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Condition Restraining Alienation Under Transfer of Property Act
Section 10 of the Transfer of Property Act of 1882 establishes the condition restricting the alienation of property. According to this provision, if the transferee is restricted from transferring his interest in his property to another person due to a condition that arose when the property was transferred to the transferee, the condition will be declared null and void, but the transfer will remain valid.
Condition Restraining Alienation (Section 10)
This section states that if a property is transferred subject to any condition that absolutely restrains the transferee from disposing of the property, the condition is void, with the exception of a lease and married women. The provision is based on the idea of equity, which states that property should not be rendered inalienable permanently. This is founded on the basic rule of jurisprudence "alienatio rei prae fertur juri accrescendi," which states that the law prefers alienation to accumulation.
Further, Alienation is the transfer of property. One of the most essential aspects of ownership rights is the right of disposal. Section 10 says that any restriction on the right of disposal is incompatible with the essential feature of ownership rights. As a result, Section provides that if a transfer is subject to a condition that prevents the transferee (who now becomes the owner) from disposing of or parting with his interest in the property, the condition is null and void.
Since the transferee has become the owner of the property, any restrictions limiting his right to dispose of it are no longer binding on him, and he is free to transfer it to anybody by any means.
Essential Elements of Section 10
Any property transfer the subject matter is property transfer, or property transfer must exist.
A condition or limitation is imposed to make or effect the transfer.
The condition or limitation prohibits the transferee from alienating.
Kinds of Restraint
Section 10 declares a condition void if it absolutely restrains alienation. The restriction on alienation is absolute if it totally removes or limits the right to disposal. Section 10 relieves a transferee of immovable property from an absolute restriction on his right to deal with the property as an owner. This provision applies when property is transferred subject to a condition or limitation that prevents the transferee from disposing of his interest in the property. The restraint must be an absolute restraint in order to render such a condition invalid.
The restraint may be absolute as a limitation on the power of alienation in time or as to a specific or specified person only, or it may take any other form. The contents of the deed will inform you if the restraint in question is absolute or partial.
In the case of a will, if an absolute right is vested in a defendant, an adopted son, in respect of properties left to him by a "will". It was decided that no further restrictions, as per Sections 10 and 11, could be placed restraining alienation of the property or imposing a restriction repugnant to the interest created in the property.
The section only provided for absolute restraints. It is silent on the partial restraints. The restraint is partial if it does not substantially limit the transferee's capacity for alienation but simply limits it to some extent. A partial restraint is enforceable and legal. According to George Jessel, "The test is whether the condition substantially limits the power of alienation; it is a question of substance, not form. You may restrict alienation in a variety of ways, like prohibiting it for a specified group of people or restricting it to a particular period of time ".
Renand v. Tourangeaon held that a condition requiring the transferee not to transfer the property for twenty years is an absolute restriction and hence void. If the condition was that the transferee not transfer the property for three years, it would be a partial restraint and hence valid.
In the case of Muhammad Raza v. Abhas Bandi Bibi, where the condition restricted the transferee from transferring the property to strangers, i.e., those not connected to the transferor, the Privy Council ruled that the condition was just a partial restraint that was valid and enforceable. Similarly, when a condition in the sale deed said that the property should not be transferred outside the vendor's family, but the transferee sold it to the vendor's first cousin, the Bombay High Court decided that the condition was a partial constraint and valid. The first cousin belonged to the vendor's stock, according to the court.
Section 10 makes two exceptions to the general rule that conditions prohibiting alienation are null and void. The first is for a lease, while the second is for a property transferred to a married woman.
A lease is a limited interest transfer in which the lessor (transferor) retains ownership and only transfers the right to enjoyment to the lessee (transferee). A lessor may impose the condition that the lessee not assign or sublease his interest in the property to any other person. A condition of this type will be valid. There is a restriction on the lessee's (transferee's) ability to alienate; such a condition is valid, and he cannot transfer his interest without the lessor's consent.
A condition in the ease that the lessee not sublet or assign his interest to anybody during the lease term is valid. A condition in the lease deed allowing the lessee to surrender the lease if the lessor has to sell the property13 is valid. If the lessor does not expressly state that breach of this condition would result in the lease being terminated, then the lessor's remedy for breach of such restraint is not a suit for ejectment. The lessor may only suit the lessee for an injunction and damages for breach of the condition.
When a property is transferred to a married woman who is not a Hindu, Muslim, or Buddhist, the transferor has the legal right to impose a condition restraining alienation. Section 10 does not relate to such a condition. The Married Women's Right to Property Act of 1874 has similar laws that apply to married women who are not Hindu, Muslim, or Buddhist. Personal laws of Hindus, Muslims, and Buddhists already provide for the validity of restraints on the alienation of these communities' married women. So, the two main requirements are that the lady be married and that she not be Hindu, Mohammedan, or Buddhist.
Section 10 states that when a property is transferred subject to a condition restraining the transferee from alienating or parting with his interest in the property, the condition is null and void. The principle of this approach in this section is that a right of transfer is inseparable from property ownership, and so no absolute restraint on property alienation may be imposed.
The rule that absolute restraint is void is based on a public policy principle that allows for free circulation and disposition of property. Section 10 is a form of silent or partial restraint. As a result, a condition imposing a partial restraint is valid.
Frequently Asked Questions (FAQ)
Q1. What is conditional restraining alienation under the Transfer of Property Act?
Ans. It was decided that Section 10 of the Transfer of Property Act clearly states that if property is subject to a condition that prohibits the transferee or any person claiming under him from parting with or disposing of his interest in the property, such a condition is void, except in the case of a lease.
Q2. What is the condition restricting the transfer?
Ans. Section 10 states that if the transferee is absolutely restricted from transferring his interest in his property to another person due to a condition that arose when the property was transferred to the transferee, the condition shall be declared void.
Q3. What does "restraining alienation" mean?
Ans. In real property law, a restraint on alienation is a provision used in the conveyance of real property that aims to prohibit the recipient from selling or otherwise transferring their interest in the property.
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