Absolute And Partial Restraint On AlienationChanakya National Law University, Patna Name- Shikhar Neelkanth Roll no. – 1233 Course- B.B.A. LL.B. (H) Topic- Absolute and partial restraint on alienation Submitted to- Dr. S. Rama Rao 1 Absolute And Partial Restraint On Alienation Contents ACKNOWLEDGEMENT................................................................................................. 3 Research Methodology............................................................................................... 4 Introduction................................................................................................................ 5 General Principles of Transfer of Property: Subject to a limitation or Condition........10 Absolute restraint..................................................................................................... 12 Partial restraint...................................................................................................... 14 Exceptions to the general rule..............................................................................16 Conclusion................................................................................................................ 23 2 Shikhar Neelkanth 3 . S. Lastly. is a culmination of efforts of a lot of people. although prepared by me.Absolute And Partial Restraint On Alienation ACKNOWLEDGEMENT Any project completed or done in isolation is unthinkable. I would also like to express my gratitude to my seniors. Firstly. the library staff and my friends who were always there for me when I needed any sort of help regarding this project. This project. I would like to thank my Professor for Property Law Dr. I would like to thank the almighty for making this happen. Moving further. Rama Rao for his valuable suggestions without which this wouldn’t have been possible. Books 2.Absolute And Partial Restraint On Alienation Research Methodology Method of research The researcher has adopted a purely doctrinal method of research. Sources of Data The following sources of data has been used in this project1. Internet 4 . Aims and Objectives The aim of this project is to present an overview of absolute and partial restraint on alienation and further elucidate it with the relevant case laws. The researcher has made extensive use of the library at the Chanakya National Law University and also the internet sources. and prevents the transferor from controlling the power of alienation of the transferee once the interest in the property is transferred. save in accordance with a provision of law. An absolute right to dispose of the property indicates that the owner can sell it for consideration or can donate it for religious or charitable purposes he may gift it to anyone. 5 . and a right to alienate it without being dictated to. yet the materials which follow evidence quite clearly that the judicial role in articulating and enforcing the doctrine is beginning anew. This general rule is applicable despite there being an express contract to the contrary. are called “restraints on alienation“. The extent to which a person transferring real or personal property may limit its subsequent disposition by the transferee has for centuries been a problem troubling the courts. Save with the help of law. such as a right to have the title to the property. should he alienate or not. this right of alienation.Absolute And Partial Restraint On Alienation Introduction Ownership of the property carries with it certain basic rights. what should be the manner of alienation. The context in which the present-day struggle arises is a far cry from the feudalistic society existing in England when the restraints on alienation doctrine was developed. cannot be unreasonably encroached upon by anyone through a private agreement. In short. at any time. mortgage it or put it up for lease. or even what kind of use it should be put to. no other person can interfere with this power or right of the owner or dictate to him. Recent developments in the field of real property security law have rekindled an interest -in one of the most ancient and important battlegrounds of the law-the extent to which the law should protect free alienability of real property and strike down attempts to restrict or penalize an owner’s ability to transfer his property. Restrictions upon the grantee’s right to transfer the property. that is one of the basic rights of the owner. a right to possess and enjoy it to the exclusion of everyone else. to whomsoever he may choose. and in whatever manner he may select. Since it is a principle of economics that wealth should be in free circulation to get the greatest benefit from it. Finally. The researcher will first look into the general provision that all such conditions should be void and then will talk about partial restraints and other conditions which are valid. understanding the domain of property is an important preliminary step in developing a justification or critique of property from the perspective of distributive justice. 6 . This project seeks to analyse the rules regarding transfer of property which talk about conditions restraining alienation of property once it is transferred. whether or not it has any payoff in resolving more immediate concerns. the question is one of intrinsic interest. Third.Absolute And Partial Restraint On Alienation Importance of the subject Understanding what the role the right to exclude plays in defining property is important for several reasons. Ownership of property carries with it certain rights. a right to possess and enjoy it to the exclusion of everyone else. and a right to alienate it to the exclusion of others without being dictated to. conditions restraining enjoyment of property which can be enforced will be discussed. these Sections provide that ordinarily there should be no restraints on alienation. for those who are learning the concept of the law of property. The researcher will analyse the law in light of decided Supreme Court and major High Court cases. Second. having a better grasp of the critical features of property may promote a clearer understanding of the often-arcane legal doctrine that surrounds this institution. 1882 contain the first set of rules that have to be observed while alienating a property. Sections 10 to 18 of the Transfer of Property Act. formulating a more precise conception of property may be necessary in order to offer a complete account of constitutional provisions that protect “property.” In any event. such as the right to have the title to the property. First. These may be called “single-variable essentialism.2 Single-variable essentialism also finds extensive if somewhat qualified support in the decisions of the contemporary U. In fact. the first fulltime law professor at an English-speaking university. United States.1 The first or single-variable version of essentialism posits that the right to exclude others is the irreducible core attribute of property.” “multiplevariable essentialism.. Blackstone:There is nothing which so generally strikes the imagination. The Court has said of the right to exclude that it is “universally held to be a fundamental element of the property right.” Single-variable essentialism Probably the oldest continuing tradition in attempts to define property is essentialism-the search for the critical element or elements that make up the irreducible core of property in all its manifestations. it is possible to identify three different intellectual traditions regarding the role of the right to exclude. Thomas W. Commentaries on the Laws of England 3 Kaiser Aetna v.S. 164. corresponding to what is called the single-variable and the multiple.” 3 that it is “one of the most 1 Merill. Thus.Absolute And Partial Restraint On Alienation Right to exclude Right to exclude others is “one of the most essential sticks in the bundle of rights that are commonly characterised as property. and engages the affections of mankind. 77 Neb. in total exclusion of the right of any other individual in the universe.” Three schools of thought regarding right to exclude Generally speaking.variable versions. or that sole and despotic dominion which one man claims and exercises over the external things of the world. Rev. Blackstone endorsed not one but two essentialist definitions of property. 444 U. 179-80 (1979) 7 .S. Supreme Court. 737 1998 2 William Blackstone. as the right of property. Property and the Right to Exclude. L.” and “nominalism. The patron saint of property essentialism is William Blackstone. the rights to exclude. 458 U. governmental interference with the right to exclude is more likely to be considered a taking of property without compensation than are interferences with other traditional elements of property. and disposal of all his acquisitions. 7 The Development of Restraints on Alienation Since Gray. and disposal”.. inherent in every Englishman. also found in Blackstone. enjoyment. Curiously. save only by the laws of the land. there is no property. Thus. Moreover. is that of property: which consists in the free use. to use or enjoy.5 Multiple variable essentialism The second version of essentialism. enjoyment. 435 (1982) 5 Dolan v.S. Takings:Private Property and thePower ofEminent Domain58-59 (1985). 48 Harv. Teleprompter Manhattan CATV Corp. the right to exclude others fails to make an appearance on this list. 4 Although all these statements imply that the right to exclude is not the only right associated with property. which have translated the Blackstonian trilogy as the rights of “possession. Epstein. Without the right to exclude.” This version of essentialism holds that property is defined by multiple attributes or incidents. But more than the right to exclude is needed in order to create a package of rights sufficiently impressive to be called property. Blackstone II: “The third absolute right. Rev. it would seem that the rights of “free use” and “enjoyment” are arguably redundant. and to transfer. City of Tigard. 373 1934-1935 8 .”18 or alternatively. 374. no other right has been singled out for such extravagant endorsement. and disposition. 384 (1994) 6 RichardA.and that it is “one of the most treasured” rights of property.Absolute And Partial Restraint On Alienation essential rights” of property. 512 U. of which the right to exclude is just one. or at least largely overlapping. Moreover. But these anomalies have been overlooked in subsequent accounts. posits that the essence of property lies not just in the right to exclude others.6 Under the multiple-variable version of essentialism. L. the right to exclude is a necessary but not a sufficient condition of property. 419. Blackstone describes these multiple attributes as the rights of “free use. without any control or diminution.7 4 Loretto v.S. use. but in a larger set of attributes or incidents. One of the most sophisticated modern expositions of property by a philosopher is that of Jeremy Waldron9. the individual person whose name is attached to that object is to determine how the object shall be used and by whom. Waldron argues. the traditions of the legal system. This general concept. takes on different conceptions in different contexts. it is entirely optional. A legal system can label as property anything it wants to.” He defines the general concept of private property as the understanding that. Borrowing a distinction developed by Ronald Dworkin. Legal Stud. and so forth. 313(1985) 9 . Multiple-Variable Essentialism. depending on the type of resource involved.” of which the various incidents or elements embody different “conceptions. “in the case of each object. but its presence is not essential. the right to exclude is neither a sufficient nor a necessary condition of property. His decision is to be upheld by the society as final. and Nominalism-do not exhaust the possibilities with respect to understanding of the nature of property. whether ownership is unified or divided. On this view. What is Private Property?. It may be a feature commonly associated with property.Absolute And Partial Restraint On Alienation Nominalism This school of thought views property as a purely conventional concept with no fixed meaningan empty vessel that can be filled by each legal system in accordance with its peculiar values and beliefs. 8 Supra at 1 9 Jeremy Waldron. 5 OxFoPnJ.8 These three schools of thought-single-variable Essentialism. Waldron argues that private property is best understood as a general “concept. Rule against alienability Section 10 of the Transfer of Property Act: Condition Restraining Alienation. who is competent to transfer. They contemplate situations where limitations may be imposed on the transferee by the transferor in the instrument on the interest so transferred. the condition or limitation is void. 11. The Transfer of Property Act (Act IV of 1882). and 12 of the Transfer of Property Act hold the answers to these questions. Conditions precedent is put prior to the transfer and the actual transfer depends upon compliance of those 10 S. 11th ed. and 12 of the Transfer of Property Act deal with the imposition of restrictions or limitations in transfer of property. 11.Absolute And Partial Restraint On Alienation General Principles of Transfer of Property: Subject to a limitation or Condition Sections 10. 2001) 10 . except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him: PROVIDED that property may be transferred to or for the benefit of a women (not being a Hindu. Lahiri. These conditions may be either conditions precedent or conditions subsequent.M. (India Law House. Conditions are limitations or restrictions on the rights of the transferees. so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein.. Muhammadan or Buddhist). under what circumstances are they valid? Sections 10. may transfer his property either unconditionally or with certain conditions. New Delhi. Transfers which are subject to restrictions are known as ‘conditional transfers’. the question that arises is: are such restrictions valid? If so.Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property. 10 In such a case. Conditional transfers Every owner of a property. a partial restraint may not be. PoonamPradhanSaxena. Subsequent conditions are those conditions which are to be fulfilled after the transfer. Categorization of restraints Since alienation of property is the sole prerogative of the owner of the property. void. generally. a partial restraint that restricts transfers only to a class of persons is not invalid. for any consideration. he is empowered to sell it at any point of time. and 11 G. Allahabad: 2005) 12 Dr. This general rule is referred to as the rule against inalienability. For instance. However.. A restraint on alienation thus would include a condition that dictates to him when to sell it. while an absolute restraint is void. (Lexis Nexis:Nagpur. to nay person.P. Therefore. to sell it at how much consideration. and for any purpose. Property Law. Tripathi. 15th ed. 2011) 11 . The Transfer of Property Act. The rule against inalienability gives effect to the overarching principle behind the Transfer of Property Act that. to whom to sell or for what purpose he should sell. These restraints can appear in the following ways:12 Restraints on transfer for a particular time Restraints directing control over consideration/money. Restraints with respect to persons/transferee.Absolute And Partial Restraint On Alienation conditions.11These conditions are those conditions which are to be fulfilled after transfer. 1882. However. These conditions affect the rights of the transferees after transfer. (Central Law Publications. 2nd Ed. all property should be transferable. any condition that restrains alienation is considered void. This provides that if a property is transferred subject to a condition or limitation restraining the transferee’s right of parting with or disposing his interest in the property absolutely. There are certain integral components of the very term “alienation” and include selection purely at the discretion of the transferor or the transferee and the time or consideration for the transfer. if the transfer is restricted to being allowed only to specific individuals. or how to utilise the consideration. The transferee can ignore such a condition and continue his enjoyment of the transferred property as if such a condition did not exist in the first place. then such a condition is void. then it is an absolute restraint and hence. In order to wipe out his liability to another person. For making such a condition invalid the restraint must be an absolute restraint.Absolute And Partial Restraint On Alienation Restraints with respect to sale for particular purposes or use of property Absolute restraint Absolute restraint refers to a condition that attempts to take away either totally or substantially the power of alienation. “from the earliest times. It was held that from the very beginning a beneficial interest was created in favour of the person 13 Bhavani Amma Kanakadevi v CSI Dekshina Kerela Maha Idavaka. that third person tendered the securities to his creditor by way of satisfaction to hold them as a beneficiary. AIR 2008 Ker 38 14 In re. The securities carried the stipulation that they were not to be transferred. As per section 10. a condition restraining alienation would be void. Two persons purchased securities in their own names with the money belonging to a third person. In the words of Lord Justice Fry 14. the courts have always learnt against any devise to render an estate inalienable. Parry and Dags (1886) 31 Ch D 130 15 Zoroastrian Co-operative Housing Society v District Registrar Co-opertaive Societies (Urban). Section applies to a case where property is transferred subject to a condition or limitation absolutely restraining the transferee from parting with his interest in the property.”15 Section 10 relieves a transferee of immovable property from an absolute restraint placed on his right to deal with the property in his capacity as an owner thereof.13 Section 10 says that where property is transferred subject to a condition or limitation which absolutely restraints the transferee from parting with or disposing of his interest in the property is a void condition. And on his instructions they deposited the securities in the name of that person and also the interest accruing on them in that person’s account. Restraint on alienation is said to be absolute when it totally takes away the right of disposal. AIR 2005 SC 2306 12 . AIR 2004 NOC 8 (Mad) 20 RaghuramRao v Eric P. the sale will be valid because conditions imposing absolute restraint are void. The condition was held to be void and. (2004) 8 SCC 355 17 Rosher v Rosher.19 The condition restraining lessee from alienating leasehold property is not illegal or void.18 Where the settler intending to create a life estate in favour of his son-in-law ‘M’. therefore.000. handed over the title-deeds of the said property to M indicating that he had divested himself of all rights in the property but imposed absolute perpetual restraint on alienation.000. 10. she should have an option to purchase it. for Rs. a person makes a gift of a property to another person (transferee) with a condition that he will not sell it. A transfer of property for construction of a college contained a condition that if the college was not constructed. AIR 2002 Ker 38 19 Kannamal v Rajeshwari. the property would not be alienated.16 Condition imposing absolute restraint on the right of disposal is a void condition and has no effect. Mathias. Amade a gift of a house to Bwith a condition that if B sold the house during the lifetime of A’s wife. the sale deed made by the heirs of M in favour of appellants was a valid sale because the heirs were entitled to ignore the restraint on alienation and deal with the property as absolute owners. 17 The provision of law against absolute restriction on alienation is founded on the principle of public policy. 10. Under the provisions of section 10. This was held to be having the effect of absolute restraint and was void. his beneficial interest was transferable because otherwise the whole transaction would have been hit by section 10. (1884) 26 Ch D 801 18 DhavaniAmmaKankadevi v C. If the transferee sells that property.I.S. it was held that the restraint was void since the transfer was an absolute transfer in favour of M. Rather it would be re-conveyed to the person transferring it. This condition imposes an absolute restraint. V Custodian. therefore. Dekshina Kerala MahaIdavaka.20 16 Canbank Financial Services Ltd. namely that there should be free transferability of property. not capable of being enforced. For example. The value of the house was Rs. AIR 2002 SC 797 13 .Absolute And Partial Restraint On Alienation with whose monies the securities were purchased and. Absolute And Partial Restraint On Alienation Partial restraint Section 10 has only provided for absolute restraints. Where the restraint does not take away the power of alienation absolutely but only restricts it to certain extent. “the test is whether the condition takes away the whole power of alienation substantially. You may restrict alienation in many ways. (1932) 59 IA 236 23 (1927) 47 All 484 14 . it is a partial restraint.21 A restriction for a particular time or to a particular or specified person 22 has been held to be absolute restriction. Compromise was done on terms that the widow was to retain possession for life while the title of 21 K. This rule is based on sound public policy of free circulation. it is question of substance and not of mere form. Raza v Abbas BandiBibi.” A total restraint on right of alienation is void but a partial restraint would be valid and binding. Muniaswamy v K. In this case. Partial restraint is valid and enforceable. It is silent about the partial restraints. In words of Sir George Jesel. although it involved an agreement an agreement in restraint of alienation. you may restrict it by prohibiting it to a particular class of individuals or you may restrict alienation by restricting it to a particular time. AIR 2001 Kant 246 22 Mohd. A compromise by way of settlement of family disputes has been held to be valid in Mata Prasad v Nageshwar Sahai23. Venkataswamy. dispute was as to succession between a widow and a nephew. it remains void. if the transfer is restricted to being allowed only to specific individuals. While an absolute restraint is void. The Privy Council held that the compromise was valid and prudent in the circumstances of the case. one must look at the substance of the restraint and not its mere form. 15 . it applies for a specific time period only. Ordinarily. However. although in form. the restriction is valid. a price is also fixed which is far below market value and no condition is imposed on the family members to purchase. a partial restraint that restricts transfers only to a class of persons is not invalid. if alienation is restricted to only family members.Absolute And Partial Restraint On Alienation the nephew was admitted with a condition that he will not alienate the property during the widow’s life time. However. it is a partial restraint. void. How is it determined if a restriction is absolute or partial? In order to determine whether a restriction is absolute or partial. then it is an absolute restraint and hence. For instance. a partial restraint may not be. void. then the restraint is an absolute one and hence. where in addition to that restriction. Even if such a substantially absolute restriction is limited by a time period that is. Absolute And Partial Restraint On Alienation 16 . such that she shall not have the power to transfer theproperty or change her interest therein during her marriage. Thus. This exception is applicable to permanent leases too. 26is valid and enforceable. The Supreme Court has held that this section does not carve out any exception with regard to perpetual or permanent lease. AIR 1973 All 1 17 . Lease is a transfer of a limited interest where the lessor (transferor) reserves the ownership and transfers only the right of enjoyment to the lessee (transferee). which are beneficial to the lessor or those claiming under him. Such a condition will be valid. However.Absolute And Partial Restraint On Alienation Exceptions to the general rule Section 10 provides two exceptions to the rule against in alienability. this exception continues to remain on the statute books in India. This exception is based on the doctrine of coverture that operated in England in the nineteenth century. A lessor can impose a condition that the lessee will not assign his interest or sublease the property to any other person. Second. any condition restraining the lessee from alienating leasehold property is not invalid. The rule protected women from being forced to alienate their property in favour of their husbands. Lease Conditional transfer is valid in the case of lease where the condition is for the benefit of the lessor or those claiming under him. a stipulation in the contract of lease that the lessee would not sublet the premises and if he does. a Muslim. property may be transferred for the benefit of a woman who is not a Hindu. he would have to pay a fourth of the consideration as nazaar to the lessor. AIR (2002) SC 797 25 Raja JagatRanvir v Bagriden. A condition in the lease deed that the lessee 24 RaghuramRao v Eric P.25 Similarly. or a Buddhist. Section 10 does not prohibit conditions or limitations in the case of a lease.24 A condition in the ease that the lessee shall not sublet or assign his interest to anyone during the tenure of the lease is valid. Mathias. despite the abolition of the doctrine of covertures in England. First. women could be given property for their enjoyment without the right to alienate theproperty during her marriage. There. Absolute And Partial Restraint On Alienation would compulsorily have to surrender the lease in the event the lessor needs to sell the property27 again is valid. This proviso was introduced to serve a similar purpose as English law in this regard. The will provided that S had to first offer the property for sale and also had to sell her at L 3000 while the market price was L 15000. Mohammedans or Buddhists. by way of a restraint on anticipation. Rosher28. He left his entire property to S. that is. a limited interest in property can be created in favour of a transferee. 26 Sardakripa v Bepin Chandra. Relevant cases In Rosher v. Married women Restraints on the power of alienation in dispositions in favour of married woman. a person A died leaving behind his wife W and a son S. AIR 1923 Cal 679 27 Rama Rao v Thimappa. to restrain her from anticipating the future income of the property and from encumbering it or alienating it while she is under husband’s protection and shelter. under his Will. The court held that these restrictions amounted to an absolute restraint on S’s and his heir’s power of alienation and were therefore void. but a restraint on the power to alienate that limited interest will be invalid. who are not Hindu. The section is enacted to check that the transferor shall not impose an absolute restraint on the power to alienate that interest or right which was transferred to the transferee. The English Courts recognized the rule that it was open to the settler or transferor to insert a clause in the deed of settlement or transfer. Therefore. will be valid. AIR 1925 Mad 732 28 Supra Note 8 18 . This condition is invalid. In Manohar Shivram Swami v. Illustration: A and B enter into a sale deed for a piece of land. not invalidated. any interest that is transferred absolutely in a particular manner. B acquired the title of the property and sold it to C. The court held that this condition is void and therefore invalid. The court held that the condition incorporated in the sale deed absolutely restrained C from parting with his interest in the property and therefore was void. Shahabuddin29. Such conditions or directions are void and the transferee is entitled to receive property as if such a condition did not exist in the first place. The transfer itself is. and binding on the parties. 29 AIR 1935 All 493 30 AIR 1988 Bom 116 19 . B can enjoy the land in any manner that he chooses and the sale deed itself continues to be valid. who was also the brother of A. which in a number of cases has been held to be a partial restraint. The sale deed contained a condition that if C wanted to sell the property. A and B were first cousins. gift or even mortgage except the transferor or his heirs. These conditions are inconsistent with the nature of the interest transferred. Mahadeo Guruling Swami30. On A’s death. A made a will of his property in favour of B. they are called repugnant conditions. The terms of the sale deed provides that the piece of land should be used for the purposes of starting a factory for the manufacture of jute textiles only. Section 11 prohibits the imposition of any condition directing the transferee to apply or enjoy in a particular manner. The court upheld the validity of sale affected by C. Repugnant conditions are those that are inconsistent with the nature of the interest transferred. Therefore.Absolute And Partial Restraint On Alienation In Gayashi Ram v. This decision of Bombay High Court comes as a surprise as the condition here in fact was not to sell out of the family. the sale deed contained a clause that the transferee would not transfer the property to any person either by way of sale. he would sell it to the seller’s Jangam (caste) family and not to anybody else. however. Repugnant conditions Section 11 of the Transfer of Property Act deals with repugnant conditions. Manekal v BaiSavita. the restriction on the enjoyment of the interest would be valid and saved by Section 11 of the Transfer of Property Act.32 Payment of certain amount to the vendor out of the profits of property by way of rent after sale is illegal. that requires the transferee not to build upon four feet wide land. no life interest can be created in favour of a vendee in a contract of sale. impose a restriction on the enjoyment of that by him. while the second condition or covenant is a positive one. AIR 1990 Raj 90 34 Umrao Singh v Baldeo Singh. they restrain the transferee from doing a particular thing.. as it requires the transferee to ‘do a particular thing’. Positive and negative conditions or covenants Conditions or directions that the transferor may impose upon the transferee to secure better enjoyment of his own property can be of two types: positive or affirmative conditions. for the benefit of that property. i.Absolute And Partial Restraint On Alienation Thus. and the second condition in the transfer deed directs the transferee to maintain this drain by carrying necessary repairs from time to time. i. he may. i. to maintain the drain in proper shape and to carry necessary repairs. and would not build upon it.e. AIR 1972 Cal 310 32 N. CA No 959 of 1963 decided on Oct 1(SC) 33 State of Rajasthan v Jeo Raj..33 A direction in restraining of partition in a gift or will is void even thought the restriction is limited in time to the sons attaining majority. The first covenant. A transfers a land to B.e. is a negative covenant as it is in nature of ‘not to do a particular thing’. 31 A gift restraining enjoyment is void.34 The exception to this rule according to the second paragraph of Section 11 is that if the transferor owns another piece of immovable property. 31 Manjusha Devi v Sunil Chandra. they direct the transferor to do something and negative conditions.35 For example. AIR 1933 Lah 201 35 Supra at 3 20 . that he would leave open a four feet wide space adjoining A’s own land.e. In such a case. These conditions are called covenants. On this land there is also a onefoot open drain. and puts a condition. whatever interest was conveyed. Nothing in this section applies to a condition in a lease for the benefit of the lessor or those claiming under him. The difference between Section 10 and Section 11 is that the former deals with a case of an absolute prohibition against alienation of an interest created by a transfer and the latter deals with the absolute transfer of an interest followed by a restriction on its free enjoyment. the interest created is itself limited. a direction that she should enjoy only the usufruct without either encumbering the corpus or committing acts of waste would be valid. That is. Under Section 11. the right to partition is an essential ingredient of co-ownership. 21 . when once an interest has been created absolutely in favour of a person. its enjoyment must also be limited. because. such condition or limitation is void. But a condition in a deed depriving a co-owner of his or her claim to partition in respect of the common property would be bad. large or small. under Section 10. when a widow’s interest under Hindu Law is granted to a woman. for example. The insolvency exception Section 12 provides that where property is transferred subject to a condition or limitation leaking any interest therein. reserved or given to or for the benefit of any person. no fetters can be imposed on its full and free enjoyment. Where.Absolute And Partial Restraint On Alienation Section 10 and Section 11: Differences Section 11 talks about restriction repugnant to interest created. limited or unlimited. such interest cannot be made absolutely inalienable by the transferee. to cease on his becoming insolvent or endeavoring to transfer or dispose of the same. however. there is an exception to this rule in the case of a lease.37 Thus. This implies that a lessor may stipulate that if a lessee should become insolvent.36 but if the lessee assigns the lease and then becomes insolvent. which allows a lessor to impose such a condition for his benefit in the lease. although there are general rules that prohibit any restrictions from being imposed on the enjoyment of the interest in the property after a transfer is made. In such a case. (1883) ILR 7 Bom 256 37 Smith v Gronow. then his interest in the property would cease. Illustration: A transfers his property to B with the condition that should B become insolvent. B later becomes insolvent and A seeks to enforce the condition. the lease may be forfeited and the lessor may re-enter the leased property. 36 Vyankatraya v Shivrambhat. the condition would be void and B will continue to have interest in the property. it is actually an exception to another general rule provided in Section 31 of the Transfer of Property Act. the condition does not apply. a covenant determining a lease in the event of the insolvency of the lessee is valid. Once again. Condition for the benefit of the lessor The insolvency exception has been created to prevent a transferee from defrauding his creditors in such an eventuality by allowing the property to revert back to the grantor through such a condition.Absolute And Partial Restraint On Alienation Although this relates to the restrictions on transfer of property. Hence. (1891) 2 QB 394 22 . Most of these revolve around transfer of leases since the lessor retains significant interests in the property even after the lease agreement is executed. there are certain exceptions to it. 23 . under Article 300A of the Constitution of India. one in case of married women and other in favour of lessor. the same should be examined from the stand point of whether it is reasonable restriction or otherwise. it is a question of substance and not of mere form. Even under Article 19 of the Constitution of India the citizen has a fundamental right to reside and settle down in any part of the Indian Territory. The section provides two exceptions. The test is whether the condition takes away the whole power of alienation substantially. The rule that a condition of absolute restraint is void is founded also on the principle of public policy allowing free circulation and disposition of property.Absolute And Partial Restraint On Alienation Conclusion Section 10 lays down that where property is transferred subject to a condition absolutely restraining the transferee from parting with his interest in the property. the condition is void. to property and such a right is not to be deprived except in accordance with law. every citizen has a right. the ownership of the property. If there is a law made by the appropriate legislature. The principle underlying this section is that a right of transfer is incidental to. and inseparable from. Moreover. A condition imposing partial restraint may be valid. It is only a condition which absolutely restrains the transferee from disposing of the interest that is rendered void.