Restriction Repugnant to Interest Created Under Transfer of Property Act

Section 11 of the Transfer of Property Act covers repugnant conditions. Repugnant conditions are those that are inconsistent with the nature of the transferred interest.

This provision prohibits the imposition of any condition ordering the transferee to apply or enjoy any interest that is transferred absolutely in a particular manner. Such conditions or directions are null and void, and the transferee is entitled to receive property as if such a condition had never existed. Until now, the transfer was not null and void. These terms are inconsistent with the nature of the transferred interest. As a result, they are regarded as repugnant situations.

If a property is transferred absolutely in favor of the transferee, then any condition or terms of transfer restricting the full enjoyment of the property (i.e., repugnant to the interest created) allow the transferee under Section 11 of the TP Act to receive and dispose of the property as if there were no such condition.

Essential Elements

This section comes into effect when the following conditions are fulfilled −

• The transfer creates an absolute interest in favor of the transferee.

• The transfer terms provide that the interest in the property must be enjoyed or applied in the manner specified by the transferor.

Interest must be Created Absolutely

Section 11 specifies that the interest created in favor of the transferee be absolute in order for it to apply. This Section does not apply when the created interest is not absolute, such as a lease. A lease transfers only a limited interest, and the lease is bound by the conditions and mode of enjoyment. The transfer of an absolute interest in property is not the same as the transfer of an absolute estate in property. Any interest, such as a life estate, may be created without any conditions or restrictions qualifying its legal incidents.

Interest shall be Applied or Enjoyed in the Manner Prescribed by the Transferor

The term "enjoyment of property" refers to several rights, including the right of alienation, the right to partition property, the right to use the property for the purpose of residence, a provision for payment, and so on. Property alienation rights are an essential element of property enjoyment. A restriction on such rights is thus a restriction on the enjoyment of property, and such restrictions should be disregarded.

A condition in a transfer deed compelling the donee of property and his heir to remain in the property on pain of forfeiture of the gift is a restraint on the enjoyment of property and would be void for repugnancy if the donor's primary intention was to make an absolute gift.

Object − The purpose of Section 11 is to make it easier for the transferee to enjoy the property transferred by sale or gift, in which full ownership is transferred.

Exception

Nothing in this section shall be deemed to effect any right which the transfer may have to enforce such a direction or any remedy which he may have in respect of a breach thereof where such a direction is made in respect of one piece of immovable property for the purpose of securing the beneficial enjoyment of another piece of such property.

Insolvency Condition

Section 12 of the Act states that Where property is transferred subject to a condition or limitation making any interest therein,reserved or given to or for the benefit of any person, to cease on his becoming insolvent or endeavouring to transfer or dispose of the same, such condition or limitation is void. But nothing in this section applies to a condition in a lease for the benefit of the lessor or those claiming under him.

Conclusion

The Transfer of Property Act, 1882, was created to govern the free transfer of property in India. This transfer may occur in the present or in the future, but it must happen among live people. This also addresses the restrictions and conditions that are imposed on transferring property, either entirely or in part. Sections 10, 11, and 12 contain certain conditions that make the transferor's alienation of property void.

Frequently Asked Questions (FAQ)

Q1. What is the exception to Section 11 of the Transfer of Property Act?

Ans. If the transferor owns another piece of immovable property, he may put constraints or restrictions on the transferee's right of enjoyment for the benefit of that property.

Q2. What is the difference between Sections 10 and 11 of the Transfer of Property Act?

Ans. The difference between Sections 10 and 11 is that the former covers an absolute prohibition on alienation of an interest created by a transfer, whereas the latter covers an absolute transfer of an interest followed by a restriction on its free enjoyment.

Q3. What is "restricted interest" under the Transfer of Property Act?

Ans. It says that an interest in property that is restricted to the owner's personal enjoyment cannot be transferred. This means that a person's right or interest that is only for his own enjoyment cannot be transferred.

Q4. What are Sections 10, 11, and 12 of the Transfer of Property Act?

Ans. Sections 10, 11, and 12 of the Transfer of Property Act address the imposition of restrictions or limitations on property transfers. They contemplate situations in which the transferor may set limitations on the transferee in the instrument based on the interest thus transferred.