Transfer of Property Act (TPA)
Conditional Transfers under Sections 25 to 34: The Scheme of the Chapter
A transferor may attach a condition to what he gives. He may say that the gift shall take effect only if something happens, or that it shall come to an end if something happens. The first is a condition precedent, the second a condition subsequent, and the ten sections from 25 to 34 work out the consequences of both: whether the condition is good at all, how strictly it must be satisfied, what happens to the gift over when the first gift fails, and how much time the transferee has to do what he was asked to do.
Figure 1: The ten sections, and the three questions they divide into
1. The Ten Sections
Section | Subject | Substance |
|---|---|---|
25 | Validity of the condition | An interest dependent upon a condition fails if the fulfilment of the condition is impossible, forbidden by law, of such a nature that it would defeat the provisions of any law, fraudulent, involves or implies injury to the person or property of another, or is regarded by the court as immoral or opposed to public policy |
26 | Fulfilment of a condition precedent | Where the terms of a transfer impose a condition to be fulfilled before a person can take an interest, the condition is deemed fulfilled if it is substantially complied with |
27 | The ulterior disposition | Where an interest is created with a further disposition to another on the failure of the prior disposition, the ulterior disposition takes effect if the prior fails — whether or not the failure occurs in the manner contemplated, unless the terms show a contrary intention |
28 | Ulterior transfer conditional on an event | An ulterior disposition may be made to take effect on the happening, or the not happening, of a specified uncertain event |
29 | Fulfilment of a condition subsequent | Where an interest is to cease on the non-fulfilment of a condition, the condition must be strictly fulfilled |
30 | Prior disposition unaffected by invalidity of the ulterior | If the ulterior disposition is invalid, the prior disposition is not affected by that invalidity |
31 | Condition that an interest shall cease | An interest may be made to cease on the happening, or the not happening, of a specified uncertain event |
32 | The event must be a lawful condition | For such a condition to be valid, the event must be one which could lawfully constitute the condition of the creation of an interest |
33 | An act to be performed, no time specified | Where the condition requires an act to be performed and no time is specified, it may be performed at any time before the person interested becomes entitled to the property |
34 | An act to be performed, time specified | Where a time is specified, the act must be done within it — but where performance is prevented by the fraud of a person who would benefit, further time is allowed |
2. The Two Kinds of Condition
The distinction that organises the chapter A condition precedent must be satisfied before the interest arises. Until then the interest is contingent under section 21. Sections 25, 26 and 33 are its provisions. A condition subsequent operates on an interest that has already arisen, and defeats it. The interest is vested and defeasible. Sections 29, 31, 32 and 34 are its provisions. Two consequences follow from the difference, and they are the most examinable points in the chapter: a condition precedent need only be substantially complied with (section 26), while a condition subsequent must be strictly fulfilled (section 29); and a bad condition precedent destroys the gift (section 25), while a bad condition of cesser leaves the interest standing (section 32). |
3. Substantial and Strict Fulfilment
Condition precedent — s. 26 | Condition subsequent — s. 29 | |
|---|---|---|
The standard | Substantial compliance is enough | Strict fulfilment is required |
Why | The condition stands between the transferee and a gift intended for him; the law does not defeat the gift on a technicality | The condition operates to take away an interest already vested, and a divesting provision is construed strictly against the person invoking it |
Typical instance | A direction to obtain a person's consent, complied with in substance | A provision that the interest shall cease unless an act is done in a particular manner |
4. The Ulterior Disposition: Sections 27, 28 and 30
- Section 27 states the general rule. Where property is transferred to one person, with a further disposition to another on the failure of the prior disposition, the ulterior disposition takes effect on that failure. The second paragraph adds the qualification: if the deed shows that the ulterior disposition was to take effect only if the prior failed in a particular manner, it takes effect only in that manner.
- Section 28 permits an ulterior disposition to be made to depend on a specified uncertain event happening or not happening — the ordinary machinery of a gift over.
- Section 30 protects the first gift: if the ulterior disposition is invalid, the prior disposition is unaffected. The first taker keeps what he was given.
- And section 16 is the exception to all of this. Where the prior interest failed under section 13 or section 14, the dependent interest fails with it, and the ordinary rule of acceleration in section 27 does not apply.
5. Time for Performance: Sections 33 and 34
Situation | Rule |
|---|---|
The condition requires an act, and no time is specified — section 33 | The act may be performed at any time before the person interested becomes entitled to the property |
The condition requires an act within a specified time — section 34 | The act must be performed within that time |
Performance within the time is prevented by fraud | Section 34 allows further time: where the performance is prevented by the fraud of a person who would derive a benefit from its non-fulfilment, further time is allowed |
6. How to Approach a Problem on the Chapter
- Identify the kind of condition. Precedent or subsequent — everything else follows.
- Test the condition under section 25. Impossible, forbidden, defeating a law, fraudulent, injurious, immoral or against public policy?
- If it is bad, say what falls. A bad condition precedent takes the interest with it; a bad condition of cesser falls alone, leaving the interest absolute — sections 25 and 32.
- If it is good, ask how it must be satisfied — substantially under section 26, strictly under section 29 — and by when, under sections 33 and 34.
- Then deal with any gift over, under sections 27, 28 and 30, remembering section 16.
Retention aid Twenty-five asks if the condition is lawful; twenty-six and twenty-nine ask how well it must be performed; thirty-three and thirty-four ask by when; and twenty-seven to thirty deal with what comes next. Ten sections, four questions. |
7. Related Topics and Provisions
- Conditional Transfer, General Principles under Section 25 — the six vitiating heads, examined in detail
- Vested Interest, Section 19 and Contingent Interest, Section 21 — the categories the conditions operate on
- Section 16, TPA — the exception to acceleration where the prior interest failed under sections 13 or 14
- Sections 10 to 12, TPA — conditions struck down while the transfer stands, and the contrast with section 25
- Section 23, Indian Contract Act, 1872 — the source of the unlawful-object language in section 25
- Sections 120 to 137, Indian Succession Act, 1925 — the corresponding testamentary rules