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Restriction repugnant to interest created in TPA

Restriction repugnant to interest created
Restriction repugnant to interest created


Restriction On Free Enjoyment Of Property 

Section 11 of the Transfer of Property Act(TPA) addresses restrictions on the enjoyment of property that are repugnant to the interest created by a transfer. It establishes that when property is transferred to someone with an absolute interest, any conditions dictating how that interest should be applied or enjoyed are deemed void.

The core principle underlying Section 11 is the preservation of the right to free enjoyment of property, which is inherent in ownership. Therefore, any condition that diminishes this enjoyment is considered invalid.

This principle ensures that the transferee receives the property with all its legal incidents, without any restrictions that detract from the completeness of the interest conveyed.

For instance, if a property is transferred absolutely, such as through sale, exchange, or unconditional gift, the transfer must include all the legal rights and privileges associated with full ownership.

Conditions like requiring the transferee to reside in a specific place within the estate or to maintain the property in a particular manner would be void because they interfere with the transferee's absolute ownership rights.

Moreover, restrictions imposed through conditions in deeds that deprive co-owners of their right to partition common property or delay partition until certain conditions are met are also deemed void.

Similarly, conditions that restrain the transferee from demolishing a house or from enjoying the gifted property as they see fit are considered repugnant to the absolute interest created and are thus invalid.

In practical terms, if a lease agreement contains conditions regarding how the property should be used, such as prohibiting commercial activities, the lessor can enforce these conditions against the lessee if they are violated.

However, if a property is sold with conditions that restrict the new owner from collecting rent or evicting tenants, these conditions would not be binding because they conflict with the absolute interest created by the transfer.

Ultimately, Section 11 ensures that transfers of property with absolute interests are not burdened by conditions that impede the transferee's rights to enjoy and use the property as they see fit.

Exception to Section 11

An exception to Section 11 of the Transfer of Property Act arises when conditions are imposed by the transferor for the benefit of their adjoining land.

This exception, as delineated in the second paragraph of Section 11 and established in the case of Tulk v. Moxhay, allows the transferor to impose restrictions on the enjoyment of the transferred property if it serves to ensure the beneficial enjoyment of their adjacent land.

Under this exception, the transferor retains the authority to issue such directions if they pertain to one piece of immovable property aimed at securing the advantageous use of another piece of property owned by the transferor.

Furthermore, the transferor possesses the right to enforce these conditions and seek remedies for any breaches thereof. Notably, these conditions can only be enforced by the transferor and not by the transferee of the adjacent property, as established in the case of Leela v. Ambujakshi.

Several illustrations elucidate the application of this exception:

- Suppose A gifts a house to B and directs that B must not increase its height to obstruct the passage of light and air to A's adjoining house. In this scenario, the direction is valid and binding.

- If A owns two properties, X and Y, and sells X to B with a condition that B must invest in building and repairing a drain passing over X, which adjoins Y, the restriction is valid and enforceable.

- In another scenario, A leases their zamindari to B, reserving all minerals and certain plots of land for mining purposes. A directs B to allow passage to the mines from the reserved plots. Here, the direction is binding on B.

- Finally, if A sells land adjoining their house to B with a condition that B must maintain the front lawn as a garden akin to A's own house, to maintain visual harmony between the properties, the direction is binding on B.

These examples underscore the principle that conditions imposed by the transferor for the benefit of their adjoining land are permissible exceptions to the general rule against restrictions on the enjoyment of transferred property under Section 11.

Void Restrictions

Thus, the following restrictions are void

  1. A condition attached with transfer of an absolute interest in estate that the grantee will reside in a particular place in estate.

  2. The transferee should always let the land at a definite rent or cultivate it in a particular manner

  3. A condition in a deed depriving the co-owner of his claim to partition in respect of common property. Similarly, a direction not to partition property until all the sons attained majority. 

  4. A transfers his house to B with the condition that B would not demolish it

  5. A gift restraining enjoyment

Difference between Sec. 10 and Sec. 11

Section 10 and Section 11 of the Transfer of Property Act serve distinct but complementary purposes in regulating the rights of property owners and the validity of restrictions imposed upon them.

  • Section 10 primarily addresses restrictions on the transferability of property interests, whether absolute or limited. It invalidates any condition or limitation that imposes an absolute restraint on the alienation of property. This means that any attempt to prevent the owner from freely transferring their property interest, regardless of its size or nature, is deemed void. However, it's important to note that Section 10 does not prohibit all restrictions on transferability. Rather, it specifically targets conditions that impose an absolute prohibition on alienation.

  • On the other hand, Section 11 focuses on restrictions that impede the free enjoyment of property. When an interest in property is transferred absolutely, any condition that directs how that interest should be applied or enjoyed is considered void. This ensures that the transferee retains the full liberty to utilize, manage, and dispose of the property according to their own discretion. The rationale behind this principle is that absolute ownership grants the owner complete autonomy over the property, and any condition that limits this autonomy is inconsistent with the concept of absolute ownership.

  • For example, if a property is transferred with a condition that the transferee must always lease the land at a specific rent or cultivate it in a particular manner, such conditions would be void under Section 11 because they detract from the transferee's absolute right to enjoy the property as they see fit.

  • While Section 10 and Section 11 serve different functions, they both aim to prevent property owners from being unduly restricted in their rights once the property has been transferred to them. Section 10 focuses on preserving the owner's ability to transfer their property interest, while Section 11 safeguards their freedom to enjoy and manage the property without external interference. Together, these provisions ensure that property owners retain the full benefits and prerogatives of ownership without unjust limitations imposed by restrictive conditions.

Leading Case Law

  1. In the landmark case of Tulk v. Moxhay [(1848) 2 PHILL 774], the dispute revolved around the sale of vacant land by X, the owner, to E, who undertook a covenant to maintain the land in its existing state, free from any constructions, and to upkeep the surrounding square garden. This covenant was passed down through various conveyances until it reached Y, the final purchaser, who intended to build on the land despite being aware of the covenant. X sought legal recourse by filing a suit to enjoin Y from proceeding with the construction.

Under common law, positive covenants like the one in question were considered burdens on the land and therefore could not bind subsequent purchasers like Y. However, recognizing the injustice of this position and X's legitimate interest in preserving the amenities of the surrounding area, Lord Cottenham, L.C., sought to remedy the situation by invoking equity.

He held that since Y had notice of the covenant, his conscience was affected, creating an equitable interest in the enforcement of the covenant. This marked the creation of a new class of equitable interest aimed at addressing the deficiencies of the common law, known as restrictive or negative covenants in modern law.

The court established two crucial rules in this case:

  • Covenants between the original transferor and the initial transferee are always enforceable.

  • Negative covenants are binding on subsequent transferees with notice.

It was emphasized that purchasers with notice of an equity cannot be in a better position than the party from whom they purchased. Therefore, Y, being aware of the covenant, was legally bound by it, irrespective of its character.

This case exemplifies an exception to the general rule under the Transfer of Property Act, which states that purchasers acquire all the rights of the transferor.

Here, the transfer was subject to the condition of beneficial enjoyment by the transferor, illustrating the exception enshrined in the principles established in Tulk v. Moxhay, which is also reflected in the first paragraph of Section 40 of the Transfer of Property Act.

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