Transfer of Property Act (TPA)
Condition Precedent and Condition Subsequent under Sections 26 to 34: Fulfilment, Ulterior Dispositions and Divesting
Once section 25 has decided that a condition is lawful, nine sections work out what is to be done with it. Two of them set the standard of performance, and they set it differently: a condition precedent need only be substantially complied with, because it stands between the transferee and a gift intended for him; a condition subsequent must be strictly fulfilled, because it operates to take away an interest he already has. Four more deal with the gift over, and two with the time allowed for doing what the condition requires.
Figure 1: A condition that must be satisfied before the interest grows, and a condition that cuts down an interest already grown
1. The Two Kinds of Condition
Point | Condition precedent | Condition subsequent |
|---|---|---|
When it operates | Before the interest arises | After the interest has vested, to defeat it |
Character of the interest meanwhile | Contingent — section 21 | Vested and defeasible — section 19, and its Explanation |
Standard of fulfilment | Substantial compliance — section 26 | Strict fulfilment — section 29 |
Effect of a bad condition | The interest fails — section 25 | The condition fails and the interest continues — section 32 |
Typical wording | 'to B if he does X' | 'to B, but if he does X, to C' |
Time for performance | Sections 33 and 34 according to the terms | Sections 33 and 34 according to the terms |
2. Section 26: Fulfilment of a Condition Precedent
Section 26, TPA 'Where the terms of a transfer of property impose a condition to be fulfilled before a person can take an interest in the property, the condition shall be deemed to have been fulfilled if it has been substantially complied with.' The Act's illustrations. A transfers ₹500 to B on condition that he shall marry with the consent of C, D and E. E dies. B marries with the consent of C and D. B is deemed to have fulfilled the condition. But where B marries without their consent and afterwards obtains it, the condition has not been fulfilled. |
The two illustrations mark the boundary precisely. Substantial compliance means the substance of what the transferor asked for has been achieved, allowing for events outside the transferee's control. It does not mean doing the thing in the wrong order and repairing it afterwards.
3. Section 29: Fulfilment of a Condition Subsequent
Section 29, TPA 'An ulterior disposition of the kind contemplated by the last preceding section cannot take effect unless the condition is strictly fulfilled.' Illustration. A transfers ₹500 to B, to be paid to him on his attaining his majority or marrying, with a proviso that if B dies a minor or marries without C's consent, the ₹500 shall go to D. B marries when only seventeen years of age, without C's consent. The transfer to D takes effect. |
The contrast with section 26 is deliberate and is the most examinable point in this block. A provision that takes property away is construed strictly against the person who invokes it; a provision that stands between a transferee and a benefit intended for him is construed indulgently.
4. Sections 27, 28 and 30: The Gift Over
- Section 27 — the ulterior disposition. Where, on a transfer, an interest is created in favour of one person, and by the same transaction an ulterior disposition of the same property is made in favour of another on the failure of the prior disposition, the ulterior disposition takes effect on that failure, whether or not the failure occurs in the manner contemplated — unless the terms show that the ulterior disposition was to take effect only if the prior failed in a particular manner.
- Section 28 — an ulterior transfer on an event. An ulterior disposition may validly be made to depend on a specified uncertain event happening, or not happening — the ordinary machinery of a gift over.
- Section 30 — the prior disposition is protected. If the ulterior disposition is invalid, the prior disposition is not affected by that invalidity. The first taker keeps what he was given. The Act's illustration: a farm transferred to B for her life and, if she does not desert her husband, to C — the condition being void, B is nevertheless entitled to the farm for her life as if no condition had been inserted.
- And section 16 is the exception. Where the prior interest failed under section 13 or section 14, the dependent interest falls with it, and the rule of acceleration in section 27 does not operate.
5. Sections 31 and 32: The Condition of Cesser
Sections 31 and 32 Section 31 — an interest may be created with the condition superadded that it shall cease to exist in case a specified uncertain event shall happen, or shall not happen. Section 32 — in order that such a condition may be valid, it is necessary that the event to which it relates be one which could legally constitute the condition of the creation of an interest. So the six heads in section 25 test a condition of cesser too. But because the interest has already vested, the consequence is different: the condition fails and the transferee keeps the property, free of the divesting provision. |
This is the statutory form of what is meant by a vested interest subject to divestment — an interest complete in the holder, which the transferor has reserved the power to cut short on a stated event. The Explanation to section 19 confirms that such a provision does not prevent the interest from vesting in the first place.
6. Sections 33 and 34: Time for Performance
Situation | Rule | Illustration |
|---|---|---|
No time is specified for the act — section 33 | The act may be performed at any time before the person interested becomes entitled to the property | A condition requiring the transferee to execute a release may be satisfied at any time before he is entitled to call for the property |
A time is specified — section 34 | The act must be performed within that time | 'Provided he goes to England within three years' — he must go within three years |
Performance prevented by fraud — section 34 | Where performance within the time is prevented by the fraud of a person who would derive a benefit from its non-fulfilment, further time is allowed | Where the person entitled on non-performance has himself obstructed it |
7. A Method for Problems
- Classify the condition. Precedent or subsequent?
- Test it under section 25 — and under section 32 if it is a condition of cesser.
- If good, apply the right standard — substantial under section 26, strict under section 29.
- Check the time — section 33 or section 34, and look for fraud preventing performance.
- Then deal with the gift over — sections 27, 28 and 30, remembering section 16.
Retention aid Substantially before, strictly after. And the other half of the pair: a bad condition before destroys the gift; a bad condition after destroys only itself. |
8. Related Topics and Provisions
- Conditional Transfer, General Principles under Section 25 — the six vitiating heads
- Conditional Transfers, Sections 25 to 34 — the chapter scheme
- Vested Interest, Section 19 — the Explanation, and vested interests subject to divestment
- Contingent Interest, Section 21 — the character of an interest awaiting a condition precedent
- Section 16, TPA — the exception to acceleration
- Sections 120 to 137, Indian Succession Act, 1925 — the testamentary counterparts