The Doctrine of Acceleration under the Transfer of Property Act, 1882

The article 'The Doctrine of acceleration under the Transfer of Property Act' comprehensively deals with conditional transfer, case laws, the applicability of section 27 of the transfer of property Act, and so on. The principles of equity were used to control the transfer of immovable property in India prior to the current act's introduction in 1882. The majority of provisions of the Act of 1882 were derived from equity court rulings made before 1884. The courts occasionally had to render judgment based on their own sense of justice and fair play. A law commission was therefore established in England to draft a code of substantive law governing the transfer of properties in India in order to correct the current situation.

Consequently, since the Transfer of Property Act of 1882 was passed, its terms have been modified a total of 12 times. Whitley Stokes introduced it, and it went into effect on July 1st, 1882. In essence, the Act was read twice, once in 1877 and again in 1882.

The primary objective of the Transfer of Property Act of 1882 is to establish, change, or control the legislation of transferable property and the appropriate parties. The Act serves as a consistent and organized piece of legislation governing the transfer of real estate between persons who are still alive. The sections comprise different theories like the doctrine of cypress, the doctrine of acceleration, the doctrine of part performance, etc. to make the law effective.

Introduction

The Transfer of Property Act, of 1882, specifically mentions conditional transfers in Section 25; however, sections 26 to section 34 all mention them in one manner or another. A property transfer is referred to as a conditional transfer when interest is being produced on it and is made to depend on the fulfillment of a condition. A condition is something that depends on something else happening or not happening in order for a right to exist. Additionally, there are two other kinds of circumstances: prior and succeeding conditions, which are specified in Sections 26 and 29 of the same law, respectively. Different types of conditional transfer include Condition precedent, Condition subsequent, Condition collateral, and Doctrine of acceleration.

Essentially, acceleration is the reduction of the amount of time left before an event occurs. According to Section 27 of the Transfer of Property Act, conditional transfers to one party coupled with transfers to another upon failure of a prior disposition result in the subsequent disposition becoming effective upon such failure. This is essentially what the Doctrine of Acceleration refers to. Furthermore, When an interest in a piece of property is transferred in one person's favor, and in the same transaction, an ulterior disposition of the same interest is made in another person's favour, the latter disposition will take effect if the prior disposition under the transfer fails, even though the prior disposition may not have failed in the way that the transferor had intended.

The doctrine of acceleration basically talks about a person who has the right to demand ownership of the property at some point in the future having that right accelerated if that holder loses their claim to the property. If a life estate is unsuccessful for whatever reason, the remainder is accelerated as the life interest that fails or ends earlier accelerates the interest of the remainder beneficiaries who then take their interest at that earlier time instead of on the tenant's death for all times. The final beneficiary will also get the property under the doctrine of acceleration due to the mediator's passing, negligence, etc.

The court interprets the intent of such interest as meant to demand impact on the failure or determination of prior interest in any way. The effect of prior interest is to accelerate the next which is limited to the required effect on the regular determination of that prior interest. Additionally, it illustrates a scenario in which a second interest will be generated if a prior interest fails for some cause that was not anticipated or reasonably predicted by the transferors and two interests are created in the same transaction.

Case Laws

● Ajudhia v. Rakhman Kaur[1]

In this case, when a local law prevented the mother from having the property registered in her name and prevented her from accepting the gift, the property was given as a gift to the children.

● Behari Lal v. Madho Lal[2]

The Privy Council in this case laying down limitations on the rule of acceleration stated that for a good acceleration in law it is absolutely necessary that the entire interposed life estate should have been withdrawn. But what has happened throughout the course of decisions both in Calcutta and Madras has been a blending of a totally different set of considerations with those plain and easily intelligible limitations placed upon the doctrine of acceleration.

● Nobokiskore Sarma Roy v. Hari Nath Sarma Roy[3]

It was held that it is impossible to argue that the next reversioner's approval of the widow's alienation of a portion of the entire estate in which she has a life interest will not validate and make such alienation absolute, given that it is now a well-known feature of Hindu law that the widow may accelerate her life estate in favour of the next reversioner.

● Rajendran v. Deivassigamani[4]

It is determined that the Doctrine of Acceleration might be recognized as long as it does not conflict with the interests of the transaction's parties or compromise the advantages of the prior disposition's beneficiaries. Furthermore, for the party seeking claim of title to the property on the basis of the Doctrine of Acceleration to succeed, there should be clear and concrete evidence as to the effacement of the interest by the beneficiaries of the prior disposition and the effacement of such prior disposition should be bonafide, voluntary, real and there should be the total renunciation of interest by the beneficiaries of the prior disposition and the alleged surrender of interest of the beneficiaries of the prior disposition should not be a mere device to divide the interest amongst the reversioners so as to deprive the advantage of the estate to the beneficiaries of the prior disposition.

Applicability of Section 27 of The Transfer Of Property Act

Section 16 of the same Act (that if the prior transfer fails due to violation of sections 13 and 14 then a transfer that was to take effect upon the prior transfer would also fail) and Section 27 (doctrine of acceleration) (conditional transfer to one person coupled with transfer to another on the failure of prior disposition) have opposing viewpoints. The subsequent interest likewise fails if the prior interest fails, as per section 25. As a result of the breach of sections 13 or 14, the failure of the preceding transfer should be taken into account in this situation.

As a result, the following transfer would take effect if the earlier transfer fails for a cause that was not anticipated by the earlier transfer or that he could not have expected. Therefore, the later transfer would only be valid if the prior interest was initially fully valid and its failure was not brought about by any circumstances that actually occurred after the transfer and were not reasonably foreseeable by the transferor at the time of the transfer. Therefore, if a preceding transfer fails, subsequent interest would increase in accordance with the doctrine of acceleration.

The condition could be explained by the case wherein a Hindu man made a gift to a kid who was supposed to be adopted by his wife with the stipulation that if the adoption could not be finalized and the man passed away without having any sons, the boy's gift would go to his daughters. The daughter's gifts received an instant effect because the power of adoption with W(widow) was invalid.[5]

Relation with other Legislations

Section 129 of the Indian Succession Act is based upon grounds similar to that of the doctrine of acceleration. As per the provision, if there is a bequest to one person and a bequest of the same thing to another, the second bequest will become effective upon the failure of the first bequest, even if it did not happen in the way the testator had intended.

The same is discussed in case law where A left B and C his possessions in a will. The directive in the will said that his property was to be sold, and as a result, B and C were to split the selling earnings evenly. It further said that any issues would inherit the property if B or C passed away during A's lifetime or before the estate could be divided in this way. After A's passing, B and C both developed a stake in the situation. If any of them passed away prior to the property being divided and distributed, their individual shares would vest in their legitimate offspring. Five months after A passed away, C also passed away before the sale and distribution of the property could be completed. It was held B has to have sold his stake and become fully invested in his issue.[6]

Conclusion

According to the Transfer of Property Act of 1882, a transfer of property is essentially an act by which a person passes the property to at least one or more other people or to himself and one or more other people. The act of transfer might also be eliminated in the short term or long term. Any kind of property, including immovable property, may be transferred. The person could be a private individual, business, organization, or group of people.

The Doctrine of Acceleration, which can be considered an English doctrine and is defined as a rule of constructive depending on condition and antecedent transfer, is one of the key doctrines under this statute. When a premature finding of the previous interest requires rapid effect, an interest in the remainder is interpreted broadly with regard to the limitation of property. The doctrine of acceleration, which discusses conditional transfers to one person combined with transfers to another upon failure of a preceding disposition, can be thought of as a subset of conditional transfers.

References

[1] (1883) 10 Cal 482

[2] (1891) L.R. 19 I.A. 30

[3] (1884) I.L.R. 10 Cal. 1102

[4] S.A. No. 1862 of 2004.

[5] Radha Prasad v. Rani Mani, (1906) 33 Cal 947

[6] Govindraju v. Mangalam Pillai, AIR (1933) Mad 80

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