Transfer of Property Act (TPA)
TPA Conditional Transfer Section 25
Conditional Transfer under Section 25: Impossible, Forbidden, Fraudulent and Immoral Conditions, and the Two Kinds of Condition
A transferor may attach a condition to his gift, but not any condition he pleases. Section 25 lists six vices, and an interest dependent on a condition tainted by any of them fails. That last word is the point of the section and the point students most often miss: where sections 10 to 12 strike out the offending condition and leave the transfer standing, section 25 takes the interest down with the condition. The reason is structural — a condition precedent is what the gift rests on, and when it is removed there is nothing left to support the gift.
Figure 1: The six vitiating heads, what falls with them, and the contrast between the two kinds of condition
1. The Section
Section 25, TPA 'An interest created on a transfer of property and dependent upon a condition fails if the fulfilment of the condition is impossible, or is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of any law, or is fraudulent, or involves or implies injury to the person or property of another, or the Court regards it as immoral or opposed to public policy.' |
2. The Six Heads
Head | Meaning | The Act's illustration or a standard instance |
|---|---|---|
Impossible of fulfilment | The condition cannot be performed — physically, or because the state of affairs it assumes does not exist | A lets a farm to B on condition that he shall walk a hundred miles in an hour. And: A gives ₹500 to B on condition that he shall marry A's daughter C, C being dead at the date of the transfer |
Forbidden by law | The act required is one the law prohibits | A condition requiring the transferee to do something an enactment forbids |
Would defeat the provisions of any law | Not directly prohibited, but designed to evade a statutory scheme | A condition framed to escape a ceiling on holdings, or a statutory right of pre-emption |
Fraudulent | The condition is a means of practising a fraud on a third person | A condition requiring the transferee to assist in concealing property from creditors |
Involving injury to the person or property of another | Performance would harm someone else | A transfers ₹500 to B on condition that she shall murder C |
Immoral or opposed to public policy | The court's own assessment | A transfers ₹500 to his niece C if she will desert her husband. And, on the same principle, conditions in general restraint of marriage or of trade |
3. The Effect: the Interest Fails
The section says that the interest fails, not merely the condition. The consequence must be stated carefully, because it is exactly the opposite of the rule under sections 10, 11 and 12.
Provision | What is struck down | What survives |
|---|---|---|
Section 25 — a bad condition precedent | The interest fails | Nothing of that gift; the property remains with the transferor or passes under the rest of the deed |
Sections 10 to 12 — a restraint or a repugnant condition | Only the condition is void | The transfer stands, and the transferee takes free of the fetter |
Section 32 — a bad condition of cesser | The condition of cesser fails | The interest continues; the divesting provision is simply ineffective |
Why the results differ A condition precedent is the foundation of the gift. The transferor has said 'you take if'. Remove the 'if' and there is no gift left to give effect to, so the interest fails with the condition. A restraint or a condition of cesser is an addition to a gift already made. The transferor has said 'you take, but'. Remove the 'but' and a complete transfer remains. |
4. Condition Precedent and Condition Subsequent
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 |
How it must be fulfilled | Substantially — section 26 | Strictly — section 29 |
If the condition is bad | The interest fails — section 25 | The condition fails and the interest continues — section 32 |
Time for performance | Section 33 where no time is specified; section 34 where a time is fixed | The same provisions apply according to the terms |
Typical wording | 'to B if he qualifies as a doctor' | 'to B, but if he ceases to practise, to C' |
5. Section 32 Explained
Section 32, TPA 'In order that a condition that an interest shall cease to exist 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.' In other words, the same six heads in section 25 test a condition of cesser under section 31. But because the interest has already vested, the failure of the condition does not destroy it: the divesting provision is ineffective and the transferee holds the property free of it. |
6. Public Policy in Practice
- Restraint of marriage. A condition in general restraint of marriage is treated as opposed to public policy, following the principle in section 26 of the Indian Contract Act; a partial or reasonable restriction may stand.
- Interference with marital duties. The Act's own illustration — a gift to a niece if she deserts her husband — is the clearest case.
- Restraint of trade. A condition in restraint of lawful trade attracts the same objection, by analogy with section 27 of the Contract Act.
- Interference with parental or personal duties, and conditions requiring the commission of an offence, fall under the injury and illegality heads.
- The category is not closed, and the section leaves the assessment expressly to the court — 'the Court regards it as immoral or opposed to public policy'.
7. Worked Examples
The limitation | Result |
|---|---|
'To B if he walks from Delhi to Mumbai in a day' | The condition is impossible; the interest fails — section 25 |
'To B if he marries C', C being dead at the date of the transfer | Impossible; the interest fails |
'To B if he murders C' | Injury to the person of another; the interest fails |
'To my niece C if she leaves her husband' | Opposed to public policy; the interest fails |
'To B, but if B marries outside the community, to C' | A condition subsequent; tested under sections 31 and 32, and if bad, the condition alone fails and B keeps the property |
'To B absolutely, but B shall never sell' | Not section 25 at all — this is a restraint on alienation under section 10; the condition is void and B takes free of it |
Retention aid Impossible, forbidden, evasive, fraudulent, injurious, immoral. Then the single line that carries the marks: under section 25 the interest fails, because a condition precedent is what the gift stands on — while under sections 10 to 12 and section 32 only the condition falls. |
8. Landmark Cases
📖 Zoroastrian Co-operative Housing Society Ltd. v. District Registrar, Co-operative Societies, (2005) 5 SCC 632 Held: In examining the validity of a condition restricting the use or transfer of property, the court looks at the source and the substance of the restriction rather than at its form. A restriction voluntarily accepted as part of the terms on which a person joins an association stands on a different footing from a condition fastened by a transferor upon his transferee, and is not struck down merely because it limits what the holder may do with the property. Ratio: The validity of a condition is judged by its substance and by the relationship in which it was imposed. |
📖 Rajes Kanta Roy v. Santi Debi, AIR 1957 SC 255 Held: Where a condition is attached to a transfer, its character decides the character of the interest. A provision by which an interest already given is to be divested on a subsequent event does not prevent the interest from vesting, whereas a condition which must be satisfied before the transferee can take leaves the interest contingent. Ratio: Whether a condition is precedent or subsequent determines whether the interest is contingent or vested and defeasible. |
9. Related Topics and Provisions
- Conditional Transfers, Sections 25 to 34 — the chapter scheme
- Sections 26 and 29, TPA — substantial and strict fulfilment
- Sections 31 and 32, TPA — the condition that an interest shall cease, and its validity
- Sections 10 to 12, TPA — where only the condition is struck down
- Sections 23, 26 and 27, Indian Contract Act, 1872 — unlawful objects, restraint of marriage and restraint of trade
- Contingent Interest, Section 21 — the character of an interest awaiting a condition precedent