided also that, where rent is accepted after the institution of a suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver.

Section 113. Waiver of notice to quit

A notice given under section 111, clause (h), is waived, with the express or implied consent of the person to whom it is given, by any act on the part of the person giving it showing an intention to treat the lease as subsisting. Illustrations

(a) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice expires. B tenders, and A accepts, rent which has become due in respect of the property since the expiration of the notice. The notice is waived.

(b) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice expires, and B remains in possession. A gives to B as lessee a second notice to

quit. The first notice is waived.

Section 114. Relief against forfeiture for nonpayment of rent

Where a lease of immoveable property has determined by forfeiture for nonpayment of rent, and the lessor sues to eject the lessee, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment pass an order relieving the lessee against the forfeiture; and thereu pon the lessee shall hold the property leased as if the forfeiture had not occurred.

[1] Section 114A. Relief against forfeiture in certain other cases

Where a lease of immoveable property has determined by forfeiture for a breach of an express condition which prov ides that on breach thereof the lessor may reenter, no suit for ejectment shall lie unless and until the lessor has served on the lessee a notice in writing__

(a) specifying the particular breach complained of ; and

(b) if the breach is capable of remedy, requiring the lessee to remedy the breach; and the lessee fails, within a reasonable time from the date of the service of the notice, to remedy the breach, if it is capable of remedy. Nothing in this section shall apply to an express condition against the assigning, underletting, parting with the possession, or disposing, of the property leased, or to an express condition relating to forfeiture in case of nonpayment of rent.]

1Ins. by Act No. XX of 1929, s. 58.

Section 115. Effect of surrender and forfeiture on underleases

The surrender, express or implied, of a lease of immoveable property does not prejudice an underlease of the property or any part thereof previously granted by the lessee, on terms and conditions substantially the same (except as regards the amount of rent) as those of the original lease; but, unless the surrender is made for the purpose of obtaining a new lease, the rent payable by, and the contracts binding on, the underlessee shall be respectively payable to and enforceable by the lessor. The forfeiture of such a lease annuls all such underleases except where such forfeiture has been procured by the lessor in fraud of the underlessees, or relief against the forfeiture is granted under section 114.

Section 116. Effect of holding over

If a lessee or underlessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or underlessee, or otherwi se assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section

106. Illustrations

(a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs. 100. The five years expire, but C continues in possession of the house and pays the rent to A. C’s lease is renewed from month to month.

(b) A lets a farm to B f or the life of C. C dies, but B continues in possession with A’s assent. B’s lease is renewed from year to year.

Section 117. Exemption of leases for agricultural purposes

None of the provisions of this Chapter apply to leases for agricultural purposes, except in so far as the 1[Provincial Government] 2[* * *] may, by notification published in the 1[official Gazette], declare all or any of such provisions to be so applicable 3[in the case of all or any of such leases], together with, or subject to, those of the local law, if any, for the time being in force. Such notification shall not take effect until the expiry of six months from the date of its publication.

CHAPTER VI

OF EXCHANGES

Section 118. “Exchange” defined

When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an “exchange”. A transfer of property in completion of an exchange can be made only in manner provided for the transfer of such property by sale.

1Subs. by A. O., 1937.

2Rep. by the Devolution Act, 1920 (Act No. XXXVIII of 1920), s. 2 and Sch. I.

3Ins. by Act No. VI of 1904, s. 6.

[1] Section 119. Right of party deprived of thing received in exchange

If any party to an exchange or any person claiming through or under such party is by reason of any defect in the title of the other party deprived of the thing or any part of the thing received by him in exchange, then, unless a contrary intention appears from the terms of the exchange, such other party is liable to him or any person claiming through or under him for loss caused thereby, or at the option of the person so deprived, for the return of the thing transferred, if still in the possession of such other party or his legal representative or a transferee from him without consideration.]

Section 120. Rights and liabilities of parties

Save as otherwise provided in this Chapter, each party has the rights and is subject to the liabilities of a seller as to that which he gives, and has the rights and is subject to the liabilities of a buyer as to that which he takes.

Section 121. Exchange of money

On an exchange of money, each party thereby warrants the genuineness of the money given by him.

CHAPTER VII

OF GIFTS

Section 122. “Gift” defined

“Gift” is the transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. Acceptance when to be made. Such acceptance must be made during the lifetime of the donor and while he is still capable of giving. If the donee dies before acceptance, the gift is void.

Section 124. Gift of existing and future property

A gift comprising both existing and future property is void as to the latter.

Section 125. Gift to several of whom one does not accept

A gift of a thing to two or more donees, of whom one does not accept it, is void as to the interest which he would have taken had he accepted.

1Subs. by Act No. XX of 1929, s. 59.

2As to limitation to the territorial operation of s. 123, see s. 1, supra. S. 123 extends to every cantonment in the Provinces, etc.__ see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924).

Section 126. When gift may be suspended or revoked

The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part, at the mere will of the donor, is void wholly or in part, as the case may be. A gift may also be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded. Save as aforesaid a gift cannot be revoked. Nothing contained in this se ction shall be deemed to affect the rights of transferees for consideration without notice. Illustrations

(a) A gives a field to B, reserving to himself, with B's assent, the right to take back the field in case B and his descendants die before A. B dies without descendants in A’s lifetime. A may take back the field.

(b) A gives a lakh of rupees to B, reserving to himself, with B’s assent, the right to take back at pleasure Rs. 10,000 out of the lakh. The gift holds good as to Rs. 90,000, but is void as to Rs. 10,000, which continue to belong to A.

Section 127. Onerous gift

Where a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not, burden by an obligation, the donee can take nothing by the gift unless he accepts it fully. Where a gift is in the form of two or more separate and independent transfers to the same person of several things, the donee is at liberty to accept one of them and refuse the others, although the former may be beneficial and the latter onerous. Onerous gift to disqualified person. A donee not co mpetent to contract and accepting property burdened by any obligation is not bound by his acceptance. But if, after becoming competent to contract and being aware of the obligation, he retains the property given, he becomes so bound. Illustrations

(a) A has shares in, X, a prosperous joint stock company, and also shares in Y, a joint stock company, in difficulties. Heavy calls are expected in respect of the shares in Y. A gives B all his shares in joint stock companies. B refuses to accept the shares in Y. He cannot take the shares in X.

(b) A having a lease for a term of years of a house at a rent which he and his representatives are bound to pay during the term, and which is more than the house can be let for, gives to B the lease, and also, as a separate and independent transaction, a sum of money. B refuses to accept the lease. He does not by this refusal forfeit the money.

Section 128. Universal donee

Subject to the provisions of section 127, where a gift consists of the donor’s whole property, the donee is personally liable for all the debts due by l[and liabilities of] the donor at the time of the gift to the extent of the property comprised therein.

Section 129. Saving of donations mortis casua and Muslim law

Nothing in this Chapter relates to gifts of moveable property made in contemplation of death, or shall be deemed to affect any rule of 2[Muslim] law 1[* * *]. 3[CHAPTER VIII

OF TRANSFERS OF ACTIONABLE CLAIMS

Section 130. Transfer of actionable claim

(1) The transfer of an actionable claim 1[whether with or without consideration] shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorized agent, 1[* * *] shall be complete and effectual upon the execution of such instrument, and thereupon all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter

provided be given or not:

Provided that every dealing with the debt or other actionable claim by the debtor or other person from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or other actionable claim, shall (save where the debtor or other person is a party to the transfer or has received express notice thereof as hereinafter provided) be valid as against such transfer.

(2) The transferee of an actionable claim may, upon the execution of such instrument of transfer as aforesaid, sue or institute proceedings for the same in his own name without obtaining the transferor’s consent to such suit or proceedings and without making him a party thereto. Exception.__ Nothing in this section applies to the transfer of a marine or fire policy of insurance 1[or affects the provisions of section 38 of the Insurance Act, 1938(IV of 1938)]. Illustrations

(i) A owes money to B, who transfers the debt to C. B then demands the debt from A, who, not having received notice of the transfer, as prescribed in section 131, pays B. The payment is valid, and C cannot sue A for the debt.

(ii) A effects a policy on his own life with an Insurance Company and assigns it to a Bank for securing the payment of an existing or future debt. If A dies, the Bank is entitled to receive the amount of the policy and to sue on it without the concurrence of A’s executor, subject to the proviso in subsection (1) of section 130 and to the provisions of section 132.

1Ins. and rep. by Act No. XX of 1929, ss. 60-62.

2Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.

3Subs. by Act No. II of 1900, s. 4.

4Added by the Insurance Act, 1938 (Act No. IV of 1938), s. 121.

I30A. 1[* * * * * * *]

Section 131. Notice to be in writing, signed

Every notice of transfer of an actionable claim shall be in writing, signed by the transferor or his agent duly authorised in this behalf, or, in case the transferor refuses to sign, by the transferee or his agent, and shall state the name and address of the transferee.

Section 132. Liability of transferee of actionable claim

The transferee of an actionable claim shall take it subject to all the liabilities and equities to which the transferor was subject in respect thereof at the date of the transfer.

Illustrations

(i) A transfers to C a debt due to him by B, A being then i ndebted to B. C sues B for the debt due by B to A. In such suit B is entitled to set off the debt due by A to him; although C was unaware of it at the date of such transfer.

(ii) A executed a bond in favour of B under circumstances entitling the former to have it delivered up and cancelled. B assigns the bond to C for value and without notice of such circumstances. C cannot enforce the bond against A.

Section 133. Warranty of solvency of debtor

Where the transferor of a debt warrants the solvency of the debtor, the warranty, in the absence of a contract to the contrary, applies only to his solvency at the time of the transfer, and is limited, where the transfer is made for consideration, to the amount or value of such consideration.

Section 134. Mortgaged debt

Where a debt is transferred for the purpose of securing an existing or future debt, the debt so transferred, if received by the transferor or recovered by the transferee, is applicable, first, in payment of the costs of such recovery: secondly, in or towards satisfaction of the amount for the time being secured by the transfer; and the residue, if any, belongs to the transferor or other person entitled to receive the same.

[2] Section 135. Assignment of ri ghts under policy of insurance against fire

Every assignee by endorsement or other writing, of a policy of insurance against fire, in whom the property in the subject insured shall be absolutely vested at the date of the assignment, shall have transferred and vested in him all rights of suit as if the contract contained in the policy had been made with himself.]

Section 135A. [Repealed]

1[* * * * * * *]

Section 136. Incapacity of officers connected with Courts of Justice

No Judge, legal practitioner or officer connected with any Court of Justice shall buy or traffic in, or stipulate for, or agree to receive any share of, or interest in, any actionable claim, and no Court of Justice shall enforce, at his instance, or at the instance of any person claiming by or t hrough him, any actionable claims, so dealt with by him as aforesaid.

Section 137. Saving of negotiable instruments, etc

Nothing in the foregoing sections of this Chapter applies to stocks, shares or debentures, or to instruments which are for the time being, by law or custom, negotiable, or to any mercantile document of title to goods.

Explanation.__ The expression “mercantile document of title to goods” includes a bill of lading, dockwarrant, warehousekeeper’s certificate, railway receipt, warrant or order for the delivery of goods, and any other document used in the ordinary course of business as p roof of the possession or control of goods, or authorizing or purporting to authorize, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented.] ___________

1Repealed by the Marine Insurance Act, 2018 (Act No. V of 2018), s. 92.

2Subs. by Act No. VI of 1944, s. 3.

THE SCHEDULE

Year and chapter Subject Extent of repeal

(a) STATUTES 27 Hen. VIII, c.10 Uses The whole. 13 Eliz., c.5 Fraudulent conveyances The whole. 27 Eliz., c.4 Fraudulent conveyances The whole. 4 Wm. and Mary, c.16 Clandestine mortgages The whole.

(b) ACTS OF THE GOVERNOR GENERAL IN COUNCIL 1[* *] 1[* *] 1[* *] 1[* *] 1[* *] 1[* *] XI of 1855

Mesne profits and improvements.

Section 1; in the title, the words “to mesne profits and,” and in the preamble “to limit the liability for mesne profits and”. XXVII of 1866 2[*] Trustee Act Section 31. IV of 1872 Punjab Laws Act So far as it relates to Bengal Regulations I of 1798 and XVII of 1806. 2[* *] 2[* *] 2[* *] 2[* *] 2[* *] 2[* *] I of 1877 Specific Relief . . In sections 35 and 36, the words “in writing”. 3[* *]

________

5626363 Date: 21-01-2025

1Omitted by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch. (with effect from the 14th October, 1955).

2Repealed by the Federal Laws (Revision and Declaration) Act, 1951 (Act No. XXVI of 1951), s. 3 and 2nd Sch.

3Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (Ordinance No. XXVII of 1981), s. 3 and 2nd Sch.

Print contents from the source

CONTENTS
CHAPTER I
PRELIMINARY
1. Short title
Commencement
Extent
2. Repeal of Acts
Saving of certain enactments, incidents, rights, liabilities, etc.
3. Interpretation clause
4. Enactments relating to contracts to be taken as part of Contract Act
CHAPTER II
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
(A)Transfer of property, whether moveable or immoveable
5. "Transfer of property" defined
6. What may be transferred
7. Persons competent to transfer
8. Operation of transfer
9. Oral transfer
10. Condition restraining alienation
11. Restriction repugnant to interest created
12. Condition making interest determinable on insolvency or attempted alienation
13. Transfer for benefit of unborn person

Page 2 of 56

14. Rule against perpetuity
15. Transfer to class some of whom come under sections 13 and 14
16. Transfer to take effect on failure of prior interest
17. Direction for accumulation
18. Transfer in perpetuity for benefit of public
19. Vested interest
20. When unborn person acquires vested interest on transfer for his benefit
21. Contingent interest
22. Transfer to members of a class who attain a particular age
23. Transfer contingent on happening of specified uncertain event
24. Transfer to such of certain persons as survive at some period not specified
25. Conditional transfer
26. Fulfilment of condition precedent
27. Conditional transfer to one person coupled with transfer to another on failure of prior
disposition
28. Ulterior transfer conditional on happening or not happening of specified event
29. Fulfilment of condition subsequent
30. Prior disposition not affected by invalidity of ulterior disposition
31. Condition that transfer shall cease to have effect in case specified uncertain event happens or
does not happen
32. Such condition must not be invalid
33. Transfer conditional on performance of act, no time being specified for performance
34. Transfer conditional on performance of act, time being specified
Election
35. Election when necessary
Apportionment
36. Apportionment of periodical payments on determination of interest of person entitled
37. Apportionment of benefit of obligation on severance

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(B) Transfer of Immoveable Property
38. Transfer by person authorized only under certain circumstances to transfer
39. Transfer where third person is entitled to maintenance
40. Burden of obligation imposing restriction on use of land, or of obligation annexed to ownership
but not amounting to interest or easement
41. Transfer by ostensible owner
42. Transfer by person having authority to revoke former transfer
43. Transfer by unauthorized person who subsequently acquires interest in property transferred
44. Transfer by one coowner
45. Joint transfer for consideration
46. Transfer for consideration by persons having distinct interests
47. Transfer by coowner of share in common property
48. Priority of rights created by transfer
49. Transferee's right under policy
50. Rent bona-fide paid to holder under defective title
51. Improvements made by bona fide holders under defective titles
52. Transfer of property pending suit relating thereto
53. Fradulent transfer
53A. Part performance
CHAPTER III
OF SALES OF IMMOVEABLE PROPERTY
54. "Sale" defined
Sale how made
Contract for sale
55. Rights and liabilities of buyer and seller
56. Marshalling by subsequent purchaser
Discharge of Incumbrances on sale
57. Provision by court for incumbrance and sale freed therefrom

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CHAPTER IV
OF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES
58. "Mortgage," "mortgagor," "mortgagee," "mortgagemoney" and "mortgagedeed" defined
Simple mortgage
Mortgage by conditional sale
Usufructuary mortgage
English mortgage
Mortgage by deposit of titledeeds
Anomalous mortgage
59. Mortgage when to be by assurance
59A. References to mortgagors and mortgagees to include persons deriving title from them
Rights and Liabilities of Mortgagor
60. Right of mortgagor to redeem
Redemption of portion of mortgaged property
60A. Obligation to transfer to third party instead of retransference to Mortgagor
60B. Right to inspection and production of documents
61. Right to redeem separately or simultaneously
62. Right of usufructuary mortgagor to recover possession
63. Accession to mortgaged property
Accession acquired in virtue of transferred ownership
63A. Improvements to mortgaged property
64. Renewal of mortgaged lease
65. Implied contracts by mortgagor
65A. Mortgagor's power to lease
66. Waste by mortgagor in possession
Rights and Liabilities of Mortgagee
67. Right to foreclosure or sale
67A. Mortgagee when bound to bring one suit on several mortgages
68. Right to sue for mortgagemoney
69. Power of sale when valid.
69A Appointment of receiver

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70. Accession to mortgaged property
71. Renewal of mortgaged lease
72. Rights of mortgagee in possession
73. Right to proceeds of revenue sale or compensation on acquisition
7475. [Repealed]
76. Liabilities of mortgagee in possession
Loss occasioned by his default
77. Receipts in lieu of interest
Priority
78. Postponement of prior mortgagee
79. Mortgage to secure uncertain amount when maximum is expressed
80. [Repealed]
Marshalling and Contribution
81. Marshalling securities
82. Contribution to mortgagedebt
Deposit in Court
83 Power to deposit in Court money due on mortgage
Right to money deposited by mortgagor
84. Cessation of interest
85-90. [Repealed]
Redemption
91. Persons who may sue for redemption
92. Subrogation
93. Prohibition of tacking
94. Rights of mesne mortgagee
95. Right of redeeming comortgagor to expenses
96. Mortgage by deposit of titledeeds
97. [Repealed]

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Anomalous Mortgages
98. Rights and liabilities of parties to anomalous mortgages
99. [Repealed]
Charges
100. Charges
101. No merger in case of subsequent encumbrance
Notice and Tender
102. Service or tender on or to agent
103. Notice, etc., to or by person incompetent to contract
104. Power to make rules
CHAPTER V
OF LEASES OF IMMOVEABLE PROPERTY
105. Lease defined
Lessor, lessee, premium and rent defined
106. Duration of certain leases in absence of written contract or local usage
107. Leases how made
108. Rights and liabilities of lessor and lessee
109. Rights of lessors’ transferee
110. Exclusion of day on which term commences
Duration of lease for year
Option to determine lease
111. Determination of lease
112. Waiver of forfeiture
113. Waiver of notice to quit
114. Relief against forfeiture for nonpayment of rent
114A. Relief against forfeiture in certain other cases
115. Effect of surrender and forfeiture on underleases
116. Effect of holding over
117. Exemption of leases for agricultural purposes

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CHAPTER VI
OF EXCHANGES
118. "Exchange" defined
119. Right of party deprived of thing received in exchange
120. Rights and liabilities of parties

121. Exchange of money
CHAPTER VII
OF GIFTS
122. "Gift" defined
Acceptance when to be made
123. Transfer how effected
124. Gift of existing and future property
125. Gift to several of whom one does not accept
126. When gift may be suspended or revoked
127. Onerous gift
Onerous gift to disqualified person
128. Universal done

129. Saving of donations mortis casua and Muslim law

CHAPTER VIII
OF TRANSFERS OF ACTIONABLE CLAIMS

130. Transfer of actionable claim
130A. [Repealed]
131. Notice to be in writing, signed
132. Liability of transferee of actionable claim
133. Warranty of solvency of debtor
134. Mortgaged debt
135. Assignment of rights under policy of insurance against fire
135A. [Repealed]
136. Incapacity of officers connected with Courts of Justice
137. Saving of negotiable instruments, etc.

Compare the original stored transcription

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THE TRANSFER OF PROPERTY ACT, 1882

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CHAPTER VI
OF EXCHANGES
118. "Exchange" defined
119. Right of party deprived of thing received in exchange
120. Rights and liabilities of parties

129. Saving of donations mortis casua and Muslim law

CHAPTER VIII
OF TRANSFERS OF ACTIONABLE CLAIMS

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THE TRANSFER OF PROPERTY ACT, 1882
1ACT No. IV OF 1882
[17th February, 1882]
An Act to amend the law relating to the Transfer of Property by act of Parties.
Preamble. WHEREAS it is expedient to define and amend certain parts of the law relating to
the transfer of property by act of parties; It is hereby enacted as follows:__

CHAPTER I

PRELIMINARY
1. Short title.—This Act may be called the Transfer of Property Act, 1882.
Commencement. It shall come into force on the first day of July, 1882.
2[* * * * * * *]
Extent. 3[ 2[This] Act or any Part thereof may by notification in the official Gazette be
extended to the whole or any part of 2[a Province] 4[by the Provincial Government]].
5[And any 6[Provincial Government] may, 7[* * * ] from time to time, by notification in the
6[official Gazette], exempt either retrospectively or prospectively, any part of the territories
administered by such 5[Provincial Government] from all or any of the following provisions, namely:__
Sections 54, paragraphs 2 and 3, 59, 107 and 123.]

1This Act has been extended with effect from 1st January, 1915, to the Province of Sindh, see Bom. R. & O.
Ss. 54, 107 and 123 have been extended from 6th May, 1935, to all Municipalities in the Punjab and all notified areas declared and notified under s. 241
of the Punjab Municipal Act, 1911, see Punjab Gazette Extraordinary, 1925, p. 27.
S. 54, paras, 2 and 3, and ss. 59, 107 and 123 extend to every cantonment in the Provinces, etc., see s. 287 of the Cantonments Act. 1924 (Act No. II of
1924). It has been rep. as to Crown Grants by the Crown Grants Act, 1895 (Act No. XV of 1895), and amended in Sind by Sind Act No. XIV of 1939,
s.2.
This Act shall be deemed to have been amended in its application to the Province of Sind, see Sind Act No. XIV of 1939.
The Act has been extended, in respect of nonagricultural lands, to Baluchistan States Union and the Khairpur State by G.G.Os. 4 and 5 of 1953, as
amended respectively.
The Act has been and shall be deemed to have been brought into force in Gwadur with effect from the 8th Septemter, 1958, by the Gwadur (Application
of Central Laws) Ordinance, 1960 (Ordinance No. XXXVII of 1960), s. 2.
The Act, as in force in the NorthWest Frontier Province immediately before the commencement of N.W.F.P. Regulation No. 2 of 1974, has been
applied to the Provincially Administered Tribal Areas of Chitral, Dir, Kalam, Swat and Malakand protected Area, by N.W.F.P. Regulation, No. 2 of
1974, s. 3.
2Omitted and subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Sch.
3Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch.
4Subs. by A. O., 1964, Art. 2 and Sch.
5Subs. by Act No. III of 1885, s. 1.
6Subs. by A. O., 1937.
7Rep. by the Devolution Act, 1920 (Act No. XXXVIII of 1920), s. 2 and Sch. 1.

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1[Notwithstanding anything in the foregoing part of this section, sections 54, paragraphs 2 and
3, 59, 107 and 123 shall not extend or be extended to any district or tract of country for the time being
excluded from the operation of the Registration Act, 2[1908(XVI of 1908)], under the power conferred
by the first section of that Act or otherwise.]
2. Repeal of Acts. Saving of certain enactments, incidents, rights, liabilitie s, etc.—In the
territories to which this Act extends for the time being the enactments specified in the schedule hereto
annexed shall be repealed to the extent therein mentioned. But nothing herein contained shall be
deemed to affect__
(a) the provisions of any enactment not hereby expressly repealed :
(b) any terms or incidents of any contract or constitution of property which are
consistent with the provisions of this Act, and are allowed by the law for the
time being in force:
(c) any right or liability arising out of a legal relation constituted before this Act
comes into force, or any relief in respect of any such right or liability: or
(d) save as provided by section 57 and Chapter IV of this Act, any transfer by
operation of law or by, or in execution of, a decree or order of a Court of
competent jurisdiction:
and nothing in the second chapter of this Act shall be deemed to affect any rule of 3[*],
4[Muslim] 3[* *]law.
3. Interpretation clause.—In this Act, unless there is something repugnant in the subject or
context,__
“immoveable property” does not include standing timber, growing crops or grass:
“instrument” means a nontestamentary instrument :
5[“attested”, in relation to an instrument, means 6[and shall be deemed always to hav e meant]
attested by two or more witnesses each of whom has seen the executant sign or affix his mark
to the instrument, or has seen some other person sign the instrument in the presence and by the
direction of the executant, or has received from the execu tant a personal acknowledgement or
his signature or mark, or of the signature of such other person, and each of whom has signed
the instrument in the presence of the executant; but it shall not be necessary that more than one
of such witnesses shall have been present at the same time, and no particular form of attestation
shall be necessary:]
“registered” means registered in 7[a province] under the law for the time being in force
regulating the registration of documents:

1Ins. by Act No. III of 1885; it is to be deemed to have been added from the date on which Act 4 of 1882 came into force.
2Subs. by Act No. XX of 1929, for 1877.
3Rep. by Act No. XX of 1929, s. 3.
4Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.
5Ins. by Act No. XXVII of 1926, s. 2.
6Ins. by the Repealing and Amending Act, 1927 (Act No. X of 1927), s. 2 and Sch. 1.
7Subs. by A. O., 1949, Sch.

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“attached to the earth” means__
(a) rooted in the earth, as in the case of trees and shrubs ;
(b) imbedded in the earth, as in the case of walls or buildings ; or
(c) attached to what is so imbedded for the permanent beneficial enjoyment of that
to which it is attached:
l[“Actionable claim” means a claim to any debt, other than a debt secured by mortgage of
immoveable property or by hypothecation or pledge of moveable property, or to any beneficial
interest in moveable property not in the possession, either actual or constructive, of the
claimant, which the Civil Courts recognize as affording grounds for relief, whether such debt
or beneficial interest be existent, accruing, conditional or contingent:]
2[“a person is said to have notice” of a fact when he actually knows that fact, or when, but for
wilful abstention from an inquiry or search which he ought to have made, or gross negligence,
he would have known it.
Explanation I.__ Where any transaction relating to immoveable property is required by law to
be and has been effected by a registered instrument, any person acquiring such property or any part of,
or share or interest in, such property shall be deemed to have notice of su ch instrument as from the
date of registration or, 3[where the property is not all situated in one subdistrict, or where the registered
instrument has been registered under subsection (2) of section 30 of the Registration Act, 1908 (XVI
of 1908), from the earliest date on which any memorandum of such registered instrument has been
filed by any SubRegistrar within whose subdistrict any part of the property which is being acquired,
or of the property wherein a share or interest is being acquired, is situated] :
Provided that__
(1) the instrument has been registered and its registration completed in the manner prescribed
by the Registration Act, 1908(XVI of 1908), and the rules made thereunder,
(2) the instrument 3[or memorandum] has been duly entered or filed, as the case may be, in
books kept under section 51 of that Act, and
(3) the particulars regarding the transaction to which the instrument relates have been correctly
entered in the indexes kept under section 55 of that Act.
Explanation II.__ Any person acquiring any immoveable property or any share or interest in any
such property shall be deemed to have notice of the title, if any, of any person who is for the time being
in actual possession thereof.
Explanation III.__ A person shall be deemed to have had notice of any fact if his agent acquires
notice thereof whilst acting on his behalf in the course of business to which that fact is material:
Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with
notice thereof as against any person who was a party to or otherwise cognizant of the fraud.]

1Ins. by Act No. II of 1900, s. 2.
2Subs. by Act No. XX of 1929, s. 4.
3Ins. by Act No. V of 1930, s. 2.

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4. Enactments relating to contracts to be taken as part of Contract Act. — The chapters and
sections of this Act which relate to contracts shall be taken as part of the Contract Act, 1872 (IX of 1872).
1[And sections, 54 paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the
Registration Act, 2[1908 (XVI of 1908)].]

CHAPTER II

OF TRANSFERS OF PROPERTY BY ACT OF PARTIES

(A) Transfer of Property, whether moveable or immoveable
5. “Transfer of property” defined. — In the following sections “transfer of property” means an
act by which a living person conveys property, in present or in future, to one or more other living persons,
or to himself,
2[or to himself] and one or more other living persons; and “to transfer property” is to perform such
act.
2[In this section “living person” includes a company or association or body of individuals, whether
incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to
transfer of property to or by companies, associations or bodies of individuals.]
6. What may be transferred. — Property of any kind may be transferred, except as otherwise
provided by this Act or by any other law for the time being in force.
(a) The chance of an heira pparent succeeding to an estate, the chance of a relation
obtaining a legacy on the death of a kinsman, or any other mere possibility of a like
nature, cannot be transferred.
(b) A mere right of reentry for breach of a condition subsequent cannot be transferred
to any one except the owner of the property affected thereby.
(c) An easement cannot be transferred apart from the dominant heritage.
(d) An interest in property restricted in its enjoyment to the owner personally cannot
be transferred by him.
2[(dd) A right to future maintenance, in whatsoever manner arising, secured or determined,
cannot be transferred.]
(e) A mere right to sue 3[* * *] cannot be transferred.
(f) A public office cannot be transferred, nor can the salary of a public officer, whether
before or after it has become payable.
(g) Stipends allowed to military 4[, naval], 5[airforce] and civil pensioners of 6[the
Government] and political pensions cannot be transferred.

1Ins. by Act No. III of 1885, s. 3.
2Subs. and ins. by Act No. XX of 1929, ss. 5-7.
3Rep. by Act No. II of 1900, s. 3 (i).
4Ins. by Act No. XXXV of 1934, s. 2 and Sch.
5Ins. by the Repealing and Amending Act, 1927 (Act No. X of 1927), s. 2 and Sch. I.
6Subs. by the Central Laws (Adaptation) Order, 1961 (President’s Order No. 1 of 1961), Art. 2. (with effect from the 23rd March, 1956).

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(h) No transfer can be made (1) in so far as it is opposed to the nature of the interest
affected thereby, or (2) l[for an unlawful object or consideration within the
meaning of section 23 of the contract Act, 1872 (IX of 1872),] or (3) to a person
legally disqualified to be transferee.
2[(i) Nothing in this section shall be deemed to authorize a tenant having an
untransferable right of occupancy, the farmer of an estate in re spect of which
default has been made in paying revenue or the lessee of an estate under the
management of a Court of Wards, to assign his interest as such tenant, farmer
or lessee.]
7. Persons competent to transfer. —Every person competent to contract and e ntitled to
transferable property, or authorized to dispose of transferable property not his own, is competent to
transfer such property either wholly or in part, and either absolutely or conditionally, in the
circumstances, to the extent and in the manner allowed and prescribed by any law for the time being
in force.
8. Operation of transfer.—Unless a different intention is expressed or necessarily implied, a
transfer of property passes forthwith to the transferee all the interest which the transferor is th en
capable of passing in the property, and in the legal incidents thereof.
Such incidents include, where the property is land, the easements annexed thereto, the rents
and profits thereof accruing after the transfer, and all things attached to the earth;
and, where the property is machinery attached to the earth, the moveable parts thereof;
and, where the property is a house, the easements annexed thereto, the rent thereof accruing
after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent
use therewith;
and, where the property is a debt or other actionable claim, the securities therefor (except where
they are also for other debts or claims not transferred to the transferee), but not arrears of interest
accrued before the transfer;
and, where the property is money or other property yielding income, the interest or income
thereof accruing after the transfer takes effect.
9. Oral transfer.—A transfer of property may be made without writing in every case in which
a writing is not expressly required by law.
10. 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: Provided that
property may be transferred to or for the benefit of a woman (not being a Hindu, 3[Muslim] or
Buddhist), so that she shall not have power during her marriage to transfer or charge the same or her
beneficial interest therein.

1Subs. by Act No. II of 1900, s. 3 (ii).
2Ins. by Act No. III of 1885, s. 4.
3Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.

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11. Restriction repugnant to interest created.—Where, on a transfer of property, an interest
therein is created absolutely in favour of any person, but the terms of the transfer direct that such
interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and
dispose of such interest as if there were no such direction.

1[Where any such direction has been made in respect of one piece of immoveable property for
the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this
section shall be deemed to affect any right which the transferor may have to enforce such direction or
any remedy which he may have in respect of a breach thereof.]

12. Condition making interest determinable on insolvency or attempted alienation. —
where property is transferred subject to a condition or limitation making any interest therein, reserved
or given to or for the benefit of any person, to cease on his becoming insolvent or endeavouring to
transfer or dispose of the same, such condition or limitation is void.

Nothing in this section applies to a condition in a lease for the benefit of the lessor or those
claiming under him.

13. Transfer for benefit of unborn person. —Where, on a transfer of property, an interest
therein is created for the b enefit of a person not in existence at the date of the transfer, subject to a
prior interest created by the same transfer, the interest created for the benefit of such person shall not
take effect, unless it extends to the whole of the remaining interest of the transferor in the property.

Illustration

A transfers property of which he is the owner to B in trust for A and his intended wife
successively for their lives, and, after the death of the survivor, for the eldest son of the intended
marriage for life, and after his death for A’s second son. The interest so created for the benefit of the
eldest son does not take effect, because it does not extend to the whole of A’s remaining interest in the
property.

14. Rule against perpetuity.— No transfer of property can operate to create an interest which
is to take effect after the lifetime of one or more persons living at the date of such transfer, and the
minority of some person who shall be in existence at the expiration of that period, and to whom, if he
attains full age, the interest created is to belong.

15. Transfer to class some of whom come under sections 13 and 14. — If, on a transfer of
property, an interest therein is created for the benefit of a class of persons with regard to some of whom
such interest fails by reason of any of the rules contained in sections 13 and 14, such interest fails 1[in
regard to those persons only and not in regard to the whole class].

1[16. Transfer to take effect on failure of prior interest. — Where, by reason of any of the
rules contained in sections 13 and 14, an interest created for the benefit of a person or of a class of
persons fails in regard to such person or the whole of such class, any interest created in the same
transaction and intended to take effect after or upon failure of such prior interest also fails.

17. Direction for accumulation.— (1) Where the terms of a transfer of property direct that the
income arising from the property shall be accumulated either wholly or in part during a period longer
than__

(a) the life of the transferor, or

(b) a period of eighteen years from the date of the transfer,

such direction shall, save as hereinafter provided, be void to the extent to which the period during
which the accumulation is directed exceeds the longer of the aforesaid periods, and at the end of such
lastmentioned period the property and the income thereof shall be disposed of as if the period during
which the accumulation has been directed to be made had elapsed.

1Subs. by Act No. XX of 1929, ss. 8-10.

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(2) This section shall not affect any direction for accumulation for the purpose of__
(i) the payment of the debts of the transferor or any other person taking any interest
under the transfer, or
(ii) the provision of portions for children or remoter issue of the transferor or of any
other person taking any interest under the transfer, or
(iii) the preservation or maintenance of the property transferred; and such direction
may be made accordingly.
18. Transfer in perpetuity for benefit of public.— The restrictions in sections 14, 16 and 17
shall not apply in the case of a transfer of property for the benefit of the public in the advancement of
religion, knowledge, commerce, health, safety, or any other object beneficial to mankind.]
19. Vested interest.—Where, on a transfer of property, an interest therein is created in favour
of a person without specifying the time when it is to take effect, or in terms specifying that it is to take
effect forthwith or on the happening of an event which must happen , such interest is vested, unless a
contrary intention appears from the terms of the transfer.
A vested interest is not defeated by the death of the transferee before he obtains possession.
Explanation.__ An intention that an interest shall not be vested is not to be inferred merely from
a provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same
property is given or reserved to some other person, or whereby income arising from the property is
directed to be accumulated until the time of enjoyment arrives, or from a provision that if a particular
event shall happen the interest shall pass to another person.
20. When unborn person acquires vested interest on transfer for his benefit. —Where, on
a transfer of property, an int erest therein is created for the benefit of a person not then living, he
acquires upon his birth, unless a contrary intention appear from the terms of the transfer, a vested
interest, although he may not be entitled to the enjoyment thereof immediately on his birth.
21. Contingent interest.—Where, on a transfer of property, an interest therein is created in
favour of a person to take effect only on the happening of a specified uncertain event, or if a specified
uncertain event shall not happen, such person thereby acquires a contingent interest in the property.
Such interest becomes a vested interest, in the former case, on the happening of the event, in the latter,
when the happening of the event becomes impossible.
Exception.__Where, under a transfer of property, a person becomes entitled to an interest therein
upon attaining a particular age, and the transferor also gives to him absolutely the income to arise from
such interest before he reaches that age, or directs the income or so much thereof as may be necessary
to be applied for his benefit, such interest is not contingent.
22. Transfer to members of a class who attain a particular age. —Where, on a transfer of
property, an interest therein is created in favour of such members only of a class as shall attain a
particular age, such interest does not vest in any member of the class who has not attained that age.

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23. Transfer contingent on happening of specified uncertain event.—Where, on a transfer
of property, an interest therein is to accrue to a specified person if a specified uncertain event shall
happen, and no time is mentioned for the occurrence of that event, the interest fails unle ss such event
happens before, or at the same time as, the intermediate or precedent interest ceases to exist.
24. Transfer to such of certain persons as survive at some period not specified. —Where,
on a transfer of property, an interest therein is to accrue to such of certain persons as shall be surviving
at some period, but the exact period is not specified, the interest shall go to such of them as shall be
alive when the intermediate or precedent interest ceases to exist, unless a contrary intention appea rs
from the terms of the transfer.
Illustration
A transfers property to B for life, and after his death to C and D, equally to be divided between
them, or to the survivor of them. C dies during the life of B. D survives B. At B’s death the property
passes to D.
25. Conditional transfer.—An interest created on a transfer of property and dependent upon
a condition fails if the fulfilment of the condition is impossible, or is forbidden by law, or is of such a
nature that, if permitted, it would defeat the provisions of any law, or is fraudulent, or involves or implies
injury to the person or property of another, or the Court regards it as immoral or opposed to public
policy.
Illustrations
(a) A lets a farm to B on condition that he shall walk a hundred miles in an hour.
The lease is void.
(b) A gives Rs. 500 to B on condition that he shall marry A’s daughter C. At the
date of the transfer C was dead. The transfer is void.
(c) A transfers Rs. 500 to B on condition that she shall murder C. The tran sfer is
void.
(d) A transfers Rs. 500 to his niece C if she will desert her husband. The transfer is
void.
26. Fulfilment of condition precedent.—Where the terms of a transfer of property impose a
condition to be fulfilled before a person can take an inter est in the property, the condition shall be
deemed to have been fulfilled if it has been substantially complied with.
Illustrations
(a) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of
C, D and E. E dies. B marries with the consent of C and D. B is deemed to have
fulfilled the condition.
(b) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of
C, D and E. B marries without the consent of C, D and E, but obtains their
consent after the marriage. B has not fulfilled the condition.

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27. Conditional transfer to one person coupled with transfer to another on failure of prior
disposition.— Where, on a transfer of property, an interest therein is created in favour of one person,
and by the same transaction an ulterior disposition of the same interest is made in favour of another, if
the prior disposition under the transfer shall fail, the ulterior disposition shall take effect upon the
failure of the prior disposition, although the failure may not have occurred in the manner contemplated
by the transferor.
But, where the intention of the parties to the transaction is that the ult erior disposition shall
take effect only in the event of the prior disposition failing in a particular manner, the ulterior
disposition shall not take effect unless the prior disposition fails in that manner.
Illustrations
(a) A transfers Rs. 500 to B on condition that he shall execute a certain lease within
three months after A’s death, and, if he should neglect to do so, to C. B dies in
A’s lifetime. The disposition in favour of C takes effect.
(b) A transfers property to his wife; but, in case she shou ld die in his lifetime,
transfers to B that which he had transferred to her. A and his wife perish
together, under circumstances which make it impossible to prove that she died
before him. The disposition in favour of B does not take effect.
28. Ulterior transfer conditional on happening or not happening of specified event.— On
a transfer of property an interest therein may be created to accrue to any person with the condition
superadded that in case a specified uncertain event shall happen such interest s hall pass to another
person, or that in case a specified uncertain event shall not happen such interest shall pass to another
person. In each case the dispositions are subject to the rules contained in sections 10, 12, 21, 22, 23,
24, 25 and 27.
29. Fulfilment of condition subsequent. —An ulterior disposition of the kind contemplated
by the last preceding section cannot take effect unless the condition is strictly fulfilled.
Illustration
A transfers Rs. 500 to B, to be paid to him on his attaining his majority or marrying, with a
proviso that, if B dies a minor or marries without C’s consent, the Rs. 500 shall go to D. B marries
when only 17 years of age, without C’s consent. The transfer to D takes effect.
30. Prior disposition not affected by inva lidity of ulterior disposition. —If the ulterior
disposition is not valid, the prior disposition is not affected by it.
Illustration
A transfers a farm to B for her life, and, if she do not desert her husband, to C. B is entitled to
the farm during her life as if no condition had been inserted.
31. Condition that transfer shall cease to have effect in case specified uncertain event
happens or does not happen.— Subject to the provisions of section 12, on a transfer of property an
interest therein may be created with the condition superadded that it shall cease to exist in case a
specified uncertain event shall happen, or in case a specified uncertain event shall not happen.

Page 17 of 56

Illustrations
(a) A transfers a farm to B for his life, with a proviso that, in case B cuts down a
certain wood, the transfer shall cease to have any effect. B cuts down the wood.
He loses his lifeinterest in the farm.
(b) A transfers a farm to B, provided that, if B shall not go to England within three
years after the date of the transfer, his interest in the farm shall cease. B does
not go to England within the term prescribed. His interest in the farm ceases.
32. Such condition must not be invalid.— In order that a condition that an interest shall cease
to exist may be valid, it is necessary that the event to which it relates be one which could legally
constitute the condition of the creation of an interest.
33. Transfer conditional on per formance of act, no time being specified for
performance.— Where, on a transfer of property, an interest therein is created subject to a condition
that the person taking it shall perform a certain act, but no time is specified for the performance of the
act, the condition is broken when he renders impossible, permanently or for an indefinite period, the
performance of the act.
34. Transfer conditional on performance of act, time being specified. —Where an act is to
be performed by a person either as a condition to be fulfilled before an interest created on a transfer of
property is enjoyed by him, or as a condition on the nonfulfilment of which the interest is to pass from
him to another person, a nd a time is specified for the performance of the act, if such performance
within the specified time is prevented by the fraud of a person who would be directly benefited by
nonfulfilment of the condition, such further time shall as against him be allowed for performing the
act as shall be requisite to make up for the delay caused by such fraud. But if no time is specified for
the performance of the act, then, if its performance is by the fraud of a person interested in the
nonfulfilment of the condition rendered impossible or indefinitely postponed, the condition shall as
against him be deemed to have been fulfilled.
Election
35. Election when necessary. —Where a person professes to transfer property which he has
no right to transfer, and as part of the same transaction confers any benefit on the owner of the property,
such owner must elect either to confirm such transfer or to dissent from it; and in the latter case he
shall relinquish the benefit so conferred, and the benefit so relinquished shall revert to the transferor
or his representative as if it had not been disposed of,
Subject nevertheless,
where the transfer is gratuitous, and the transferor has, before the election, died or otherwise
become incapable of making a fresh transfer,
and in all cases where the transfer is for consideration,
to the charge of making good to the disappointed transferee the amount or value of the property
attempted to be transferred to him.

Page 18 of 56

Illustrations
The farm of l[Ulipur] is the property of C and worth Rs. 800. A by an instrument of gift
professes to transfer it to B, giving by the same instrument Rs. 1,000 to C. C elects to retain the farm.
He forfeits the gift of Rs. 1,000.
In the same case, A dies before the election. His representative must out of the Rs. 1,000 pay
Rs. 800 to B.
The rule in the first paragraph of this section applies whether the transferor does or does not
believe that which he professes to transfer to be his own.
A person taking no benefit directly under a transaction, but deriving a benefit un der it
indirectly, need not elect.
A person who in his one capacity takes a benefit under the transaction may in another dissent
therefrom.
Exception to the last preceding four rules .__ Where a particular benefit is expressed to be
conferred on the owner of the property which the transferor professes to transfer, and such benefit is
expressed to be in lieu of that property, if such owner claim the property, he must relinquish the
particular benefit, but he is not bound to relinquish any other benefit conferred upon him by the same
transaction.
Acceptance of the benefit by the person on whom it is conferred constitutes an election by him
to confirm the transfer, if he is aware of his duty to elect and of those circumstances which would
influence the judgment of a reasonable man in making an election, or if he waives enquiry into the
circumstances.
Such knowledge or waiver shall, in the absence of evidence to the contrary, be presumed, if the
person on whom the benefit has been conferred has enjoyed it for two years without doing any act to
express dissent.
Such knowledge or waiver may be inferred from any act of his which renders it impossible to
place the persons interested in the property professed to be transferred in the same condition as if such
act had not been done.
Illustration
A transfers to B an estate to which C is entitled, and as part of the same transaction gives C a
coalmine. C takes possession of the mine and exhausts it. He has thereby confirmed the transfer of
the estate to B.
If he does not within one year after the date of the transfer signify to the transferor or his
representatives his intention to confirm or to dissent from the transfer, the transferor or his
representatives may, upon the expiration of that period, require him to make his election; and, if he
does not comply with such requisition within a reasonable time after he has received it, he shall be
deemed to have elected to confirm the transfer.

1Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch. (with effect from the 14th October, 1956).

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In case of disability, the election shall be postponed until the disability ceases, or until the
election is made by some competent authority.
Apportionment
36. Apportionment of periodical payments on determination of interest of person
entitled.— In the absence of a contract or local usage to the contrary, all rents, annuities, pensions,
dividends and other periodical payments in the nature of income shall, upon the transfer of the interest
of the person entitled to receive such payments, be deemed, as between the transferor and the
transferee, to accrue due from day to day, and to be apportionable accordingly, but to be payable on
the days appointed for the payment thereof.
37. Apportionment of benefit of obligation on severance. —When, in consequence of a
transfer, property is divided and held in several shares, and thereupon the benefit of any obligation
relating to the property as a whole passes from one to several owners of the property, the corresponding
duty shall, in the absence of a contract to the contrary amongst the owners, be performed in favour of
each of such owners in proportion to the value of his share in the property, provided that the duty can
be served and that the severance does not substantially increase the burden of the obligation; but if the
duty cannot be severed, or if the severance would substantially increase the burden of the obligation,
the duty shall be performed for the benefit of suc h one of the several owners as they shall jointly
designate for that purpose:
Provided that no person on whom the burden of the obligation lies shall be answerable for
failure to discharge it in manner provided by this section, unless and until he has had reasonable notice
of the severance.
Nothing in this section applies to leases for agricultural purposes unless and until the
l[Provincial Government] by notification in the official Gazette so directs.
Illustrations
(a) A sells to B, C and D a house situat e in a village and leased to E at an annual
rent of Rs. 30 and delivery of one fat sheep, B having provided half the
purchasemoney and C and D onequarter each. E, having notice of this, must
pay Rs. 15 to B, Rs. 71/2 to C, and Rs. 71/2 to D, and must d eliver the sheep
according to the joint direction of B, C and D.
(b) In the same case, each house in the village being bound to provide ten days'
labour each year on a dyke to prevent inundation, E had agreed as a term of his
lease to perform this work for A. B, C and D severally require E to perform the
ten days’ work due on account of the house of each. E is not bound to do more
than ten days’ work in all, according to such directions as B, C and D may join
in giving.
(B)Transfer of Immoveable Property
38. Transfer by person authorized only under certain circumstances to transfer.— Where
any person, authorized only under circumstances in their nature variable to dispose of immoveable
property, transfers such property for consideration, alleging the existence of such circumstances, they

1Subs. by A.O., 1937.

Page 20 of 56

shall, as between the transferee on the one part and the transferor and other persons (if any) affected
by the transfer on the other part, be deemed to have existed, if the transferee, after using reasonable
care to ascertain the existence of such circumstances, has acted in good faith.
Illustration
A, a Hindu widow, whose husband has left collateral heirs, alleging that the property held by
her as such is insufficient for her maintenance, agrees, for purposes neither religious nor charitable, to
sell a field, part of such property, to B. B satisfies himself by reasonable enquiry that the income of
the property is insufficient for A’s maintenance, and that the sale of the field is necessary, and, acting
in good faith, buys the field from A. As between B on the one part and A and the collateral heirs on
the other part, a necessit for the sale shall be deemed to have existed.
39. Transfer where third person is entitled to maintenance. —Where a third person has a
right to receive maintenance, or a provision for advancement or marriage, from the profits of
immoveable property, and such property is transferred 1[* * *], the right may be enforced against the
transferee, if he has notice 1[thereof] or if the transfer is gratuitous; but not against a transferee for
consideration and without notice of the right, nor against such property in his hands.
1[* * * * * * *]
40. Burden of obligation imposing restriction on use of land, or of obligation annexed to
ownership but not amounting to interest or easement.—Where, for the more beneficial enjoyment
of his own immoveable property, a third person has, independently of any interest in the immoveable
property of another or of any easement thereon, a right to restrain the enjoyment 1[in a particular
manner of the latter property], or
Where a third person is entitled to the benefit of an obligation arising out of contract and
annexed to the ownership of immoveable property, but not amounting to an interest therein or easement
thereon,
such right or obligation may be enforced against a transferee with notice thereof or a gratuitous
transferee of the property affected thereby, but not against a transferee for consideration and without
notice of the right or obligation, nor against such property in his hands.
Illustration
A contracts to sell 2[Ulipur] to B. While the contract is still in force he sells 2[Ulipur] to C, who
has notice of the contract. B may enforce the contract against C to the same extent as against A.
41. Transfer by ostensible owner. —Where, with the consent, express or implied, of the
persons interested in immoveable property, a person is the ostensible owner of such property and
transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor
was not authorized to make it: provided that the transferee, after taking reasonable care to ascertain
that the transferor had power to make the transfer, has acted in good faith.

1Rep. and subs. by Act No. XX of 1929, ss. 11-12.
2Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s.3 and 2nd Sch. (with effect from the 14th October, 1956).

Page 21 of 56

42. Transfer by person having authority to revoke former transfer. —Where a person
transfers any immoveable property reserving power to revoke the transfer, and subsequently transfers
the property for consideration to another transferee, such transfer operates in favour of such transferee
(subject to any condition attached to the exercise of the power) as a revocation of the former transfer
to the extent of the power.
Illustration
A lets a house to B, and reserves power to revoke the lease if, in the opinion of a specified
surveyor, B should make a use of it detrimental to its value. Afterwards A, thinking that such a use has
been made, lets the house to C. This operates as a revocation of B’s lease subject to the opinion of the
surveyor as to B’s use of the house having been detrimental to its value.
43. Transfer by unauthorized person who subsequently acquires interest in property
transferred.—Where a person 1[fraudulently or] erroneously represents that he is authorized to
transfer certain immoveable property and professes to transfer such property for consi deration, such
transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire
in such property at any time during which the contract of transfer subsists.
Nothing in this section shall impair the right of transfer ees in good faith for consideration
without notice of the existence of the said option.
Illustration
A, a Hindu, who has separated from his father B, sells to C three fields, X, Y and Z, representing
that A is authorized to transfer the same. Of these fields Z does not belong to A, it having been retained
by B on the partition; but on B’s dying A as heir obtains Z. C, not having rescinded the contract of
sale, may require A to deliver Z to him.
44. Transfer by one coowner. — Where one of two or more coowners of immoveable
property legally competent in that behalf transfers his share of such property or an y interest therein,
the transferee acquires, as to such share or interest, and so far as is necessary to give effect to the
transfer, the transferor’s right to joint possession or other common or part enjoyment of the property,
and to enforce a partition of the same, but subject to the conditions and liabilities affecting, at the date
of the transfer, the share or interest so transferred.
Where the transferee of a share of a dwellinghouse belonging to an undivided family is not a
member of the family, nothing in this section shall be deemed to entitle him to joint possession or other
common or part enjoyment of the house.
45. Joint transfer for consideration. —Where immoveable property is transferred for
consideration to two or more persons, and such consi deration is paid out of a fund belonging to them
in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in
such property identical, as nearly as may be, with the interests to which they were respectively entitled
in the fund; and, where such consideration is paid out of separate funds belonging to them respectively,
they are, in the absence of a contract to the contrary, respectively entitled to interest in such property
in proportion to the shares of the consideration which they respectively advanced.

1Ins. by Act No. XX of 1929, s. 13.

Page 22 of 56

In the absence of evidence as to the interests in the fund to which they were respectively
entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be
equally interested in the property.
46. Transfer for consideration by persons having distinct interests. —Where immoveable
property is transferred for consideration by persons having distinct interests therein, the transferors
are, in the absence of a contract to the contrary, entitled to share in the consideration equally, where
their interest in the property were of equal value, and, where such interests were of unequal value,
proportionately to the value of their respective interests.
Illustrations
(a) A, owning a moiety, and B and C each a quarter share, of mauza 1[Ulipur],
exchange an eighth share of that mauza for a quarter share of mauza
1[Mithapukur]. There being no agreement to the contrary, A is entitled to an
eighth share in 1[Mithapukur], and B and C each to a sixteenth share in that
mauza.
(b) A, being entitled to a lifeinterest in mauza 1[Jalkothi] and B and C to the
reversion, sell the mauza for Rs. 1,000. A’s lifeinterest is ascertained to be
worth Rs. 600, the reversion Rs. 400. A is entitled to receive Rs. 600 out of the
purchasemoney, B and C to receive Rs. 400.
47. Transfer by coowner of share in common property. —Where several coowners of
immoveable property transfer a share therein without specifying that the transfer is to take effect on
any particular share or shares of the transferors, the transfer, as among such transferors, takes effect
on such shares equally where the shares were equal, and, where they were unequal, proportionately to
the extent of such shares.
Illustration
A, the owner of an eightanna share, and B and C, each the owner of a fouranna share, in
mauza 1[Ulipur], transfer a twoanna share in the mauza to D, withou t specifying from which of their
several shares the transfer is made. To give effect to the transfer oneanna share is taken from the share
of A, and half an anna share from each of the shares of B and C.
48. Priority of rights created by transfer.—Where a person purports to create by transfer at
different times rights in or over the same immoveable property, and such rights cannot all exist or be
exercised to their full extent together, each later created right shall, in the absence of a special contract
or reservation binding the earlier transferees, be subject to the rights previously created.
49. Transferee’s right under policy .—Where immoveable property is transferred for
consideration, and such property or any part thereof is at the date of the transfe r insured against loss
or damage by fire, the transferee, in case of such loss or damage, may, in the absence of a contract to
the contrary, require any money which the transferor actually receives under the policy, or so much
thereof as may be necessary, to be applied in reinstating the property.

1Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), ss. 3-4 and 2nd Sch. (with effect from the 14th October,
1956).

Page 23 of 56

50. Rent bonafide paid to holder under defective title.—No person shall be chargeable with
any rents or profits of any immoveable property, which he has in good faith paid or delivered to any
person of whom he in good faith held such property, notwithstanding it may afterwards appear that the
person to whom such payment or delivery was made had no right to receive such rents or profits.
Illustration
A lets a field to B at a rent of Rs. 50, and then transfers the field to C. B, having no notice of
the transfer, in good faith pays the rent to A. B is not chargeable with the rent so paid.
51. Improvements made by bonafide holders under defective titles.—When the transferee
of immoveable property makes any improvement on the property, believing in good faith that he is
absolutely entitled thereto, and h e is subsequently evicted there from by any person having a better
title, the transferee has a right to require the person causing the eviction either to have the value of the
improvement estimated and paid or secured to th e transferee, or to sell his interest in the property to
the transferee at the then market value thereof, irrespective of the value of such improvement.
The amount to be paid or secured in respect of such improvement shall be the estimated value
thereof at the time of the eviction.
When, under the circumstances aforesaid, the transferee has planted or sown on the property
crops which are growing when he is evicted therefrom, he is entitled to such crops and to free ingress
and egress to gather and carry them.
1[52. Transfer of property pending suit relating thereto. —During the 2[pendency] in any
Court having authority in 3[Pakistan], or established beyond the limits of 3[Pakistan] by 4[the 5[Federal
Government] 6[* * *], of 7[any] suit or proceeding 7[which is not collusive and] in which any right to
immoveable property is directly and specifically in question, the property cannot be transferred or
otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party
thereto under any decree or order which may be made therein, except under the authority of the Court
and on such terms as it may impose.
7[Explanation.__ For the purposes of this section, the pendency of a suit or proceeding shall be
deemed to commence from the date of the presentation of the plaint or the institution of the proceeding
in a Court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of
by a final decree or order and complete sa tisfaction or discharge of such decree or order has been
obtained, or has become unobtainable by reason of the expiration of any period of limitation prescribed
for the execution thereof by any law for the time being in force.]
7[53. Fradulent transfer.__ (1) Every transfer of immoveable property made with intent to

1Section 52 has been amended in Sindh by the Transfer of Property and the Indian Registration (Sindh Amdt.) Act, 1939 (XIV of 1939), s. 2.
2Subs. by Act No. XX of 1929, s.14.
3Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch. (with effect from the 14th October, 1956).
4Subs. by A.O., 1937.
5Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.
6Omitted by A. O., 1949, Sch.
7Subs. and ins. by Act No. XX of 1929, s. 14.

Page 24 of 56

defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated
or delayed.
Nothing in this subsection shall impair the rights of a transferee in good faith and for
consideration.
Nothing in this subsection shall aff ect any law for the time being in force relating to
insolvency.
A suit instituted by a creditor (which term includes a decree-holder whether he has or has not
applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent
to defeat or delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of,
all the creditors.
(2) Every transfer of immoveable property made without consideration with intent to
defraud a subsequent transferee shall be voidable at the option of such transferee.
For the purposes of this subsection, no transfer made without consideration shall be deemed
to have been made with intent to defraud by reason only that a subsequent transfer for consideration
was made.]
1[53A. Part performance. —Where any person contracts to transfer for consideration any
immoveable property by writing signed by him or on his behalf from which the terms necessary to
constitute the transfer can be ascertained with reasonable certainty,
and the transferee has, in part performance of the contract, taken possession of the property or
any part thereof, or the transferee, being already in possession, continues in possession in part
performance of the contract and has done some act in furtherance of the contract,
and the transferee has performed or is willing to perform his part of the contract,
then, notwithstanding that the contract, though required to be registered, has not been
registered, or, where there is an instrument of transfer, that the tr ansfer has not been completed in the
manner prescribed therefor by the law for the time being in force, the transferor or any person claiming
under him shall be debarred from enforcing against the transferee and persons claiming under him any
right in respect of the property of which the transferee has taken or continued in possession, other than
a right expressly provided by the terms of the contract:
Provided that nothing in this section shall affect the rights of a transferee for consideration who
has no notice of the contract or of the part performance thereof.]

CHAPTER III

OF SALES OF IMMOVEABLE PROPERTY
54. “Sale” defined.—“Sale” is a transfer of ownership in exchange for a price paid or promised
or partpaid and partpromised.

1Ins. by Act No. XX of 1929, s. 16.

Page 25 of 56

Sale how made. 1Such transfer, in the case of tangible immoveable property of the value of
one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made
only by a registered instrument.
1In the case of tangible immoveable property, of a value less than one hundred rupees, such
transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immoveable property takes place when the seller places the buyer, or such
person as he directs, in possession of the property.
Contract for sale. A contract for the sale of immoveable proper ty is a contract that a sale of
such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property.
55. Rights and liabilities of buyer and seller. —In the absence of a contract to the contrary,
the buyer and the seller of immoveable property respectively are subject to the liabilities, and have the
rights, mentioned in the rules next following, or such of them as are applicable to the property sold:
(1) The seller is bound—
(a) to disclose to the buyer any material defect in the property 2[or in the seller’s
title thereto] of which the seller is, and the buyer is not, aware, and which the
buyer could not with ordinary care discover;
(b) to produce to the buyer on his request for exam ination all documents of title
relating to the property which are in the seller’s possession or power;
(c) to answer to the best of his information all relevant questions put to him by the
buyer in respect to the property or the title thereto;
(d) on payment or tender of the amount due in respect of the price, to execute a
proper conveyance of the property when the buyer tenders it to him for
execution at a proper time and place;
(e) between the date of the contract of sale and the delivery of the property, to take
as much care of the property and all documents of title relating thereto which
are in his possession as an owner of ordinary prudence would take of such
property and documents;
(f) to give, on being so required, the buyer, or such person as he directs, such
possession of the property as its nature admits;
(g) to pay all public charges and rent accrued due in respect of the property up to
the date of the sale, the interest on all incumbrances on such property due on
such date, and, e xcept where the property is sold subject to incumbrances, to
discharge all incumbrances on the property then existing.
(2) The seller shall be deemed to contract with the buyer that the interest which the seller
professes to transfer to the buyer subsists and that he has power to transfer the same:
1As to limitation to the territorial operation of paragraphs 2 and 3 of s. 54, see s. 1, supra. These paragraphs extend to every cantonment in the Provinces,
etc., see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924).
2Ins. by Act No. VI of 1929, s. 17.

Page 26 of 56

Provided that, where the sale is made by a person in a fiduciary character, he shall be deemed
to contract with the buyer that the seller has done no act whereby the property is incumbered or
whereby he is hindered from transferring it.
The benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the
interest of the transferee as such, and may be enforced by every person in whom that interest is for the
whole or any part thereof from time to time vested.
(3) Where the whole of the purchasemoney has been paid to the seller, he is also bound to
deliver to the buyer all documents of title relating to the property which are in the seller’s possession
or power:
Provided that, (a) where the seller retains any part of the property comprised in such
documents, he is entitled to retain them all, and, (b) where the whole of such property is sold to
different buyers, the buyer of the lot of greatest value is entitled to such documents. But in case (a) the
seller, and in case (b) the buyer, of the lot of greatest value, is bound, upon every reasonable request
by the buyer, or by any of the other buyers, as the case may be, and at the cost of the person making
the request, to produce the said documents and furnish such true copies thereof or extracts therefrom
as he may require; and in the mean time, the seller, or the buyer of the lot of greatest value, as the case
may be, shall keep the said documents safe, uncancelled and undefaced, unless prevented from so
doing by fire or other inevitable accident.
(4) The seller is entitled__
(a) to the rents and profits of the property till the ownership thereof passes to the
buyer;
(b) where the ownership of the property has passed to the buyer before payment of
the whole of the purchasemoney, to a charge upon the property in the hands of
the buyer 1[any transferee without consideration or any transferee with notice
of the nonpayment], for the amount of the purchasemoney, or any part thereof
remaining unpaid, and for interest on such amoun t or part 1[from the date on
which possession has been delivered].
(5) The buyer is bound__
(a) to disclose to the seller any fact as to the nature or extent of the seller’s interest
in the property of which the buyer is aware but of which he has reason to believe
that the seller is not aware, and which materially increases the value of such
interest;
(b) to pay or tender, at the time and place of completing the sale, the
purchasemoney to the seller or such person as he directs: Provided that, where
the property is sold free from incumbrances, the buyer may retain out of the
purchasemoney the amount of any incumbrances on the property existing at the
date of the sale, and shall pay the amount so retained to the persons entitled
thereto;

1Ins. by Act No. XX of 1929, s. 17.

Page 27 of 56

(c) where the ownership of the property has passed to the buyer, to bear any loss
arising from the destruction, injury or decrease in value of the property not
caused by the seller;
(d) where the ownership of the property has passed to the buyer, as between himself
and the seller, to pay all public charges and rent which may become payable in
respect of the property, the principal moneys due on any incumbrances subject
to which the property is sold, and the interest thereon afterwards accruing due.
(6) The buyer is entitled__
(a) where the ownership of the property has passed to him, to the benefit of any
improvement in, or increase in value of, the property, and to the rents and profits
thereof;
(b) unless he has improperly declined to accept delivery of the property, to a charge
on the property, as against the seller and all persons claiming under him, 1[* *
*] to the extent of the seller’s interest in the property for the amount of any
purchasemoney properly paid by the buyer in anticipation of the delivery and
for interest on such amount; and, when he properly declines to accept the
delivery, also for the earnest (if any) and for the costs (if any) awarded to him
of a suit to compel specific performance of the contract or to obtain a decree for
its rescission.
An omission to make such disclosures as are mentioned in this section, paragraph (1), clause
(a), and paragraph (5), clause (a), is fraudulent.
1[56. Marshalling by subsequent purchaser. —If the owner of two or more properties
mortgages them to one person and then sells one or more of the properties to another person, the buyer
is, in the absence of a contract to the contrary, entitled to have the mortgagedebt satisfied out of the
property or properties not sold to him, so far as the same will extend, but not so as to prejudice the
rights of the mortgagee or persons claiming under him or of any other person who has for consideration
acquired an interest in any of the properties.]

Discharge of Incumbrances on Sale

57. Provision by Court for incumbrance and sale freed therefrom.__ (a)Where immoveable
property subject to any incumbrance, whether immediately payable or not, is sold by the Court or in
execution of a decree, or out of Court, the Court may, if it thinks fit, on the application of any party to
the sale, direct or allow payment into Court,—

(1) in case of an annual or monthly sum charged on the property, or of a capital sum charged
on a determinable interest in the pr operty__ of such amount as, when invested in securities of the
2[Federal Government], the Court considers will be sufficient, by means of the interest thereof, to keep
down or otherwise provide for that charge, and

1Rep. and subs. by Act No. XX of 1929, ss. 17-18.
2Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.

Page 28 of 56

(2) in any other case of a capital sum charged on the property__ of the amount sufficient to
meet the incumbrance and any interest due thereon.

But in either case there shall also be paid into Court such additional amount as the Court
considers will be sufficient to meet the contingency of further costs, expenses and interest, and any
other contingency, except depreciation of investments, not exceeding onetenth part of the original
amount to be paid in, unless the Court for special reasons (which it shall record) thinks fit to require a
larger additional amount.
(b) Thereupon the Court may, if it thinks fit, and after notice to the incumbrancer,
unless the Court, for reasons to be recorded in writing, thinks fit to dispense
with such notice, decla re the property to be freed from the incumbrance, and
make any order for conveyance, or vesting order, proper for giving effect to the
sale, and give directions for the retention and investment of the money in Court.
(c) After notice served on the persons interested in or entitled to the money or fund
in Court, the Court may direct payment or transfer thereof to the persons entitled
to receive or give a discharge for the same, and generally may give directions
respecting the application or distribution of the capital or income thereof.
(d) An appeal shall lie from any declaration, order or direction under this section as
if the same were a decree.
(e) In this section “Court” means (l) a High Court in the exercise of its ordinary or
extraordinary original civil jurisdiction, (2) the Court of a District Judge within
the local limits of whose jurisdiction the property or any part thereof is situate,
(3) any other Court which the l[Provincial Government] may, from time to time,
by notification in the official Gazette, declare to be competent to exercise the
jurisdiction conferred by this section.

CHAPTER IV

OF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES
58. “Mortgage,” “mortgagor,” mortgagee,” “mortgagemoney” and “mortgagedeed”
defined.__ (a) A mortgage is the transfer of an interest in specific immoveable property for the purpose
of securing the payment of money advanced or to be advanced by wa y of loan, an existing or future
debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee ; the principal money and
interest of which payment is secured for the time being are called the mortgagemoney, and the
instrument (if any) by which the transfer is effected is called a mortgagedeed.

1Subs. by A. O., 1937.

Page 29 of 56

Simple Mortgage. (b) Where, without delivering possession of the mortgaged property, the
mortgagor binds himself personally to pay the mortgagemoney, and agrees, expressly or impliedly,
that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to
cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be
necessary, in payment of the mortgagemoney, the transaction is called a simple mortgage and the
mortgagee a simple mortgagee.

Mortgage by co nditional sale. (c) Where the mortgagor ostensibly sells the mortgaged
property__
on condition that on default of payment of the mortgagemoney on a certain date the sale shall
become absolute, or
on condition that on such payment being made the sale shall become void, or
on condition that on such payment being made the buyer shall transfer the property to the seller,
the transaction is called a mortgage by conditional sale and the mortgagee a mortga gee by
conditional sale:
l[Provided that no such transaction shall be deemed to be a mortgage, unless the condition is
embodied in the document which effects or purports to effect the sale;]
Usufructuary mortgage. (d) Where the mortgagor delivers possessio n 1[or expressly or by
implication binds himself to deliver possession] of the mortgaged property to the mortgagee, and
authorizes him to retain such possession until payment of the mortgagemoney, and to receive the rents
and profits accruing from the proper ty 1[or any part of such rents and profits and to appropriate the
same] in lieu of interest, or in payment of the mortgagemoney, or partly in lieu of interest 1[or] partly
in payment of the mortgagemoney, the transaction is called an usufructuary mortgag e and the
mortgagee an usufructuary mortgagee.
English Mortgage. (e) Where the mortgagor binds himself to repay the mortgagemoney, on
a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a
proviso that he will retransfer it to the mortgagor upon payment of the mortgagemoney as agreed,
the transaction is called an English mortgage.
Mortgage by deposit of title deeds. 1[(f) Where a person 2[* * *] delivers to a creditor or his
agent documents of title to immovea ble property, with intent to create a security thereon, the
transaction is called a mortgage by deposit of titledeeds 2[:]
2[Provided that, where a mortgage by deposit of title deeds is to be created in favour of a
banking company as defined in the Banking Tribunals Ordinance, 1984 (LVIII of 1984), the same may
also be created by an entry in the record of rights against the entry relating to such immovable
property.]
Anomalous mortgage. (g) A mortgage which is not a simple mortgage, a mortgage by
conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of
titledeeds within the meaning of this section is called an anomalous mortgage.]

1Ins. and subs. by Act No. XX of 1929, s. 19.
2Omitted, subs. & added by the Finance Act, 1986 (Act No. 1 of 1986), s. 2.

Page 30 of 56

*59. Mortgage when to be by assurance.—Where the principal money secured is one hundred
rupees or upwards, a mortgage 1[other than a mortgage by deposit of titledeeds] can be effected only
by a registered instrument signed by the mortgagor and attested by at least two witnesses.
Where the principal money secured is less than one hundred rupees, a mortgage may be effected
either by 2[a registered instrument] signed and attested as aforesaid, or (except in the case of a simple
mortgage) by delivery of the property.
1[* * * * * * *]
1[59A. References to mortgagors and mortgagees to include persons deriving title from
them.—Unless otherwise expressly provided, references in this Chapter to mortgagors and mortgagees
shall be deemed to include references to persons deriving title from them respectively.]
Rights and Liabilities of Mortgagor
60. Right of mortgagor to redeem.—At any time after the principal money has become 1[due],
the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgagemoney,
to require the mortgagee (a) to deliver 1[to the mortgagor the mortgagedeed and all documents relating
to the mortgaged property which are in the possession or power of the mortgagee], (b) where the
mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor,
and (c) at the cost of the mortgagor either to retransfer the mortgaged property to him or to such third
person as he may direct, or to execute and (where the mortgage has been effected by a registered
instrument) to have registered an acknowledgement in writing that any right in derogation of his
interest transferred to the mortgagee has been extinguished:
Provided that the right conferred by this section has not been extinguished by the act of the
parties or by 1[decree] of a Court.
The right conferred by this section is called a right to redeem and a suit to enforce it is called a
suit for redemption.
Nothing in this section shall be deemed to render invalid any provision to the effect that, if the
time fixed for payment of the principal money has been allowed to pass or no such time has been fixed,
the mortgagee shall be entitled to reasonable notice before payment or tender of such money.
Redemption of portion of mortgaged property. Nothing in this section shall entitle a person
interested in a share only of the mortgaged property to redeem his own shar e only, on payment of a
proportionate part of the amount remaining due on the mortgage, except 1[only] where a mortgagee,
or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in
part, the share of a mortgagor.
1[60A. Obligation to transfer to third party instead of retransference to Mortgagor .—
(1) Where a mortgagor is entitled to redemption, then, on the fulfilment of any conditions on the
fulfilment of which he would be entitled to require a retransfer, he may require the mortgagee, instead
of retransferring the property, to assign the mortgagedebt and transfer the mortgaged property to such

*As to limitation to the territorial operation of s. 59, see s. 1, supra. Section 59 extends to every cantonment in the Provinces, etc.—see s. 287 of the
Cantonments Act, 1924 (Act No. II of 1924).
1Ins., omitted and subs. by Act No. XX of 1929, ss. 20-23.
2Subs. by Act No. VI of 1904, s. 3.

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third person as the mor tgagor may direct; and the mortgagee shall be bound to assign and transfer
accordingly.
(2) The rights conferred by this section belong to and may be enforced by the mortgagor or by
any encumbrancer notwithstanding a n intermediate encumbrance; but the requisition of any
encumbrancer shall prevail over a requisition of the mortgagor and, as between encumbrancers, the
requisition of a prior encumbrancer shall prevail over that of a subsequent encumbrancer.
(3) The provisions of this section do not apply in the case of a mortgagee who is or has been in
possession.
60B. Right to inspection and production of documents.—A mortgagor, as long as his right
of redemption subsists, shall be entitled at all reasonable times, at his request and at his own cost, and
on payment of the mortgagee’s costs and expenses in this behalf, to inspect and make copies or
abstracts of, or extracts from, documents of title relating to the mortgaged property which are in the
custody or power of the mortgagee.]
1[61. Right to redeem separately or simultaneously. —A mortgagor who has executed two
or more mortgages in favour of the same mortgagee shall, in the absence of a contract to the contrary,
when the principal money of any two or more of the mortgages has become due, be entitled to redeem
any one such mortgage separately, or any two or more of such mortgages together.]
62. Right of usufructuary mortgagor to recover possession.—In the case of a usufructuary
mortgage, the mortgagor has a right to recover possession of the property 1[together with the
mortgagedeed and all documents relating to the mortgaged property which are in the possession or
power of the mortgage],__
(a) where the mortgagee is authorized to pay himself the mortgagemoney from the
rents and profits of the property,__when such money is paid;
(b) where the mortgagee is authorized to pay himself from such rents and profits
1[or any part thereof a part only of the m ortgagemoney]—when the term, if
any, prescribed for the payment of the mortgagemoney has expired and the
mortgagor pays or tenders to the mortgagee 1[the mortgagemoney or the
balance thereof] or deposits it in Court as hereinafter provided.
63. Accession to mortgaged property. —Where mortgaged property in possession of the
mortgagee has, during the continuance of the mortgage, received any accession, the mortgagor, upon
redemption, shall, in the absence of a contract to the contrary, be entitled as agains t the mortgagee to
such accession.
Accession acquired in virtue of transferred ownership. Where such accession has been
acquired at the expense of the mortgagee, and is capable of separate possession or enjoyment without
detriment to the principal property, the mortgagor desiring to take the accession must pay to the
mortgagee the expense of acquiring it. If such separate possession or enjoyment is not possible, the

1Subs. and ins. by Act No. XX of 1929, ss. 24-25.

Page 32 of 56

accession must be delivered with the property; the mortgagor being liable, in the case of an acquisition
necessary to preserve the property from destruction, forfeiture or sale, or made with his assent, to pay
the proper cost thereof, as an ad dition to the principal money, 1[with interest at the same rate as is
payable on the principal, or, where no such rate is fixed, at the rate of nine per cent. per annum].
In the case last mentioned the profits, if any, arising from the accession shall be credited to the
mortgagor.
Where the mortgage is usufructuary and the accession has been acquired at the expense of the
mortgagee, the profits, if any, arising from the accession shall, in the absence of a contract to the
contrary, be set off against interest, if any, payable on the money so expended.
1[63A. Improvements to mortgaged property.__ (1) Where mortgaged property in possession
of the mortgagee has, during the continuance of the mortgage, been improved, the mortgagor, upon
redemption, shall, in the absence of a contract to the contrary, be entitled to the improvement ; and the
mortgagor shall not, save only in cases provided for in subsection (2), be liable to pay the cost thereof.
(2) Where any such improvement was effected at the cost of the mortgagee and was necessary
to preserve the property from destruction or deterioration or was necessary to prevent the security from
becoming insufficient, or was made in compliance with the lawful order of any public servant or public
authority, the mortgagor shall, in the absence of a contract to the contrary, be liable to pay the proper
cost thereof as an addition to the principal money with interest at the same rate as is payable on the
principal, or, where no such rate is fixed, at the rate of nine per cent. per annum, and the profits, if any,
accruing by reason of the improvement shall be credited to the mortgagor.]
64. Renewal of mortgaged lease.—Where the mortgaged property is a lease 1[* * *], and the
mortgagee obtains a renewal of the lease, the mortgagor, upon redemption, shall, in the absence of a
contract by him to the contrary, have the benefit of the new lease.
65. Implied contracts by mortgagor. —In the absence of a contract to the contrary, the
mortgagor shall be deemed to contract with the mortgagee__
(a) that the interest which the mortgagor profes ses to transfer to the mortgagee
subsists, and that the mortgagor has power to transfer the same;
(b) that the mortgagor will defend, or if the mortgagee be in possession of the
mortgaged property, enable him to defend, the mortgagor’s title thereto;
(c) that the mortgagor will, so long as the mortgagee is not in possession of the
mortgaged property, pay all public charges accruing due in respect of the
property ;
(d) and, where the mortgaged property is a lease 1[* * *], that the rent payable under
the lease, the conditions contained therein, and the contracts binding on the
lessee have been paid, performed and observed down to the commencement of
the mortgage; and that the mortgagor will, so long as the security exists and the
mortgagee is not in possession of the mortgaged property, pay the rent reserved
by the lease, or, if the lease be renewed, the renewed lease, perform the
conditions contained therein and observe the contracts binding on the lessee,

1Subs., ins. and omitted by Act No. XX of 1929, ss. 26-29.

Page 33 of 56

and indemnify the mortgagee against all claims sustained by reason of the
nonpayment of the said rent or the nonperformance or nonobservance of the
said conditions and contracts;
(e) and, where the mortgage is a second or subsequent incumbrance on the property,
that the mortgagor will pay the interest from time to time accruing due on each
prior incumbrance as and when it becomes due, and will at the proper time
discharge the principal money due on such prior incumbrance.
1[* * * * * * *]
The benefit of the contracts mentioned in this section shall be annexed to and shall go with the
interest of the mortgagee as such, and may be enforced by every person in whom that interest
is for the whole or any part thereof from time to time vested.
1
[65A. Mortgagor’s power to lease. __(1) Subject to the provisions of subsection (2), a
mortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases
thereof which shall be binding on the mortgagee.
(2)(a) Every such lease shall be such as would be made in the ordinary course of
management of the property concerned, and in accordance with any local law,
custom or usage.
(b) Every such lease shall reserve the best rent that can reasonably be obtained, and
no premium shall be paid or promised and no rent shall be payable in advance.
(c) No such lease shall contain a covenant for renewal.
(d) Every such lease shall take effect from a date not later than six months from the
date on which it is made.
(e) In the case of a lease of buildings, whether leased with or without the land on
which they stand, the duration of the lease shall in no case exceed three years,
and the lease shall contain a covenant for payment of the r ent and a condition
of reentry on the rent not being paid within a time therein specified.
(3) The provisions of subsection (1) apply only if and as far as a contrary intention is not
expressed in the mortgagedeed; and the provisions of subsection (2) may be varied or extended by
the mortgagedeed and, as so varied and extended, shall, as far as may be, operate in like manner and
with all like incidents, effects and consequences, as if such variations or extensions were contained in
that subsection.]
66. Waste by mortgagor in possession. —A mortgagor in possession of the mortgaged
property is not liable to the mortgagee for allowing the property to deteriorate ; but he must not commit
any act which is destructive or permanently injurious thereto, if the security is insufficient or will be
rendered insufficient by such act.

1Omitted., ins. and subs. by Act No. XX of 1929, ss. 29-30..

Page 34 of 56

Explanation.__ A security is insufficient within the meaning of this section unless the value of the
mortgaged property exceeds by onethird, or, if consisting of buildings, exceeds by onehalf, the amount
for the time being due on the mortgage.
Rights and Liabilities of Mortgagee
67. Right to foreclosure or sale.—In the absence of a contract to the contrary, the mortgagee has
at any time after the mortgagemoney has become 1[due] to him, and before a decree has been made for the
redemption of the mortgaged property, or the mortgagemoney has been paid or deposited as hereinafter
provided, a right to obtain from the Court 1[a decree] that the mortgagor shall be absolutely debarred of his
right to redeem the property, or 1[a decree] that the property be sold.
A suit to obtain 1[a decree] that a mortgagor shall be absolutely debarred of his right to redeem the
mortgaged property is called a suit for foreclosure.
Nothing in this section shall be deemed—
1[(a) to authorise any mortgagee other than a mortgagee by conditional sale or a mortgagee
under an anomalous mortgage by the terms of which he is entitled to foreclose, to
institute a suit for foreclosure, or an usufructuary mortgagee as such or a mortgagee
by conditional sale as such to institute a suit for sale; or]
(b) to authorize a mortgagor who holds the mortgagee’s rights as his trustee or legal
representative, and who may sue for a sale of the property, to institute a suit for
foreclosure; or
(c) to authorize the mortgagee of a railway, canal or other work in the maintenance of
which the public are interested, to institute a suit for foreclosure or sale; or
(d) to authorize a person interested in part only of the mortgagemoney to institute a
suit relating only to a corresponding part of the mortgaged property, unless the
mortgagees have, with the consent of the mortgagor, severed their interests under
the mortgage.
1[67A. Mortgagee when bound to bring one suit on several mortgages. — A mortgagee who
holds two or more mortgages executed by the same mortgagor in respect of each of which he has a right to
obtain the same kind of decree under section 67, and who sues to obtain such decree on any one of the
mortgages shall, in the absence of a contract to the contrary, be bound to sue on all the mortgages in respect
of which the mortgagemoney has become due.]
1[68. Right to sue for mortgagemoney. __(1) The mortgagee has a right to sue for the
mortgagemoney in the following cases and no others, namely:__
(a) where the mortgagor binds himself to repay the same;
(b) where, by any cause other than the wrongful act or default of the mortgagor or
mortgagee, the mortgaged property is wholly or partially destroyed or the security
is rendered insufficient within the meanin g of section 66, and the mortgagee has
given the mortgagor a reasonable opportunity of providing further security

1Subs. and ins. by Act No. XX of 1929, ss. 31-33.

Page 35 of 56

enough to render the whole security sufficient, and the mortgagor has failed to
do so ;
(c) where the mortgagee is deprived of the whole or part of his security by or in
consequence of the wrongful act or default of the mortgagor;
(d) where, the mortgagee being entitled to possession of the mortgaged property,
the mortgagor fails to deliver the same to him, or to secure the possession
thereof to him without disturbance by the mortgagor or any person claiming
under a title superior to that of the mortgagor:
Provided that, in the case referred to in clause (a), a transferee from the mortgagor or from his
legal representative shall not be liable to be sued for the mortgagemoney.
(2) Where a suit is brought under clause (a) or clause (b) of subsection (1), the Court may, at
its discretion, stay the suit and all proceedings ther ein, notwithstanding any contract to the contrary,
until the mortgagee has exhausted all his available remedies against the mortgaged property or what
remains of it, unless the mortgagee abandons his security and, if necessary, retransfers the mortgaged
property.]
69. Power of sale when valid.—1[(1)] 1[ 2[* * *] 2[A] mortgagee, or any person acting on his
behalf, shall, subject to the provisions of this section, have power to sell or concur in selling the
mortgaged property, or any part thereof, in default of payment of the mortgagemoney, without the
intervention of the Court, in the following cases and in no others, namely :__]
(a) where the mortgage is an English mortgage, and neither the mortgagor nor the
mortgagee is a Hindu, 3[Muslim] or Buddhist 4[or a member of any other race,
sect, tribe or class from time to time specified in this behalf by 5[the Provincial
Government], in the 5[official Gazette]];
6[(b) where the mortgagee is the Federal Government or a Provincial Government or
a banking company as defined in the Banking Tribunals Ordinance, 1984 (LVIII
of 1984).]
(c) where 1[a power of sale without the intervention of the Court is expressly
conferred on the mortgagee by the mortgagedeed and] the mortgaged property
or any part thereof 1[was, on the date of the execution of the mortgagedeed],
situate within the 7[town of] Karachi, 8[* * * ]or in any other town 1[or area]
which the 8[Provincial Government] may, by notification in the 8[official
Gazette], specify in this behalf.

1Numbered, subs. and ins. by Act No. XX of 1929, s. 34.
2Omitted and subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (Ordinance No. XXVII of 1981), s. 3 and 2nd Sch.
3Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.
4Ins. by Act No. III of 1885, s. 5.
5Subs. by A. O., 1937.
6Subs. by the Finance Act, 1986 (Act No. 1 of 1986), s. 2.
7Subs. by A. O., 1949, Sch.
8Rep. and subs. by A. O., 1937.

Page 36 of 56

1[*] 1[(2)] 2[A power under subsection (1) shall not] be exercised unless and until__
1[(a)] notice in writing requiring payment of the principal money has been served on
the mortgagor, or on one of several mortgagors, and default has been made in
payment of the principal money, or of part thereof, for three months after such
service; or
1[(b)] some interest under the mortgage amounting at least to five hundred rupees is in
arrear and unpaid for three months after becoming due 2[:]
2[Provided that the power of a scheduled bank under clause (b) of subsection (1) shall further
be subject to such conditions as may be prescribed in this behalf by notification in the official Gazette
by the 3[Federal Government] in consultation with the State Bank of Pakistan.]
1[(3)] When a sale has been made in professed exercise of such a power, the title of the
purchaser shall not be impeachable on the ground that no case had arisen to authorize the sale, or that
due notice was not given, or that the power was otherwise improperly or irregularly exercised; but any
person damnified by an unauthorized or improper or irregular exercise of the power shall have his
remedy in damages against the person exercising the power.
1[(4)] The money which is received by the mortgagee, arising from the sale, after discharge of
prior incumbrances, if any, to which the sale is not made subject, or after payment into Court under
section 57 of a sum to meet any prior incumbrance, shall, in the absence of a contract to the contrary,
be held by him in tru st to be applied by him, first, in payment of all costs, charges and expenses
properly incurred by him as incident to the sale or any attempted sale; and, secondly, in discharge of
the mortgage money and costs and other money, if any, due under the mortga ge; and the residue of
the money so received shall be paid to the person entitled to the mortgaged property, or authorised to
give receipts for the proceeds of the sale thereof.
4[* * * * * * *]
1[* * * * * * *]
1[69A. Appointment of receiver.__ (1) A mortgagee having the right to exercise a power of
sale under section 69 shall, subject to the provisions of subsection (2), be entitled to appoint, by
writing signed by him or on his behalf, a receiver of the income of the mortgaged property or any part
thereof.
(2) Any person who has been named in the mortgagedeed and is willing and able to act as
receiver may be appointed by the mortgagee.

1Rep., numbered, lettered and ins. by Act No. XX of 1929, ss. 34-35.
2Subs. and added by Act No. V of 1966, s. 2.
3Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.
4Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (Ordinance No. XXVII of 1981), s. 3 and 2nd Sch.

Page 37 of 56

If no person has been so named, or if all persons named are unable or unwilling to act, or are
dead, the mortgagee may appoint any person to whose appointment the mortgagor agrees; failing such
agreement, the mortgagee shall be entitled to apply to the Court for the appointment of a receiver, and
any person appointed by the Court shall be deemed to have been duly appointed by the mortgagee.
A receiver may at any time be removed by writing signed by or on behalf of the mortgagee and
the mortgagor, or by the Court on application made by either party and on due cause shown.
A vacancy in the office of receiver may be filled in accordance with the provisions of this sub
section.
(3) A receiver appointed under the powers conferred by this section shall be deemed to be the
agent of the mortgagor; and the mortgagor shall be solely responsible for the receiver’s acts or defaults,
unless the mortgagedeed otherwise provides or unless such acts or defaults are due to the improper
intervention of the mortgagee.
(4) The receiver shall have power to demand and recover all the income of which he is
appointed receiver, by suit, execution or otherwise, in the name either of the mortgagor or of th e
mortgagee to the full extent of the interest which the mortgagor could dispose of, and to give valid
receipts accordingly for the same, and to exercise any powers which may have been delegated to him
by the mortgagee in accordance with the provisions of this section.
(5) A person paying money to the receiver shall not be concerned to inquire if the appointment
of the receiver was valid or not.
(6) The receiver shall be entitled to retain out of any money received by him, for his
remuneration, and in sat isfaction of all costs, charges and expenses incurred by him as receiver, a
commission at such rate not exceeding five per cent. on the gross amount of all money received as is
specified in his appointment, and, if no rate is so specified, then at the rate of five per cent. on that
gross amount, or at such other rate as the Court thinks fit to allow, on application made by him for that
purpose.
(7) The receiver shall, if so directed in writing by the mortgagee, insure to the extent, if any,
to which the mo rtgagee might have insured, and keep insured against loss or damage by fire, out of
the money received by him, the mortgaged property or any part thereof being of an insurable nature.
(8) Subject to the provisions of this Act as to the application of insurance money, the receiver
shall apply all money received by him as follows, namely:__
(i) in discharge of all rents, taxes, land revenue, rates and outgoings whatever
affecting the mortgaged property;
(ii) in keeping down all annual sums or other payments , and the interest on all
principal sums, having priority to the mortgage in right whereof he is receiver;
(iii) in payment of his commission, and of the premiums on fire, life or other
insurances, if any, properly payable under the mortgagedeed or under this Act,
and the cost of executing necessary or proper repairs directed in writing by the
mortgagee;
(iv) in payment of the interest falling due under the mortgage;

Page 38 of 56

(v) in or towards discharge of the principal money, if so directed in writing by the
mortgagee;
and shall pay the residue, if any, of the money received by him to the person who, but for the
possession of the receiver, would have been entitled to receive the income of which he is appointed
receiver, or who is otherwise entitled to the mortgaged property.
(9) The provisions of subsection (1) apply only if and as far as a contrary intention is not expressed
in the mortgagedeed; and the provisions of subsections (3) to (8) inclusive may be varied or extended by
the mortgagedeed, and, as so varied or extended, shall, as far as may be, operate in like manner and with
all the like incidents, effects and consequences, as if such variations or extensions were contained in the
said subsections.
(10) Application may be made, without the institution of a suit, to the Court for its opinion, advice
or direction on any present question respecting the management or administration of the mortgaged
property, other than questions of difficulty or importance not proper in the opinion of the Court for
summary disposal. A copy of such application shall be served upon, and the hearing thereof may be
attended by, such of the persons interested in the application as the Court may think fit.
The costs of every application under this subsection shall be in the discretion of the Court.
(11) In this section, “the Court” means the Court which would have jurisdiction in a suit to enforce
the mortgage.]
70. Accession to mortgaged property.—If, after the date of a mortgage, any accession is made to
the mortgaged property, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes
of the security, be entitled to such accession.
Illustrations
(a) A mortgages to B a certain field bordering on a river. The field is increased by
alluvion. For the purposes of his security, B is entitled to the increase.
(b) A mortgages a certain plot of building land to B and afterwards erects a house on
the plot. For the purposes of his security B is entitled to the house as well as the
plot.
71. Renewal of mortgaged lease. —When the mortgaged property is a lease 1[* * * ], and the
mortgagor obtains a renewal of the lease, the mortgagee, in the absence of a contract to the contrary, shall,
for the purposes of the security, be entitled to the new lease.
72. Rights of mortgagee in possession.—1[A mortgagee] may spend such money as is necessary—
1[* * * * * * *]
(b) for 1[the preservation of the mortgaged property] from destruction, forfeiture or
sale;

1Rep. and subs. by Act No. XX of 1929, ss. 36-37.

Page 39 of 56

(c) for supporting the mortgagor’s title to the property ;
(d) for making his own title thereto good against the mortgagor ; and,
(e) when the mortgaged property is a renewable leasehold, for the renewal of the
lease;
and may, in the absence of a contract to the contrary, add such money to the principal money, at the
rate of interest payable on the principal, and where no such rate is fixed, at the rate of nine per cent.
per annum:
l[Provided that the expenditure of money by the mortgagee under clause (b) or clause (c) shall
not be deemed to be necessary unless the mortgagor has been called upon and has failed to take proper
and timely steps to preserve the property or to support the title.]
Where the property is by its nature insurable, the mortgagee may also, in the absence of a
contract to the contrary, insure and keep insured against loss or damage by fire the whole or any part
of such property; and the premiums paid for any such insurance shall be 1[added to the principal money
with interest at the same rate as is payable on the principal money or, where no such rate is fixed, at
the rate of nine per cent. per annum]. But the amount of such insurance shall not exceed the amount
specified in this behalf in the mortgagedeed or (if no such amount is therein specified) two thirds of
the amount that would be required in case of total destruction to reinstate the property insured.
Nothing in this section shall be deemed to authorize the mortgagee to insure when an insurance
of the property is kept up by or on behalf of the mortgagor to the amount in which the mortgage e is
hereby authorized to insure.
1[73. Right to proceeds of revenue sale or compensation on acquisition .__ (1) Where the
mortgaged property or any part thereof or any interest therein is sold owing to failure to pay arrears of
revenue or other charges of a public nature or rent due in respect of such property, and such failure did
not arise from any default of the mortgagee, the mortgagee shall be entitled to claim payment of the
mortgagemoney, in whole or in part, out of any surplus of the sale proceeds remaining after payment
of the arrears and of all charges and deductions directed by law.
(2) Where the mortgaged property or any part thereof or any interest therein is acquired under
the Land Acquisition Act, 1894(I of 1894), or any other enactment for the time being in force providing
for the compulsory acquisition of immoveable property, the mortgagee shall be entitled to claim
payment of the mortgagemoney, in whole or in part, out of the amount due to the mortgagor as com
pensation.
(3) Such claims shall prevail against all other claims except those of prior encumbrancers, and
may be enforced notwithstanding that the principal money on the mortgage has not become due.]
74. 1[* * * * * * *]
75. 1[* * * * * * *]

1Ins., subs. and rep. by Act No. XX of 1929, ss. 37-39.

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76. Liabilities of mortgagee in possession.—When, during the continuance of the mortgage,
the mortgagee takes possession of the mortgaged property,—
(a) he must manage the property as a person of ordinary prudence would manage it
if it were his own;
(b) he must use his best endeavours to collect the rents and profits thereof;
(c) he must, in the absence of a contract to the contrary, out of the income of the
property, pay the Government revenue, all other charges of a public nature l[and
all rent] accruing due in respect thereof during such possession, and any arrears
of rent in default of payment of which the property may be summarily sold;
(d) he must, in the absence of a contract to the contrary, make such necessary repairs
of the property as he can pay for out of the rents and profits thereof after
deducting from such rents and profits the payments mentioned in clause (c) and
the interest on the principal money;
(e) he must not commit any act which is destructive or permanently injurious to the
property;
(f) where he has insured the whole or any part of the property against loss or
damage by fire, he must, in case of such loss or damage, apply any money which
he actually receives under the policy or so much thereof as may be necessary,
in reinstating the property, or, if the mortgagor so directs, in reduction or
discharge of the mortgagemoney;
(g) he must keep clear, full and accurate accounts of all sums received and spent by
him as mortgagee, and, at any time during the continuance of the mortgage, give
the mortgagor, at his request and cost, true copies of such accounts and of the
vouchers by which they are supported ;
(h) his receipts from the mortgaged property, or, where such property is personally
occupied by him, a fair occupationrent in respect thereof, shall, after deducting
the expenses l[properly incurred for the management of the property and the
collection of rents and profits and the other exp enses] mentioned in clauses (c)
and (d), and interest thereon, be debited against him in reduction of the amount
(if any) from time to time due to him on account of interest 1[* * *] and, so far
as such receipts exceed any interest due, in reduction or dis charge of the
mortgagemoney; the surplus, if any, shall be paid to the mortgagor;
(i) When the mortgagor tenders, or deposits in manner hereinafter provided, the
amount for the time being due on the mortgage, the mortgagee must,
notwithstanding the provisions in the other clauses of this section, account for
his 1[*] receipts from the mortgaged property from the date of the tender or from
the earliest time when he could take such amount out of Court, as the case may
be 1[and shall not be entitled to deduct any amount therefrom on account of any

1Ins. and rep. by Act No. XX of 1929, s. 40.

Page 41 of 56

expenses incurred after such date or time in connection with the mortgaged
property].
Loss occasioned by his default. If the mortgagee fail to perform any of the duties imposed
upon him by this section, he may, when accounts are ta ken in pursuance of a decree made under this
Chapter, be debited with the loss, if any, occasioned by such failure.
77. Receipts in lieu of interest.— Nothing in section 76, clauses (b), (d), (g) and (h), applies
to cases where there is a contract between the mortgagee and the mortgagor that the receipts from the
mortgaged property shall, so long as the mortgagee is in possession of the property, be taken in lieu of
interest on the principal money, or in lieu of such interest and defined portions of the principal.
Priority
78. Postponement of prior mortgagee. —Where, through the fraud, misrepresentation or
gross neglect of a prior mortgagee, another person has been induced to advance money on the security
of the mortgaged property, the prior mortgagee shall be postponed to the subsequent mortgagee.
79. Mortgage to secure uncertain amount when maximum is expressed. — If a mortgage
made to secure future advances, the performance of an engagement or the balance of a running account,
expresses the maximum to be secured thereby, a subsequent mortgage of the same property shall, if
made with notice of the prior mortgage, be postponed to the prior mortgage in respect of all advances
or debits not exceeding the maximum though made or allowed with notice of the subsequent mortgage.
Illustration
A mortgages Sultanpur to his bankers, B & Co., to secure the balance of his account with them
to the extent of Rs. 10,000. A then mortgages Sultanpur to C, to secure Rs. 10,000, C having notice of
the mortgage to B & Co., and C gives notice to B & Co. of the second mortgage. At the date of the
second mortgage, the balance due to B & Co. does not exceed Rs. 5,000. B & Co., subsequently
advance to A sums making the balance of the account against him exceed the sum of Rs. 10,000. B &
Co. are entitled, to the extent of Rs. 10,000, to priority over C.
80. 1[* * * * * * *]
Marshalling and Contribution
1[81. Marshalling securities.— If the owner of two or more properties mortgages them to one
person and then mortgages one or more of the properties to another person, the subsequent mortgagee
is, in the absence of a contract to the contrary, entitled to have the prior mortgagedebt satisfied out of
the property or properties not mortgaged to him, so far as the same will extend, but not so as to
prejudice the rights of the prior mortgagee or of any other person who has for consideration acquired
an interest in any of the properties.]
82. Contribution to mortgagedebt.— 1[Where property subject to a mortgage belongs to two
or more persons having distinct and separate rights of ownership therein, the different shares in or parts
of such property owned by such persons are, in the absence of a contract to the contrary, liable

1Rep. and subs. by Act No. XX of 1929, ss. 41-43.

Page 42 of 56

to contribute rateably to the debt secured by the mortgage, and, for the purpose of determining the rate
at which each such share or part shall contribute, the value thereof shall be deemed to be its value at
the date of the mortgage after deduction of the amount of any other m ortgage or charge to which it
may have been subject on that date.]
Where, of two properties belonging to the same owner, one is mortgaged to secure one debt
and then both are mortgaged to secure another debt, and the former debt is paid out of the former
property, each property is, in the absence of a contract to the contrary, liable to contribute rateably to
the latter debt after deducting the amount of the former debt from the value of the property out of
which it has been paid.
Nothing in this section ap plies to a property liable under section 81 to the claim of the
1[subsequent] mortgagee.
Deposit in Court

83. Power to deposit in Court money due on mortgage. —At any time after the principal
money 1[payable in respect of any mortgage has become due] and before a suit for redemption of the
mortgaged property is barred, the mortgagor, or any other person entitled to institute such suit, may
deposit, in any Court in which he might have instituted such suit, to the account of the mortgagee, the
amount remaining due on the mortgage.
Right to money deposited by mortgagor. The Court shall thereupon cause written notice of
the deposit to be served on the mortgagee, and the mortgagee may, on presenting a petition (verified
in manner prescribed by law for the ve rification of plaints) stating the amount then due on the
mortgage, and his willingness to accept the money so deposited in full discharge of such amount, and
on depositing in the same Court the mortgagedeed 1[and all documents in his possession or power
relating to the mortgaged property], apply for and receive the money, and the mortgagedeed 1[and all
such other documents] so deposited shall be delivered to the mortgagor or such other person as
aforesaid.
1[Where the mortgagee is in possession of the mo rtgaged property, the Court shall, before
paying to him the amount so deposited, direct him to deliver possession thereof to the mortgagor and
at the cost of the mortgagor either to retransfer the mortgaged property to the mortgagor or to such
third person as the mortgagor may direct or to execute and (where the mortgage has been effected by
a registered instrument) have registered an acknowledgement in writing that any right in derogation of
the mortgagor’s interest transferred to the mortgagee has been extinguished.]
84. Cessation of interest.—When mortgagor or such other person as aforesaid has tendered or
deposited in Court under section 83 the amount remaining due on the mortgage, interest on the
principal money shall cease from the date of the tender or 1[in the case of a deposit, where no previous
tender of such amount has been made] as soon as the mortgagor or such other person as aforesaid has
done all that has to be done by him to enable the mortgagee to take such amount out of Court, 1[and
the notice required by section 83 has been served on the mortgagee:
Provided that, where the mortgagor has deposited such amount without having made a previous
tender thereof and has subsequently withdrawn the same or any part thereof, interest on the principal
money shall be payable from the date of such withdrawal].

1Subs. and ins. by Act No. XX of 1929, ss. 43-45.

Page 43 of 56

Nothing in this section or in section 83 shall be deemed to deprive the mortgagee of his right
to interest when there exists a contract that he shall be entitled to reasonable notice before payment or
tender of the mortgagemoney l[and such notice has not been given before the making of the tender or
deposit, as the case may be].
2Suits for Foreclosure, Sale or Redemption
85. 3[* * * * * * *]
2Foreclosure and Sale
[86 to 90.] 3[* * * * * * *]
Redemption
1[91. Persons who may sue for redemption.—Besides the mortgagor, any of the following
persons may redeem, or institute a suit for redemption of, the mortgaged property, namely :__
(a) any person (other than the mortgagee of the interest sought to be redeemed) who
has any interest in, or charge upon, the property mortgaged or in or upon the
right to redeem the same;
(b) any surety for the payment of the mortgagedebt or any part thereof; or
(c) any creditor of the mortgagor who has in a suit for the administration of his
estate obtained a decree for sale of the mortgaged property.]
1[92. Subrogation.—Any of the persons referred to in section 91 (other than the mortgagor)
and any comortgagor shall, on redeeming property subject to the mortgage, have, so far as regards
redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he
redeems may have against the mortgagor or any other mortgagee.
The right conferred by this section is called the right of subrogation, and a person acquiring the
same is said to be subrogated to the rights of the mortgagee whose mortgage he redeems.
A person who has advanced to a mortgagor money with which the mortgage has been redeemed
shall be subrogated to the rights of the mortgagee whose mortgage has been redeemed, if the mortgagor
has by a registered instrument agreed that such persons shall be so subrogated.
Nothing in this section shall be deemed to confer a right of subrogation on any person unless
the mortgage in respect of which the right is claimed has been redeemed in full.
93. Prohibition of tacking. —No mortgagee paying off a prior mortgage, whether with or
without notice of an intermediate mortgage, shall thereby acquire any priority in respect of his original
security; and, except in the case provided for by section 79, no mortgagee making a subseque nt
advance to the mortgagor, whether with or without notice of an intermediate mortgage, shall thereby
acquire any priority in respect of his security for such subsequent advance.

1Ins. and subs. by Act No. XX of 1929, ss. 45-47.
2For the repealed provisions, as reenacted, see the Code of Civil Procedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV.
3Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V.

Page 44 of 56

94. Rights of mesne mortgagee. —Where a property i s mortgaged for successive debts to
successive mortgagees, a mesne mortgagee has the same rights against mortgagees posterior to himself
as he has against the mortgagor.]
1[95. Right of redeeming comortgagor to expenses. —Where one of several mortgagors
redeems the mortgaged property, he shall, in enforcing his right of subrogation under section 92 against
his co mortgagors, be entitled to add to the mortgagemoney recoverable from them such proportion
of the expenses properly incurred in such redemption as is attributable to their share in the property.
96. Mortgage by deposit of titledeeds.— The provisions hereinbefore contained which apply
to a simple mortgage shall, so far as may be, apply to a mortgage by deposit of titledeeds.]
97. 2[* * * * * * *]
Anomalous Mortgages
98. Rights and liabilities of parties to anomalous mortgages.—In the case of 1[an anomalous
mortgage] the rights and liabilities of the parties shall be determined by their contract as evidenced in
the mortgagedeed, and, so far as such contract does not extend, by local usage.
99. 3[* * * * * * *]
Charges
100. Charges.—Where immoveable property of one person is by act of parties or operation of
law made security for the payment of money to another, and the transaction does not amount to a
mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore
contained 1[which apply to a simple mortgage shall, so far as may be, apply to such charge].
Nothing in this section applies to the charge of a trustee on the trustproperty for expenses
properly incurred in the execution of his trust, 1[and, save as otherwise expressly provided by any law
for the time being in force, no charge shall be enforced against any property in the hands of a person
to whom such property has been transferred for consideration and without notice of the charge].
1[101. No merger in case of subsequent encumbrance.—Any mortgagee of, or person having
a charge upon, immoveable property, or any transferee from such mortgagee or chargeholder, may
purchase or otherwise acquire the rights in the property of the mortgagor or owner, as the case may be,
without thereby causing the mortgage or charge to be merged as between himself and any subsequent
mortgagee of, or person having a subsequent charge upon, the same property; and no such subsequent
mortgagee or chargeholder shall be entitled to foreclose or sell such property without redeeming the
prior mortgage or charge, or otherwise than subject thereto.]

1Subs. and ins. by Act No. XX of 1929, ss. 48-51.
2Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. For the repealed provisions as reenacted, see the Code of Civil
Procedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV, rules 12 and 13.
3Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. For the repealed provisions as reenacted, see Act V of 1908, Sch.
I, Order XXXIV, rule 14.

Page 45 of 56

Notice and Tender
102. Service or tender on or to agent.—Where the person on or to whom any notice or tender
is to be served or made under this Chapter does not reside in the district in which the mortgaged
property or some part thereof is situate, service or tender on or to an agent holding a general power
ofattorney from such person or otherwise duly authorized to accept such service or tender shall be
deemed sufficient.
1[Where no person or agent on whom such notice should be served can be found or is known]
to the person required to serve the notice, the la tter person may apply to any Court in which a suit
might be brought for redemption of the mortgaged property, and such Court shall direct in what manner
such notice shall be served, and any notice served in compliance with such direction shall be deemed
sufficient:
1[Provided that, in the case of a notice required by section 83, in the case of a deposit, the
application shall be made to the Court in which the deposit has been made.]
1[Where no person or agent to whom such tender should be made can be found or is known] to
the person desiring to make the tender, the latter person may deposit 1[in any Court in which a suit
might be brought for redemption of the mortgaged property] the amount sought to be tendered, and
such deposit shall have the effect of a tender of such amount.
103. Notice, etc., to or by person incompetent to contract.—Where, under the provisions of
this Chapter, a notice is to be served on or by, or a tender or deposit made or accepted or taken out of
Court by, any person incompetent to contract, such notice may be served 1[on or by], or tender or
deposit made, accepted or taken, by the legal curator of the property of such person; but where there
is no such curator, and it is requisite or desirable in the interests of such person that a notice should be
served or a tender or deposit made under the provisions of this Cha pter, application may be made to
any Court in which a suit might be brought for the redemption of the mortgage to appoint a guardian
ad litem for the purpose of serving or receiving service of such notice, or making or accepting such
tender, or making or t aking out of Court such deposit, and for the performance of all consequential
acts which could or ought to be done by such person if he were competent to contract; and the
provisions of 1[ Order XXXII in the First Schedule to the Code of Civil Procedure, 1 908(V of 1908)]
shall, so far as may be, apply to such application and to the parties thereto and to the guardian appointed
thereunder.
104. Power to make rules. —The High Court may, from time to time, make rules consistent
with this Act for carrying out, in itself and in the Courts of Civil Judicature subject to its
superintendence, the provisions contained in this Chapter.

CHAPTER V

OF LEASES OF IMMOVEABLE PROPERTY
105. Lease defined.— A lease of immoveable property is a transfer of a right to enjoy such
property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid
or promised, or of money, a share of crops, service or any other thing of value , to be rendered
periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on
such terms.

1Subs. and ins. by Act No. XX of 1929, ss. 52-53.

Page 46 of 56

Lessor, lessee, premium and rent defined. The transferor is called the lessor, the transferee
is called the lessee, the price is called the premium, and the money, share, service or other thing to be
so rendered is called the rent.
106. Duration of certain leases in absence of written contract or local usage. — In the
absence of a contract or local law or usage to the contrary, a lease of immoveable property for
agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on
the part of either lessor or lessee, by six months' notice expiring with the end of a year of the tenancy;
and a lease of immoveable property for any other purpose shall be deemed to be a lease from month
to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice expiring with the
end of a month of the tenancy.
Every notice under this section must be in writing signed by or on behalf of the person giving
it, and l[either be sent by post to the party who is intended to be bound by it or be tendered or delivered
personally to su ch party], or to one of his family or servants at his residence, or (if such tender or
delivery is not practicable) affixed to a conspicuous part of the property.
2107. Leases how made.—A lease of immoveable property from year to year, or for any term
exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.
3[All other leases of immoveable property may be made either by a registered instrument or by
oral agreement accompanied by delivery of possession.]
1[Where a lease of immoveable property is made by a registered instrument, such instrument
or, where there are more instruments than one, each such instrument shall be executed by both the
lessor and the lessee:]
3[Provided that the 4[Provincial Government] may, 4[* * *] from time to time, by notification
in the 4[official Gazette], direct that leases of immoveable property, other than leases from year to year,
or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made
by unregistered instrument or by oral agreement without delivery of possession.]
108. Rights and liabilities of lessor and lessee. —In the absence of a contract or local usage
to the contrary, the lessor and the lessee of immoveable property, as against one another, respectively,
possess the rights and are subject to the liabilities mentioned in the rules next following, or such of
them as are applicable to the property leased :—

1Subs. and ins. by Act No. XX of 1929, ss. 54-55.
2As to limitation to the territorial operation of s. 107, see s. 1, supra. S. 107 extends to every cantonment in the Provinces, etc., see s. 287 of the
Cantonments Act, 1924 (Act No. II of 1924).
3Subs. and ins. by Act No. VI of 1904, ss. 5.
4Subs. and rep. by A. O., 1937.

Page 47 of 56

(A) Rights and Liabilities of the Lessor
(a) The lessor is bound to disclose to the lessee any material defect in the property,
with reference to its intended use, of which the former is and the latter is not aware,
and which the latter could not with ordinary care discover:
(b) the lessor is bound on the lessee’s request to put him in possession of the property:
(c) the lessor shall be deemed to contract with the lessee that, if the latter pays the rent
reserved by the lease and performs the contracts binding on the lessee, he may hold
the property during the time limited by the lease without interruption.

The benefit of such contract shall be annexed to and go with the lessee’s interest as such, and may be
enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.
(B)Rights and Liabilities of the Lessee
(d) if during the continuance of the lease any accession is made to the property, such
accession (subject to the law relating to alluvion for the time being in force) shall
be deemed to be comprised in the lease:
(e) if by fire, tempest or flood, or violence of an army or of a mob or other irresistible
force, any material part of the property be wholly destroyed or rendered
substantially and permanently unfit for the purposes for which it was let, the lease
shall, at the option of the lessee, be void:
Provided th at, if the injury be occasioned by the wrongful act or default of the
lessee, he shall not be entitled to avail himself of the benefit of this provision:
(f) if the lessor neglects to make, within a reasonable time after notice, any repairs
which he is bound to make to the property, the lessee may make the same himself,
and deduct the expense of such repairs with interest from the rent, or otherwise
recover it from the lessor:
(g) if the lessor neglects to make any payment which he is bound to make, and which,
if not made by him, is recoverable from the lessee or against the property, the lessee
may make such payment himself, and deduct it with interest from the rent, or
otherwise recover it from the lessor:
(h) the lessee may l[even after the determination of the lease] remove, at any time
1[whilst he is in possession of the property leased but not afterwards] all things
which he has attached to the earth: provided he leaves the property in the state in
which he received it :
(i) when a lease of uncertain duration determines by any means except the fault of the
lessee, he or his legal representative is entitled to all the crops planted or sown by
the lessee and growing upon the property when the lease determines, and to free
ingress and egress to gather and carry them:

1Ins. and subs. by Act No. XX of 1929, s. 56.

Page 48 of 56

(j) the lessee may transfer absolutely or by way of mortgage or sublease the whole
or any part of his interest in the property, and any transferee of such interest or
part may again transfer it. The lessee shall not, by reason only of such transfer,
cease to be subject to any of the liabilities attaching to the lease:

nothing in this clause shall be deemed to authorize a tenant having an
untransferable right of occupancy, the farmer of an estate in respect of which
default has been made in paying revenue, or th e lessee of an estate under the
management of a Court of Wards, to assign his interest as such tenant, farmer
or lessee:

(k) the lessee is bound to disclose to the lessor any fact as to the nature or extent of
the interest which the lessee is about to tak e, of which the lessee is, and the
lessor is not, aware, and which materially increases the value of such interest:

(l) the lessee is bound to pay or tender, at the proper time and place, the premium
or rent to the lessor or his agent in this behalf:

(m) the lessee is bound to keep, and on the termination of the lease to restore, the
property in as good condition as it was in at the time when he was put in
possession, subject only to the changes caused by reasonable wear and tear or
irresistible force, and to allow the lessor and his agents, at all reasonable times
during the term, to enter upon the property and inspect the condition thereof and
give or leave notice of any defect in such condition, and, when such defect has
been caused by any act or default on the part of the lessee, his servants or agents,
he is bound to make it good within three months after such notice has been given
or left:

(n) if the lessee becomes aware of any proceeding to recover the property or any
part thereof, or of any encroac hment made upon, or any interference with, the
lessor’s rights concerning such property, he is bound to give, with reasonable
diligence, notice thereof to the lessor:

(o) the lessee may use the property and its products (if any) as a person of ordinary
prudence would use them if they were his own; but he must not use, or permit
another to use, the property for a purpose other than that for which it was leased,
or fell 1[or sell] timber, pull down or damage buildings 1[belonging to the lessor,
or] work mines or quarries not open when the lease was granted, or commit any
other act which is destructive or permanently injurious thereto:

(p) he must not, without the lessor’s consent, erect on the property any permanent
structure, except for agricultural purposes:

(q) on the determination of the lease, the lessee is bound to put the lessor into
possession of the property.

109. Rights of lessor’s transferee. —If the lessor transfers the property leased, or any part
thereof, or any part of his interest therein, the transferee, in the absence of a contract to the contrary,
shall possess all the rights, and, if the lessee so elects, be subject to all the liabilities of the lessor as to
the property or part transferred so long as he is the owner of it; but the lessor shall not, by reason only
of such transfer, cease to be subject to any of the liabilities imposed upon him by the lease, unless the
lessee elects to treat the transferee as the person liable to him:

Provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if

1Ins. by Act No. XX of 1929, s. 56.

Page 49 of 56

the lessee, not having reason to believe that such transfer has been made, pays rent to the lessor, the
lessee shall not be liable to pay such rent over again to the transferee.

The lessor, the transferee and the lessee may determine what proportion of the premium or rent
reserved by the lease is payable in respect of the part so transferred , and, in case they disagree, such
determination may be made by any Court having jurisdiction to entertain a suit for the possession of
the property leased.

110. Exclusion of day on which term commences. —Where the time limited by a lease of
immoveable property is expressed as commencing from a particular day, in computing that time such
day shall be excluded. Where no day of commencement is named, the time so limited begins from the
making of the lease.

Duration of lease for year. Where the time so limited is a year or a number of years, in the
absence of an express agreement to the contrary, the lease shall last during the whole anniversary of
the day from which such time commences.

Option to determine lease. Where the time so limited is expressed to be terminable before its
expiration, and the lease omits to mention at whose option it is so terminable, the lessee, and not the
lessor, shall have such option.

111. Determination of lease.— A lease of immoveable property determines__

(a) by efflux of the time limited thereby:

(b) where such time is limited conditionally on the happening of some eventby the
happening of such event:

(c) where the interest of the les sor in the property terminates on, or his power to
dispose of the same extends only to, the happening of any eventby the
happening of such event:

(d) in case the interests of the lessee and the lessor in the whole of the property
become vested at the same time in one person in the same right:

(e) by express surrender; that is to say, in case the lessee yields up his interest under
the lease to the lessor, by mutual agreement between them:

(f) by implied surrender:

(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition
which provides that on breach thereof the lessor may reenter 1[* * *]; or (2) in
case the lessee renounces his character as such by setting up a title in a third
person or by claiming title in himself; 1[or (3) the lessee is adjudicated an
insolvent and the lease provides that the lessor may reenter on the happening
of such event]; and in 1[any of these cases] the lessor or his transferee 1[gives
notice in writing to the lessee of] his intention to determine the lease:

(h) on the expiration of a notice to determine the lease, or to quit, or of intention to
quit, the property leased, duly given by one party to the other.

Illustration to clause (f)

A lessee accepts from his lessor a new lease of the prop erty leased, to take effect during the
continuance of the existing lease. This is an implied surrender of the former lease, and such lease
determines thereupon.

1Rep., ins. and subs. by Act No. XX of 1929, s. 57.

Page 50 of 56

112. Waiver of forfeiture. —A forfeiture under section 111, clause (g), is waived by
acceptance of rent which has become due since the forfeiture, or by distress for such rent, or by any
other act on the part of the lessor showing an intention to treat the lease as subsisting:
Provided that the lessor is aware that the forfeiture has been incurred:
Provided also that, where rent is accepted after the institution of a suit to eject the lessee on the
ground of forfeiture, such acceptance is not a waiver.
113. Waiver of notice to quit.— A notice given under section 111, clause (h), is waived, with
the express or implied consent of the person to whom it is given, by any act on the part of the person
giving it showing an intention to treat the lease as subsisting.
Illustrations
(a) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice
expires. B tenders, and A accepts, rent which has become due in respect of the
property since the expiration of the notice. The notice is waived.
(b) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice
expires, and B remains in possession. A gives to B as lessee a second notice to
quit. The first notice is waived.
114. Relief against forfeiture for nonpayment of rent. —Where a lease of immoveable
property has determined by forfeiture for nonpayment of rent, and the lessor sues to eject the lessee,
if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with
interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for
making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment pass
an order relieving the lessee against the forfeiture; and thereu pon the lessee shall hold the property
leased as if the forfeiture had not occurred.
1[114A. Relief against forfeiture in certain other cases. —Where a lease of immoveable
property has determined by forfeiture for a breach of an express condition which prov ides that on
breach thereof the lessor may reenter, no suit for ejectment shall lie unless and until the lessor has
served on the lessee a notice in writing__
(a) specifying the particular breach complained of ; and
(b) if the breach is capable of remedy, requiring the lessee to remedy the breach;
and the lessee fails, within a reasonable time from the date of the service of the notice, to
remedy the breach, if it is capable of remedy.
Nothing in this section shall apply to an express condition against the assigning, underletting,
parting with the possession, or disposing, of the property leased, or to an express condition relating to
forfeiture in case of nonpayment of rent.]

1Ins. by Act No. XX of 1929, s. 58.

Page 51 of 56

115. Effect of surrender and forfeiture on underleases.—The surrender, express or implied,
of a lease of immoveable property does not prejudice an underlease of the property or any part thereof
previously granted by the lessee, on terms and conditions substantially the same (except as regards the
amount of rent) as those of the original lease; but, unless the surrender is made for the purpose of
obtaining a new lease, the rent payable by, and the contracts binding on, the underlessee shall be
respectively payable to and enforceable by the lessor.
The forfeiture of such a lease annuls all such underleases except where such forfeiture has
been procured by the lessor in fraud of the underlessees, or relief against the forfeiture is granted
under section 114.
116. Effect of holding over. —If a lessee or underlessee of property remains in possession
thereof after the determination of the lease granted to the lessee, and the lessor or his legal
representative accepts rent from the lessee or underlessee, or otherwi se assents to his continuing in
possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or
from month to month, according to the purpose for which the property is leased, as specified in section
106.
Illustrations
(a) A lets a house to B for five years. B underlets the house to C at a monthly rent
of Rs. 100. The five years expire, but C continues in possession of the house
and pays the rent to A. C’s lease is renewed from month to month.
(b) A lets a farm to B f or the life of C. C dies, but B continues in possession with
A’s assent. B’s lease is renewed from year to year.
117. Exemption of leases for agricultural purposes.— None of the provisions of this Chapter
apply to leases for agricultural purposes, except in so far as the 1[Provincial Government] 2[* * *] may,
by notification published in the 1[official Gazette], declare all or any of such provisions to be so
applicable 3[in the case of all or any of such leases], together with, or subject to, those of the local law,
if any, for the time being in force.
Such notification shall not take effect until the expiry of six months from the date of its
publication.
CHAPTER VI

OF EXCHANGES
118. “Exchange” defined.—When two persons mutually transfer the ownership of one thing
for the ownership of another, neither thing or both things being money only, the transaction is called
an “exchange”.
A transfer of property in completion of an exchange can be made only in manner provided for
the transfer of such property by sale.

1Subs. by A. O., 1937.
2Rep. by the Devolution Act, 1920 (Act No. XXXVIII of 1920), s. 2 and Sch. I.
3Ins. by Act No. VI of 1904, s. 6.

Page 52 of 56

1[119. Right of party deprived of thing received in exchange.— If any party to an exchange
or any person claiming through or under such party is by reason of any defect in the title of the other
party deprived of the thing or any part of the thing received by him in exchange, then, unless a contrary
intention appears from the terms of the exchange, such other party is liable to him or any person
claiming through or under him for loss caused thereby, or at the option of the person so deprived, for
the return of the thing transferred, if still in the possession of such other party or his legal representative
or a transferee from him without consideration.]
120. Rights and liabilities of parties.— Save as otherwise provided in this Chapter, each party
has the rights and is subject to the liabilities of a seller as to that which he gives, and has the rights and
is subject to the liabilities of a buyer as to that which he takes.
121. Exchange of money. —On an exchange of money, each party thereby warrants the
genuineness of the money given by him.
CHAPTER VII

OF GIFTS
122. “Gift” defined. —“Gift” is the transfer of certain existing moveable or immoveable
property made voluntarily and without consideration, by one person, called the donor, to another,
called the donee, and accepted by or on behalf of the donee.
Acceptance when to be made. Such acceptance must be made during the lifetime of the donor
and while he is still capable of giving.
If the donee dies before acceptance, the gift is void.

2123. Transfer how effected.— For the purpose of making a gift of immoveable property, the
transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested
by at least two witnesses.
For the purpose of making a gift of moveable property, the transfer may be effected either by
a registered instrument signed as aforesaid or by delivery.
Such delivery may be made in the same way as goods sold may be delivered.
124. Gift of existing and future property. —A gift comprising both existing and future
property is void as to the latter.
125. Gift to several of whom one does not accept.— A gift of a thing to two or more donees,
of whom one does not accept it, is void as to the interest which he would have taken had he accepted.

1Subs. by Act No. XX of 1929, s. 59.
2As to limitation to the territorial operation of s. 123, see s. 1, supra. S. 123 extends to every cantonment in the Provinces, etc.__ see s. 287 of the
Cantonments Act, 1924 (Act No. II of 1924).

Page 53 of 56

126. When gift may be suspended or revoked.—The donor and donee may agree that on the
happening of any specified event which does not depend on the will of the donor a gift shall be
suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part, at the
mere will of the donor, is void wholly or in part, as the case may be.
A gift may also be revoked in any of the cases (save want or failure of consideration) in which,
if it were a contract, it might be rescinded.
Save as aforesaid a gift cannot be revoked.
Nothing contained in this se ction shall be deemed to affect the rights of transferees for
consideration without notice.
Illustrations
(a) A gives a field to B, reserving to himself, with B's assent, the right to take back
the field in case B and his descendants die before A. B dies without descendants
in A’s lifetime. A may take back the field.
(b) A gives a lakh of rupees to B, reserving to himself, with B’s assent, the right to
take back at pleasure Rs. 10,000 out of the lakh. The gift holds good as to Rs.
90,000, but is void as to Rs. 10,000, which continue to belong to A.
127. Onerous gift.—Where a gift is in the form of a single transfer to the same person of
several things of which one is, and the others are not, burden by an obligation, the donee can take
nothing by the gift unless he accepts it fully.
Where a gift is in the form of two or more separate and independent transfers to the same person
of several things, the donee is at liberty to accept one of them and refuse the others, although the former
may be beneficial and the latter onerous.
Onerous gift to disqualified person. A donee not co mpetent to contract and accepting
property burdened by any obligation is not bound by his acceptance. But if, after becoming competent
to contract and being aware of the obligation, he retains the property given, he becomes so bound.
Illustrations
(a) A has shares in, X, a prosperous joint stock company, and also shares in Y, a joint
stock company, in difficulties. Heavy calls are expected in respect of the shares
in Y. A gives B all his shares in joint stock companies. B refuses to accept the
shares in Y. He cannot take the shares in X.
(b) A having a lease for a term of years of a house at a rent which he and his
representatives are bound to pay during the term, and which is more than the
house can be let for, gives to B the lease, and also, as a separate and independent
transaction, a sum of money. B refuses to accept the lease. He does not by this
refusal forfeit the money.

Page 54 of 56

128. Universal donee.—Subject to the provisions of section 127, where a gift consists of the
donor’s whole property, the donee is personally liable for all the debts due by l[and liabilities of] the
donor at the time of the gift to the extent of the property comprised therein.
129. Saving of donations mortis casua and Muslim law.—Nothing in this Chapter relates to
gifts of moveable property made in contemplation of death, or shall be deemed to affect any rule of
2[Muslim] law 1[* * *].
3[CHAPTER VIII

OF TRANSFERS OF ACTIONABLE CLAIMS
130. Transfer of actionable claim.—(1) The transfer of an actionable claim 1[whether with or
without consideration] shall be effected only by the execution of an instrument in writing signed by
the transferor or his duly authorized agent, 1[* * *] shall be complete and effectual upon the execution
of such instrument, and thereupon all the rights and remedies of the transferor, whether by way of
damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter
provided be given or not:
Provided that every dealing with the debt or other actionable claim by the debtor or other person
from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been
entitled to recover or enforce such debt or other actionable claim, shall (save where the debtor or other
person is a party to the transfer or has received express notice thereof as hereinafter provided) be valid
as against such transfer.
(2) The transferee of an actionable claim may, upon the execution of such instrument of transfer
as aforesaid, sue or institute proceedings for the same in his own name without obtaining the
transferor’s consent to such suit or proceedings and without making him a party thereto.
Exception.__ Nothing in this section applies to the transfer of a marine or fire policy of insurance
1[or affects the provisions of section 38 of the Insurance Act, 1938(IV of 1938)].
Illustrations
(i) A owes money to B, who transfers the debt to C. B then demands the debt from
A, who, not having received notice of the transfer, as prescribed in section 131,
pays B. The payment is valid, and C cannot sue A for the debt.
(ii) A effects a policy on his own life with an Insurance Company and assigns it to
a Bank for securing the payment of an existing or future debt. If A dies, the
Bank is entitled to receive the amount of the policy and to sue on it without the
concurrence of A’s executor, subject to the proviso in subsection (1) of section
130 and to the provisions of section 132.

1Ins. and rep. by Act No. XX of 1929, ss. 60-62.
2Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.
3Subs. by Act No. II of 1900, s. 4.
4Added by the Insurance Act, 1938 (Act No. IV of 1938), s. 121.

Page 55 of 56

I30A. 1[* * * * * * *]

131. Notice to be in writing, signed.—Every notice of transfer of an actionable claim shall be
in writing, signed by the transferor or his agent duly authorised in this behalf, or, in case the transferor
refuses to sign, by the transferee or his agent, and shall state the name and address of the transferee.

132. Liability of transferee of actionable claim. The transferee of an actionable claim shall
take it subject to all the liabilities and equities to which the transferor was subject in respect thereof at
the date of the transfer.

Illustrations

(i) A transfers to C a debt due to him by B, A being then i ndebted to B. C sues B
for the debt due by B to A. In such suit B is entitled to set off the debt due by A
to him; although C was unaware of it at the date of such transfer.

(ii) A executed a bond in favour of B under circumstances entitling the former to
have it delivered up and cancelled. B assigns the bond to C for value and without
notice of such circumstances. C cannot enforce the bond against A.

133. Warranty of solvency of debtor.— Where the transferor of a debt warrants the solvency
of the debtor, the warranty, in the absence of a contract to the contrary, applies only to his solvency at
the time of the transfer, and is limited, where the transfer is made for consideration, to the amount or
value of such consideration.

134. Mortgaged debt.—Where a debt is transferred for the purpose of securing an existing or
future debt, the debt so transferred, if received by the transferor or recovered by the transferee, is
applicable, first, in payment of the costs of such recovery: secondly, in or towards satisfaction of the
amount for the time being secured by the transfer; and the residue, if any, belongs to the transferor or
other person entitled to receive the same.

2[135. Assignment of ri ghts under policy of insurance against fire. —Every assignee by
endorsement or other writing, of a policy of insurance against fire, in whom the property in the subject
insured shall be absolutely vested at the date of the assignment, shall have transferred and vested in
him all rights of suit as if the contract contained in the policy had been made with himself.]

135A. 1[* * * * * * *]

136. Incapacity of officers connected with Courts of Justice.—No Judge, legal practitioner
or officer connected with any Court of Justice shall buy or traffic in, or stipulate for, or agree to receive
any share of, or interest in, any actionable claim, and no Court of Justice shall enforce, at his instance,
or at the instance of any person claiming by or t hrough him, any actionable claims, so dealt with by
him as aforesaid.

137. Saving of negotiable instruments, etc. —Nothing in the foregoing sections of this
Chapter applies to stocks, shares or debentures, or to instruments which are for the time being, by law
or custom, negotiable, or to any mercantile document of title to goods.

Explanation.__ The expression “mercantile document of title to goods” includes a bill of lading,
dockwarrant, warehousekeeper’s certificate, railway receipt, warrant or order for the delivery of
goods, and any other document used in the ordinary course of business as p roof of the possession or
control of goods, or authorizing or purporting to authorize, either by endorsement or by delivery, the
possessor of the document to transfer or receive goods thereby represented.]
___________

1Repealed by the Marine Insurance Act, 2018 (Act No. V of 2018), s. 92.
2Subs. by Act No. VI of 1944, s. 3.

Page 56 of 56

THE SCHEDULE

Year and chapter Subject Extent of repeal
(a) STATUTES
27 Hen. VIII, c.10 Uses The whole.
13 Eliz., c.5 Fraudulent conveyances The whole.
27 Eliz., c.4 Fraudulent conveyances The whole.
4 Wm. and Mary, c.16 Clandestine mortgages The whole.
(b) ACTS OF THE GOVERNOR GENERAL IN COUNCIL
1[* *] 1[* *] 1[* *]
1[* *] 1[* *] 1[* *]
XI of 1855

Mesne profits and improvements.

Section 1; in the title, the words
“to mesne profits and,” and in
the preamble “to limit the
liability for mesne profits and”.
XXVII of 1866 2[*] Trustee Act Section 31.
IV of 1872 Punjab Laws Act So far as it relates to Bengal
Regulations I of 1798 and
XVII of 1806.
2[* *] 2[* *] 2[* *]
2[* *] 2[* *] 2[* *]
I of 1877 Specific Relief . . In sections 35 and 36, the
words “in writing”.
3[* *]

________

5626363 Date: 21-01-2025
1Omitted by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch. (with effect from the 14th October,
1955).
2Repealed by the Federal Laws (Revision and Declaration) Act, 1951 (Act No. XXVI of 1951), s. 3 and 2nd Sch.
3Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (Ordinance No. XXVII of 1981), s. 3 and 2nd Sch.

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17 citations to other instruments0 citations from other laws25 internal provision references3 explicit external provision references

Instruments cited by this law 7

Cantonments Act, 1924

Cites this instrument · 5 occurrences

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911, see Punjab Gazette Extraordinary, 1925, p. 27. S. 54, paras, 2 and 3, and ss. 59, 107 and 123 extend to every cantonment in the Provinces, etc., see s. 287 of the Cantonments Act. 1924 (Act No. II of 1924). It has been rep. as to Crown Grants by the Crown Grants Act, 1895 (Act No. XV of 1895), and amended in Sind by Sind Act No. XIV of 1939, s.2. This Act shall be deemed to have been amended in its applic

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ion to the territorial operation of paragraphs 2 and 3 of s. 54, see s. 1, supra. These paragraphs extend to every cantonment in the Provinces, etc., see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924). 2Ins. by Act No. VI of 1929, s. 17. Page 26 of 56 Provided that, where the sale is made by a person in a fiduciary character, he shall be deemed to contract with the buyer that the seller has d

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such *As to limitation to the territorial operation of s. 59, see s. 1, supra. Section 59 extends to every cantonment in the Provinces, etc.—see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924). 1Ins., omitted and subs. by Act No. XX of 1929, ss. 20-23. 2Subs. by Act No. VI of 1904, s. 3. Page 31 of 56 third person as the mor tgagor may direct; and the mortgagee shall be bound to assig

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9, ss. 54-55. 2As to limitation to the territorial operation of s. 107, see s. 1, supra. S. 107 extends to every cantonment in the Provinces, etc., see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924). 3Subs. and ins. by Act No. VI of 1904, ss. 5. 4Subs. and rep. by A. O., 1937. Page 47 of 56 (A) Rights and Liabilities of the Lessor (a) The lessor is bound to disclose to the

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1929, s. 59. 2As to limitation to the territorial operation of s. 123, see s. 1, supra. S. 123 extends to every cantonment in the Provinces, etc.__ see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924). Page 53 of 56 126. When gift may be suspended or revoked.—The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shal

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Gwadur (Application of Central Laws) Ordinance, 1960

Cites this instrument · 1 occurrence

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d 5 of 1953, as amended respectively. The Act has been and shall be deemed to have been brought into force in Gwadur with effect from the 8th Septemter, 1958, by the Gwadur (Application of Central Laws) Ordinance, 1960 (Ordinance No. XXXVII of 1960), s. 2. The Act, as in force in the NorthWest Frontier Province immediately before the commencement of N.W.F.P. Regulation No. 2 of 1974, has been applied to the Provincially Administered Tribal

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Edition needs identification

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Registration Act, 1908 · Federal
REGISTRATION ACT, 1908 · Punjab

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ion or, 3[where the property is not all situated in one subdistrict, or where the registered instrument has been registered under subsection (2) of section 30 of the Registration Act, 1908 (XVI of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any SubRegistrar within whose subdistrict any part of the property which is being acquired, or of the property

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or interest is being acquired, is situated] : Provided that__ (1) the instrument has been registered and its registration completed in the manner prescribed by the Registration Act, 1908(XVI of 1908), and the rules made thereunder, (2) the instrument 3[or memorandum] has been duly entered or filed, as the case may be, in books kept under section 51 of that Act, and (3) the particulars regarding the transac

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Contract Act, 1872 · Federal
CONTRACT ACT 1872 · Punjab

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. Enactments relating to contracts to be taken as part of Contract Act. — The chapters and sections of this Act which relate to contracts shall be taken as part of the Contract Act, 1872 (IX of 1872). 1[And sections, 54 paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the Registration Act, 2[1908 (XVI of 1908)].] CHAPTER II OF TRANSFERS OF PROPERTY BY ACT OF PARTIES (A) Tran

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) in so far as it is opposed to the nature of the interest affected thereby, or (2) l[for an unlawful object or consideration within the meaning of section 23 of the contract Act, 1872 (IX of 1872),] or (3) to a person legally disqualified to be transferee. 2[(i) Nothing in this section shall be deemed to authorize a tenant having an untransferable right of occupancy, the farmer of an estate in re spect

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Land Acquisition Act, 1894 · Federal
LAND ACQUISITION ACT, 1894 · Punjab

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of the arrears and of all charges and deductions directed by law. (2) Where the mortgaged property or any part thereof or any interest therein is acquired under the Land Acquisition Act, 1894(I of 1894), or any other enactment for the time being in force providing for the compulsory acquisition of immoveable property, the mortgagee shall be entitled to claim payment of the mortgagemoney, in whole or in part, out

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Code of Civil Procedure (CPC) , 1908 (Under Review)

Citation near repeal wording · 5 occurrences

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in respect of his security for such subsequent advance. 1Ins. and subs. by Act No. XX of 1929, ss. 45-47. 2For the repealed provisions, as reenacted, see the Code of Civil Procedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV. 3Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. Page 44 of 56 94. Rights of mesne mortgagee. —Where a property i s mortgaged for successive

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No. XX of 1929, ss. 45-47. 2For the repealed provisions, as reenacted, see the Code of Civil Procedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV. 3Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. Page 44 of 56 94. Rights of mesne mortgagee. —Where a property i s mortgaged for successive debts to successive mortgagees, a mesne mortgagee has the same rights against mortgag

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h property without redeeming the prior mortgage or charge, or otherwise than subject thereto.] 1Subs. and ins. by Act No. XX of 1929, ss. 48-51. 2Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. For the repealed provisions as reenacted, see the Code of Civil Procedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV, rules 12 and 13. 3Rep. by the Code of Civil Procedure, 1908 (

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y Act No. XX of 1929, ss. 48-51. 2Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. For the repealed provisions as reenacted, see the Code of Civil Procedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV, rules 12 and 13. 3Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. For the repealed provisions as reenacted, see Act V of 1908, Sch. I, Order XXXIV,

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and Sch. V. For the repealed provisions as reenacted, see the Code of Civil Procedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV, rules 12 and 13. 3Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. For the repealed provisions as reenacted, see Act V of 1908, Sch. I, Order XXXIV, rule 14. Page 45 of 56 Notice and Tender 102. Service or tender on or to agent.—Whe

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Marine Insurance Act, 2018

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o authorize, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented.] ___________ 1Repealed by the Marine Insurance Act, 2018 (Act No. V of 2018), s. 92. 2Subs. by Act No. VI of 1944, s. 3. Page 56 of 56 THE SCHEDULE Year and chapter Subject Extent of repeal (a) STATUTES 27 Hen. VIII, c.10 Uses The whole. 13 Eliz., c.5 Fraudulent

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References to provisions in this text 25

Section 57

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ity arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability: or (d) save as provided by section 57 and Chapter IV of this Act, any transfer by operation of law or by, or in execution of, a decree or order of a Court of competent jurisdiction: and nothing in the second chapter of this Act shall be deemed to affect any ru

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Section 12

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had been inserted. 31. Condition that transfer shall cease to have effect in case specified uncertain event happens or does not happen.— Subject to the provisions of section 12, on a transfer of property an interest therein may be created with the condition superadded that it shall cease to exist in case a specified uncertain event shall happen, or in case a specified uncertain event shall not happe

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Section 59

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the property, to assign the mortgagedebt and transfer the mortgaged property to such *As to limitation to the territorial operation of s. 59, see s. 1, supra. Section 59 extends to every cantonment in the Provinces, etc.—see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924). 1Ins., omitted and subs. by Act No. XX of 1929, ss. 20-23. 2Subs. by Act No. VI of 1904, s. 3. Page 31 of

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Section 67

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ages. — A mortgagee who holds two or more mortgages executed by the same mortgagor in respect of each of which he has a right to obtain the same kind of decree under section 67, and who sues to obtain such decree on any one of the mortgages shall, in the absence of a contract to the contrary, be bound to sue on all the mortgages in respect of which the mortgagemoney has become due.] 1[68. Right t

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Section 66

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act or default of the mortgagor or mortgagee, the mortgaged property is wholly or partially destroyed or the security is rendered insufficient within the meanin g of section 66, and the mortgagee has given the mortgagor a reasonable opportunity of providing further security 1Subs. and ins. by Act No. XX of 1929, ss. 31-33. Page 35 of 56 enough to render the whole security su

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Section 69

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eeds of the sale thereof. 4[* * * * * * *] 1[* * * * * * *] 1[69A. Appointment of receiver.__ (1) A mortgagee having the right to exercise a power of sale under section 69 shall, subject to the provisions of subsection (2), be entitled to appoint, by writing signed by him or on his behalf, a receiver of the income of the mortgaged property or any part thereof. (2) Any person who has been n

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Section 76

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ta ken in pursuance of a decree made under this Chapter, be debited with the loss, if any, occasioned by such failure. 77. Receipts in lieu of interest.— Nothing in section 76, clauses (b), (d), (g) and (h), applies to cases where there is a contract between the mortgagee and the mortgagor that the receipts from the mortgaged property shall, so long as the mortgagee is in possession of the property

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Section 81

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ter deducting the amount of the former debt from the value of the property out of which it has been paid. Nothing in this section ap plies to a property liable under section 81 to the claim of the 1[subsequent] mortgagee. Deposit in Court 83. Power to deposit in Court money due on mortgage. —At any time after the principal money 1[payable in respect of any mortgage has become due] and befor

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Section 83

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sferred to the mortgagee has been extinguished.] 84. Cessation of interest.—When mortgagor or such other person as aforesaid has tendered or deposited in Court under section 83 the amount remaining due on the mortgage, interest on the principal money shall cease from the date of the tender or 1[in the case of a deposit, where no previous tender of such amount has been made] as soon as the mortgagor

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Section 83

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agor or such other person as aforesaid has done all that has to be done by him to enable the mortgagee to take such amount out of Court, 1[and the notice required by section 83 has been served on the mortgagee: Provided that, where the mortgagor has deposited such amount without having made a previous tender thereof and has subsequently withdrawn the same or any part thereof, interest on the princip

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Section 83

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ey shall be payable from the date of such withdrawal]. 1Subs. and ins. by Act No. XX of 1929, ss. 43-45. Page 43 of 56 Nothing in this section or in section 83 shall be deemed to deprive the mortgagee of his right to interest when there exists a contract that he shall be entitled to reasonable notice before payment or tender of the mortgagemoney l[and such notice has not been given

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Section 91

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or who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property.] 1[92. Subrogation.—Any of the persons referred to in section 91 (other than the mortgagor) and any comortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage h

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Section 79

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r with or without notice of an intermediate mortgage, shall thereby acquire any priority in respect of his original security; and, except in the case provided for by section 79, no mortgagee making a subseque nt advance to the mortgagor, whether with or without notice of an intermediate mortgage, shall thereby acquire any priority in respect of his security for such subsequent advance. 1Ins.

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Section 92

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95. Right of redeeming comortgagor to expenses. —Where one of several mortgagors redeems the mortgaged property, he shall, in enforcing his right of subrogation under section 92 against his co mortgagors, be entitled to add to the mortgagemoney recoverable from them such proportion of the expenses properly incurred in such redemption as is attributable to their share in the property. 96. Mortgage

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Section 83

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such notice shall be served, and any notice served in compliance with such direction shall be deemed sufficient: 1[Provided that, in the case of a notice required by section 83, in the case of a deposit, the application shall be made to the Court in which the deposit has been made.] 1[Where no person or agent to whom such tender should be made can be found or is known] to the person desiring to ma

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Section 111

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and such lease determines thereupon. 1Rep., ins. and subs. by Act No. XX of 1929, s. 57. Page 50 of 56 112. Waiver of forfeiture. —A forfeiture under section 111, clause (g), is waived by acceptance of rent which has become due since the forfeiture, or by distress for such rent, or by any other act on the part of the lessor showing an intention to treat the lease as subsisting: Prov

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Section 111

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fter the institution of a suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver. 113. Waiver of notice to quit.— A notice given under section 111, clause (h), is waived, with the express or implied consent of the person to whom it is given, by any act on the part of the person giving it showing an intention to treat the lease as subsisting. Illustrations (a) A, the

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Section 114

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s all such underleases except where such forfeiture has been procured by the lessor in fraud of the underlessees, or relief against the forfeiture is granted under section 114. 116. Effect of holding over. —If a lessee or underlessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from t

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Section 106

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absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106. Illustrations (a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs. 100. The five years expire, but C continues in possession of the house and pays the rent to A. C’s lease is renewe

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Section 127

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f money. B refuses to accept the lease. He does not by this refusal forfeit the money. Page 54 of 56 128. Universal donee.—Subject to the provisions of section 127, where a gift consists of the donor’s whole property, the donee is personally liable for all the debts due by l[and liabilities of] the donor at the time of the gift to the extent of the property comprised therein. 129. Sav

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Section 131

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Illustrations (i) A owes money to B, who transfers the debt to C. B then demands the debt from A, who, not having received notice of the transfer, as prescribed in section 131, pays B. The payment is valid, and C cannot sue A for the debt. (ii) A effects a policy on his own life with an Insurance Company and assigns it to a Bank for securing the payment of an existing or future debt. If A dies, t

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Section 130

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dies, the Bank is entitled to receive the amount of the policy and to sue on it without the concurrence of A’s executor, subject to the proviso in subsection (1) of section 130 and to the provisions of section 132. 1Ins. and rep. by Act No. XX of 1929, ss. 60-62. 2Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table. 3Subs. by Act No. II of 190

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Section 132

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the amount of the policy and to sue on it without the concurrence of A’s executor, subject to the proviso in subsection (1) of section 130 and to the provisions of section 132. 1Ins. and rep. by Act No. XX of 1929, ss. 60-62. 2Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table. 3Subs. by Act No. II of 1900, s. 4. 4Added by the Insurance Ac

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Section 1

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e mortgages The whole. (b) ACTS OF THE GOVERNOR GENERAL IN COUNCIL 1[* *] 1[* *] 1[* *] 1[* *] 1[* *] 1[* *] XI of 1855 Mesne profits and improvements. Section 1; in the title, the words “to mesne profits and,” and in the preamble “to limit the liability for mesne profits and”. XXVII of 1866 2[*] Trustee Act Section 31. IV of 1872 Punjab Laws Act So far as it relates to Bengal

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Section 31

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Section 1; in the title, the words “to mesne profits and,” and in the preamble “to limit the liability for mesne profits and”. XXVII of 1866 2[*] Trustee Act Section 31. IV of 1872 Punjab Laws Act So far as it relates to Bengal Regulations I of 1798 and XVII of 1806. 2[* *] 2[* *] 2[* *] 2[* *] 2[* *] 2[* *] I of 1877 Specific Relief . . In sections 35 and 36, the words “in writing

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Provisions explicitly cited in other instruments 3

Section 30 of Registration Act, 1908

Cited by Transfer of Property Act, 1882

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Registration Act, 1908 · Federal
REGISTRATION ACT, 1908 · Punjab

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date of registration or, 3[where the property is not all situated in one subdistrict, or where the registered instrument has been registered under subsection (2) of section 30 of the Registration Act, 1908 (XVI of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any SubRegistrar within whose subdistrict any part of the property which is being acquired, or of the property

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Section 23 of contract Act, 1872

Cited by Transfer of Property Act, 1882

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Contract Act, 1872 · Federal
CONTRACT ACT 1872 · Punjab

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fer can be made (1) in so far as it is opposed to the nature of the interest affected thereby, or (2) l[for an unlawful object or consideration within the meaning of section 23 of the contract Act, 1872 (IX of 1872),] or (3) to a person legally disqualified to be transferee. 2[(i) Nothing in this section shall be deemed to authorize a tenant having an untransferable right of occupancy, the farmer of an estate in re spect

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Section 38 of Insurance Act, 1938

Cited by Transfer of Property Act, 1882

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thout making him a party thereto. Exception.__ Nothing in this section applies to the transfer of a marine or fire policy of insurance 1[or affects the provisions of section 38 of the Insurance Act, 1938(IV of 1938)]. Illustrations (i) A owes money to B, who transfers the debt to C. B then demands the debt from A, who, not having received notice of the transfer, as prescribed in section 131, pays B. The payment is valid,

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