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  "title": "Transfer of Property Act, 1882",
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  "text": "Page 1 of 56 \r\n \r\n \r\n \r\n \r\nTHE TRANSFER OF PROPERTY ACT, 1882 \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\nCONTENTS \r\nCHAPTER I \r\nPRELIMINARY \r\n1. Short title \r\nCommencement \r\nExtent \r\n2. Repeal of Acts \r\nSaving of certain enactments, incidents, rights, liabilities, etc. \r\n3. Interpretation clause \r\n4. Enactments relating to contracts to be taken as part of Contract Act \r\nCHAPTER II \r\nOF TRANSFERS OF PROPERTY BY ACT OF PARTIES \r\n(A)Transfer of property, whether moveable or immoveable \r\n5. \"Transfer of property\" defined \r\n6. What may be transferred \r\n7. Persons competent to transfer \r\n8. Operation of transfer \r\n9. Oral transfer \r\n10. Condition restraining alienation \r\n11. Restriction repugnant to interest created \r\n12. Condition making interest determinable on insolvency or attempted alienation \r\n13. Transfer for benefit of unborn person \r\n \r\n\r\n \r\nPage 2 of 56 \r\n \r\n14. Rule against perpetuity \r\n15. Transfer to class some of whom come under sections 13 and 14 \r\n16. Transfer to take effect on failure of prior interest \r\n17. Direction for accumulation \r\n18. Transfer in perpetuity for benefit of public \r\n19. Vested interest \r\n20. When unborn person acquires vested interest on transfer for his benefit \r\n21. Contingent interest \r\n22. Transfer to members of a class who attain a particular age \r\n23. Transfer contingent on happening of specified uncertain event \r\n24. Transfer to such of certain persons as survive at some period not specified \r\n25. Conditional transfer \r\n26. Fulfilment of condition precedent \r\n27. Conditional transfer to one person coupled with transfer to another on failure of prior \r\ndisposition \r\n28. Ulterior transfer conditional on happening or not happening of specified event \r\n29. Fulfilment of condition subsequent \r\n30. Prior disposition not affected by invalidity of ulterior disposition \r\n31. Condition that transfer shall cease to have effect in case specified uncertain event happens or \r\ndoes not happen \r\n32. Such condition must not be invalid \r\n33. Transfer conditional on performance of act, no time being specified for performance \r\n34. Transfer conditional on performance of act, time being specified \r\nElection \r\n35. Election when necessary \r\nApportionment \r\n36. Apportionment of periodical payments on determination of interest of person entitled \r\n37. Apportionment of benefit of obligation on severance \r\n \r\nPage 3 of 56 \r\n \r\n(B) Transfer of Immoveable Property \r\n38. Transfer by person authorized only under certain circumstances to transfer \r\n39. Transfer where third person is entitled to maintenance \r\n40. Burden of obligation imposing restriction on use of land, or of obligation annexed to ownership \r\nbut not amounting to interest or easement \r\n41. Transfer by ostensible owner \r\n42. Transfer by person having authority to revoke former transfer \r\n43. Transfer by unauthorized person who subsequently acquires interest in property transferred \r\n44. Transfer by one co­owner \r\n45. Joint transfer for consideration \r\n46. Transfer for consideration by persons having distinct interests \r\n47. Transfer by co­owner of share in common property \r\n48. Priority of rights created by transfer \r\n49. Transferee's right under policy \r\n50. Rent bona-fide paid to holder under defective title \r\n51. Improvements made by bona fide holders under defective titles \r\n52. Transfer of property pending suit relating thereto \r\n53. Fradulent transfer \r\n53A. Part performance \r\nCHAPTER III \r\nOF SALES OF IMMOVEABLE PROPERTY \r\n54. \"Sale\" defined \r\nSale how made \r\nContract for sale \r\n55. Rights and liabilities of buyer and seller \r\n56. Marshalling by subsequent purchaser \r\nDischarge of Incumbrances on sale \r\n57. Provision by court for incumbrance and sale freed therefrom \r\n \r\n \r\nPage 4 of 56 \r\n \r\nCHAPTER IV \r\nOF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES \r\n58. \"Mortgage,\" \"mortgagor,\" \"mortgagee,\" \"mortgage­money\" and \"mortgage­deed\" defined \r\nSimple mortgage \r\nMortgage by conditional sale \r\nUsufructuary mortgage \r\nEnglish mortgage \r\nMortgage by deposit of title­deeds \r\nAnomalous mortgage \r\n59. Mortgage when to be by assurance \r\n59A. References to mortgagors and mortgagees to include persons deriving title from them \r\nRights and Liabilities of Mortgagor \r\n60. Right of mortgagor to redeem \r\nRedemption of portion of mortgaged property \r\n60A. Obligation to transfer to third party instead of re­transference to Mortgagor \r\n60B. Right to inspection and production of documents \r\n61. Right to redeem separately or simultaneously \r\n62. Right of usufructuary mortgagor to recover possession \r\n63. Accession to mortgaged property \r\nAccession acquired in virtue of transferred ownership \r\n63A. Improvements to mortgaged property \r\n64. Renewal of mortgaged lease \r\n65. Implied contracts by mortgagor \r\n65A. Mortgagor's power to lease \r\n66. Waste by mortgagor in possession \r\nRights and Liabilities of Mortgagee \r\n67. Right to foreclosure or sale \r\n67A. Mortgagee when bound to bring one suit on several mortgages \r\n68. Right to sue for mortgage­money \r\n69. Power of sale when valid. \r\n69A Appointment of receiver \r\n \r\nPage 5 of 56 \r\n \r\n70. Accession to mortgaged property \r\n71. Renewal of mortgaged lease \r\n72. Rights of mortgagee in possession \r\n73. Right to proceeds of revenue sale or compensation on acquisition \r\n74­75. [Repealed] \r\n76. Liabilities of mortgagee in possession \r\nLoss occasioned by his default \r\n77. Receipts in lieu of interest \r\nPriority \r\n78. Postponement of prior mortgagee \r\n79. Mortgage to secure uncertain amount when maximum is expressed \r\n80. [Repealed] \r\nMarshalling and Contribution \r\n81. Marshalling securities \r\n82. Contribution to mortgage­debt \r\nDeposit in Court \r\n83 Power to deposit in Court money due on mortgage \r\nRight to money deposited by mortgagor \r\n84. Cessation of interest \r\n85-90. [Repealed] \r\nRedemption \r\n91. Persons who may sue for redemption \r\n92. Subrogation \r\n93. Prohibition of tacking \r\n94. Rights of mesne mortgagee \r\n95. Right of redeeming co­mortgagor to expenses \r\n96. Mortgage by deposit of title­deeds \r\n97. [Repealed] \r\n \r\nPage 6 of 56 \r\n \r\nAnomalous Mortgages \r\n98. Rights and liabilities of parties to anomalous mortgages \r\n99. [Repealed]  \r\nCharges \r\n100. Charges \r\n101. No merger in case of subsequent encumbrance \r\nNotice and Tender \r\n102. Service or tender on or to agent \r\n103. Notice, etc., to or by person incompetent to contract \r\n104. Power to make rules \r\nCHAPTER V \r\nOF LEASES OF IMMOVEABLE PROPERTY \r\n105. Lease defined \r\nLessor, lessee, premium and rent defined \r\n106. Duration of certain leases in absence of written contract or local usage \r\n107. Leases how made \r\n108. Rights and liabilities of lessor and lessee \r\n109. Rights of lessors’ transferee \r\n110. Exclusion of day on which term commences \r\nDuration of lease for year \r\nOption to determine lease \r\n111. Determination of lease \r\n112. Waiver of forfeiture \r\n113. Waiver of notice to quit \r\n114. Relief against forfeiture for non­payment of rent \r\n114A. Relief against forfeiture in certain other cases \r\n115. Effect of surrender and forfeiture on under­leases \r\n116. Effect of holding over \r\n117. Exemption of leases for agricultural purposes \r\n \r\nPage 7 of 56 \r\n \r\nCHAPTER VI  \r\nOF EXCHANGES \r\n118. \"Exchange\" defined \r\n119. Right of party deprived of thing received in exchange \r\n120. Rights and liabilities of parties \r\n \r\n121. Exchange of money \r\nCHAPTER VII \r\nOF GIFTS \r\n122. \"Gift\" defined \r\nAcceptance when to be made \r\n123. Transfer how effected \r\n124. Gift of existing and future property \r\n125. Gift to several of whom one does not accept \r\n126. When gift may be suspended or revoked \r\n127. Onerous gift \r\nOnerous gift to disqualified person \r\n128. Universal done \r\n \r\n129. Saving of donations mortis casua and Muslim law \r\n \r\nCHAPTER VIII \r\nOF TRANSFERS OF ACTIONABLE CLAIMS \r\n \r\n130. Transfer of actionable claim \r\n130A. [Repealed] \r\n131. Notice to be in writing, signed \r\n132. Liability of transferee of actionable claim \r\n133. Warranty of solvency of debtor \r\n134. Mortgaged debt \r\n135. Assignment of rights under policy of insurance against fire \r\n135A. [Repealed]  \r\n136. Incapacity of officers connected with Courts of Justice \r\n137. Saving of negotiable instruments, etc. \r\nTHE SCHEDULE \r\n \r\nPage 8 of 56 \r\n \r\nTHE TRANSFER OF PROPERTY ACT, 1882 \r\n1ACT No. IV OF 1882 \r\n[17th February, 1882] \r\nAn Act to amend the law relating to the Transfer of Property by act of Parties. \r\nPreamble. WHEREAS it is expedient to define and amend certain parts of the law relating to \r\nthe transfer of property by act of parties; It is hereby enacted as follows:__ \r\n \r\nCHAPTER I  \r\n \r\nPRELIMINARY \r\n1.  Short title.—This Act may be called the Transfer of Property Act, 1882.  \r\n     Commencement. It shall come into force on the first day of July, 1882. \r\n     2[* * * * * * *] \r\nExtent. 3[ 2[This] Act or any Part thereof may by notification in the official Gazette be \r\nextended to the whole or any part of 2[a Province] 4[by the Provincial Government]]. \r\n5[And any 6[Provincial Government] may, 7[* * * ] from time to time, by notification in the \r\n6[official Gazette], exempt either retrospectively or prospectively, any part of the territories \r\nadministered by such 5[Provincial Government] from all or any of the following provisions, namely:__ \r\nSections 54, paragraphs 2 and 3, 59, 107 and 123.] \r\n \r\n \r\n \r\n1This Act has been extended with effect from 1st January, 1915, to the Province of Sindh, see Bom. R. & O. \r\nSs. 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 \r\nof the Punjab Municipal Act, 1911, see Punjab Gazette Extraordinary, 1925, p. 27. \r\nS. 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 \r\n1924). 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, \r\ns.2. \r\nThis Act shall be deemed to have been amended in its application to the Province of Sind, see Sind Act No. XIV of 1939. \r\nThe 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 \r\namended respectively. \r\nThe 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 \r\nof Central Laws) Ordinance, 1960 (Ordinance No. XXXVII of 1960), s. 2. \r\nThe 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 \r\napplied to the Provincially Administered Tribal Areas of Chitral, Dir, Kalam, Swat and Malakand protected Area, by N.W.F.P. Regulation, No. 2 of \r\n1974, s. 3. \r\n2Omitted and subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Sch. \r\n3Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch. \r\n4Subs. by A. O., 1964, Art. 2 and Sch. \r\n5Subs. by Act No. III of 1885, s. 1. \r\n6Subs. by A. O., 1937. \r\n7Rep. by the Devolution Act, 1920 (Act No. XXXVIII of 1920), s. 2 and Sch. 1. \r\n  \r\n \r\nPage 9 of 56 \r\n \r\n1[Notwithstanding anything in the foregoing part of this section, sections 54, paragraphs 2 and \r\n3, 59, 107 and 123 shall not extend or be extended to any district or tract of country for the time being \r\nexcluded from the operation of the Registration Act, 2[1908(XVI of 1908)], under the power conferred \r\nby the first section of that Act or otherwise.]  \r\n2. Repeal of Acts. Saving of certain enactments, incidents, rights, liabilitie s, etc.—In the \r\nterritories to which this Act extends for the time being the enactments specified in the schedule hereto \r\nannexed shall be repealed to the extent therein mentioned. But nothing herein contained shall  be \r\ndeemed to affect__ \r\n(a) the provisions of any enactment not hereby expressly repealed : \r\n(b) any terms or incidents of any contract or constitution of property which are \r\nconsistent with the provisions of this Act, and are allowed by the law for the \r\ntime being in force: \r\n(c) any right or liability arising out of a legal relation constituted before this Act \r\ncomes into force, or any relief in respect of any such right or liability: or \r\n(d) save as provided by section 57 and Chapter IV of this Act, any transfer by \r\noperation of law or by, or in  execution of, a decree or order of a Court of \r\ncompetent jurisdiction: \r\nand nothing in the second chapter of this Act shall be deemed to affect any rule of 3[*], \r\n4[Muslim] 3[* *]law. \r\n3. Interpretation clause.—In this Act, unless there is something repugnant in the subject or \r\ncontext,__ \r\n“immoveable property” does not include standing timber, growing crops or grass:  \r\n“instrument” means a non­testamentary instrument : \r\n5[“attested”, in relation to an instrument, means 6[and shall be deemed always to hav e meant] \r\nattested by two or more witnesses each of whom has seen the executant sign or affix his mark \r\nto the instrument, or has seen some other person sign the instrument in the presence and by the \r\ndirection of the executant, or has received from the execu tant a personal acknowledgement or \r\nhis signature or mark, or of the signature of such other person, and each of whom has signed \r\nthe instrument in the presence of the executant; but it shall not be necessary that more than one \r\nof such witnesses shall have been present at the same time, and no particular form of attestation \r\nshall be necessary:] \r\n“registered” means registered in 7[a province] under the law for the time being in force \r\nregulating the registration of documents: \r\n \r\n1Ins. 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. \r\n2Subs. by Act No. XX of 1929, for 1877. \r\n3Rep. by Act No. XX of 1929, s. 3. \r\n4Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table. \r\n5Ins. by Act No. XXVII of 1926, s. 2. \r\n6Ins. by the Repealing and Amending Act, 1927 (Act No. X of 1927), s. 2 and Sch. 1. \r\n7Subs. by A. O., 1949, Sch. \r\n  \r\n \r\nPage 10 of 56 \r\n \r\n“attached to the earth” means__ \r\n(a) rooted in the earth, as in the case of trees and shrubs ; \r\n(b) imbedded in the earth, as in the case of walls or buildings ; or \r\n(c) attached to what is so imbedded for the permanent beneficial enjoyment of that \r\nto which it is attached: \r\nl[“Actionable claim” means a claim to any debt, other than a debt secured by mortgage of \r\nimmoveable property or by hypothecation or pledge of moveable property, or to any beneficial \r\ninterest in moveable property not in the possession, either actual or constructive, of the \r\nclaimant, which the Civil Courts recognize as affording grounds for relief, whether such debt \r\nor beneficial interest be existent, accruing, conditional or contingent:] \r\n2[“a person is said to have notice” of a fact when he actually knows that fact, or when, but for \r\nwilful abstention from an inquiry or search which he ought to have made, or gross negligence, \r\nhe would have known it. \r\nExplanation I.__ Where any transaction relating to immoveable property is required by law to \r\nbe and has been effected by a registered instrument, any person acquiring such property or any part of, \r\nor share or interest in, such property shall be deemed to have notice of su ch instrument as from the \r\ndate of registration or, 3[where the property is not all situated in one sub­district, or where the registered \r\ninstrument has been registered under sub­section (2) of section 30 of the Registration Act, 1908 (XVI \r\nof 1908), from the earliest date on which any memorandum of such registered instrument has been \r\nfiled by any Sub­Registrar within whose sub­district any part of the property which is being acquired, \r\nor of the property wherein a share or interest is being acquired, is situated] : \r\nProvided that__ \r\n(1) the instrument has been registered and its registration completed in the manner prescribed \r\nby the Registration Act, 1908(XVI of 1908), and the rules made thereunder, \r\n(2) the instrument 3[or memorandum] has been duly entered or filed, as the case may be, in \r\nbooks kept under section 51 of that Act, and \r\n(3)  the particulars regarding the transaction to which the instrument relates have been correctly \r\nentered in the indexes kept under section 55 of that Act. \r\nExplanation II.__ Any person acquiring any immoveable property or any share or interest in any \r\nsuch property shall be deemed to have notice of the title, if any, of any person who is for the time being \r\nin actual possession thereof. \r\nExplanation III.__ A person shall be deemed to have had notice of any fact if his agent acquires \r\nnotice thereof whilst acting on his behalf in the course of business to which that fact is material: \r\nProvided that, if the agent fraudulently conceals the fact, the principal shall not be charged with \r\nnotice thereof as against any person who was a party to or otherwise cognizant of the fraud.] \r\n \r\n1Ins. by Act No. II of 1900, s. 2. \r\n2Subs. by Act No. XX of 1929, s. 4. \r\n3Ins. by Act No. V of 1930, s. 2. \r\n \r\nPage 11 of 56 \r\n \r\n4. Enactments relating to contracts to be taken as part of Contract Act. — The chapters and \r\nsections of this Act which relate to contracts shall be taken as part of the Contract Act, 1872 (IX of 1872). \r\n1[And sections, 54 paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the \r\nRegistration Act, 2[1908 (XVI of 1908)].] \r\n \r\nCHAPTER II \r\n \r\nOF TRANSFERS OF PROPERTY BY ACT OF PARTIES \r\n \r\n(A) Transfer of Property, whether moveable or immoveable \r\n5. “Transfer of property” defined. — In the following sections “transfer of property” means an \r\nact by which a living person conveys property, in present or in future, to one or more other living persons, \r\nor to himself, \r\n2[or to himself] and one or more other living persons; and “to transfer property” is to perform such \r\nact. \r\n2[In this section “living person” includes a company or association or body of individuals, whether \r\nincorporated or not, but nothing herein contained shall affect any law for the time being in force relating to \r\ntransfer of property to or by companies, associations or bodies of individuals.] \r\n6. What may be transferred. — Property of any kind may be transferred, except as otherwise \r\nprovided by this Act or by any other law for the time being in force. \r\n(a) The chance of an heir­a pparent succeeding to an estate, the chance of a relation \r\nobtaining a legacy on the death of a kinsman, or any other mere possibility of a like \r\nnature, cannot be transferred. \r\n(b) A mere right of re­entry for breach of a condition subsequent cannot be transferred \r\nto any one except the owner of the property affected thereby. \r\n(c) An easement cannot be transferred apart from the dominant heritage. \r\n(d) An interest in property restricted  in its enjoyment to the owner personally cannot \r\nbe transferred by him. \r\n2[(dd) A right to future maintenance, in whatsoever manner arising, secured or determined, \r\ncannot be transferred.] \r\n(e) A mere right to sue 3[* * *] cannot be transferred. \r\n(f) A public office cannot be transferred, nor can the salary of a public officer, whether \r\nbefore or after it has become payable. \r\n(g) Stipends allowed to military 4[, naval], 5[air­force] and civil pensioners of 6[the \r\nGovernment] and political pensions cannot be transferred. \r\n \r\n \r\n1Ins. by Act No. III of 1885, s. 3. \r\n2Subs. and ins. by Act No. XX of 1929, ss. 5-7. \r\n3Rep. by Act No. II of 1900, s. 3 (i). \r\n4Ins. by Act No. XXXV of 1934, s. 2 and Sch. \r\n5Ins. by the Repealing and Amending Act, 1927 (Act No. X of 1927), s. 2 and Sch. I. \r\n6Subs. by the Central Laws (Adaptation) Order, 1961 (President’s Order No. 1 of 1961), Art. 2. (with effect from the 23rd March, 1956). \r\n \r\nPage 12 of 56 \r\n \r\n(h) No transfer can be made (1) in so far as it is opposed to the nature of the interest \r\naffected thereby, or (2) l[for an unlawful object or consideration within the \r\nmeaning of section 23 of the contract Act, 1872 (IX of 1872),] or (3) to a person \r\nlegally disqualified to be transferee. \r\n2[(i)  Nothing in this section shall be deemed to authorize a tenant having an \r\nuntransferable right of occupancy, the farmer of an estate in re spect of which \r\ndefault has been made in paying revenue or the lessee of an estate under the \r\nmanagement of a Court of Wards, to assign his interest as such tenant, farmer \r\nor lessee.] \r\n7. Persons competent to transfer. —Every person competent to contract and e ntitled to \r\ntransferable property, or authorized to dispose of transferable property not his own, is competent to \r\ntransfer such property either wholly or in part, and either absolutely or conditionally, in the \r\ncircumstances, to the extent and in the manner allowed and prescribed by any law for the time being \r\nin force. \r\n8. Operation of transfer.—Unless a different intention is expressed or necessarily implied, a \r\ntransfer of property passes forthwith to the transferee all the interest which the transferor is th en \r\ncapable of passing in the property, and in the legal incidents thereof. \r\nSuch incidents include, where the property is land, the easements annexed thereto, the rents \r\nand profits thereof accruing after the transfer, and all things attached to the earth; \r\nand, where the property is machinery attached to the earth, the moveable parts thereof; \r\nand, where the property is a house, the easements annexed thereto, the rent thereof accruing \r\nafter the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent \r\nuse therewith; \r\nand, where the property is a debt or other actionable claim, the securities therefor (except where \r\nthey are also for other debts or claims not transferred to the transferee), but not arrears of interest \r\naccrued before the transfer; \r\nand, where the property is money or other property yielding income, the interest or income \r\nthereof accruing after the transfer takes effect. \r\n9. Oral transfer.—A transfer of property may be made without writing in every case in which \r\na writing is not expressly required by law. \r\n10. Condition restraining alienation.—Where property is transferred subject to a condition \r\nor limitation absolutely restraining the transferee or any person claiming under him from parting with \r\nor disposing of his interest in the property, the condition or limitation is void, except in the case  of a \r\nlease where the condition is for the benefit of the lessor or those claiming under him: Provided that \r\nproperty may be transferred to or for the benefit of a woman (not  being a Hindu, 3[Muslim] or \r\nBuddhist), so that she shall not have power during her marriage to transfer or charge the same or her \r\nbeneficial interest therein. \r\n \r\n1Subs. by Act No. II of 1900, s. 3 (ii). \r\n2Ins. by Act No. III of 1885, s. 4. \r\n3Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table. \r\n \r\nPage 13 of 56 \r\n \r\n11. Restriction repugnant to interest created.—Where, on a transfer of property, an interest \r\ntherein is created absolutely in favour of any person, but  the terms of the transfer direct that such \r\ninterest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and \r\ndispose of such interest as if there were no such direction. \r\n \r\n1[Where any such direction has been made in respect of one piece of immoveable property for \r\nthe purpose of securing the beneficial enjoyment of another piece of such property, nothing in this \r\nsection shall be deemed to affect any right which the transferor may have to enforce such direction or \r\nany remedy which he may have in respect of a breach thereof.] \r\n \r\n12. Condition making interest determinable on insolvency or attempted alienation. — \r\nwhere property is transferred subject to a condition or limitation making any interest therein, reserved \r\nor given to or for the benefit of any person, to cease on his becoming insolvent or endeavouring to \r\ntransfer or dispose of the same, such condition or limitation is void. \r\n \r\nNothing in this section applies to a condition in a lease for the benefit of the lessor or  those \r\nclaiming under him. \r\n \r\n13. Transfer for benefit of unborn person. —Where, on a transfer of property, an interest \r\ntherein is created for the b enefit of a person not in existence at the date of the transfer, subject to a \r\nprior interest created by the same transfer, the interest created for the benefit of such person shall not \r\ntake effect, unless it extends to the whole of the remaining interest of the transferor in the property. \r\n \r\nIllustration \r\n \r\nA transfers property of which he is the owner to B in trust for A and his intended wife \r\nsuccessively for their lives, and, after the death of the survivor, for the eldest son of the intended \r\nmarriage for life, and after his death for A’s second son. The interest so created for the benefit of the \r\neldest son does not take effect, because it does not extend to the whole of A’s remaining interest in the \r\nproperty. \r\n \r\n14. Rule against perpetuity.— No transfer of property can operate to create an interest which \r\nis to take effect after the life­time of one or more persons living at the date of such transfer, and the \r\nminority of some person who shall be in existence at the expiration of that period, and to whom, if he \r\nattains full age, the interest created is to belong. \r\n \r\n15. Transfer to class some of whom come under sections 13 and 14. — If, on a transfer of \r\nproperty, an interest therein is created for the benefit of a class of persons with regard to some of whom \r\nsuch interest fails by reason of any of the rules contained in sections 13 and 14, such interest fails 1[in \r\nregard to those persons only and not in regard to the whole class]. \r\n \r\n1[16. Transfer to take effect on failure of prior interest. — Where, by reason of any of the \r\nrules contained in sections 13 and 14, an interest created for the benefit of a person or of a class of \r\npersons fails in regard to such person or the whole of such class, any interest created in the same \r\ntransaction and intended to take effect after or upon failure of such prior interest also fails. \r\n \r\n17. Direction for accumulation.— (1) Where the terms of a transfer of property direct that the \r\nincome arising from the property shall be accumulated either wholly or in part during a period longer \r\nthan__ \r\n \r\n(a) the life of the transferor, or \r\n \r\n \r\n(b) a period of eighteen years from the date of the transfer, \r\n \r\n \r\nsuch direction shall, save as hereinafter provided, be void to the extent to which the period during \r\nwhich the accumulation is directed exceeds the longer of the aforesaid periods, and at the end of such \r\nlast­mentioned period the property and the income thereof shall be disposed of as if the period during \r\nwhich the accumulation has been directed to be made had elapsed. \r\n \r\n1Subs. by Act No. XX of 1929, ss. 8-10. \r\n \r\nPage 14 of 56 \r\n \r\n (2) This section shall not affect any direction for accumulation for the purpose of__ \r\n(i) the payment of the debts of the transferor or any other person taking any interest \r\nunder the transfer, or \r\n(ii) the provision of portions for children or remoter issue of the transferor or of any \r\nother person taking any interest under the transfer, or \r\n(iii) the preservation or maintenance of the property transferred; and such direction \r\nmay be made accordingly. \r\n18. Transfer in perpetuity for benefit of public.— The restrictions in sections 14, 16 and 17 \r\nshall not apply in the case of a transfer of property for the benefit of the public in the advancement of \r\nreligion, knowledge, commerce, health, safety, or any other object beneficial to mankind.] \r\n19. Vested interest.—Where, on a transfer of property, an interest therein is created in favour \r\nof a person without specifying the time when it is to take effect, or in terms specifying that it is to take \r\neffect forthwith or on the happening of an event which must happen , such interest is vested, unless a \r\ncontrary intention appears from the terms of the transfer. \r\nA vested interest is not defeated by the death of the transferee before he obtains possession. \r\nExplanation.__ An intention that an interest shall not be vested is not to be inferred merely from \r\na provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same \r\nproperty is given or reserved to some other person, or whereby income arising from the property is \r\ndirected to be accumulated until the time of enjoyment arrives, or from a provision that if a particular \r\nevent shall happen the interest shall pass to another person. \r\n20. When unborn person acquires vested interest on transfer for his benefit. —Where, on \r\na transfer of property, an int erest therein is created for the benefit of a person not then living, he \r\nacquires upon his birth, unless a contrary intention appear from the terms of the transfer, a vested \r\ninterest, although he may not be entitled to the enjoyment thereof immediately on his birth. \r\n21. Contingent interest.—Where, on a transfer of property, an interest therein is created in \r\nfavour of a person to take effect only on the happening of a specified uncertain event, or if a specified \r\nuncertain event shall not happen, such person thereby acquires a contingent interest in the property. \r\nSuch interest becomes a vested interest, in the former case, on the happening of the event, in the latter, \r\nwhen the happening of the event becomes impossible. \r\nException.__Where, under a transfer of property, a person becomes entitled to an interest therein \r\nupon attaining a particular age, and the transferor also gives to him absolutely the income to arise from \r\nsuch interest before he reaches that age, or directs the income or so much thereof as may be necessary \r\nto be applied for his benefit, such interest is not contingent. \r\n22. Transfer to members of a class who attain a particular age. —Where, on a transfer of \r\nproperty, an interest therein is created in favour of such members only of a class as shall attain a \r\nparticular age, such interest does not vest in any member of the class who has not attained that age. \r\n \r\n \r\n \r\nPage 15 of 56 \r\n \r\n23. Transfer contingent on happening of specified uncertain event.—Where, on a transfer \r\nof property, an interest therein is to accrue to a specified person if a specified uncertain event shall \r\nhappen, and no time is mentioned for the occurrence of that event, the interest fails unle ss such event \r\nhappens before, or at the same time as, the intermediate or precedent interest ceases to exist. \r\n24. Transfer to such of certain persons as survive at some period not specified. —Where, \r\non a transfer of property, an interest therein is to accrue to such of certain persons as shall be surviving \r\nat some period, but the exact period is not specified, the interest shall go to such of them as shall be \r\nalive when the intermediate or precedent interest ceases to exist, unless a contrary intention appea rs \r\nfrom the terms of the transfer. \r\nIllustration \r\nA transfers property to B for life, and after his death to C and D, equally to be divided between \r\nthem, or to the survivor of them. C dies during the life of B. D survives B. At B’s death the property \r\npasses to D. \r\n25. Conditional transfer.—An interest created on a transfer of property and dependent upon \r\na condition fails if the fulfilment of the condition is impossible, or is forbidden by law, or is of such a \r\nnature that, if permitted, it would defeat the provisions of any law, or is fraudulent, or involves or implies \r\ninjury to the person or property of another, or the Court regards it as immoral or opposed to public \r\npolicy. \r\nIllustrations \r\n(a) A lets a farm to B on condition that he shall walk a hundred miles in an hour. \r\nThe lease is void. \r\n(b) A gives Rs. 500 to B on condition that he shall marry A’s daughter C. At the \r\ndate of the transfer C was dead. The transfer is void. \r\n(c) A transfers Rs. 500 to B on condition that she shall murder C. The tran sfer is \r\nvoid. \r\n(d) A transfers Rs. 500 to his niece C if she will desert her husband. The transfer is \r\nvoid. \r\n26. Fulfilment of condition precedent.—Where the terms of a transfer of property impose a \r\ncondition to be fulfilled before a person can take an inter est in the property, the condition shall be \r\ndeemed to have been fulfilled if it has been substantially complied with. \r\nIllustrations \r\n(a) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of \r\nC, D and E. E dies. B marries with the consent of C and D. B is deemed to have \r\nfulfilled the condition. \r\n(b) A transfers Rs. 5,000 to B on condition that he shall marry with the  consent of \r\nC, D and E. B marries without the consent of C, D and E, but obtains their \r\nconsent after the marriage. B has not fulfilled the condition. \r\n  \r\n \r\nPage 16 of 56 \r\n \r\n27. Conditional transfer to one person coupled with transfer to another on failure of prior \r\ndisposition.— Where, on a transfer of property, an interest therein is created in favour of one person, \r\nand by the same transaction an ulterior disposition of the same interest is made in favour of another, if \r\nthe prior disposition under the transfer shall  fail, the ulterior disposition shall take effect upon the \r\nfailure of the prior disposition, although the failure may not have occurred in the manner contemplated \r\nby the transferor. \r\nBut, where the intention of the parties to the transaction is that the ult erior disposition shall \r\ntake effect only in the event of the prior disposition failing in a particular manner, the ulterior \r\ndisposition shall not take effect unless the prior disposition fails in that manner. \r\nIllustrations \r\n(a) A transfers Rs. 500 to B on condition that he shall execute a certain lease within \r\nthree months after A’s death, and, if he should neglect to do so, to C. B dies in \r\nA’s life­time.  The disposition in favour of C takes effect. \r\n(b) A transfers property to his wife; but, in case she shou ld die in his life­time, \r\ntransfers to B that which he had transferred to her. A and his wife perish \r\ntogether, under circumstances which make it impossible to prove that she died \r\nbefore him. The disposition in favour of B does not take effect. \r\n28. Ulterior transfer conditional on happening or not happening of specified event.— On \r\na transfer of property an interest therein may be created to accrue to any person with the condition \r\nsuperadded that in case a specified uncertain event shall happen such interest s hall pass to another \r\nperson, or that in case a specified uncertain event shall not happen such interest shall pass to another \r\nperson. In each case the dispositions are subject to the rules contained in sections 10, 12, 21, 22, 23, \r\n24, 25 and 27. \r\n29. Fulfilment of condition subsequent. —An ulterior disposition of the kind contemplated \r\nby the last preceding section cannot take effect unless the condition is strictly fulfilled. \r\nIllustration \r\nA transfers Rs. 500 to B, to be paid to him on his attaining his majority or marrying, with a \r\nproviso that, if B dies a minor or marries without C’s consent, the Rs. 500 shall go to D. B marries \r\nwhen only 17 years of age, without C’s consent. The transfer to D takes effect. \r\n30. Prior disposition not affected by inva lidity of ulterior disposition. —If the ulterior \r\ndisposition is not valid, the prior disposition is not affected by it. \r\nIllustration \r\nA transfers a farm to B for her life, and, if she do not desert her husband, to C. B is entitled to \r\nthe farm during her life as if no condition had been inserted. \r\n31. Condition that transfer shall cease to have effect in case specified uncertain event \r\nhappens or does not happen.— Subject to the provisions of section 12, on a transfer of property an \r\ninterest therein may be created with the condition superadded that it shall cease to exist in case a \r\nspecified uncertain event shall happen, or in case a specified uncertain event shall not happen. \r\n \r\n \r\nPage 17 of 56 \r\n \r\nIllustrations \r\n(a) A transfers a farm to B for his life, with a proviso that, in case B cuts down a \r\ncertain wood, the transfer shall cease to have any effect. B cuts down the wood. \r\nHe loses his life­interest in the farm. \r\n(b) A transfers a farm to B, provided that, if B shall not go to England within three \r\nyears after the date of the transfer, his interest in the farm shall cease. B does \r\nnot go to England within the term prescribed. His interest in the farm ceases. \r\n32. Such condition must not be invalid.— In order that a condition that an interest shall cease \r\nto exist may be valid, it is necessary that the event to which it relates be one which could legally \r\nconstitute the condition of the creation of an interest. \r\n 33. Transfer conditional on per formance of act, no time being specified for \r\nperformance.— Where, on a transfer of property, an interest therein is created subject to a condition \r\nthat the person taking it shall perform a certain act, but no time is specified for the performance of the \r\nact, the condition is broken when he renders impossible, permanently or for an indefinite period, the \r\nperformance of the act. \r\n34. Transfer conditional on performance of act, time being specified. —Where an act is to \r\nbe performed by a person either as a condition to be fulfilled before an interest created on a transfer of \r\nproperty is enjoyed by him, or as a condition on the non­fulfilment of which the interest is to pass from \r\nhim to another person, a nd a time is specified for the performance of the act, if such performance \r\nwithin the specified time is prevented by the fraud of a person who would be directly benefited by \r\nnon­fulfilment of the condition, such further time shall as against him be allowed  for performing the \r\nact as shall be requisite to make up for the delay caused by such fraud. But if no time is specified for \r\nthe performance of the act, then, if its performance is by the fraud of a person interested in the \r\nnon­fulfilment of the condition rendered impossible or indefinitely postponed, the condition shall as \r\nagainst him be deemed to have been fulfilled. \r\nElection \r\n35. Election when necessary. —Where a person professes to transfer property which he has \r\nno right to transfer, and as part of the same transaction confers any benefit on the owner of the property, \r\nsuch owner must elect either to confirm such transfer or to dissent from it; and in the latter case he \r\nshall relinquish the benefit so conferred, and the benefit so relinquished shall revert to the transferor \r\nor his representative as if it had not been disposed of, \r\nSubject nevertheless, \r\nwhere the transfer is gratuitous, and the transferor has, before the election, died or otherwise \r\nbecome incapable of making a fresh transfer, \r\nand in all cases where the transfer is for consideration, \r\nto the charge of making good to the disappointed transferee the amount or value of the property \r\nattempted to be transferred to him. \r\n  \r\n \r\nPage 18 of 56 \r\n \r\nIllustrations \r\nThe farm of l[Ulipur] is the property of C and worth Rs. 800. A by an instrument of gift \r\nprofesses to transfer it to B, giving by the same instrument Rs. 1,000 to C. C elects to retain the farm. \r\nHe forfeits the gift of Rs. 1,000. \r\nIn the same case, A dies before the election. His representative must out of the Rs. 1,000  pay \r\nRs. 800 to B. \r\nThe rule in the first paragraph of this section applies whether the transferor does or does not \r\nbelieve that which he professes to transfer to be his own. \r\nA person taking no benefit directly under a transaction, but deriving a benefit un der it \r\nindirectly, need not elect. \r\nA person who in his one capacity takes a benefit under the transaction may in another dissent \r\ntherefrom. \r\nException  to  the  last  preceding  four  rules .__ Where a particular benefit is expressed to be  \r\nconferred on the owner of the property which the transferor professes to transfer, and such benefit is \r\nexpressed to be in lieu of that property, if such owner claim the property, he must relinquish the \r\nparticular benefit, but he is not bound to relinquish any other benefit conferred upon him by the same \r\ntransaction. \r\nAcceptance of the benefit by the person on whom it is conferred constitutes an election by him \r\nto confirm the transfer, if he is aware of his duty to elect and of those circumstances which would \r\ninfluence the judgment of a reasonable man in making an election, or if he waives enquiry into the \r\ncircumstances. \r\nSuch knowledge or waiver shall, in the absence of evidence to the contrary, be presumed, if the \r\nperson on whom the benefit has been conferred has enjoyed it for two years without doing any act to \r\nexpress dissent. \r\nSuch knowledge or waiver may be inferred from any act of his which renders it impossible to \r\nplace the persons interested in the property professed to be transferred in the same  condition as if such \r\nact had not been done. \r\nIllustration \r\nA transfers to B an estate to which C is entitled, and as part of the same transaction gives C a \r\ncoal­mine. C takes possession of the mine and exhausts it. He has thereby confirmed the transfer of \r\nthe estate to B. \r\nIf he does not within one year after the date of the transfer signify to the transferor or his \r\nrepresentatives his intention to confirm or to dissent from the transfer, the transferor or his \r\nrepresentatives may, upon the expiration of that period, require him to make his election; and, if he \r\ndoes not comply with such requisition within a reasonable time after he has received it, he shall be \r\ndeemed to have elected to confirm the transfer. \r\n \r\n1Subs. 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).  \r\n \r\nPage 19 of 56 \r\n \r\nIn case of disability, the election shall be postponed until the disability ceases, or until the \r\nelection is made by some competent authority. \r\nApportionment \r\n36. Apportionment of periodical payments on determination of interest of person \r\nentitled.— In the absence of a contract or local usage to the contrary, all rents, annuities, pensions, \r\ndividends and other periodical payments in the nature of income shall, upon the transfer of the interest \r\nof the person entitled to receive such payments, be deemed, as between the transferor and the \r\ntransferee, to accrue due from day to day, and to be apportionable accordingly, but to be payable on \r\nthe days appointed for the payment thereof. \r\n37. Apportionment of benefit of obligation on severance. —When, in consequence of a \r\ntransfer, property is divided and held in several shares, and thereupon the benefit of any obligation \r\nrelating to the property as a whole passes from one to several owners of the property, the corresponding \r\nduty shall, in the absence of a contract to the contrary amongst the owners, be performed in favour of \r\neach of such owners in proportion to the value of his share in the property, provided that the duty can \r\nbe served and that the severance does not substantially increase the burden of the obligation; but if the \r\nduty cannot be severed, or if the severance would substantially increase the burden of the obligation, \r\nthe duty shall be performed for the benefit of suc h one of the several owners as they shall jointly \r\ndesignate for that purpose: \r\nProvided that no person on whom the burden of the obligation lies shall be answerable for \r\nfailure to discharge it in manner provided by this section, unless and until he has had reasonable notice \r\nof the severance. \r\nNothing in this section applies to leases for agricultural purposes unless and until the \r\nl[Provincial Government] by notification in the official Gazette so directs. \r\nIllustrations \r\n(a) A sells to B, C and D a house situat e in a village and leased to E  at an annual \r\nrent of Rs. 30 and delivery of one fat sheep, B having provided half the \r\npurchase­money and C and D one­quarter each. E, having notice of this, must \r\npay Rs. 15 to B, Rs. 7­1/2 to C, and Rs. 7­1/2 to D, and must d eliver the sheep \r\naccording to the joint direction of B, C and D. \r\n(b) In the same case, each house in the village being bound to provide ten days' \r\nlabour each year on a dyke to prevent inundation, E had agreed as a term of his \r\nlease to perform this work for A. B, C and D severally require E to perform the \r\nten days’ work due on account of the house of each. E is not bound to do more \r\nthan ten days’ work in all, according to such directions as B, C and D may join \r\nin giving. \r\n(B)Transfer of Immoveable Property \r\n38. Transfer by person authorized only under certain circumstances to transfer.— Where \r\nany person, authorized only under circumstances in their nature variable to dispose of immoveable \r\nproperty, transfers such property for consideration, alleging the existence of such circumstances, they  \r\n \r\n1Subs. by A.O., 1937. \r\n \r\nPage 20 of 56 \r\n \r\nshall, as between the transferee on the one part and the transferor and other persons (if any) affected \r\nby the transfer on the other part, be deemed to have existed, if the transferee, after  using reasonable \r\ncare to ascertain the existence of such circumstances, has acted in good faith. \r\nIllustration \r\nA, a Hindu widow, whose husband has left collateral heirs, alleging that the property held by \r\nher as such is insufficient for her maintenance, agrees, for purposes neither religious nor charitable, to \r\nsell a field, part of such property, to B. B satisfies himself by reasonable enquiry that the income of \r\nthe property is insufficient for A’s maintenance, and that the sale of the field is necessary, and, acting \r\nin good faith, buys the field from A. As between B on the one part and A and the collateral heirs on  \r\nthe other part, a necessit for the sale shall be deemed to have existed. \r\n39. Transfer where third person is entitled to maintenance. —Where a third person has a \r\nright to receive maintenance, or a provision for advancement or marriage, from the profits of \r\nimmoveable property, and such property is transferred 1[* * *], the right may be enforced against the \r\ntransferee, if he has notice 1[thereof] or if the transfer is gratuitous; but not against a transferee for \r\nconsideration and without notice of the right, nor against such property in his hands. \r\n1[* * * * * * *] \r\n40. Burden of obligation imposing restriction on use of land, or of obligation  annexed to \r\nownership but not amounting to interest or easement.—Where, for the more beneficial enjoyment \r\nof his own immoveable property, a third person has, independently of any interest in the immoveable \r\nproperty of another or of any easement thereon, a right to restrain the enjoyment 1[in a particular \r\nmanner of the latter property], or \r\nWhere a third person is entitled to the benefit of an obligation arising out of contract and \r\nannexed to the ownership of immoveable property, but not amounting to an interest therein or easement \r\nthereon, \r\nsuch right or obligation may be enforced against a transferee with notice thereof or a gratuitous \r\ntransferee of the property affected thereby, but not against a transferee for consideration and without \r\nnotice of the right or obligation, nor against such property in his hands. \r\nIllustration \r\nA contracts to sell 2[Ulipur] to B. While the contract is still in force he sells 2[Ulipur] to C, who \r\nhas notice of the contract. B may enforce the contract against C to the same extent as against A. \r\n41. Transfer by ostensible owner. —Where, with the consent, express or implied, of the \r\npersons interested in immoveable property, a person is the ostensible owner of such property and \r\ntransfers the same for consideration, the transfer shall not be voidable on the ground that the transferor \r\nwas not authorized to make it: provided that the transferee, after taking reasonable care to ascertain \r\nthat the transferor had power to make the transfer, has acted in good faith. \r\n \r\n1Rep. and subs. by Act No. XX of 1929, ss. 11-12. \r\n2Subs. 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). \r\n  \r\n \r\nPage 21 of 56 \r\n \r\n42. Transfer by person having authority to revoke former transfer. —Where a person \r\ntransfers any immoveable property reserving power to revoke the transfer, and subsequently transfers \r\nthe property for consideration to another transferee, such transfer operates in favour of such transferee \r\n(subject to any condition attached to the exercise of the power) as a revocation of the former transfer \r\nto the extent of the power. \r\nIllustration \r\nA lets a house to B, and reserves power to revoke the lease if, in the opinion of a specified \r\nsurveyor, B should make a use of it detrimental to its value. Afterwards A, thinking that such a use has \r\nbeen made, lets the house to C. This operates as a revocation of B’s lease subject to the opinion of the \r\nsurveyor as to B’s use of the house having been detrimental to its value. \r\n43. Transfer by unauthorized person who subsequently acquires interest in property \r\ntransferred.—Where a person 1[fraudulently or] erroneously represents that he is authorized to \r\ntransfer certain immoveable property and professes to transfer such property for consi deration, such \r\ntransfer shall, at the option of the transferee, operate on any interest which the transferor may acquire \r\nin such property at any time during which the contract of transfer subsists. \r\nNothing in this section shall impair the right of transfer ees in good faith for consideration \r\nwithout notice of the existence of the said option. \r\nIllustration \r\nA, a Hindu, who has separated from his father B, sells to C three fields, X, Y and Z, representing \r\nthat A is authorized to transfer the same. Of these fields Z does not belong to A, it having been retained \r\nby B on the partition; but on B’s dying A as heir obtains Z. C, not having rescinded the contract of \r\nsale, may require A to deliver Z to him. \r\n44. Transfer by one co­owner. — Where one of two or more co­owners of immoveable \r\nproperty legally competent in that behalf transfers his share of such property or an y interest therein, \r\nthe transferee acquires, as to such share or interest, and so far as is necessary to give effect to the  \r\ntransfer, the transferor’s right to joint possession or other common or part enjoyment of the property, \r\nand to enforce a partition of the same, but subject to the conditions and liabilities affecting, at the  date \r\nof the transfer, the share or interest so transferred. \r\nWhere the transferee of a share of a dwelling­house belonging to an undivided family is not a \r\nmember of the family, nothing in this section shall be deemed to entitle him to joint possession or other \r\ncommon or part enjoyment of the house. \r\n45. Joint transfer for consideration. —Where immoveable property is transferred for \r\nconsideration to two or more persons, and such consi deration is paid out of a fund belonging to them \r\nin common, they are, in the absence of a contract to the contrary, respectively entitled to interests in \r\nsuch property identical, as nearly as may be, with the interests to which they were respectively entitled \r\nin the fund; and, where such consideration is paid out of separate funds belonging to them respectively, \r\nthey are, in the absence of a contract to the contrary, respectively entitled to interest in such property \r\nin proportion to the shares of the consideration which they respectively advanced. \r\n \r\n1Ins. by Act No. XX of 1929, s. 13. \r\n  \r\n \r\nPage 22 of 56 \r\n \r\nIn the absence of evidence as to the interests in the fund to which they were respectively \r\nentitled, or as to the shares which they respectively advanced, such persons shall be presumed to be \r\nequally interested in the property. \r\n46. Transfer for consideration by persons having distinct interests. —Where immoveable \r\nproperty is transferred for consideration by persons having distinct interests therein, the transferors \r\nare, in the absence of a contract to the contrary, entitled to share in the consideration equally, where \r\ntheir interest in the property were of equal value, and, where such interests were of unequal value, \r\nproportionately to the value of their respective interests. \r\nIllustrations \r\n(a) A, owning a moiety, and B and C each a quarter share, of mauza 1[Ulipur], \r\nexchange an eighth share of that mauza for a quarter share of mauza \r\n1[Mithapukur]. There being no agreement to the contrary, A is entitled to an \r\neighth share in 1[Mithapukur], and B and C each to a sixteenth share in that \r\nmauza. \r\n(b) A, being entitled to a life­interest in mauza 1[Jalkothi] and B and C to the \r\nreversion, sell the mauza for Rs. 1,000. A’s life­interest is ascertained to be \r\nworth Rs. 600, the reversion Rs. 400. A is entitled to receive Rs. 600 out of the \r\npurchase­money, B and C to receive Rs. 400. \r\n47. Transfer by co­owner of share in common property. —Where several co­owners  of \r\nimmoveable property transfer a share therein without specifying that the transfer is to take effect on \r\nany particular share or shares of the transferors, the transfer, as among such transferors, takes effect \r\non such shares equally where the shares were equal, and, where they were unequal, proportionately  to \r\nthe extent of such shares. \r\nIllustration \r\nA, the owner of an eight­anna share, and B and C, each the owner of a four­anna share, in \r\nmauza 1[Ulipur], transfer a two­anna share in the mauza to D, withou t specifying from which of their \r\nseveral shares the transfer is made. To give effect to the transfer one­anna share is taken from the share \r\nof A, and half an anna share from each of the shares of B and C. \r\n48. Priority of rights created by transfer.—Where a person purports to create by transfer at \r\ndifferent times rights in or over the same immoveable property, and such rights cannot all exist or be \r\nexercised to their full extent together, each later created right shall, in the absence of a special contract \r\nor reservation binding the earlier transferees, be subject to the rights previously created. \r\n49. Transferee’s right under policy .—Where immoveable property is transferred for \r\nconsideration, and such property or any part thereof is at the date of the transfe r insured against loss \r\nor damage by fire, the transferee, in case of such loss or damage, may, in the absence of a contract to \r\nthe contrary, require any money which the transferor actually receives under the policy, or so much \r\nthereof as may be necessary, to be applied in reinstating the property. \r\n \r\n1Subs. 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, \r\n1956). \r\n \r\n  \r\n \r\nPage 23 of 56 \r\n \r\n50.  Rent bona­fide paid to holder under defective title.—No person shall be chargeable with \r\nany rents or profits of any immoveable property, which he has in good faith paid or delivered to any \r\nperson of whom he in good faith held such property, notwithstanding it may afterwards appear that the \r\nperson to whom such payment or delivery was made had no right to receive such rents or profits. \r\nIllustration \r\nA lets a field to B at a rent of Rs. 50, and then transfers the field to C. B, having no notice of \r\nthe transfer, in good faith pays the rent to A. B is not chargeable with the rent so paid. \r\n51.  Improvements made by bona­fide holders under defective titles.—When the transferee \r\nof immoveable property makes any improvement on the property, believing in good faith that he is \r\nabsolutely entitled thereto, and h e is subsequently evicted there from by any person having a better \r\ntitle, the transferee has a right to require the person causing the eviction either to have the value of the \r\nimprovement estimated and paid or secured to th e transferee, or to sell his interest in the property to \r\nthe transferee at the then market value thereof, irrespective of the value of such improvement. \r\nThe amount to be paid or secured in respect of such improvement shall be the estimated value \r\nthereof at the time of the eviction. \r\nWhen, under the circumstances aforesaid, the transferee has planted or sown on the property \r\ncrops which are growing when he is evicted therefrom, he is entitled to such crops and to free ingress \r\nand egress to gather and carry them. \r\n1[52. Transfer of property pending suit relating thereto. —During the 2[pendency] in any \r\nCourt having authority in 3[Pakistan], or established beyond the limits of 3[Pakistan] by 4[the 5[Federal \r\nGovernment] 6[* * *], of 7[any] suit or proceeding 7[which is not collusive and] in which any right to \r\nimmoveable property is directly and specifically in question, the property cannot be transferred or \r\notherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party \r\nthereto under any decree or order which may be made therein, except under the authority of the  Court \r\nand on such terms as it may impose. \r\n7[Explanation.__ For the purposes of this section, the pendency of a suit or proceeding shall be \r\ndeemed to commence from the date of the presentation of the plaint or the institution of the proceeding \r\nin a Court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of \r\nby a final decree or order and complete sa tisfaction or discharge of such decree or order has been \r\nobtained, or has become unobtainable by reason of the expiration of any period of limitation prescribed \r\nfor the execution thereof by any law for the time being in force.] \r\n7[53.  Fradulent transfer.__ (1) Every transfer of immoveable property made with intent to \r\n \r\n1Section 52 has been amended in Sindh by the Transfer of Property and the Indian Registration (Sindh Amdt.) Act, 1939 (XIV of 1939), s. 2. \r\n2Subs. by Act No. XX of 1929, s.14. \r\n3Subs. 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). \r\n4Subs. by A.O., 1937. \r\n5Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table.  \r\n6Omitted by A. O., 1949, Sch.  \r\n7Subs. and ins. by Act No. XX of 1929, s. 14. \r\n  \r\n \r\nPage 24 of 56 \r\n \r\ndefeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated \r\nor delayed. \r\nNothing in this sub­section shall impair the rights of a transferee in good faith and for \r\nconsideration. \r\nNothing in this sub­section shall aff ect any law for the time being in force relating to \r\ninsolvency. \r\nA suit instituted by a creditor (which term includes a decree-holder whether he has or has not \r\napplied for execution of his decree) to avoid a transfer on the ground that it has been made with intent \r\nto defeat or delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of, \r\nall the creditors. \r\n(2) Every transfer of immoveable property made without consideration with intent to \r\ndefraud a subsequent transferee shall be voidable at the option of such transferee. \r\nFor the purposes of this sub­section, no transfer made without consideration shall be deemed \r\nto have been made with intent to defraud by reason only that a subsequent transfer for consideration \r\nwas made.] \r\n1[53A. Part performance. —Where any person contracts to transfer for consideration any \r\nimmoveable property by writing signed by him or on his behalf from which the terms necessary to \r\nconstitute the transfer can be ascertained with reasonable certainty, \r\nand the transferee has, in part performance of the contract, taken possession of the property or  \r\nany part thereof, or the transferee, being already in possession, continues in possession in part \r\nperformance of the contract and has done some act in furtherance of the contract, \r\nand the transferee has performed or is willing to perform his part of the contract, \r\nthen, notwithstanding that the contract, though required to be registered, has not been \r\nregistered, or, where there is an instrument of transfer, that the tr ansfer has not been completed in the \r\nmanner prescribed therefor by the law for the time being in force, the transferor or any person claiming \r\nunder him shall be debarred from enforcing against the transferee and persons claiming under him any \r\nright in respect of the property of which the transferee has taken or continued in possession, other than \r\na right expressly provided by the terms of the contract: \r\nProvided that nothing in this section shall affect the rights of a transferee for consideration who \r\nhas no notice of the contract or of the part performance thereof.] \r\n \r\nCHAPTER III \r\n \r\nOF SALES OF IMMOVEABLE PROPERTY \r\n54. “Sale” defined.—“Sale” is a transfer of ownership in exchange for a price paid or promised \r\nor part­paid and part­promised. \r\n \r\n \r\n1Ins. by Act No. XX of 1929, s. 16. \r\n \r\n \r\nPage 25 of 56 \r\n \r\nSale how made.  1Such transfer, in the case of tangible immoveable property of the value of \r\none hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made \r\nonly by a registered instrument. \r\n1In the case of tangible immoveable property, of a value less than one hundred rupees, such \r\ntransfer may be made either by a registered instrument or by delivery of the property. \r\nDelivery of tangible immoveable property takes place when the seller places the buyer, or such \r\nperson as he directs, in possession of the property. \r\nContract for sale. A contract for the sale of immoveable proper ty is a contract that a sale of \r\nsuch property shall take place on terms settled between the parties. \r\nIt does not, of itself, create any interest in or charge on such property. \r\n55. Rights and liabilities of buyer and seller. —In the absence of a contract to the contrary, \r\nthe buyer and the seller of immoveable property respectively are subject to the liabilities, and have the \r\nrights, mentioned in the rules next following, or such of them as are applicable to the property sold: \r\n(1) The seller is bound— \r\n(a) to disclose to the buyer any material defect in the property 2[or in the seller’s \r\ntitle thereto] of which the seller is, and the buyer is not, aware, and which the \r\nbuyer could not with ordinary care discover; \r\n(b) to produce to the buyer on his request for exam ination all documents of title \r\nrelating to the property which are in the seller’s possession or power; \r\n(c) to answer to the best of his information all relevant questions put to him by the \r\nbuyer in respect to the property or the title thereto; \r\n(d) on payment or tender of the amount due in respect of the price, to execute a \r\nproper conveyance of the property when the buyer tenders it to him for \r\nexecution at a proper time and place; \r\n(e) between the date of the contract of sale and the delivery of the property, to take \r\nas much care of the property and all documents of title relating thereto which \r\nare in his possession as an owner of ordinary prudence would take of such \r\nproperty and documents; \r\n(f) to give, on being so required, the buyer, or such person as he directs, such \r\npossession of the property as its nature admits; \r\n(g) to pay all public charges and rent accrued due in respect of the property up to \r\nthe date of the sale, the interest on all incumbrances on such property due on \r\nsuch date, and, e xcept where the property is sold subject to incumbrances, to \r\ndischarge all incumbrances on the property then existing. \r\n(2) The seller shall be deemed to contract with the buyer that the interest which the seller \r\nprofesses to transfer to the buyer subsists and that he has power to transfer the same: \r\n1As 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, \r\netc., see s. 287 of the Cantonments Act, 1924 (Act No. II of 1924). \r\n2Ins. by Act No. VI of 1929, s. 17. \r\n \r\nPage 26 of 56 \r\n \r\nProvided that, where the sale is made by a person in a fiduciary character, he shall be deemed \r\nto contract with the buyer that the seller has done no act whereby the property is incumbered or \r\nwhereby he is hindered from transferring it. \r\nThe benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the \r\ninterest of the transferee as such, and may be enforced by every person in whom that interest is for the \r\nwhole or any part thereof from time to time vested. \r\n(3) Where the whole of the purchase­money has been paid to the seller, he is also bound to \r\ndeliver to the buyer all documents of title relating to the property which are in the seller’s possession \r\nor power: \r\nProvided that, (a) where the seller retains any part of the property comprised in such \r\ndocuments, he is entitled to retain them all, and, (b) where the whole of such property is sold to \r\ndifferent buyers, the buyer of the lot of greatest value is entitled to such documents. But in case (a) the \r\nseller, and in case (b) the buyer, of the lot of greatest value, is bound, upon every reasonable request \r\nby the buyer, or by any of the other buyers, as the case may be, and at the cost of the person making \r\nthe request, to produce the said documents and furnish such true copies thereof or extracts therefrom \r\nas he may require; and in the mean time, the seller, or the buyer of the lot of greatest value, as the case \r\nmay be, shall keep the said documents safe, uncancelled and undefaced, unless prevented from so \r\ndoing by fire or other inevitable accident. \r\n(4)  The seller is entitled__ \r\n(a) to the rents and profits of the property till the ownership thereof passes to the \r\nbuyer; \r\n(b) where the ownership of the property has passed to the buyer before payment of \r\nthe whole of the purchase­money, to a charge upon the property in the hands of \r\nthe buyer 1[any transferee without consideration or any transferee with notice \r\nof the non­payment], for the amount of the purchase­money, or any part thereof \r\nremaining unpaid, and for interest on such amoun t or part 1[from the date on \r\nwhich possession has been delivered]. \r\n(5)  The buyer is bound__ \r\n(a) to disclose to the seller any fact as to the nature or extent of the seller’s interest \r\nin the property of which the buyer is aware but of which he has reason to believe \r\nthat the seller is not aware, and which materially increases the value of such \r\ninterest; \r\n(b) to pay or tender, at the time and place of completing the sale, the \r\npurchase­money to the seller or such person as he directs: Provided that, where \r\nthe property is sold free from incumbrances, the buyer may retain out of the \r\npurchase­money the amount of any incumbrances on the property existing at the \r\ndate of the sale, and shall pay the  amount so retained to the persons entitled \r\nthereto; \r\n \r\n1Ins. by Act No. XX of 1929, s. 17. \r\n \r\n \r\nPage 27 of 56 \r\n \r\n(c) where the ownership of the property has passed to the buyer, to bear any loss \r\narising from the destruction, injury or decrease in value of the property not \r\ncaused by the seller; \r\n(d) where the ownership of the property has passed to the buyer, as between himself \r\nand the seller, to pay all public charges and rent which may become payable in \r\nrespect of the property, the principal moneys due on any incumbrances subject \r\nto which the property is sold, and the interest thereon afterwards accruing due. \r\n(6)  The buyer is entitled__ \r\n(a) where the ownership of the property has passed to him, to the benefit of any \r\nimprovement in, or increase in value of, the property, and to the rents and profits \r\nthereof; \r\n(b) unless he has improperly declined to accept delivery of the property, to a charge \r\non the property, as against the seller and all persons claiming under him, 1[* * \r\n*] to the extent of the seller’s interest in the property for the amount of any \r\npurchase­money properly paid by the buyer in anticipation of the delivery and \r\nfor interest on such amount; and, when he properly declines to accept the \r\ndelivery, also for the earnest (if any) and for the costs (if any) awarded to him \r\nof a suit to compel specific performance of the contract or to obtain a decree for \r\nits rescission. \r\nAn omission to make such disclosures as are mentioned in this section, paragraph (1), clause \r\n(a), and paragraph (5), clause (a), is fraudulent. \r\n1[56. Marshalling by subsequent purchaser. —If the owner of two or more properties \r\nmortgages them to one person and then sells one or more of the properties to another person, the buyer \r\nis, in the absence of a contract to the contrary, entitled to have the mortgage­debt satisfied out of the \r\nproperty or properties not sold to him, so far as the same will extend, but not so as to prejudice the \r\nrights of the mortgagee or persons claiming under him or of any other person who has for consideration \r\nacquired an interest in any of the properties.] \r\n \r\nDischarge of Incumbrances on Sale \r\n \r\n 57. Provision by Court for incumbrance and sale freed therefrom.__ (a)Where immoveable \r\nproperty subject to any incumbrance, whether immediately payable or not, is sold by the Court or in \r\nexecution of a decree, or out of Court, the Court may, if it thinks fit, on the application of any party to \r\nthe sale, direct or allow payment into Court,— \r\n \r\n (1) in case of an annual or monthly sum charged on the property, or of a capital sum  charged \r\non a determinable interest in the pr operty__ of such amount as, when  invested in securities of the  \r\n2[Federal Government], the Court considers will be sufficient, by means of the interest thereof, to keep \r\ndown or otherwise provide for that charge, and \r\n \r\n \r\n1Rep. and subs. by Act No. XX of 1929, ss. 17-18. \r\n2Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table. \r\n \r\n \r\nPage 28 of 56 \r\n \r\n (2)  in any other case of a capital sum charged on the property__ of the amount sufficient to \r\nmeet the incumbrance and any interest due thereon. \r\n \r\n But in either case there shall also be paid into Court such additional amount as the Court \r\nconsiders will be sufficient to meet the contingency of further costs, expenses and interest, and any \r\nother contingency, except depreciation of investments, not exceeding one­tenth part of the original \r\namount to be paid in, unless the Court for special reasons (which it shall record) thinks fit to require a \r\nlarger additional amount. \r\n(b) Thereupon the Court may, if it thinks fit, and after notice to the incumbrancer, \r\nunless the Court, for reasons to be recorded in writing, thinks fit to dispense \r\nwith such notice, decla re the property to be freed from the incumbrance, and \r\nmake any order for conveyance, or vesting order, proper for giving effect to the \r\nsale, and give directions for the retention and investment of the money in Court. \r\n(c) After notice served on the persons interested in or entitled to the money or fund \r\nin Court, the Court may direct payment or transfer thereof to the persons entitled \r\nto receive or give a discharge for the same, and generally may give directions \r\nrespecting the application or distribution of the capital or income thereof. \r\n(d) An appeal shall lie from any declaration, order or direction under this section as \r\nif the same were a decree. \r\n(e) In this section “Court” means (l) a High Court in the exercise of its ordinary or \r\nextraordinary original civil jurisdiction, (2) the Court of a District Judge within \r\nthe local limits of whose jurisdiction the property or any part thereof is situate, \r\n(3) any other Court which the l[Provincial Government] may, from time to time, \r\nby notification in the official Gazette, declare to be competent to exercise the \r\njurisdiction conferred by this section. \r\n \r\nCHAPTER IV \r\n \r\nOF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES \r\n58. “Mortgage,” “mortgagor,” mortgagee,” “mortgage­money” and “mortgage­deed” \r\ndefined.__ (a) A mortgage is the transfer of an interest in specific immoveable property for the purpose \r\nof securing the payment of money advanced or to be advanced by wa y of loan, an existing or future \r\ndebt, or the performance of an engagement which may give rise to a pecuniary liability. \r\nThe transferor is called a mortgagor, the transferee a mortgagee ; the principal money and \r\ninterest of which payment is secured for the  time being are called the mortgage­money, and the \r\ninstrument (if any) by which the transfer is effected is called a mortgage­deed. \r\n \r\n \r\n \r\n \r\n1Subs. by A. O., 1937. \r\n \r\n \r\nPage 29 of 56 \r\n \r\nSimple Mortgage. (b) Where, without delivering possession of the mortgaged property, the \r\nmortgagor binds himself personally to pay the mortgage­money, and agrees, expressly or impliedly, \r\nthat, in the event of his failing to pay according to his contract, the mortgagee shall  have a right to \r\ncause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be \r\nnecessary, in payment of the mortgage­money, the transaction is called a simple mortgage and the \r\nmortgagee a simple mortgagee. \r\n \r\nMortgage by co nditional sale.  (c) Where the mortgagor ostensibly sells the mortgaged \r\nproperty__  \r\non condition that on default of payment of the mortgage­money on a certain date the sale shall \r\nbecome absolute, or  \r\non condition that on such payment being made the sale shall become void, or  \r\non condition that on such payment being made the buyer shall transfer the property to the seller, \r\nthe transaction is called a mortgage by conditional sale and the mortgagee a mortga gee by \r\nconditional sale: \r\nl[Provided that no such transaction shall be deemed to be a mortgage, unless the condition is \r\nembodied in the document which effects or purports to effect the sale;] \r\nUsufructuary mortgage. (d) Where the mortgagor delivers possessio n 1[or expressly or by \r\nimplication binds himself to deliver possession] of the mortgaged property to the mortgagee, and \r\nauthorizes him to retain such possession until payment of the mortgage­money, and to receive the rents \r\nand profits accruing from the proper ty 1[or any part of such rents and profits and to appropriate the \r\nsame] in lieu of interest, or in payment of the mortgage­money, or partly in lieu of interest 1[or] partly \r\nin payment of the mortgage­money, the transaction is called an usufructuary mortgag e and the \r\nmortgagee an usufructuary mortgagee. \r\nEnglish Mortgage. (e) Where the mortgagor binds himself to re­pay the mortgage­money, on \r\na certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a \r\nproviso that he will re­transfer it to the mortgagor upon payment of the mortgage­money as agreed, \r\nthe transaction is called an English mortgage. \r\nMortgage by deposit of title deeds. 1[(f) Where a person 2[* * *] delivers to a creditor or his \r\nagent documents of title to immovea ble property, with intent to create a security thereon, the \r\ntransaction is called a mortgage by deposit of title­deeds 2[:] \r\n2[Provided that, where a mortgage by deposit of title deeds is to be created in favour of a \r\nbanking company as defined in the Banking Tribunals Ordinance, 1984 (LVIII of 1984), the same may \r\nalso be created by an entry in the record of rights against the entry relating to such immovable \r\nproperty.] \r\nAnomalous mortgage.  (g) A mortgage which is not a simple mortgage, a mortgage by \r\nconditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of \r\ntitle­deeds within the meaning of this section is called an anomalous mortgage.] \r\n \r\n1Ins. and subs. by Act No. XX of 1929, s. 19. \r\n2Omitted, subs. & added by the Finance Act, 1986 (Act No. 1 of 1986), s. 2.  \r\n \r\nPage 30 of 56 \r\n \r\n*59. Mortgage when to be by assurance.—Where the principal money secured is one hundred \r\nrupees or upwards, a mortgage 1[other than a mortgage by deposit of title­deeds] can be effected only \r\nby a registered instrument signed by the mortgagor and attested by at least two witnesses. \r\nWhere the principal money secured is less than one hundred rupees, a mortgage may be effected \r\neither by 2[a registered instrument] signed and attested as aforesaid, or (except in the case of a simple \r\nmortgage) by delivery of the property. \r\n1[* * * * * * *] \r\n1[59A. References to mortgagors and mortgagees to include persons deriving title from \r\nthem.—Unless otherwise expressly provided, references in this Chapter to mortgagors and mortgagees \r\nshall be deemed to include references to persons deriving title from them respectively.] \r\nRights and Liabilities of Mortgagor \r\n60. Right of mortgagor to redeem.—At any time after the principal money has become 1[due],  \r\nthe mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage­money,  \r\nto require the mortgagee (a) to deliver 1[to the mortgagor the mortgage­deed and all documents relating \r\nto the mortgaged property which are in the possession or power of the mortgagee], (b) where the \r\nmortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor, \r\nand (c) at the cost of the mortgagor either to re­transfer the mortgaged property to him or to such third \r\nperson as he may direct, or to execute and (where the mortgage has been effected by a registered \r\ninstrument) to have registered an acknowledgement in writing that any right in derogation of his \r\ninterest transferred to the mortgagee has been extinguished: \r\nProvided that the right conferred by this section has not been extinguished by the act of the \r\nparties or by 1[decree] of a Court. \r\nThe right conferred by this section is called a right to redeem and a suit to enforce it is called a \r\nsuit for redemption. \r\nNothing in this section shall be deemed to render invalid any provision to the effect that, if the \r\ntime fixed for payment of the principal money has been allowed to pass or no such time has been fixed, \r\nthe mortgagee shall be entitled to reasonable notice before payment or tender of such money. \r\nRedemption of portion of mortgaged property. Nothing in this section shall entitle a person \r\ninterested in a share only of the mortgaged property to redeem his own shar e only, on payment of a \r\nproportionate part of the amount remaining due on the mortgage, except 1[only] where a mortgagee, \r\nor, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in \r\npart, the share of a mortgagor. \r\n1[60A. Obligation to transfer to third party instead of re­transference to Mortgagor .— \r\n(1) Where a mortgagor is  entitled  to  redemption,  then,  on  the  fulfilment  of any conditions on the \r\nfulfilment of which he would be entitled to require a re­transfer, he may require the mortgagee, instead \r\nof re­transferring the property, to assign the mortgage­debt and transfer the mortgaged property to such  \r\n \r\n \r\n*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 \r\nCantonments Act, 1924 (Act No. II of 1924). \r\n1Ins., omitted and subs. by Act No. XX of 1929, ss. 20-23. \r\n2Subs. by Act No. VI of 1904, s. 3. \r\n \r\nPage 31 of 56 \r\n \r\nthird person as the mor tgagor may direct; and the mortgagee shall be bound to assign and transfer \r\naccordingly. \r\n (2) The rights conferred by this section belong to and may be enforced by the mortgagor or by \r\nany encumbrancer notwithstanding a n intermediate encumbrance; but the requisition of any \r\nencumbrancer shall prevail over a requisition of the mortgagor and, as between encumbrancers, the \r\nrequisition of a prior encumbrancer shall prevail over that of a subsequent encumbrancer. \r\n(3) The provisions of this section do not apply in the case of a mortgagee who is or has been in \r\npossession. \r\n60B. Right to inspection and production of documents.—A mortgagor, as long as his right \r\nof redemption subsists, shall be entitled at all reasonable times, at his request and at his own cost, and \r\non payment of the mortgagee’s costs and expenses in this behalf, to inspect and make copies or \r\nabstracts of, or extracts from, documents of title relating to the mortgaged property which are in the \r\ncustody or power of the mortgagee.] \r\n1[61. Right to redeem separately or simultaneously. —A mortgagor who has executed two \r\nor more mortgages in favour of the same mortgagee shall, in the absence of a contract to the contrary, \r\nwhen the principal money of any two or more of the mortgages has become due, be entitled to redeem \r\nany one such mortgage separately, or any two or more of such mortgages together.] \r\n62. Right of usufructuary mortgagor to recover possession.—In the case of a usufructuary \r\nmortgage, the mortgagor has a right to recover possession of the property 1[together with the \r\nmortgage­deed and all documents relating to the mortgaged property which are in the possession or  \r\npower of the mortgage],__ \r\n(a) where the mortgagee is authorized to pay himself the mortgage­money from the \r\nrents and profits of the property,__when such money is paid; \r\n(b) where the mortgagee is authorized to pay himself from such rents and profits \r\n1[or any part thereof a part only of the m ortgage­money]—when the term, if \r\nany, prescribed for the payment of the mortgage­money has expired and the \r\nmortgagor pays or tenders to the mortgagee 1[the mortgage­money or the \r\nbalance thereof] or deposits it in Court as hereinafter provided. \r\n63. Accession to mortgaged property. —Where mortgaged property in possession of the \r\nmortgagee has, during the continuance of the mortgage, received any accession, the mortgagor, upon \r\nredemption, shall, in the absence of a contract to the contrary, be entitled as agains t the mortgagee to \r\nsuch accession. \r\nAccession acquired in virtue of transferred ownership.  Where such accession has been \r\nacquired at the expense of the mortgagee, and is capable of separate possession or enjoyment without \r\ndetriment to the principal property, the mortgagor desiring to take the accession must pay to the \r\nmortgagee the expense of acquiring it. If such separate possession or enjoyment is not possible, the \r\n \r\n \r\n1Subs. and ins. by Act No. XX of 1929, ss. 24-25. \r\n \r\n \r\n \r\nPage 32 of 56 \r\n \r\naccession must be delivered with the property; the mortgagor being liable, in the case of an acquisition \r\nnecessary to preserve the property from destruction, forfeiture or sale, or made with his assent, to pay \r\nthe proper cost thereof, as an ad dition to the principal money, 1[with interest at the same rate as is \r\npayable on the principal, or, where no such rate is fixed, at the rate of nine per cent. per annum]. \r\nIn the case last mentioned the profits, if any, arising from the accession shall be credited to the \r\nmortgagor. \r\nWhere the mortgage is usufructuary and the accession has been acquired at the expense of the \r\nmortgagee, the profits, if any, arising from the accession shall, in the absence of a contract to the \r\ncontrary, be set off against interest, if any, payable on the money so expended. \r\n1[63A. Improvements to mortgaged property.__ (1) Where mortgaged property in possession \r\nof the mortgagee has, during the continuance of the mortgage, been improved, the mortgagor, upon \r\nredemption, shall, in the absence of a contract to the contrary, be entitled to the improvement ; and the \r\nmortgagor shall not, save only in cases provided for in sub­section (2), be liable to pay the cost thereof. \r\n(2)  Where any such improvement was effected at the cost of the mortgagee and was necessary \r\nto preserve the property from destruction or deterioration or was necessary to prevent the security from \r\nbecoming insufficient, or was made in compliance with the lawful order of any public servant or public \r\nauthority, the mortgagor shall, in the absence of a contract to the contrary, be liable to pay the proper \r\ncost thereof as an addition to the principal money with interest at the same rate as is payable on the \r\nprincipal, or, where no such rate is fixed, at the rate of nine per cent. per annum, and the profits, if any, \r\naccruing by reason of the improvement shall be credited to the mortgagor.] \r\n64. Renewal of mortgaged lease.—Where the mortgaged property is a lease 1[* * *], and the \r\nmortgagee obtains a renewal of the lease, the mortgagor, upon redemption, shall, in the absence of a \r\ncontract by him to the contrary, have the benefit of the new lease. \r\n65. Implied contracts by mortgagor. —In the absence of a contract to the contrary, the \r\nmortgagor shall be deemed to contract with the mortgagee__ \r\n(a) that the interest which the mortgagor profes ses to transfer to the mortgagee \r\nsubsists, and that the mortgagor has power to transfer the same; \r\n(b) that the mortgagor will defend, or if the mortgagee be in possession of the \r\nmortgaged property, enable him to defend, the mortgagor’s title thereto; \r\n(c) that the mortgagor will, so long as the mortgagee is not in possession of the \r\nmortgaged property, pay all public charges accruing due in respect of the \r\nproperty ; \r\n(d) and, where the mortgaged property is a lease 1[* * *], that the rent payable  under \r\nthe  lease, the conditions contained therein, and the contracts binding on the \r\nlessee have been paid, performed and observed down to the commencement of \r\nthe mortgage; and that the mortgagor will, so long as the security exists and the \r\nmortgagee is not in possession of the mortgaged property, pay the rent reserved \r\nby the lease, or, if the lease be renewed, the renewed lease, perform the \r\nconditions contained therein and observe the contracts binding  on  the   lessee, \r\n \r\n1Subs., ins. and omitted by Act No. XX of 1929, ss. 26-29. \r\n \r\nPage 33 of 56 \r\n \r\nand indemnify the mortgagee against all claims sustained by reason of the \r\nnon­payment of the said rent or the non­performance or non­observance of the \r\nsaid conditions and contracts; \r\n(e) and, where the mortgage is a second or subsequent incumbrance on the property, \r\nthat the mortgagor will pay the interest from time to time accruing due on each \r\nprior incumbrance as and when it becomes due, and will at the proper time \r\ndischarge the principal money due on such prior incumbrance. \r\n1[* * * * * * *] \r\nThe benefit of the contracts mentioned in this section shall be annexed to and shall go with the \r\ninterest of the mortgagee as such, and may be enforced by every person in whom that interest \r\nis for the whole or any part thereof from time to time vested. \r\n1\r\n[65A. Mortgagor’s power to lease. __(1) Subject to the provisions of sub­section (2), a  \r\nmortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases \r\nthereof which shall be binding on the mortgagee. \r\n(2)(a)  Every such lease shall be such as would be made in the ordinary course of \r\nmanagement of the property concerned, and in accordance with any local law, \r\ncustom or usage. \r\n(b) Every such lease shall reserve the best rent that can reasonably be obtained, and \r\nno premium shall be paid or promised and no rent shall be payable in advance. \r\n(c) No such lease shall contain a covenant for renewal. \r\n(d) Every such lease shall take effect from a date not later than six months from the \r\ndate on which it is made. \r\n(e) In the case of a lease of buildings, whether leased with or without the land on \r\nwhich they stand, the duration of the lease shall in no case exceed three years, \r\nand the lease shall contain a covenant for payment of the r ent and a condition \r\nof re­entry on the rent not being paid within a time therein specified. \r\n(3)  The provisions of sub­section (1) apply only if and as far as a contrary intention is not \r\nexpressed in the mortgage­deed; and the provisions of sub­section (2)  may be varied or extended by \r\nthe mortgage­deed and, as so varied and extended, shall, as far as may be, operate in like manner and \r\nwith all like incidents, effects and consequences, as if such variations or extensions were contained in \r\nthat sub­section.] \r\n66. Waste by mortgagor in possession. —A mortgagor in possession of the mortgaged \r\nproperty is not liable to the mortgagee for allowing the property to deteriorate ; but he must not commit \r\nany act which is destructive or permanently injurious thereto, if the  security is insufficient or will be \r\nrendered insufficient by such act. \r\n \r\n1Omitted., ins. and subs. by Act No. XX of 1929, ss. 29-30..  \r\n  \r\n \r\nPage 34 of 56 \r\n \r\nExplanation.__ A security is insufficient within the meaning of this section unless the value of the \r\nmortgaged property exceeds by one­third, or, if consisting of buildings, exceeds by one­half, the amount \r\nfor the time being due on the mortgage. \r\nRights and Liabilities of Mortgagee \r\n67. Right to foreclosure or sale.—In the absence of a contract to the contrary, the mortgagee has \r\nat any time after the mortgage­money has become 1[due] to him, and before a decree has been made for the \r\nredemption of the mortgaged property, or the mortgage­money has been paid or deposited as hereinafter \r\nprovided, a right to obtain from the Court 1[a decree] that the mortgagor shall be absolutely debarred of his \r\nright to redeem the property, or 1[a decree] that the property be sold. \r\nA suit to obtain 1[a decree] that a mortgagor shall be absolutely debarred of his right to redeem the \r\nmortgaged property is called a suit for foreclosure. \r\nNothing in this section shall be deemed— \r\n1[(a) to authorise any mortgagee other than a mortgagee by conditional sale or a mortgagee \r\nunder an anomalous mortgage by the terms of which he is entitled to foreclose, to \r\ninstitute a suit for foreclosure, or an usufructuary mortgagee as such or a mortgagee \r\nby conditional sale as such to institute a suit for sale; or] \r\n(b) to authorize a mortgagor who holds the mortgagee’s rights as his trustee or legal \r\nrepresentative, and who may sue for a sale of the property, to institute a suit for \r\nforeclosure; or \r\n(c) to authorize the mortgagee of a railway, canal or other work in the maintenance of \r\nwhich the public are interested, to institute a suit for foreclosure or sale; or \r\n(d) to authorize a person interested in part only of the mortgage­money to institute a \r\nsuit relating only to a corresponding part of the mortgaged property, unless the \r\nmortgagees have, with the consent of the mortgagor, severed their interests under \r\nthe mortgage. \r\n1[67A. Mortgagee when bound to bring one suit on several mortgages. — A mortgagee who \r\nholds two or more mortgages executed by the same mortgagor in respect of each of which he has a right to \r\nobtain the same kind of decree under section 67, and who sues to obtain such decree on any one of the \r\nmortgages shall, in the absence of a contract to the contrary, be bound to sue on all the mortgages in respect \r\nof which the mortgage­money has become due.] \r\n1[68. Right to sue for mortgage­money. __(1) The mortgagee has a right to sue for the  \r\nmortgage­money in the following cases and no others, namely:__ \r\n(a) where the mortgagor binds himself to repay the same; \r\n(b) where, by any cause other than the wrongful act or default of the mortgagor or \r\nmortgagee, the mortgaged property is wholly or partially destroyed or the security \r\nis rendered insufficient within the meanin g of section 66, and the mortgagee has \r\ngiven the  mortgagor  a  reasonable  opportunity  of  providing  further  security \r\n  \r\n \r\n1Subs. and ins. by Act No. XX of 1929, ss. 31-33. \r\n \r\nPage 35 of 56 \r\n \r\nenough to render the whole security sufficient, and the mortgagor has failed to \r\ndo so ; \r\n(c) where the mortgagee is deprived of the whole or part of his security by or in \r\nconsequence of the wrongful act or default of the mortgagor; \r\n(d) where, the mortgagee being entitled to possession of the mortgaged property, \r\nthe mortgagor fails to deliver the same to him, or to secure the possession \r\nthereof to him without disturbance by the mortgagor or any person claiming \r\nunder a title superior to that of the mortgagor: \r\nProvided that, in the case referred to in clause (a), a transferee from the mortgagor or from his \r\nlegal representative shall not be liable to be sued for the mortgage­money. \r\n(2)  Where a suit is brought under clause (a) or clause (b) of sub­section (1), the Court may, at \r\nits discretion, stay the suit and all proceedings ther ein, notwithstanding any contract to the contrary, \r\nuntil the mortgagee has exhausted all his available remedies against the mortgaged property or what \r\nremains of it, unless the mortgagee abandons his security and, if necessary, re­transfers the mortgaged \r\nproperty.] \r\n69. Power of sale when valid.—1[(1)] 1[ 2[* * *] 2[A] mortgagee, or any person acting on his \r\nbehalf, shall, subject to the provisions of this section, have power to sell or concur in selling the \r\nmortgaged property, or any part thereof, in default of payment of the mortgage­money, without the \r\nintervention of the Court, in the following cases and in no others, namely :__] \r\n(a) where the mortgage is an English mortgage, and neither the mortgagor nor the \r\nmortgagee is a Hindu, 3[Muslim] or Buddhist 4[or a member of any other race, \r\nsect, tribe or class from time to time specified in this behalf by 5[the Provincial \r\nGovernment], in the 5[official Gazette]]; \r\n6[(b)  where the mortgagee is the Federal Government or a Provincial Government or \r\na banking company as defined in the Banking Tribunals Ordinance, 1984 (LVIII \r\nof 1984).] \r\n(c)   where 1[a power of sale without the intervention of the Court is expressly \r\nconferred on the mortgagee by the mortgage­deed and] the mortgaged property \r\nor any part thereof 1[was, on the date of the execution of the mortgage­deed], \r\nsituate within the 7[town of] Karachi, 8[* * * ]or in any other town 1[or area] \r\nwhich the 8[Provincial Government] may, by notification in the 8[official \r\nGazette], specify in this behalf. \r\n \r\n \r\n1Numbered, subs. and ins. by Act No. XX of 1929, s. 34. \r\n2Omitted and subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (Ordinance No. XXVII of 1981), s. 3 and 2nd Sch. \r\n3Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table. \r\n4Ins. by Act No. III of 1885, s. 5.  \r\n5Subs. by A. O., 1937.  \r\n6Subs. by the Finance Act, 1986 (Act No. 1 of 1986), s. 2. \r\n7Subs. by A. O., 1949, Sch.  \r\n8Rep. and subs. by A. O., 1937.  \r\n \r\n \r\nPage 36 of 56 \r\n \r\n1[*] 1[(2)] 2[A power under sub­section (1) shall not] be exercised unless and until__ \r\n1[(a)] notice in writing requiring payment of the principal money has been served on \r\nthe mortgagor, or on one of several mortgagors, and default has been made in \r\npayment of the principal money, or of part thereof, for three months after such \r\nservice; or \r\n1[(b)] some interest under the mortgage amounting at least to five hundred rupees is in \r\narrear and unpaid for three months after becoming due 2[:] \r\n2[Provided that the power of a scheduled bank under clause (b) of sub­section (1) shall further \r\nbe subject to such conditions as may be prescribed in this behalf by notification in the official Gazette \r\nby the 3[Federal Government] in consultation with the State Bank of Pakistan.] \r\n1[(3)] When a sale has been made in professed exercise of such a power, the title of the \r\npurchaser shall not be impeachable on the ground that no case had arisen to authorize the sale, or that \r\ndue notice was not given, or that the power was otherwise improperly or irregularly exercised; but any \r\nperson damnified by an unauthorized or improper or irregular exercise of the power shall have his \r\nremedy in damages against the person exercising the power. \r\n1[(4)]  The money which is received by the mortgagee, arising from the sale, after discharge of \r\nprior incumbrances, if any, to which the sale is not made subject, or after payment into Court under \r\nsection 57 of a sum to meet any prior incumbrance, shall, in the absence of a contract to the contrary, \r\nbe held by him in tru st to be applied by him, first, in payment of all costs, charges and expenses \r\nproperly incurred by him as incident to the sale or any attempted sale; and, secondly, in discharge of \r\nthe mortgage­ money and costs and other money, if any, due under the mortga ge; and the residue of \r\nthe money so received shall be paid to the person entitled to the mortgaged property, or authorised to \r\ngive receipts for the proceeds of the sale thereof. \r\n4[* * * * * * *] \r\n1[* * * * * * *] \r\n1[69A.  Appointment of receiver.__ (1) A mortgagee having the right to exercise a power of \r\nsale under section 69 shall, subject to the provisions of sub­section (2), be entitled to appoint, by \r\nwriting signed by him or on his behalf, a receiver of the income of the mortgaged property or any part  \r\nthereof. \r\n(2)  Any person who has been named in the mortgage­deed and is willing and able to act as \r\nreceiver may be appointed by the mortgagee. \r\n \r\n \r\n \r\n1Rep., numbered, lettered and ins. by Act No. XX of 1929, ss. 34-35. \r\n2Subs. and added by Act No. V of 1966, s. 2.  \r\n3Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table. \r\n4Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (Ordinance No. XXVII of 1981), s. 3 and 2nd Sch. \r\n \r\n \r\n \r\n \r\nPage 37 of 56 \r\n \r\nIf no person has been so named, or if all persons named are unable or unwilling to act, or are \r\ndead, the mortgagee may appoint any person to whose appointment the mortgagor agrees; failing such \r\nagreement, the mortgagee shall be entitled to apply to the Court for the appointment of a receiver, and \r\nany person appointed by the Court shall be deemed to have been duly appointed by the mortgagee. \r\nA receiver may at any time be removed by writing signed by or on behalf of the mortgagee and \r\nthe mortgagor, or by the Court on application made by either party and on due cause shown. \r\nA vacancy in the office of receiver may be filled in accordance with the provisions of this sub­ \r\nsection. \r\n(3)   A receiver appointed under the powers conferred by this section shall be deemed to be the \r\nagent of the mortgagor; and the mortgagor shall be solely responsible for the receiver’s acts or defaults, \r\nunless the mortgage­deed otherwise provides or unless such acts or defaults are due to the improper \r\nintervention of the mortgagee. \r\n(4)  The receiver shall have power to demand and recover all the income of which he is \r\nappointed receiver, by suit, execution or otherwise, in the name either of the mortgagor or of th e \r\nmortgagee to the full extent of the interest which the mortgagor could dispose of, and to give valid \r\nreceipts accordingly for the same, and to exercise any powers which may have been delegated to him \r\nby the mortgagee in accordance with the provisions of this section. \r\n(5)   A person paying money to the receiver shall not be concerned to inquire if the appointment \r\nof the receiver was valid or not. \r\n(6) The receiver shall be entitled to retain out of any money received by him, for his \r\nremuneration, and in sat isfaction of all costs, charges and expenses incurred by him as receiver, a \r\ncommission at such rate not exceeding five per cent. on the gross amount of all money received as is \r\nspecified in his appointment, and, if no rate is so specified, then at the rate  of five per cent. on that \r\ngross amount, or at such other rate as the Court thinks fit to allow, on application made by him for that \r\npurpose. \r\n(7)  The receiver shall, if so directed in writing by the mortgagee, insure to the extent, if any, \r\nto which the mo rtgagee might have insured, and keep insured against loss or damage by fire, out of \r\nthe money received by him, the mortgaged property or any part thereof being of an insurable nature. \r\n(8)   Subject to the provisions of this Act as to the application of insurance money, the receiver \r\nshall apply all money received by him as follows, namely:__ \r\n(i) in discharge of all rents, taxes, land revenue, rates and outgoings whatever \r\naffecting the mortgaged property; \r\n(ii) in keeping down all annual sums or other payments , and the interest on all \r\nprincipal sums, having priority to the mortgage in right whereof he is receiver; \r\n(iii) in payment of his commission, and of the premiums on fire, life or other \r\ninsurances, if any, properly payable under the mortgage­deed or under this Act, \r\nand the cost of executing necessary or proper repairs directed in writing by the \r\nmortgagee; \r\n(iv) in payment of the interest falling due under the mortgage; \r\n \r\nPage 38 of 56 \r\n \r\n(v) in or towards discharge of the principal money, if so directed in writing by the \r\nmortgagee; \r\nand shall pay the residue, if any, of the money received by him to the person who, but for the \r\npossession of the receiver, would have been entitled to receive the income of which he is appointed \r\nreceiver, or who is otherwise entitled to the mortgaged property. \r\n(9)   The provisions of sub­section (1) apply only if and as far as a contrary intention is not expressed \r\nin the mortgage­deed; and the provisions of sub­sections (3) to (8) inclusive may be varied or extended by \r\nthe mortgage­deed, and, as so varied or extended, shall, as far as may be, operate in like manner and with \r\nall the like incidents, effects and consequences, as if such variations or extensions were contained in the \r\nsaid sub­sections. \r\n(10)   Application may be made, without the institution of a suit, to the Court for its opinion, advice \r\nor direction on any present question respecting the management or administration of the mortgaged \r\nproperty, other than questions of difficulty or importance not proper in the opinion of the Court for \r\nsummary disposal. A copy of such application shall be served upon, and the hearing thereof may be \r\nattended by, such of the persons interested in the application as the Court may think fit. \r\nThe costs of every application under this sub­section shall be in the discretion of the Court. \r\n(11)  In this section, “the Court” means the Court which would have jurisdiction in a suit to enforce \r\nthe mortgage.] \r\n70.  Accession to mortgaged property.—If, after the date of a mortgage, any accession is made to \r\nthe mortgaged property, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes \r\nof the security, be entitled to such accession. \r\nIllustrations \r\n(a) A mortgages to B  a certain field bordering on a river. The field is increased by \r\nalluvion. For the purposes of his security, B is entitled to the increase. \r\n(b) A mortgages a certain plot of building land to B and afterwards erects a house on \r\nthe plot. For the purposes of his security B is entitled to the house as well as the \r\nplot. \r\n71. Renewal of mortgaged lease. —When the mortgaged property is a lease 1[* * * ], and the \r\nmortgagor obtains a renewal of the lease, the mortgagee, in the absence of a contract to the contrary, shall, \r\nfor the purposes of the security, be entitled to the new lease. \r\n72. Rights of mortgagee in possession.—1[A mortgagee] may spend such money as is necessary— \r\n 1[* * * * * * *] \r\n(b) for 1[the preservation of the mortgaged property] from destruction, forfeiture or \r\nsale; \r\n \r\n \r\n \r\n \r\n \r\n \r\n1Rep. and subs. by Act No. XX of 1929, ss. 36-37. \r\n \r\nPage 39 of 56 \r\n \r\n (c) for supporting the mortgagor’s title to the property ; \r\n(d) for making his own title thereto good against the mortgagor ; and, \r\n(e) when the mortgaged property is a renewable lease­hold, for the renewal of the \r\nlease; \r\nand may, in the absence of a contract to the contrary, add such money to the principal money, at the \r\nrate of interest payable on the principal, and where no such rate is fixed, at the rate of nine per cent. \r\nper annum:  \r\nl[Provided that the expenditure of money by the mortgagee under clause (b) or clause (c) shall \r\nnot be deemed to be necessary unless the mortgagor has been called upon and has failed to take proper \r\nand timely steps to preserve the property or to support the title.] \r\nWhere the property is by its nature insurable, the mortgagee may also, in the absence of a  \r\ncontract to the contrary, insure and keep insured against loss or damage by fire the whole or any part \r\nof such property; and the premiums paid for any such insurance shall be 1[added to the principal money \r\nwith interest at the same rate as is payable on the principal money or, where no such  rate is fixed, at \r\nthe rate of nine per cent. per annum]. But the amount of such insurance shall not exceed the amount \r\nspecified in this behalf in the mortgage­deed or (if no such amount is therein specified) two­ thirds of \r\nthe amount that would be required in case of total destruction to reinstate the property insured. \r\nNothing in this section shall be deemed to authorize the mortgagee to insure when an insurance \r\nof the property is kept up by or on behalf of the mortgagor to the amount in which the mortgage e is \r\nhereby authorized to insure. \r\n1[73. Right to proceeds of revenue sale or compensation on acquisition .__ (1) Where the \r\nmortgaged property or any part thereof or any interest therein is sold owing to failure to pay arrears  of \r\nrevenue or other charges of a public nature or rent due in respect of such property, and such failure did \r\nnot arise from any default of the mortgagee, the mortgagee shall be entitled to claim payment of the \r\nmortgage­money, in whole or in part, out of any surplus of the sale proceeds remaining after payment \r\nof the arrears and of all charges and deductions directed by law. \r\n(2)  Where the mortgaged property or any part thereof or any interest therein is acquired under \r\nthe Land Acquisition Act, 1894(I of 1894), or any other enactment for the time being in force providing \r\nfor the compulsory acquisition of immoveable property, the mortgagee shall be entitled to claim \r\npayment of the mortgage­money, in whole or in part, out of the amount due to the mortgagor as com­ \r\npensation. \r\n(3)  Such claims shall prevail against all other claims except those of prior encumbrancers, and \r\nmay be enforced notwithstanding that the principal money on the mortgage has not become due.] \r\n74. 1[*   *  *  *  *  *  *]  \r\n75. 1[*   *  *  *  *  *  *]   \r\n \r\n \r\n1Ins., subs. and rep. by Act No. XX of 1929, ss. 37-39. \r\n \r\n \r\n \r\n \r\nPage 40 of 56 \r\n \r\n76.  Liabilities of mortgagee in possession.—When, during the continuance of the mortgage, \r\nthe mortgagee takes possession of the mortgaged property,— \r\n(a) he must manage the property as a person of ordinary prudence would manage it \r\nif it were his own; \r\n(b) he must use his best endeavours to collect the rents and profits thereof; \r\n(c) he must, in the absence of a contract to the contrary, out of the income of the  \r\nproperty, pay the Government revenue, all other charges of a public nature l[and \r\nall rent] accruing due in respect thereof during such possession, and any arrears \r\nof rent in default of payment of which the property may be summarily sold; \r\n(d) he must, in the absence of a contract to the contrary, make such necessary repairs \r\nof the property as he can pay for out of the rents and profits thereof after \r\ndeducting from such rents and profits the payments mentioned in clause (c) and \r\nthe interest on the principal money; \r\n(e) he must not commit any act which is destructive or permanently injurious to the \r\nproperty; \r\n(f) where he has insured the whole or any part of the property against loss or \r\ndamage by fire, he must, in case of such loss or damage, apply any money which \r\nhe actually receives under the policy or so much thereof as may be necessary, \r\nin reinstating the property, or, if the mortgagor so directs, in reduction or \r\ndischarge of the mortgage­money; \r\n(g) he must keep clear, full and accurate accounts of all sums received and spent by \r\nhim as mortgagee, and, at any time during the continuance of the mortgage, give \r\nthe mortgagor, at his request and cost, true copies of such accounts and of the \r\nvouchers by which they are supported ; \r\n(h) his receipts from the mortgaged property, or, where such property is personally \r\noccupied by him, a fair occupation­rent in respect thereof, shall, after deducting \r\nthe expenses l[properly incurred for the management of the property and the \r\ncollection of rents and profits and the other exp enses] mentioned in clauses (c) \r\nand (d), and interest thereon, be debited against him in reduction of the amount \r\n(if any) from time to time due to him on account of interest 1[* * *] and, so far \r\nas such receipts exceed any interest due, in reduction or dis charge of the \r\nmortgage­money; the surplus, if any, shall be paid to the mortgagor; \r\n(i) When the mortgagor tenders, or deposits in manner hereinafter provided, the \r\namount for the time being due on the mortgage, the mortgagee must, \r\nnotwithstanding the provisions in the other clauses of this section, account for \r\nhis 1[*] receipts from the mortgaged property from the date of the tender or from \r\nthe earliest time when he could take such amount out of Court, as the case may \r\nbe 1[and shall not be entitled to deduct any amount therefrom on account of any \r\n \r\n \r\n1Ins. and rep. by Act No. XX of 1929, s. 40. \r\n \r\n \r\nPage 41 of 56 \r\n \r\nexpenses incurred after such date or time in connection with the mortgaged \r\nproperty]. \r\nLoss occasioned by his default.  If the mortgagee fail to perform any of the duties imposed \r\nupon him by this section, he may, when accounts are ta ken in pursuance of a decree made under this \r\nChapter, be debited with the loss, if any, occasioned by such failure. \r\n77. Receipts in lieu of interest.— Nothing in section 76, clauses (b), (d), (g) and (h), applies \r\nto cases where there is a contract between the mortgagee and the mortgagor that the receipts from the \r\nmortgaged property shall, so long as the mortgagee is in possession of the property, be taken in lieu of \r\ninterest on the principal money, or in lieu of such interest and defined portions of the principal. \r\nPriority \r\n78. Postponement of prior mortgagee. —Where, through the fraud, misrepresentation or \r\ngross neglect of a prior mortgagee, another person has been induced to advance money on the security \r\nof the mortgaged property, the prior mortgagee shall be postponed to the subsequent mortgagee. \r\n79. Mortgage to secure uncertain amount when maximum is expressed. — If a mortgage \r\nmade to secure future advances, the performance of an engagement or the balance of a running account, \r\nexpresses the maximum to be secured thereby, a subsequent mortgage of the same property shall, if  \r\nmade with notice of the prior mortgage, be postponed to the prior mortgage in respect of all advances \r\nor debits not exceeding the maximum though made or allowed with notice of the subsequent mortgage. \r\nIllustration \r\nA mortgages Sultanpur to his bankers, B & Co., to secure the balance of his account with them \r\nto the extent of Rs. 10,000. A then mortgages Sultanpur to C, to secure Rs. 10,000, C having notice of \r\nthe mortgage to B  & Co., and C gives notice to B & Co. of the second mortgage. At the date of the \r\nsecond mortgage, the balance due to B & Co. does not exceed Rs. 5,000. B & Co., subsequently \r\nadvance to A sums making the balance of the account against him exceed the sum of Rs. 10,000. B & \r\nCo. are entitled, to the extent of Rs. 10,000, to priority over C. \r\n80.  1[* * * * * * *]  \r\nMarshalling and Contribution \r\n1[81. Marshalling securities.— If the owner of two or more properties mortgages them to one \r\nperson and then mortgages one or more of the properties to another person, the subsequent mortgagee \r\nis, in the absence of a contract to the contrary, entitled to have the prior mortgage­debt satisfied out  of \r\nthe property or properties not mortgaged to him, so far as the same will extend, but not so as to \r\nprejudice the rights of the prior mortgagee or of any other person who has for consideration acquired \r\nan interest in any of the properties.] \r\n82. Contribution to mortgage­debt.— 1[Where property subject to a mortgage belongs to two \r\nor more persons having distinct and separate rights of ownership therein, the different shares in or parts \r\nof such property owned by such persons are, in the absence of a contract to the contrary, liable  \r\n \r\n \r\n \r\n \r\n1Rep. and subs. by Act No. XX of 1929, ss. 41-43. \r\n \r\n \r\nPage 42 of 56 \r\n \r\nto contribute rateably to the debt secured by the mortgage, and, for the purpose of determining the rate \r\nat which each such share or part shall contribute, the value thereof shall be deemed to be its value at \r\nthe date of the mortgage after deduction of the amount of any other m ortgage or charge to which it \r\nmay have been subject on that date.] \r\nWhere, of two properties belonging to the same owner, one is mortgaged to secure one debt \r\nand then both are mortgaged to secure another debt, and the former debt is paid out of the former \r\nproperty, each property is, in the absence of a contract to the contrary, liable to contribute rateably to \r\nthe latter debt after deducting the amount of the former debt from the value of the property out of \r\nwhich it has been paid. \r\nNothing in this section ap plies to a property liable under section 81 to the claim of the  \r\n1[subsequent] mortgagee. \r\nDeposit in Court \r\n \r\n83. Power to deposit in Court money due on mortgage. —At any time after the principal  \r\nmoney 1[payable in respect of any mortgage has become due] and before a suit for redemption of the \r\nmortgaged property is barred, the mortgagor, or any other person entitled to institute such suit, may \r\ndeposit, in any Court in which he might have instituted such suit, to the account of the mortgagee, the \r\namount remaining due on the mortgage. \r\nRight to money deposited by mortgagor.  The Court shall thereupon cause written notice of \r\nthe deposit to be served on the mortgagee, and the mortgagee may, on presenting a petition (verified \r\nin manner prescribed by law for the ve rification of plaints) stating the amount then due on the \r\nmortgage, and his willingness to accept the money so deposited in full discharge of such amount, and \r\non depositing in the same Court the mortgage­deed 1[and all documents in his possession or power \r\nrelating to the mortgaged property], apply for and receive the money, and the mortgage­deed 1[and all \r\nsuch other documents] so deposited shall be delivered to the mortgagor or such other person as \r\naforesaid. \r\n1[Where the mortgagee is in possession of the mo rtgaged property, the Court shall, before \r\npaying to him the amount so deposited, direct him to deliver possession thereof to the mortgagor and \r\nat the cost of the mortgagor either to re­transfer the mortgaged property to the mortgagor or to such \r\nthird person as the mortgagor may direct or to execute and (where the mortgage has been effected by \r\na registered instrument) have registered an acknowledgement in writing that any right in derogation of \r\nthe mortgagor’s interest transferred to the mortgagee has been extinguished.] \r\n84. Cessation of interest.—When mortgagor or such other person as aforesaid has tendered or \r\ndeposited in Court under section 83 the amount remaining due on the mortgage, interest on the \r\nprincipal money shall cease from the date of the tender or 1[in the case of a deposit, where no previous \r\ntender of such amount has been made] as soon as the mortgagor or such other person as aforesaid has \r\ndone all that has to be done by him to enable the mortgagee to take such amount out of Court, 1[and \r\nthe notice required by section 83 has been served on the mortgagee: \r\nProvided that, where the mortgagor has deposited such amount without having made a previous \r\ntender thereof and has subsequently withdrawn the same or any part thereof, interest on the principal \r\nmoney shall be payable from the date of such withdrawal]. \r\n \r\n \r\n1Subs. and ins. by Act No. XX of 1929, ss. 43-45. \r\n \r\n \r\nPage 43 of 56 \r\n \r\nNothing in this section or in section 83 shall be deemed to deprive the mortgagee of his right \r\nto interest when there exists a contract that he shall be entitled to reasonable notice before payment or \r\ntender of the mortgage­money l[and such notice has not been given before the making of the tender  or \r\ndeposit, as the case may be]. \r\n2Suits for Foreclosure, Sale or Redemption \r\n85.  3[* * * * * * *] \r\n2Foreclosure and Sale \r\n[86 to 90.] 3[* * * * * * *]  \r\nRedemption \r\n1[91. Persons who may sue for redemption.—Besides the mortgagor, any of the following \r\npersons may redeem, or institute a suit for redemption of, the mortgaged property, namely :__ \r\n(a) any person (other than the mortgagee of the interest sought to be redeemed) who \r\nhas any interest in, or charge upon, the property mortgaged or in or upon the \r\nright to redeem the same; \r\n(b) any surety for the payment of the mortgage­debt or any part thereof; or \r\n(c) any creditor of the mortgagor who has in a suit for the administration of his \r\nestate obtained a decree for sale of the mortgaged property.] \r\n1[92. Subrogation.—Any of the persons referred to in section 91 (other than the mortgagor) \r\nand any co­mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards \r\nredemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he \r\nredeems may have against the mortgagor or any other mortgagee. \r\nThe right conferred by this section is called the right of subrogation, and a person acquiring the \r\nsame is said to be subrogated to the rights of the mortgagee whose mortgage he redeems. \r\nA person who has advanced to a mortgagor money with which the mortgage has been redeemed \r\nshall be subrogated to the rights of the mortgagee whose mortgage has been redeemed, if the mortgagor \r\nhas by a registered instrument agreed that such persons shall be so subrogated. \r\nNothing in this section shall be deemed to confer a right of subrogation on any person unless \r\nthe mortgage in respect of which the right is claimed has been redeemed in full. \r\n93. Prohibition of tacking. —No mortgagee paying off a prior mortgage, whether with or \r\nwithout notice of an intermediate mortgage, shall thereby acquire any priority in respect of his original \r\nsecurity; and, except in the case provided for by section 79, no mortgagee making a subseque nt \r\nadvance to the mortgagor, whether with or without notice of an intermediate mortgage, shall thereby \r\nacquire any priority in respect of his security for such subsequent advance. \r\n \r\n \r\n1Ins. and subs. by Act No. XX of 1929, ss. 45-47. \r\n2For the repealed provisions, as re­enacted, see the Code of Civil Procedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV. \r\n3Rep. by the Code of Civil Procedure, 1908 (Act No. V of 1908), s. 156 and Sch. V. \r\n \r\nPage 44 of 56 \r\n \r\n94. Rights of mesne mortgagee. —Where a property i s mortgaged for successive debts to \r\nsuccessive mortgagees, a mesne mortgagee has the same rights against mortgagees posterior to himself \r\nas he has against the mortgagor.] \r\n1[95. Right of redeeming co­mortgagor to expenses. —Where one of several mortgagors \r\nredeems the mortgaged property, he shall, in enforcing his right of subrogation under section 92 against \r\nhis co­ mortgagors, be entitled to add to the mortgage­money recoverable from them such proportion \r\nof the expenses properly incurred in such redemption as is attributable to their share in the property. \r\n96. Mortgage by deposit of title­deeds.— The provisions hereinbefore contained which apply \r\nto a simple mortgage shall, so far as may be, apply to a mortgage by deposit of title­deeds.] \r\n97. 2[*  * * * * * *]  \r\nAnomalous Mortgages \r\n98. Rights and liabilities of parties to anomalous mortgages.—In the case of 1[an anomalous \r\nmortgage] the rights and liabilities of the parties shall be determined by their contract as evidenced in \r\nthe mortgage­deed, and, so far as such contract does not extend, by local usage. \r\n99. 3[*  * * * * * *]  \r\nCharges \r\n100. Charges.—Where immoveable property of one person is by act of parties or operation of \r\nlaw made security for the payment of money to another, and the transaction does not amount to a \r\nmortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore \r\ncontained 1[which apply to a simple mortgage shall, so far as may be, apply to such charge]. \r\nNothing in this section applies to the charge of a trustee on the trust­property  for expenses \r\nproperly incurred in the execution of his trust, 1[and, save as otherwise expressly provided by any law \r\nfor the time being in force, no charge shall be enforced against any property in the hands of a person \r\nto whom such property has been transferred for consideration and without notice of the charge]. \r\n1[101. No merger in case of subsequent encumbrance.—Any mortgagee of, or person having \r\na charge upon, immoveable property, or any transferee from such mortgagee or charge­holder, may \r\npurchase or otherwise acquire the rights in the property of the mortgagor or owner, as the case may be, \r\nwithout thereby causing the mortgage or charge to be merged as between himself and any subsequent \r\nmortgagee of, or person having a subsequent charge upon, the same property; and no such subsequent \r\nmortgagee or charge­holder shall be entitled to foreclose or sell such property without redeeming the \r\nprior mortgage or charge, or otherwise than subject thereto.] \r\n \r\n \r\n1Subs. and ins. by Act No. XX of 1929, ss. 48-51. \r\n2Rep. 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 \r\nProcedure, 1908 (Act No. V of 1908), Sch. I, Order XXXIV, rules 12 and 13. \r\n3Rep. 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. \r\nI, Order XXXIV, rule 14. \r\n \r\n \r\n \r\n \r\nPage 45 of 56 \r\n \r\nNotice and Tender \r\n102. Service or tender on or to agent.—Where the person on or to whom any notice or tender \r\nis to be served or made under this Chapter does not reside in the district in which the mortgaged \r\nproperty or some part thereof is situate, service or tender on or to an agent holding a general power­ \r\nof­attorney from such person or otherwise duly authorized to accept such service or tender shall be \r\ndeemed sufficient. \r\n1[Where no person or agent on whom such notice should be served can be found or is known] \r\nto the person required to serve the notice, the la tter person may apply to any Court in which a suit \r\nmight be brought for redemption of the mortgaged property, and such Court shall direct in what manner \r\nsuch notice shall be served, and any notice served in compliance with such direction shall be deemed \r\nsufficient: \r\n1[Provided that, in the case of a notice required by section 83, in the case of a deposit, the \r\napplication shall be made to the Court in which the deposit has been made.] \r\n1[Where no person or agent to whom such tender should be made can be found or is known] to \r\nthe person desiring to make the tender, the latter person may deposit 1[in any Court in which a suit \r\nmight be brought for redemption of the mortgaged property] the amount sought to be tendered, and \r\nsuch deposit shall have the effect of a tender of such amount. \r\n103. Notice, etc., to or by person incompetent to contract.—Where, under the provisions of \r\nthis Chapter, a notice is to be served on or by, or a tender or deposit made or accepted or taken out of \r\nCourt by, any person incompetent to contract, such notice may be served 1[on or by], or tender or \r\ndeposit made, accepted or taken, by the legal curator of the property of such person; but where there \r\nis no such curator, and it is requisite or desirable in the interests of such person that a notice should be \r\nserved or a tender or deposit made under the provisions of this Cha pter, application may be made to \r\nany Court in which a suit might be brought for the redemption of the mortgage to appoint a guardian \r\nad litem for the purpose of serving or receiving service of such notice, or making or accepting such \r\ntender, or making or t aking out of Court such deposit, and for the performance of all consequential \r\nacts which could or ought to be done by such person if he were competent to contract; and the \r\nprovisions of 1[ Order XXXII in the First Schedule to the Code of Civil Procedure, 1 908(V of 1908)] \r\nshall, so far as may be, apply to such application and to the parties thereto and to the guardian appointed \r\nthereunder. \r\n104. Power to make rules. —The High Court may, from time to time, make rules  consistent \r\nwith this Act for carrying out, in itself and in the Courts of Civil Judicature subject to its \r\nsuperintendence, the provisions contained in this Chapter. \r\n \r\nCHAPTER V \r\n \r\nOF LEASES OF IMMOVEABLE PROPERTY \r\n105. Lease defined.— A lease of immoveable property is a transfer of a right to enjoy such \r\nproperty, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid \r\nor promised, or of money, a share of crops, service or any other thing of value , to be rendered \r\nperiodically or on specified occasions to the transferor by the transferee, who accepts the transfer on \r\nsuch terms. \r\n \r\n  \r\n1Subs. and ins. by Act No. XX of 1929, ss. 52-53. \r\n \r\nPage 46 of 56 \r\n \r\nLessor, lessee, premium and rent defined.  The transferor is called the  lessor, the transferee \r\nis called the lessee, the price is called the premium, and the money, share, service or other thing to be \r\nso rendered is called the rent. \r\n106. Duration of certain leases in absence of written contract or local usage. — In the \r\nabsence of a contract or local law or usage to the contrary, a lease of immoveable property for \r\nagricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on \r\nthe part of either lessor or lessee, by six months' notice expiring with the end of a year of the tenancy;  \r\nand a lease of immoveable property for any other purpose shall be deemed to be a lease from month \r\nto month, terminable, on the part of either lessor or lessee, by fifteen days’ notice expiring with  the \r\nend of a month of the tenancy. \r\n Every notice under this section must be in writing signed by or on behalf of the person giving \r\nit, and l[either be sent by post to the party who is intended to be bound by it or be tendered or delivered \r\npersonally to su ch party], or to one of his family or servants at his residence, or (if such tender or \r\ndelivery is not practicable) affixed to a conspicuous part of the property. \r\n2107. Leases how made.—A lease of immoveable property from year to year, or for any term \r\nexceeding one year, or reserving a yearly rent, can be made only by a registered instrument. \r\n3[All other leases of immoveable property may be made either by a registered instrument or by \r\noral agreement accompanied by delivery of possession.] \r\n1[Where a lease of immoveable property is made by a registered instrument, such instrument \r\nor, where there are more instruments than one, each such instrument shall be executed by both the \r\nlessor and the lessee:] \r\n3[Provided that the 4[Provincial Government] may, 4[* * *] from time to time, by notification  \r\nin the 4[official Gazette], direct that leases of immoveable property, other than leases from year to year, \r\nor for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made \r\nby unregistered instrument or by oral agreement without delivery of possession.] \r\n108. Rights and liabilities of lessor and lessee. —In the absence of a contract or local usage \r\nto the contrary, the lessor and the lessee of immoveable property, as against one another, respectively, \r\npossess the rights and are subject to the liabilities mentioned in the rules next following, or such of  \r\nthem as are applicable to the property leased :— \r\n \r\n \r\n \r\n \r\n1Subs. and ins. by Act No. XX of 1929, ss. 54-55. \r\n2As 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 \r\nCantonments Act, 1924 (Act No. II of 1924). \r\n3Subs. and ins. by Act No. VI of 1904, ss. 5. \r\n4Subs. and rep. by A. O., 1937. \r\n \r\n \r\n \r\n \r\n \r\n \r\nPage 47 of 56 \r\n \r\n(A) Rights and Liabilities of the Lessor \r\n(a) The lessor is bound to disclose to the lessee any material defect in the property, \r\nwith reference to its intended use, of which the former is and the latter is not aware, \r\nand which the latter could not with ordinary care discover: \r\n(b) the lessor is bound on the lessee’s request to put him in possession of the property: \r\n(c) the lessor shall be deemed to contract with the lessee that, if the latter pays the rent \r\nreserved by the lease and performs the contracts binding on the lessee, he may hold \r\nthe property during the time limited by the lease without interruption. \r\n \r\nThe benefit of such contract shall be annexed to and go with the lessee’s interest as such, and may be \r\nenforced by every person in whom that interest is for the whole or any part thereof from time to time vested. \r\n(B)Rights and Liabilities of the Lessee \r\n(d) if during the continuance of the lease any accession is made to the property, such \r\naccession (subject to the law relating to alluvion for the time being in force) shall \r\nbe deemed to be comprised in the lease: \r\n(e) if by fire, tempest or flood, or violence of an army or of a mob or other irresistible \r\nforce, any material part of the property be wholly destroyed or rendered \r\nsubstantially and permanently unfit for the purposes for which it was let, the lease \r\nshall, at the option of the lessee, be void: \r\nProvided th at, if the injury be occasioned by the wrongful act or default of the \r\nlessee, he shall not be entitled to avail himself of the benefit of this provision: \r\n(f) if the lessor neglects to make, within a reasonable time after notice, any repairs \r\nwhich he is bound to make to the property, the lessee may make the same himself, \r\nand deduct the expense of such repairs with interest from the rent, or otherwise \r\nrecover it from the lessor: \r\n(g) if the lessor neglects to make any payment which he is bound to make, and which, \r\nif not made by him, is recoverable from the lessee or against the property, the lessee \r\nmay make such payment himself, and deduct it with interest from the rent, or \r\notherwise recover it from the lessor: \r\n(h) the lessee may l[even after the determination of the lease] remove, at any time \r\n1[whilst he is in possession of the property leased but not afterwards] all things \r\nwhich he has attached to the earth: provided he leaves the property in the state in \r\nwhich he received it : \r\n(i) when a lease of uncertain duration determines by any means except the fault of the \r\nlessee, he or his legal representative is entitled to all the crops planted or sown by \r\nthe lessee and growing upon the property when the lease determines, and to free \r\ningress and egress to gather and carry them: \r\n \r\n \r\n1Ins. and subs. by Act No. XX of 1929, s. 56. \r\n  \r\n \r\nPage 48 of 56 \r\n \r\n(j) the lessee may transfer absolutely or by way of mortgage or sub­lease the whole \r\nor any part of his interest in the property, and any transferee of such interest or \r\npart may again transfer it. The lessee shall not, by reason only of such transfer, \r\ncease to be subject to any of the liabilities attaching to the lease: \r\n \r\nnothing in this clause shall be deemed to authorize a tenant having an \r\nun­transferable right of occupancy, the farmer of an estate in respect of which \r\ndefault has been made in paying revenue, or th e lessee of an estate under the \r\nmanagement of a Court of Wards, to assign his interest as such tenant, farmer \r\nor lessee: \r\n \r\n(k) the lessee is bound to disclose to the lessor any fact as to the nature or extent of \r\nthe interest which the lessee is about to tak e, of which the lessee is, and the \r\nlessor is not, aware, and which materially increases the value of such interest: \r\n \r\n(l) the lessee is bound to pay or tender, at the proper time and place, the premium \r\nor rent to the lessor or his agent in this behalf: \r\n \r\n(m) the lessee is bound to keep, and on the termination of the lease to restore, the \r\nproperty in as good condition as it was in at the time when he was put in \r\npossession, subject only to the changes caused by reasonable wear and tear or \r\nirresistible force, and to allow the lessor and his agents, at all reasonable times \r\nduring the term, to enter upon the property and inspect the condition thereof and \r\ngive or leave notice of any defect in such condition, and, when such defect has \r\nbeen caused by any act or default on the part of the lessee, his servants or agents, \r\nhe is bound to make it good within three months after such notice has been given \r\nor left: \r\n \r\n(n) if the lessee becomes aware of any proceeding to recover the property or any \r\npart thereof, or of any encroac hment made upon, or any interference with, the \r\nlessor’s rights concerning such property, he is bound to give, with reasonable \r\ndiligence, notice thereof to the lessor: \r\n \r\n(o) the lessee may use the property and its products (if any) as a person of ordinary \r\nprudence would use them if they were his own; but he must not use, or permit \r\nanother to use, the property for a purpose other than that for which it was leased, \r\nor fell 1[or sell] timber, pull down or damage buildings 1[belonging to the lessor, \r\nor] work mines or quarries not open when the lease was granted, or commit any \r\nother act which is destructive or permanently injurious thereto: \r\n \r\n(p) he must not, without the lessor’s consent, erect on the property any permanent \r\nstructure, except for agricultural purposes: \r\n \r\n(q) on the determination of the lease, the lessee is bound to put the lessor into \r\npossession of the property. \r\n \r\n109. Rights of lessor’s transferee. —If the lessor transfers the property leased, or any part \r\nthereof, or any part of his interest therein, the transferee, in the absence of a contract to the contrary, \r\nshall possess all the rights, and, if the lessee so elects, be subject to all the liabilities of the lessor as to \r\nthe property or part transferred so long as he is the owner of it; but the lessor shall not, by reason only \r\nof such transfer, cease to be subject to any of the liabilities imposed upon him by the lease, unless the \r\nlessee elects to treat the transferee as the person liable to him: \r\n \r\nProvided that the transferee is not entitled to arrears of rent due before the transfer, and that, if \r\n \r\n1Ins. by Act No. XX of 1929, s. 56.\r\n \r\nPage 49 of 56 \r\n \r\nthe lessee, not having reason to believe that such transfer has been made, pays rent to the lessor, the \r\nlessee shall not be liable to pay such rent over again to the transferee.  \r\n \r\nThe lessor, the transferee and the lessee may determine what proportion of the premium or rent \r\nreserved by the lease is payable in respect of the part so transferred , and, in case they disagree, such \r\ndetermination may be made by any Court having jurisdiction to entertain a suit for the possession of \r\nthe property leased. \r\n \r\n110. Exclusion of day on which term commences. —Where the time limited by a lease of \r\nimmoveable property is expressed as commencing from a particular day, in computing that time such \r\nday shall be excluded. Where no day of commencement is named, the time so limited begins from the \r\nmaking of the lease. \r\n \r\nDuration of lease for year.  Where the time so limited is a year or a number of years, in the \r\nabsence of an express agreement to the contrary, the lease shall last during the whole anniversary of \r\nthe day from which such time commences. \r\n \r\nOption to determine lease. Where the time so limited is expressed to be terminable before its \r\nexpiration, and the lease omits to mention at whose option it is so terminable, the lessee, and not the \r\nlessor, shall have such option. \r\n \r\n111. Determination of lease.— A lease of immoveable property determines__ \r\n \r\n(a) by efflux of the time limited thereby: \r\n \r\n(b) where such time is limited conditionally on the happening of some event­by the \r\nhappening of such event: \r\n \r\n(c) where the interest of the les sor in the property terminates on, or his power to \r\ndispose of the same extends only to, the happening of any event­by the \r\nhappening of such event: \r\n \r\n(d) in case the interests of the lessee and the lessor in the whole of the property \r\nbecome vested at the same time in one person in the same right: \r\n \r\n(e) by express surrender; that is to say, in case the lessee yields up his interest under \r\nthe lease to the lessor, by mutual agreement between them: \r\n \r\n(f) by implied surrender: \r\n \r\n(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition \r\nwhich provides that on breach thereof the lessor may re­enter 1[* * *]; or (2) in \r\ncase the lessee renounces his character as such by setting up a title in a third \r\nperson or by claiming title in himself; 1[or (3) the lessee is adjudicated an \r\ninsolvent and the lease provides that the lessor may re­enter on the happening \r\nof such event]; and in 1[any of these cases] the lessor or his transferee 1[gives \r\nnotice in writing to the lessee of] his intention to determine the lease: \r\n \r\n(h) on the expiration of a notice to determine the lease, or to quit, or of intention to \r\nquit, the property leased, duly given by one party to the other. \r\n \r\nIllustration to clause (f) \r\n \r\nA lessee accepts from his lessor a new lease of the prop erty leased, to take effect during the \r\ncontinuance of the existing lease. This is an implied surrender of the former lease, and such lease \r\ndetermines thereupon. \r\n \r\n \r\n1Rep., ins. and subs. by Act No. XX of 1929, s. 57. \r\n \r\nPage 50 of 56 \r\n \r\n112. Waiver of forfeiture. —A forfeiture under section 111, clause (g), is waived by \r\nacceptance of rent which has become due since the forfeiture, or by distress for such rent, or by any \r\nother act on the part of the lessor showing an intention to treat the lease as subsisting: \r\nProvided that the lessor is aware that the forfeiture has been incurred: \r\nProvided also that, where rent is accepted after the institution of a suit to eject the lessee on the \r\nground of forfeiture, such acceptance is not a waiver. \r\n113. Waiver of notice to quit.— A notice given under section 111, clause (h), is waived, with \r\nthe express or implied consent of the person to whom it is given, by any act on the part of the person \r\ngiving it showing an intention to treat the lease as subsisting. \r\nIllustrations \r\n(a) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice \r\nexpires. B tenders, and A accepts, rent which has become due in respect of the \r\nproperty since the expiration of the notice. The notice is waived. \r\n(b) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice \r\nexpires, and B remains in possession. A gives to B as lessee a second notice to \r\nquit. The first notice is waived. \r\n114. Relief against forfeiture for non­payment of rent. —Where a lease of immoveable \r\nproperty has determined by forfeiture for non­payment of rent, and the lessor sues to eject the lessee, \r\nif, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with \r\ninterest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for \r\nmaking such payment within fifteen days, the Court may, in lieu of making a decree for ejectment pass \r\nan order relieving the lessee against the forfeiture; and thereu pon the lessee shall hold the property \r\nleased as if the forfeiture had not occurred. \r\n1[114A. Relief against forfeiture in certain other cases. —Where a lease of immoveable \r\nproperty has determined by forfeiture for a breach of an express condition which prov ides that on \r\nbreach thereof the lessor may re­enter, no suit for ejectment shall lie unless and until the lessor has \r\nserved on the lessee a notice in writing__ \r\n(a) specifying the particular breach complained of ; and \r\n(b) if the breach is capable of remedy, requiring the lessee to remedy the breach; \r\nand the lessee fails, within a reasonable time from the date of the service of the notice, to \r\nremedy the breach, if it is capable of remedy. \r\nNothing in this section shall apply to an express condition against the assigning, under­letting, \r\nparting with the possession, or disposing, of the property leased, or to an express condition relating to \r\nforfeiture in case of non­payment of rent.] \r\n \r\n \r\n1Ins. by Act No. XX of 1929, s. 58. \r\n \r\nPage 51 of 56 \r\n \r\n115. Effect of surrender and forfeiture on under­leases.—The surrender, express or implied, \r\nof a lease of immoveable property does not prejudice an under­lease of the property or any part thereof \r\npreviously granted by the lessee, on terms and conditions substantially the same (except as regards the \r\namount of rent) as those of the original lease; but, unless the surrender is made for the purpose of \r\nobtaining a new lease, the rent payable by, and the contracts binding on, the under­lessee shall be \r\nrespectively payable to and enforceable by the lessor. \r\nThe forfeiture of such a lease annuls all such under­leases except where such forfeiture has \r\nbeen procured by the lessor in fraud of the under­lessees, or relief against the forfeiture is granted \r\nunder section 114. \r\n116. Effect of holding over. —If a lessee or under­lessee of property remains in possession \r\nthereof after the determination of the lease granted to the lessee, and the lessor or his legal \r\nrepresentative accepts rent from the lessee or under­lessee, or otherwi se assents to his continuing in \r\npossession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or \r\nfrom month to month, according to the purpose for which the property is leased, as specified in section \r\n106. \r\nIllustrations \r\n(a) A lets a house to B for five years. B underlets the house to C at a monthly rent \r\nof Rs. 100. The five years expire, but C continues in possession of the house \r\nand pays the rent to A. C’s lease is renewed from month to month. \r\n(b) A lets a farm to B f or the life of C. C dies, but B continues in possession with \r\nA’s assent. B’s lease is renewed from year to year. \r\n117. Exemption of leases for agricultural purposes.— None of the provisions of this Chapter \r\napply to leases for agricultural purposes, except in so far as the 1[Provincial Government] 2[* * *]  may, \r\nby notification published in the 1[official Gazette], declare all or any of such provisions to be so \r\napplicable 3[in the case of all or any of such leases], together with, or subject to, those of the local law, \r\nif any, for the time being in force. \r\nSuch notification shall not take effect until the expiry of six months from the date of its \r\npublication. \r\nCHAPTER VI  \r\n \r\nOF EXCHANGES \r\n118. “Exchange” defined.—When two persons mutually transfer the ownership  of one thing \r\nfor the ownership of another, neither thing or both things being money only, the transaction is called \r\nan “exchange”. \r\nA transfer of property in completion of an exchange can be made only in manner provided for \r\nthe transfer of such property by sale. \r\n \r\n1Subs. by A. O., 1937. \r\n2Rep. by the Devolution Act, 1920 (Act No. XXXVIII of 1920), s. 2 and Sch. I. \r\n3Ins. by Act No. VI of 1904, s. 6. \r\n \r\nPage 52 of 56 \r\n \r\n1[119. Right of party deprived of thing received in exchange.— If any party to an exchange \r\nor any person claiming through or under such party is by reason of any defect in the title of the other \r\nparty deprived of the thing or any part of the thing received by him in exchange, then, unless a contrary \r\nintention appears from the terms of the exchange, such other party is liable to him or any person \r\nclaiming through or under him for loss caused thereby, or at the option of the person so deprived, for \r\nthe return of the thing transferred, if still in the possession of such other party or his  legal representative \r\nor a transferee from him without consideration.] \r\n120. Rights and liabilities of parties.— Save as otherwise provided in this Chapter, each party \r\nhas the rights and is subject to the liabilities of a seller as to that which he gives, and has the rights and \r\nis subject to the liabilities of a buyer as to that which he takes. \r\n121. Exchange of money. —On an exchange of money, each party thereby warrants the \r\ngenuineness of the money given by him. \r\nCHAPTER VII  \r\n \r\nOF GIFTS \r\n122. “Gift” defined. —“Gift” is the transfer of certain existing moveable or immoveable \r\nproperty made voluntarily and without consideration, by one person, called the donor, to another, \r\ncalled the donee, and accepted by or on behalf of the donee. \r\nAcceptance when to be made. Such acceptance must be made during the lifetime of the donor \r\nand while he is still capable of giving. \r\nIf the donee dies before acceptance, the gift is void. \r\n \r\n2123. Transfer how effected.— For the purpose of making a gift of immoveable property, the \r\ntransfer must be effected by a registered instrument signed by or on behalf of the donor, and attested \r\nby at least two witnesses. \r\nFor the purpose of making a gift of moveable property, the transfer may be effected either by \r\na registered instrument signed as aforesaid or by delivery. \r\nSuch delivery may be made in the same way as goods sold may be delivered. \r\n124. Gift of existing and future property. —A gift comprising both existing and future \r\nproperty is void as to the latter. \r\n125. Gift to several of whom one does not accept.— A gift of a thing to two or more donees, \r\nof whom one does not accept it, is void as to the interest which he would have taken had he accepted. \r\n \r\n \r\n1Subs. by Act No. XX of 1929, s. 59. \r\n2As 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 \r\nCantonments Act, 1924 (Act No. II of 1924). \r\n  \r\n \r\nPage 53 of 56 \r\n \r\n126. When gift may be suspended or revoked.—The donor and donee may agree that on the \r\nhappening of any specified event which does not depend on the will of the donor a gift shall be \r\nsuspended or revoked; but a gift which the parties agree shall be revocable wholly or in part, at the \r\nmere will of the donor, is void wholly or in part, as the case may be. \r\nA gift may also be revoked in any of the cases (save want or failure of consideration) in which, \r\nif it were a contract, it might be rescinded. \r\nSave as aforesaid a gift cannot be revoked. \r\nNothing contained in this se ction shall be deemed to affect the rights of transferees for \r\nconsideration without notice. \r\nIllustrations \r\n(a) A gives a field to B, reserving to himself, with B's assent, the right to take back \r\nthe field in case B and his descendants die before A. B dies without descendants \r\nin A’s lifetime. A may take back the field. \r\n(b) A gives a lakh of rupees to B, reserving to himself, with B’s assent, the right to \r\ntake back at pleasure Rs. 10,000 out of the lakh. The gift holds good as to Rs. \r\n90,000, but is void as to Rs. 10,000, which continue to belong to A. \r\n127. Onerous gift.—Where a gift is in the form of a single transfer to the same person of \r\nseveral things of which one is, and the others are not, burden by an obligation, the donee can take \r\nnothing by the gift unless he accepts it fully. \r\nWhere a gift is in the form of two or more separate and independent transfers to the same person \r\nof several things, the donee is at liberty to accept one of them and refuse the others, although the former \r\nmay be beneficial and the latter onerous. \r\nOnerous gift to disqualified person.  A donee not co mpetent to contract and accepting \r\nproperty burdened by any obligation is not bound by his acceptance. But if, after becoming competent \r\nto contract and being aware of the obligation, he retains the property given, he becomes so bound. \r\nIllustrations \r\n(a) A has shares in, X, a prosperous joint stock company, and also shares in Y, a joint \r\nstock company, in difficulties. Heavy calls are expected in respect of the shares \r\nin Y. A gives B all his shares in joint stock companies. B refuses to accept the \r\nshares in Y. He cannot take the shares in X. \r\n(b) A having a lease for a term of years of a house at a rent which he and his \r\nrepresentatives are bound to pay during the term, and which is more than the \r\nhouse can be let for, gives to B the lease, and also, as a separate and independent \r\ntransaction, a sum of money. B refuses to accept the lease. He does not by this \r\nrefusal forfeit the money. \r\n \r\n \r\n \r\nPage 54 of 56 \r\n \r\n128. Universal donee.—Subject to the provisions of section 127, where a gift consists of the \r\ndonor’s whole property, the donee is personally liable for all the debts due by l[and liabilities of] the \r\ndonor at the time of the gift to the extent of the property comprised therein. \r\n129. Saving of donations mortis casua and Muslim law.—Nothing in this Chapter relates to \r\ngifts of moveable property made in contemplation of death, or shall be deemed to affect any rule of \r\n2[Muslim] law 1[* * *]. \r\n3[CHAPTER VIII \r\n \r\nOF TRANSFERS OF ACTIONABLE CLAIMS \r\n130. Transfer of actionable claim.—(1) The transfer of an actionable claim 1[whether with or \r\nwithout consideration] shall be effected only by the execution of an instrument in writing signed by \r\nthe transferor or his duly authorized agent, 1[* * *] shall be complete and  effectual upon  the  execution \r\nof such instrument, and thereupon all the rights and remedies of the transferor, whether by way of \r\ndamages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter \r\nprovided be given or not: \r\nProvided that every dealing with the debt or other actionable claim by the debtor or other person \r\nfrom or against whom the transferor would, but for such instrument of transfer as aforesaid, have been \r\nentitled to recover or enforce such debt or other actionable claim, shall (save where the debtor or other \r\nperson is a party to the transfer or has received express notice thereof as hereinafter provided) be valid \r\nas against such transfer. \r\n(2) The transferee of an actionable claim may, upon the execution of such instrument of transfer \r\nas aforesaid, sue or institute proceedings for the same in his own name without obtaining the \r\ntransferor’s consent to such suit or proceedings and without making him a party thereto. \r\nException.__ Nothing in this section applies to the transfer of a marine or fire policy of insurance \r\n1[or affects the provisions of section 38 of the Insurance Act, 1938(IV of 1938)]. \r\nIllustrations \r\n(i) A owes money to B, who transfers the debt to C. B then demands the debt from \r\nA, who, not having received notice of the transfer, as prescribed in section 131, \r\npays B. The payment is valid, and C cannot sue A for the debt. \r\n(ii) A effects a policy on his own life with an Insurance Company and assigns it to \r\na Bank for securing the payment of an existing or future debt. If A dies, the \r\nBank is entitled to receive the amount of the policy and to sue on it without the \r\nconcurrence of A’s executor, subject to the proviso in sub­section (1) of section \r\n130 and to the provisions of section 132. \r\n \r\n1Ins. and rep. by Act No. XX of 1929, ss. 60-62. \r\n2Subs. by the Federal Adaptation of Laws Order, 1975 (President’s Order No. 4 of 1975), Art. 2 and Table. \r\n3Subs. by Act No. II of 1900, s. 4. \r\n4Added by the Insurance Act, 1938 (Act No. IV of 1938), s. 121. \r\n  \r\n \r\nPage 55 of 56 \r\n \r\nI30A. 1[* * * * * * *] \r\n \r\n131.  Notice to be in writing, signed.—Every notice of transfer of an actionable claim shall be \r\nin writing, signed by the transferor or his agent duly authorised in this behalf, or, in case the transferor \r\nrefuses to sign, by the transferee or his agent, and shall state the name and address of the transferee. \r\n \r\n132. Liability of transferee of actionable claim.  The transferee of an actionable claim shall \r\ntake it subject to all the liabilities and equities to which the transferor was subject in respect thereof at \r\nthe date of the transfer. \r\n \r\nIllustrations \r\n \r\n(i) A transfers to C a debt due to him by B, A being then i ndebted to B. C sues B \r\nfor the debt due by B to A. In such suit B is entitled to set off the debt due by A \r\nto him; although C was unaware of it at the date of such transfer. \r\n \r\n(ii) A executed a bond in favour of B under circumstances entitling the former to  \r\nhave it delivered up and cancelled. B assigns the bond to C for value and without \r\nnotice of such circumstances. C cannot enforce the bond against A. \r\n \r\n133. Warranty of solvency of debtor.— Where the transferor of a debt warrants the solvency \r\nof the debtor, the warranty, in the absence of a contract to the contrary, applies only to his solvency at \r\nthe time of the transfer, and is limited, where the transfer is made for consideration, to the amount or \r\nvalue of such consideration. \r\n \r\n134. Mortgaged debt.—Where a debt is transferred for the purpose of securing an existing or \r\nfuture debt, the debt so transferred, if received by the transferor or recovered by the transferee, is \r\napplicable, first, in payment of the costs of such recovery: secondly, in or towards satisfaction of the \r\namount for the time being secured by the transfer; and the residue, if any, belongs to the transferor or \r\nother person entitled to receive the same. \r\n \r\n2[135. Assignment of ri ghts under policy of insurance against fire. —Every assignee by \r\nendorsement or other writing, of a policy of insurance against fire, in whom the property in the subject \r\ninsured shall be absolutely vested at the date of the assignment, shall have transferred  and vested in \r\nhim all rights of suit as if the contract contained in the policy had been made with himself.] \r\n \r\n \r\n135A. 1[* * * * * * *] \r\n \r\n \r\n136.  Incapacity of officers connected with Courts of Justice.—No Judge, legal practitioner \r\nor officer connected with any Court of Justice shall buy or traffic in, or stipulate for, or agree to receive \r\nany share of, or interest in, any actionable claim, and no Court of Justice shall enforce, at his instance, \r\nor at the instance of any person claiming by or t hrough him, any actionable claims, so dealt with by \r\nhim as aforesaid. \r\n \r\n137. Saving of negotiable instruments, etc. —Nothing in the foregoing sections of this \r\nChapter applies to stocks, shares or debentures, or to instruments which are for the time being, by law \r\nor custom, negotiable, or to any mercantile document of title to goods. \r\n \r\nExplanation.__ The expression “mercantile document of title to goods” includes a bill of lading, \r\ndock­warrant, warehouse­keeper’s certificate, railway receipt, warrant or order for the delivery of \r\ngoods, and any other document used in the ordinary course of business as p roof of the possession or \r\ncontrol of goods, or authorizing or purporting to authorize, either by endorsement or by delivery, the \r\npossessor of the document to transfer or receive goods thereby represented.] \r\n___________ \r\n \r\n1Repealed by the Marine Insurance Act, 2018 (Act No. V of 2018), s. 92. \r\n2Subs. by Act No. VI of 1944, s. 3. \r\n \r\nPage 56 of 56 \r\n \r\nTHE SCHEDULE \r\n \r\nYear and chapter Subject Extent of repeal \r\n(a) STATUTES \r\n27 Hen. VIII, c.10 Uses The whole. \r\n13 Eliz., c.5 Fraudulent conveyances The whole. \r\n27 Eliz., c.4 Fraudulent conveyances The whole. \r\n4 Wm. and Mary, c.16 Clandestine mortgages The whole. \r\n(b) ACTS OF THE GOVERNOR GENERAL IN COUNCIL \r\n1[* *] 1[* *] 1[* *] \r\n1[* *] 1[* *] 1[* *] \r\nXI of 1855 \r\n \r\nMesne profits and improvements. \r\n \r\nSection 1; in the title, the words \r\n“to mesne profits and,” and in \r\nthe preamble “to limit the \r\nliability for mesne profits and”. \r\nXXVII of 1866 2[*] Trustee Act Section 31. \r\nIV of 1872 Punjab Laws Act So far as it relates to Bengal \r\nRegulations I of 1798 and \r\nXVII of 1806. \r\n2[* *] 2[* *] 2[* *] \r\n2[* *] 2[* *] 2[* *] \r\nI of 1877 Specific Relief . . In sections 35 and 36, the \r\nwords “in writing”. \r\n 3[* *]  \r\n \r\n________ \r\n \r\n5626363           Date: 21-01-2025 \r\n1Omitted by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch. 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