UNIVERSITY OF NIVERSITY OF PETROLEUM & ENERGY S STUDIES COLLEGE OF LEGAL STUDIES B.A., LL.B. (HONS.) SEMESTER V ACADEMIC YEAR: 2015 -16
SESSION: JULY-DECEMBER
PROJECT ON CONDITIONAL TRANSFER Under the Supervii!n !" Pr!"# Shi$h% Diri 'TO BE FILLED
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BY THE STUDENT
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PRAS*ANT SING* SAP NO) ROLL NO)
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Acknowledgement:I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and this organization. I would like to extend m y sincere thanks to all of them. I am highly indebted to Prof. Shikha Dimri for her guidance and constant supervision as well as for providing necessary information regarding the project & also for her support in completing my project Conditional Transfer!. "y thanks and appreciations also go to my classmates in developing the project and people who have willingly helped me out with their abilities. I am also thankful to the I# $epartment of %'( and the library as well as without them the making of this project would have been next to impossible. I am thankful to and fortunate enough to get constant encouragement, support and guidance from my parents and friends who helped me in successfully completing this project.
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Introduction onditional -bligations under ivil aw /0nalysis* ondition (ubse2uent & ondition recedent onclusion
!nt"od#ct$on
roperty may be transferred by one person to another absolutely or conditionally. In absolute transfers, interest in property is immediately vested in the transferee because nothing is to be performed by his side. 4hereas in a conditional transfer, as the name suggests, certain conditions are attached which are to be fulfilled for the transfer and vesting of interest in the transferee. #hese conditions may be of three types5 I*
onditions recedent 0 condition which is prior to the transfer is known as condition precedent. 4here the terms of a transfer of property impose a condition to be fulfilled before a person has taken an interest in the property, the condition is known as ondition recedent.
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onditions (ubse2uent #he condition which is to be fulfilled after the transfer of property has already taken place is known as ondition (ubse2uent. 4here a transfer of property is subject to a condition subse2uent the interest which has already been vested in the transferee is affected by the fulfillment or non6 fulfillment of that condition.
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onditions ollateral #he condition which is to be fulfilled simultaneously with the transfer is known as ollateral ondition. (uch a condition is to be performed side by side the operation of transfer.
0ccording to section +7, an interest created on a transfer of property and dependent upon a condition fails under the following conditions5 i*
If the fulfillment of the condition is impossible 4here the condition to be performed is impossible of performance i.e., the condition is such that it can8t be performed, the transfer of property too can8t take place. 9or example, 0 lets a farm to : on condition that he shall walk a hundred miles in an hour. #he lease is void. (ince this condition is impossible to perform because no person can walk hundred miles in an hour. (imilarly, 0 gives ;s.7<< to : on the conditions that he
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shall marry 08s daughter . 0t the date of transfer was dead. #he transfer became void because due to 8s death the condition became impossible of performance. Is forbidden by law, or If the condition is forbidden by law the transfer on the basis of fulfillment of that condition becomes void. 9or example, 0 transfers his land to : on the condition that : will give his license to 0 /: has certain li2uor license which is given by the government under certain restrictions*. (uch a transfer is void. Is of such nature that, if permitted, it would defeat the provisions of any law, or 9or example5 0 transfers property to : on the condition that : will marry 08s daughter. : at that time was already married. =ow if this condition is performed the provisions of Hindu aw will be defeated because :, a Hindu can8t marry twice when the first wife is living and there is no divorce. Is fraudulent, or 4here the condition is fraudulent, the transfer will become void. 9or example5 0 makes a gift of his house to :, who is agent of , on condition that : shall give a false receipt on behalf of his principal . erformance of this condition would be fraudulent, therefore, the transfer is void. Involves or implies injury to the person or property of another, or 9or example5 0 transfers ;s.7<< to : on the condition that he shall murder . #he transfer is void because the condition involves injury to another person. ourt regards it immoral or opposed to public policy 4here the condition is such that the court regards it immoral or against public policy, the transfer depending upon such a condition will be void. 9or example5 4here 0 transfers ;s.7<< to his niece if she will desert her husband, the transfer is void.
%ond$t$onal Obl$gat$on #nde" %$&$l Law (Anal'$)
0n obligation is conditional where it is made to depend upon a future and uncertain event, either by suspending it until the event occurs or is certain not to occur, or by making its extinction dependent on whether or not the event occurs. #hus, a condition must be future and uncertain, and what is more, it cannot be purely potestative , which means it cannot be solely dependent on the debtor8s will. 0 condition must also be an external event that is not essential to the formation of the contract. 9or example, a buyer who agrees to pay the price if the seller agrees to deliver the item is contracting a pure and simple obligation. 4hen an obligation is subject to a suspensive condition, the creation of the obligation will depend on the occurrence of an event or on the certainty that the event will not occur> thus, the condition delays the creation of a relationship between the parties. 0s long as the condition has not occurred, the very existence of the obligation is in abeyance. #he obligation is not only inexigible, as with a term> in fact it does not exist, as it has not yet come into being. If the obligation in 2uestion is payment, the debt has not legally arisen and a person who has paid in error can claim the money back. #hus, the seller has no right to the price until the condition is fulfilled. -wnership of property sold subject to a suspensive condition is not transferred immediately. #he seller retains ownership and all the incidents thereof. -ccasionally, possession of the property may be transferred when the contract is formed, for example in a trial sale /which is presumed to be subject to a suspensive condition* but this does not have the effect of transferring ownership. 4hen the condition is fulfilled, it has a retroactive effect to the date of conclusion of the contract, both between the parties and against third parties5 #he fulfillment of a condition has a retroactive effect, between the parties and with respect to third persons, to the day on which the debtor obligated himself conditionally. #hus, with a suspensive condition, the occurrence of the event causes the agreement to have become pure and simple from the beginning5 9rom what point does the obligation exist as a pure and simple obligation, however? #he answer might seem clear5 until such time as the suspensive condition occurs, the obligation is a conditional one> but from the moment the suspensive condition occurs, a pure and simple obligation is substituted therefore. 'verything happens as though the obligation had been pure and simple from the date the contract was formed> it is deemed never to have been merely a potential obligation. #hus, when the contract provides for the transfer of the right of ownership, that right is deemed to have passed to the buyer on the date the contract was signed. #he effects and conse2uences of retroactivity will be
analyzed below. 4here the condition is not fulfilled within the allotted time or when it becomes certain that it will not be fulfilled, the contract is, for all intents and purposes, considered never to have been formed.
%ond$t$on S#be#ent and "ecedent
Condition Subsequent 0 condition subse2uent is an event or state of affairs that brings an end to something else. 0 condition subse2uent is often used in a legal context as a marker bringing an end to one@s legal rights or duties. 0 condition subse2uent may be either an event or a state of affairs that must either5 /)* occur or /+* fail to continue to occur. Example5 0 right in land may be cut off by a condition subse2uent. 4hen land rights are subject to a condition subse2uent, this creates a defeasable fee called a 9ee simple subject to condition subse2uent. In such a fee, the future interest is called a Aright of reentryA or Aright of entry.A #here, the fee simple subject to condition subse2uent does not end automatically upon the happening of the condition, but if the specified future event occurs, the grantor has a right to retake his property /as opposed to it reverting to him automatically*. 0gain, the right of entry is not automatic, but rather must be exercised to terminate the fee simple subject to condition subse2uent. #o exercise right of entry, the holder must take substantial steps to recover possession and title, for example, by filing a lawsuit. -ne of the languages used to create a fee simple subject to condition subse2uent and a right of entry is Ato 0, but if 0 sells alcohol on the land, then grantor has the right of reentry.A Condition Precedent
0 condition precedent is an event or state of affairs that is re2uired before something else will occur. In contract law, a condition precedent is an event which must occur, unless its non6occurrence is excused, before performance under a contract becomes due, i.e., before any contractual duty exists. 9or instance, in the sentence ABack will only go to heaven after he has died,A the death of Back is a condition precedent to Back going to heaven /although it is also possible in this example for the occurrence of other conditions precedent to be needed before Back goes to heaven5 it is not stated that Back will necessarily go to heaven if he dies*. In estate and trust law, it is a provision in a will or trust that prevents the vesting of a gift or be2uest until something occurs or fails to occur, e.g. the attainment of a
certain age or the predecease of another person. 9or comparison, a condition subse2uent brings a duty to an end whereas a condition precedent initiates a duty.
%oncl#$on #he word condition! may have a number of meanings. 9or instance, in some jurisdictions, condition means a major term of the contract. #hat is not the sense in which the term condition! is used in this section. #he conditional transfers are generally based on the notion that the condition imposed is form of a consideration which has to be fulfilled by the party. 0 condition which is prior to the transfer is known as condition precedent. 4here the terms of a transfer of property impose a condition to be fulfilled before a person has taken an interest in the property, the condition is known as ondition recedent. #he condition which is to be fulfilled after the transfer of property has already taken place is known as ondition (ubse2uent. 4here a transfer of property is subject to a condition subse2uent the interest which has already been vested in the transferee is affected by the fulfillment or non6 fulfillment of that condition. #he condition which is to be fulfilled simultaneously with the transfer is known as ollateral ondition. #hese conditions comprise an important part of the transfer which takes place and sometimes, rather all the time these conditions when reasonable and legally sound have to be fulfilled.
