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Report No. 70

2.11. Equity.-

Incidentally, the above resume of the important amendments would show how intimate is the connection between the law of property and equity jurisprudence. Hardly any important section of the Act can be understood in its true sense without a background of the relevant principle of equity.

Another feature that stands out on a study of the amendments is the overwhelmingly large number of amendments that touched the provisions relating to mortgages in the amending Acts of 1904, 1908, 1915 and 1929. This is understandable, because about one-third of the sections in the Act are concerned with mortgages. Apart from this purely numerical aspect, it should be mentioned that vital amendments were made in the fasciculus of sections which constitute the basic provisions on mortgages sections 59 to 63.

2.12. Gist of amendments made in 1929.-

It is desirable now to give in detail the gist of important amendments made in 1929. The Act made important amendments in the doctrine of notice. In particular, it extended the category of constructive notice. It also removed the exception regarding Hindus, in section 2. Taking note of the revision of the law of registration that had taken place, it provided that the registration of documents by which a transaction relating to immovable property is effected, is deemed to be notice. As regards the property that can be transferred, the amendment inserted a prohibition against the transfer of the right to maintenance, in whatsoever manner arising or secured or determined.

This amendment was rendered necessary by the pre-existing conflict of decisions on the subject. In regard to gifts to a class (sections 13 and 14), a welcome change was made by abolition of the English Common law rule in Leake v. Robinson, (1817) 35 English Report 2979, and by adopting a suggestion made by Wilson J. in an earlier Calcutta case. In substance, the new provision enacted that where a gift to a class fails, the failure is not to be in respect of the whole class, but only so far as the gift relates to those persons who fall within sections 13 and 14, i.e., those members who in regard to whom the gift becomes invalid.

2.13. The law regarding the validity of clauses directing accumulation was also sought to be modified. The doctrine of it lis penden (section 52) was the subject- matter of an amendment which removed certain difficulties arising from the case law1. The law relating to fraudulent transfers (section 53) was modified by revising the section on the lines of sections 172 and 173 of the Law of Property Act, 1925. A certain amount of neatness was introduced by splitting up the section so as to deal separately with transfers with and without consideration.

1. Ram Lal v. Kanya Lal, 1886 ILR 12 Cal 663.

2.14. One of the most important amendments made by the Act was by way of statutory recognition of the wel- known doctrine of part-performance. There had been an acute conflict of decisions on the subject.

2.14A. Sale of immovable property or of any interest in it was now to be made only by a registered instrument, irrespective of the value of the property. This amendment represents a movement in the direction of formalisation of the procedure for transfer-a contrast with the amendment pertaining to the doctrine of part performance (section 53A) which was, in substance, aimed at reducing the importance of formalities.

2.15. A pretty large number of amendments made in 1929 related to the law of mortgages. The class of mortgage known as mortgage by conditional sale had been a source of trouble to the courts, as it was often very difficult to decide whether the transaction was a sale (with condition of repurchase) or merely a mortgage by conditional sale. It was provided that no transaction can be a mortgage by conditional sale unless the whole arrangement (sale and the usual conditions) was embodied in one single document.

The governing test was still the intention of the parties, since the new statutory proviso was of a negative character. It did not provide that wherever there is only one document evidencing the sale and the condition, the transaction is to be deemed only a mortgage by conditional sale irrespective of the intention of the parties.

We are mentioning this since there arose a controversy on the subject even after the amendment. The definition of usufructuary mortgage was amended in order to get over a Madras ruling dealing with the case1 where possession has not actually been given. The principal remedy of the mortgagee in such a case would be to demand possession, failing which he could demand the mortgage mone.- this was separately provided by amending section 68.

1. Subammah v. Narayya, 1917 ILR 41 Mad 259.

2.16. A new definition of "anomalous mortgage" was also added in section 58(g). Rights of mortgagees under such mortgages were to be governed by revised section 9- principally by the contract as evidenced in the mortgage deed, and, so far as such contract does not extend, by local usage.

2.17. The policy of compulsory registration was sought to be implemented by providing, in section 59, second paragraph, that even where the principal money secured is less than one hundred rupees, the mortgage must be effected by a registered and attested instrument or (except in the case of a simple mortgage) by delivery of the property. The question whether attestation should continue to be insisted upon in the case of mort gages does not seem to have been discussed.

2.18. The prohibition of consolidation of mortgage- section 61- underwent a far-reaching change. The right to redeem separately or simultaneously two or more mortgages executed by a mortgagor in favour of the same mortgagee (in the absence of a contract to the contrary) was strengthened. Consolidation at the instance of the mortgagee was not to be allowed, even when the same property was mortgaged more than once.

A new section-section 63A-was inserted to deal with improvements to a mortgaged property. Curiously, the case where an improvement is effected by the mortgagee with the consent of the mortgagor-express or implied-is not expressly covered in section 63A(2). This could have been achieved by adding, after the words "public authority", the words "or with the consent express or implied of the mortgagor".

2.19. A new section- section 65A-permitted the mortgagor, while in possession to grant a lease which would be binding on the mortgagee. Certain conditions were imposed as to the kind of leases which the mortgagor can grant. The condition in section 65A(2)(e) as to the duration of the lease (maximum three years) may not be practicable, though of course, these conditions can be varied under section 65A(3). But, then, a specific provision in the mortgage deed and careful conveyancing would be required. By amending section 67 (right to foreclosure and sale), certain restrictions were imposed as to the right of fore-closure in certain kinds of mortgages.

2.20. A new section- section 67A-was added to compel a mortgagee who holds more than one mortgage executed by the same mortgagor to bring a suit on all his mortgages in certain cases. The object was to prevent a sale of mortgaged property in execution of a decree for sale in respect of one mortgage, reserving the rights of the same person as mortgagee under other mortgages in his favour, whether prior or subsequent.

As regards the right of the mortgagee to bring a suit for the mortgage money under section 68, certain changes were made, of which the most important was the addition of sub section (2), to compel the mortgagee to exhaust all his available remedies against the mortgaged property before obtaining a money decree unless he abandoned the security.

The mortgagee's power of sale without intervention of the court was also clarified. The amendment allowed the same powers of private sale in the case of English mortgages, whether the mortgage deed conferred a power or not. An amendment was also made to allow the appointment of a receiver in cases where the right to exercise the power of private sale had arisen. This was on the analogy of the English law. These matters were dealt with in sections 69 and 69A.

2.21. Certain amendments were made concerning marshalling and subrogation. The main rules of the law of subrogation were recognised in the new section.1

1. Sections 91-92.

2.22. As regards charges governed by section 100, it was made clear that the charg- holder has the same rights, as far as the case may be, as a simple mortgage. It was also provided that the charge as such cannot be enforced against property in the hands of a transferee for consideration without notice. Incidentally, the last mentioned amendment is an instance of the influence of equitable doctrines.

2.23. In regard to leases, service of notice to quit by post was provided for, (section 106). Registration of all leases, from year to year or for any term exceeding one year or reserving a yearly rent was made compulsory. The instrument of lease must be executed by both the parties. In so far as registration was made compulsory of a lease for a term exceeding on year say, even two years-certain practical difficulties may arise. Also, the amendment requiring both the parties to sign the lease seems to be contrary to the then existing usage,1 perhaps even to the current practice is to the contrary.

These, in brief, are the important amendment of 1929.

1. for the old law, see Syed Alam Sahib v. Ananthnayam, 1910 ILR 35 Mad 95.

The Transfer of Property Act, 1882 Back

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