TPA Condition Restraining Alienation Section 10

Condition Restraining Alienation under Section 10: Absolute and Partial Restraints, the Lease Exception and the Married Woman Proviso

A transferor who wants his land to stay in the family will often say so in the deed. Section 10 tells him how far he may go. A condition that absolutely restrains the transferee from parting with his interest is void, and the transferee takes the property free of it. A condition that merely narrows the power of disposal without destroying it is partial, and the law lets it stand. Between those two poles lies the whole of the litigation, and the only question the court asks is whether what remains of the power to alienate is worth anything at all.

Figure 1: Restraints ranged from the plainly partial to the plainly absolute, and the single question that places any of them

1. The Section

2. The Elements

1. There must be a transfer of property. The section governs conditions attached to a transfer. A restraint contained in a partition or a family arrangement is not strictly within it, though the courts have applied the same principle where the substance is the same.
2. A condition or limitation. Both are covered, so the form of drafting makes no difference — whether the deed forbids alienation or defines the interest so as to exclude it.
3. Absolutely restraining. This is the operative requirement, and the whole topic turns on it.
4. Binding the transferee or any person claiming under him. A restraint cast on successors in title is caught in the same way.
5. The consequence: the condition is void, and the transfer stands. Note the contrast with section 6, where the defect destroys the transfer itself. Here the transferee keeps the property and loses only the fetter.

3. Absolute and Partial Restraints

The test is one of substance. A restraint is absolute where the power of alienation is taken away, or so narrowed that what is left is of no practical value. It is partial where the transferee retains a substantial power to dispose, though not an unlimited one.

4. The Lease Exception

The section exempts a lease where the condition is for the benefit of the lessor or those claiming under him. The reason is that the lessor has not parted with the whole of his interest: he retains the reversion, and he has a legitimate interest in who occupies the property during the term. A covenant in a lease against assignment or sub-letting without the lessor's consent is therefore perfectly good, and its breach may found a forfeiture under section 111(g). Note that the exception is confined to conditions for the lessor's benefit; a restraint imposed for some other purpose does not attract it.

5. The Married Woman Proviso

The proviso permits property to be transferred to or for the benefit of a woman who is not a Hindu, Muhammadan or Buddhist, so that she shall not have power during her marriage to transfer or charge it or her beneficial interest in it.

1. Its origin is historical. It reflects the nineteenth-century English device of the restraint upon anticipation, by which property was settled on a married woman in a form that prevented her husband, or her own improvidence under his influence, from dissipating it. At the time a married woman's property was, under the English common law that governed some communities in India, largely at her husband's disposal.
2. Its exclusions follow the personal laws. Hindu, Muslim and Buddhist women were governed by their own systems, under which a woman's stridhan or her property held a different position, and the proviso was not extended to them.
3. It is largely spent. The Married Women's Property Act, 1874 and the modern legislation securing a woman's separate property have removed the mischief the proviso was designed to meet, and the restraint upon anticipation was abolished in England itself. The proviso remains on the statute book and must be stated in an answer, but it belongs to the history of the section rather than to its daily working.

6. Restraints Imposed by Agreement and by Statute

Two qualifications are worth adding, because they mark the edges of the section.

1. Statutory restraints are untouched. Section 10 governs restraints imposed by the parties. A restriction created by a tenancy or land-reform statute, or by section 6 itself, operates on its own footing.
2. Contractual arrangements voluntarily accepted may stand. In Zoroastrian Co-operative Housing Society Ltd. v. District Registrar, Co-operative Societies, (2005) 5 SCC 632, the Supreme Court upheld a society bye-law restricting membership, and therefore transfer of flats, to members of a particular community, on the footing that a person who joins such a society accepts its bye-laws as a matter of contract. The decision marks the boundary between a restraint fastened on a transferee by his transferor and a limitation a party has taken upon himself by joining an association.

7. Landmark Cases

8. Related Topics and Provisions

• Restraints on Transfer, Sections 10 to 12 — the chapter scheme in which section 10 sits
• Condition Repugnant to the Interest Created, Section 11 — the neighbouring provision on enjoyment
• Section 10 vs Section 11 — the two compared, with worked examples
• Section 12, TPA — conditions making an interest determinable on insolvency or attempted alienation
• Section 111(g), TPA — forfeiture of a lease for breach of a covenant against assignment
• Zoroastrian Co-operative Housing Society Ltd. v. District Registrar, Co-operative Societies, (2005) 5 SCC 632 — restrictions accepted by contract