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Report No. 57

5.7. Unlawful transfers.-

A transfer of property for an unlawful object is void, by virtue of a specific provision in the Transfer of Property Act1. Recovery by the transferor of property transferred for an unlawful object is, however, permissible only in certain specified cases. Under a provision in the Trusts Act,2 where the owner of property transfers it to another for an illegal purpose, and such purpose is not carried into execution, or the transferor is not as guilty as the transferee or the effect of permitting the transferee to retain the property might be to defeat the provisions of any law, the transferee must hold the property for the benefit of the transferor.

1. Section 6(h)(2), Transfer of Property Act.

2. Section 84, Trusts Act.

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