Drafting and Conveyancing Relating to Various Deeds and Documents-III – CS Professional Study Material

Chapter 6 Drafting and Conveyancing Relating to Various Deeds and Documents-III – CS Professional Drafting, Pleadings and Appearances Notes is designed strictly as per the latest syllabus and exam pattern.

Drafting and Conveyancing Relating to Various Deeds and Documents-III – Drafting, Pleadings and Appearances Study Material

Question 1.
Write a note on the following :
Mode of transfer of actionable claims. (June 2012, 4 marks)
Answer:
According to Section 130 of the Transfer of Property Act, 1882 provides the mode of transfer of actionable claim. It prescribe
(1) The transfer of an actionable claim whether with or without consideration shall be effected only by the execution of an instrument in writing signed by the transferor or duly authorised agent and shall be complete and all the rights and remedies of the transferor whether by way of damages or otherwise, shall vest in the transferee.

(2) The transferee of an actionable claim may, upon execution of like instrument of transfer as aforesaid sue, institute proceeding for the same in his own name without obtaining the transferor consent to such suit.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 2.
Write a note on the following:
Surrender of lease (Dec 2012, 4 marks)
Answer:

  • Surrender of lease is not a transfer but mere yielding up by the lessee of his interest under the lease to the lessor by mutual agreement. It is in effect merger of the estate of the lessee into the reversion.
  • It is not a transfer or an assignment of any right or estate within the meaning of Section 5 of the Transfer of Property Act, 1882 (Makhanlal v. Nagendranath, (1933) 60 Cal 379).
  • The person who surrenders is called the surrenderer and the person to whom surrender is made is called the surrenderee.
  • A surrender must be made with clear intention to yield up as mere non-payment of rent for years together or abandonment of the site does not amount to surrender (Misri Lai v. Durga Narain, AIR 1940 All. 317).
  • A Requisition Order by the Government does not amount to any surrender (Torabai v. Padan Chand, 62 CWN 176).
  • It may be expressed or implied.
  • Except in a case of some special kinds of lease as required by Special Act, no writing or registration is necessary. A surrender may be oral, if accompanied by delivery of possession.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 3.
Write note on the following:
Types of Mortgage (June 2017, 4 marks)
Answer:
(a) Simple Mortgage :
In a simple mortgage, the mortgagor without delivering possession of the mortgaged property binds himself personally to pay the mortgage money and agrees expressly or impliedly that if he fails to pay the debt and interest in terms of the mortgage deed, the property will be sold and the proceeds applied in payment of the mortgaged money.

(b) Mortgage by Conditional Sale :
In a mortgage by conditional sale, the property is sold subject to the condition that on default in payment of the mortgaged money on a certain date the sale shall become absolute or that on such payment the sale shall become void or on such payment the buyer shall transfer the property to the seller. Possession of the property shall be with the mortgagee.

(c) Usufructuary Mortgage :
In this mortgage, the mortgagor delivers possession of the mortgaged property to the mortgagee who retains the possession until the satisfaction of the debt. The mortgagee will take the usufruct in lieu of the interest or part payment of the principal or partly in payment of interest or partly in part payment of the principal. The mortgagor is not personally liable to pay the debt and the mortgagee is not entitled during the term of the mortgage to demand his mortgage money.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

(d) English Mortgage :
In an English mortgage, a mortgagor binds himself to repay the mortgaged money on certain date and transfer the mortgaged property absolutely to the mortgagee subject to the provision that he will re-transfer it to the mortgagor upon payment of the mortgaged money as agreed.

(e) Mortgage by Deposit of Title Deeds :
Mortgage by deposit of title deeds is called in English law as equitable mortgage. It is an oral transaction and no documents like Deed of Mortgage is required to be executed. No written acknowledgment is required for creating this mortgage. It is however, prudent to have a record of transaction to avoid difficulties to establish the creation of the mortgage. In this case, a Memorandum of Mortgage by deposit of title deeds is prepared by the mortgagee to secure the specific mortgage money.

(f) Anomalous Mortgage :
Anomalous Mortgage is a combination of any of the above forms of mortgage or any mortgage other than those set out above.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 4.
Write note on the following:
Conditions to be kept in mind while drafting a Sale Deed. (Aug 2021, 4 marks)
Answer:
Conditions to be kept in mind while drafting a Sale Deed
Some of the important conditions which a draftsman should bear in mind while drafting a Sale Deed are as under:
(a) Lawful Consideration and Object
The property must be purchased as a part of legal transaction having paid the consideration as required under the provisions of the Indian Contract Act, 1872 for a valid contract. Besides, the objectives for which the property is being purchased by the buyer should be lawful, i.e., not forbidden by law, not to defeat the provisions of any law, not to be fraudulent, not to involve or impart injury to the person or property of another and should not be regarded by the court of law as immoral or opposed to public policy.

(b) Competence of Person to Transfer
For a company, the test of competence to enter into a transaction of sale or purchase is that its Board of Directors should authorise a person under the resolution passed in their meeting held in conformity with the Articles of Association and having object clause to sell or purchase immovable property under its Memorandum of Association. In case the other party is an individual who is either selling to the company or purchasing from the company any land or immovable property such individual should be considered competent to transfer if it fulfils the necessary conditions prescribed under the Indian Contract Act.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

(c) Transfer of All Interest
In the Property, all interests which a transferor is capable of passing in the property as legal incident of the transfer should be explained in the document, for example, if it is transfer of land, the easements annexed thereto, the rents of profits thereof, things attached thereto etc.

(d) Absolute Transfer
The transfer should be free of any conditions or limitations which may inhibit the other party to make full use of the property in exercise of legal rights.

(e) Absolute Interest in the Property
The interest being transferred in the property should not be conditional which may restrict full enjoyment of the property by the transferee

(f) Justification for Transfer
Cogent reasons for the transfer be given so as to establish bona fide base for the transaction and to avoid eventualities of fraud and multiple litigation therefrom.

(g) Protection of Creditors’ Interest
Law protects creditors’ interest in the transferred property.

(h) Enforcement of Rights Attached to Property on Valid Transfer
If a transferee is aware of such rights attached to the property and the transfer is gratuitous then the person can enforce such rights against transferee. But this could be avoided if the transferee has no notice about such rights attached to property and also has paid full consideration for the transaction.

(i) Property to be Free from Conditions
The property being transferred should be free from any rights or obligations which a third person can enforce legally against transferee for enjoying any benefits.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

(j) Transfer in Good Faith and with Full Authority
Where the property is transferred by a person not the real owner, it is necessary to make such transfer valid for the transferor should have the authority to transfer and he must exercise this authority in good faith.

(k) Protection for Defective Title
Law protects the transferee who acquires the immovable property under good faith and for bona fide consideration but by any circumstance unknown to him is rendered to have defective title, Section 51 of the Transfer of Property Act, 1882 provides such protection to bona fide transferees acquiring properties in good faith.

(l) Precautions
The draftsman should know beforehand that the property under transfer is free from encumbrances and no litigation questioning such property or rights or interest connected therewith is pending in any court. To avoid fraudulent transfers, the draftsman should ensure that the title to such property has been investigated by competent advocate and he has certified the title is free from any encumbrance whatsoever.

In the case of a company, it must be ensured that the Board of Directors have requisite powers under Companies Act, 2013 to sell, lease or otherwise dispose of the property of company.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Questions 5.
Distinguish between the following:
Lease and License (Dec 2017, 4 marks)
Answer:

Basis Licence Lease
(i) Heritable It’s a personal non-heritable right. It’s a heritable right in rem.
(ii) Forfeiture Denial of grantors title does not necessarily result in forfeiture. Denial of lessor’s title results in forfeiture.
(iii) Registration As it’s an instrument granting right, registration is optional. As it’s an instrument creating right regist­ration is mandatory.
(iv) Governing Act It’s governed by Indian Easement Act, 1882. It’s governed by Transfer of Property Act, 1882.
(v) Consideration Consideration is paid by way of fee. Consideration is paid by way of rent.
(vi) Rent & public nuisance The licensee is not liable for rent and public nuisance. The lessee is liable for rent and public nuisance.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 6.
Distinguish between the following :
Release and re-conveyance of mortgaged assets (June 2018, 4 marks)
Answer:
Release of any of the mortgaged assets or reconveyance of the mortgaged property could be done by a registered document in case the mortgage has been created in the form other than equitable mortgage by deposit of title deeds by a registered deed of mortgage. In those cases where release or reconveyance of mortgaged property covered under equitable mortgage is sought by the mortgagor, the same could be done by releasing the relevant title documents and redepositing the remaining title deeds by rewriting the memorandum for creation of equitable mortgage. On redemption of equitable mortgage all the title deeds could be released by the mortgage to the mortgagor by personal hand delivery and against accountable receipts from the mortgagor.

Question 7.
Distinguish between the following :
English mortgage and Usufructuary mortgage (Dec 2018, 4 marks)
Answer:
English Mortgage:
In an English mortgage, a mortgagor binds himself to repay the mortgaged money on certain date and transfers the mortgaged property absolutely to the mortgagee subject to the proviso that he will re-transfer it to the mortgagor upon payment of the mortgaged money as agreed.

Usufructuary Mortgage:
In a Usufructuary mortgage, the mortgagor delivers possession of the mortgaged property to the mortgagee who retains the possession until the satisfaction of the debt. The mortgagee will take the usufruct in lieu of the interest or part payment of the principle or partly in payment of interest or partly in part payment of the principle. The, mortgagor is not personally liable to pay the debt and the mortgagee is not entitled during the term of the mortgage to demand his mortgage money.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 8.
Distinguish between “Simple Mortgage and English Mortgage. (June 2019, 4 marks)
Answer:
Simple Mortgage:
In a simple mortgage, the mortgagor without delivering possession of the mortgaged property binds himself personally to pay the mortgage money and agrees expressly or impliedly that if he fails to pay the debt and interest in terms of the mortgage deed, the property may be sold and the proceeds applied in payment of the mortgaged money.

It has following characteristics:

  • That the mortgagor must have bound himself personally to repay the loan.
  • That to secure the loan he has transferred to the mortgagee the right to have the specific immovable property sold in the event of his having failed to repay.
  • That the possession of the property is not delivered to the lender.

English Mortgage :
In an English mortgage, a mortgagor binds himself to repay the mortgaged money on certain date and transfers the mortgaged property absolutely to the mortgagee subject to the proviso that he will re-transfer it to the mortgagor upon payment of the mortgaged money as agreed.

In this mortgage the borrower promises to repay the borrowed money on a certain date. The borrower transfers the property to the lender. The lender will re-transfer the property when the money is repaid. The mortgaged property is absolutely transferred to the mortgagee.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 9.
Distinguish between the following:
Usufructuary Mortgage and Mortgage by Conditional Sale. (June 2022, 4 marks)

Question 10.
Explain the following :
(Special advantages of ‘mortgage by deposit of title deeds’. (June 2012, 4 marks)
Answer:
Mortgage by Deposit of Title Deeds:
Mortgage by deposit of title deeds is called in English law as equitable mortgage. It is an oral transaction and no documents like Deed of Mortgage is required to be executed. No written acknowledgment is required for creating this mortgage. It is however, prudent to have a record of transaction to avoid difficulties to establish the creation of the mortgage. In this case, a Memorandum of Mortgage by deposit of title deeds is prepared by the mortgagee to secure the specific mortgage money.

Characteristics:

  1. Debt even time barred, present and future advances are covered under the equitable mortgage. In other types of mortgage, future advances are not covered.
  2. Delivery of title deeds is required to be made in Bombay, Madras and Calcutta and other specified towns to which the facility is extended by State Government from time to time through Gazette notification.
    It is not necessary for creation of mortgage that the property be located in the specified town or the company making deposit should have its registered office in that town.
  3. This deposit can be made by the company through its nominee or agent duly authorised.
  4. Intent to create security by deposit of title deeds should be present at the time of such deposit in the mortgagor.
  5. Neither ownership nor possession of the property passes to the mortgagee under the equitable mortgage.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 11.
Drafting of a sale deed of immovable property requires comprehensive coverage of technicalities like offer, transfer, etc. Mention eight important covenants of sale deed of ABC Company’s factory premises. (June 2012, 8 marks)
Answer:
An Agreement of Sale of Immovable Property

THIS AGREEMENT OF SALE executed on the day of ………………. 2007 between S son of SF resident of ………………. hereinafter called vendor of the one part and P son of PF resident of ………………………. hereinafter called the purchaser of the other part. (The expression “Vendor” and “Purchaser” wherever they occur in these presents, shall also mean and include their respective heirs, executors, administrator, legal representatives and assigns).

WHEREAS the vendor is the sole and absolute owner of the property more fully set out in the Schedule hereunder.

AND WHEREAS it is agreed that the vendor shall sell and the purchaser shall purchase the said property for the sum of ₹ ………………… (Rupees in words) free of all encumbrances.

NOW THIS AGREEMENT OF SALE WITNESSES AS FOLLOWS :
1. The price of the property more fully set out in the Schedule is fixed at ₹ ………………….. (Rupees ………………..) free of all encumbrances.

2. The purchaser has paid to the vendor this day the sum of ₹ …………………. (Rupees ……………….) by way of earnest money for the due performance of the agreement, the receipt of which the vendor both hereby admit and acknowledge.

3. The time for performance of the agreement shall be ………………….. months from this date and it is agreed that time fixed herein for performance shall be the essence of this contract.

4. The purchaser shall pay to the vendor the balance sale price of ₹ …………….. (Rupees ………………..) before registration of the sale deed.

5. The vendor agrees that he will deliver vacant possession of the property to the purchaser before registration of the sale deed.
Alternatively ;The vendor agrees that he will put the purchaser in constructive possession (if vacant possession is not possible) of the property by causing the tenant in occupation of it to attorn their tenancy to the purchaser.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

6. The vendor shall execute the sale deed in favour of the purchaser or his nominee or nominees as purchaser may require.

7. The vendor shall hand over all the title deeds of the property to the purchaser or his advocate nominated by him within days from the date of this Agreement for scrutiny of title and the opinion of the vendor’s Advocate regarding title of the property shall be final and conclusive. The purchaser shall duly intimate the vendor about the approval of the title within days after delivering the title deeds to him or his Advocate.

8. If the vendor’s title to the property is not approved by the purchaser, the vendor shall refund to the purchaser the earnest money received by him under this Agreement and on failure of the vendor to refund the earnest money within days he shall be liable to repay the same with interest thereon at percent per annum.

9. If the purchaser commits a breach of the Agreement, he shall forfeit the earnest amount of ₹ …………………. (Rupees ………………….) paid by him to the vendor.

10. If the vendor commits a breach of the Agreement, the vendor shall not only refund to the purchaser the sum of ₹ ……………. (Rupees ……………) received by him as earnest money, but shall also pay to the purchaser an equal sum by way of liquidated damages.

11. Nothing contained in paras 9 and 10 supra shall prejudice the rights of the parties hereto, to specific performance of this Agreement of sale.

(Schedule of Property)

IN WITNESS WHEREOF the vendor and the purchaser have set their hands to the Agreement of sale the ……………….. of ………………….. 2007 in the presence of the witnesses:
Witness: Vendor
Witness: Purchaser

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 12.
Draft a specimen of memorandum of mortgage by deposit of title deeds. (Dec 2012, 8 marks)
Answer:
Memorandum of Mortgage by Deposit of Title Deeds: Memorandum that this ……………………. day of …………………… 2004; ‘AB’ of, etc. (the mortgagor), as beneficial owner, has deposited with ‘CD’ of, etc. (the mortgagee), the original title deeds comprised in the Schedule A hereto, relating to the premises belonging to the said ‘AB’ and situated at etc. described in Schedule B with intent to create a charge thereon for securing repayment to the said ‘CD’ of the sum of ₹ ………………… this day lent and advanced by the said ‘CD’ to the said ‘AB’ on demand with interest for the same from this date at the rate of ₹ ……………………. percent per annum.

The said ‘AB’ do hereby undertake as and when required by the said ‘CD’ to execute and register at the costs of the said ‘AB’ a legal mortgage in such form and containing such covenants and provisions as he may reasonably require.

Date this ………………… day of ………………… 2004.
The Schedule A above referred to Description of the Title Deeds deposited.
The Schedule B above referred to Description of the Property.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 13.
Draft a specimen deed of usufructuary mortgage. (Dec 2013, 8 marks)
Answer:
SPECIMEN DEED OF USUFRUCTUARY MORTGAGE

This MORTGAGE, made on …………………. day of ………………… 2012, between ‘AB’ of etc.(hereinafter called “the Mortgagor’’) of the one part and ‘CD’ of etc. (hereinafter called “the Mortgagee”) of the other part, witnesses that on consideration of the sum ₹ ……………….. Now Paid to the mortgagor by the mortgagee (the receipt where of the mortgagor does hereby acknowledge), the said ‘AB’ hereby conveys to the said ‘CD’. All that etc. (describe the property): from this day and that the mortgagee shall be in possession of the mortgaged property under the terms of the deed for securing payment on the ………………. day of ……………… 2012, of the principle sum secured, with the interest there at ₹ …………….. percent per annum.

THE MORTGAGOR hereby agrees that the mortgagee shall retain possession of the mortgaged property until the principle sum together with the interest due be paid off. Out of the proceeds of the property and on payment of the aforesaid sum.

THE MORTGAGOR does also agree to pay the government revenue and the municipal tax of the said property regularly and in case he fails to make such payment the mortgagee shall be at liberty to pay such revenue and tax.

AND LASTLY, the mortgagor also agrees that if he, the mortgagor does not pay the principle sum with the interest then due on the stipulated date, this conveyance will become absolute and the mortgagee will be entitled to foreclose the mortgaged property and thereafter the mortgagor, his heirs, executors, administrators of assigns shall be absolutely debarred of all the right to redeem the same.

IN WITNESS WHEREOF the parties herein have set their hands on the date and year here in above mentioned in the presence of:
Witness
1. ………………. ‘AB’
2. ………………. ‘CD’

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 14.
Draft a deed of sale of joint family property for legal necessity by Manager (Karta) of a Hindu Mitakshara Undivided Family. (Dec 2013, 8 marks)
Answer:
Deeds of Sale of Joint Family for Legal Necessity

THIS DEED OF SALE made on this ………………. day of …………….. between AB for self and as Karta of and representing all other coparceners V12, his son named …………………. all constituting a Hindu Mitkshara Undivided Family of etc.(hereinafter called “the vendor”) which expression shall where the subject or context allows, be deemed to include at all time here after all person being from time to time the coparceners of the said family of the one part and CD of etc. (hereinafter called “the purchaser”) of the other part.

WHEREAS the said joint family for several years past owned and still owns and possess inter alia the lands described in Schedule A.

AND WHEREAS the said joint family also carried on and still carries on business as dealers and suppliers of ………………. at no …………….. under the name and style of ………………… which suffered a heavy loss of its capital and reserves estimated at ₹ ………………… in the years …………… owing to out break of fire ……………….. at its godown at no ………………. on the day.

AND WHEREAS the joint family could not also pay its income-tax and other capital and revenue liabilities of the said business aggregating to ₹ ………………… for the years ……………………. and also its business debts estimated at ₹ …………………..

AND WHEREAS the said joint family has at present no funds nor any other resources to make up the deficit as regards capital loss and to pay liabilities of the family regards the said income tax except by the sale of one of its properties.

AND WHEREAS the said AB for self and as Karta of said joint family has by on agreement in writing dated …………………. agreed with the said CD for sale of the properties fully mentioned and described in the scheduled here to at and for sum of ₹ ……………………

AND WHEREAS the said CD after bona fide and independent enquiry is satisfied about the present financial condition of the family.

NOW THIS INDENTURE WITNESSETH that in pursuance of the said agreement and in consideration of the sum of ₹ …………………. paid by the said CD to the said AB simultaneously with the execution do hereby grant, sell, convey, transfer, assign assure the said property together with all houses, building fixtures etc.

usual covenants on the part of a vendor as in a conveyance.
Schedule above referred to
IN WITNESS ETC
Signed, sealed and delivered

………………. AB
………………. CD

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 15.
Comment on the following :
A sub-lease is a device by a lessee for a lesser term than he himself has. (June 2014, 5 marks)
Answer:
Sub-Lease:
A sub-lease is a demise by a lessee for lesser term than he himself has. Every lessee, however short his term may be, make a sub-lease unless he is refrained by the contract of the tenancy from subletting.

If the demise is for the whole term or for a period beyond the term, it amounts to assignment. If the lessee divests himself he becomes a stranger to the demised property and he has no right to have possession delivered up to him.

It is true that a covenant against subletting will restrain the assignment, but a mere covenant against subletting does not prohibit underletting a part of the premises.

As long as the lessee remains in possession he may permit another person to use the demised premises without committing a breach,of covenant, namely not to assign, underlet or part with the possession of the demised premises.

Note: The Privy Council pointed out in Hunsrai v. Bejoylal Seal, (1930) 57 Cal 1176, that in India a sub-lease is not an absolute assignment and it was further held in Akshoy Kumar v. Akman Molla, (1915) 19 OWN 1197, that there is no privity of estate as between the lessor and the sub-lessee, who does not step into the shoes of the lessee.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 16.
In the light of judicial pronouncements, discuss the following:
A lease is a transfer of a right for use of equipment/real property for a consideration. (Dec 2014, 4 marks)
Answer:
According to Section 105 of the Transfer of Property Act, 1882, a lease of immovable property is a transfer of a right to enjoy property. It is the method of acquiring the right to use equipment or real property for consideration. Lease is a contract between lessor and lessee for the fixed term for the use on hire of a specific asset selected by lessee.

Lessor retains ownership of the assets and lessee has possession and use of the asset on payment of specified rental over a period. It is a sort of contractual arrangement between the two parties whereby one acquires the right to use the property called “lessee” and the other who allows the former the right to use his owned property, called the “lessor”. Thus, lease is a contractual arrangement, it originates from a contract between the lessor and lessee and is regulated by the terms, conditions and covenants of such contract. In other words, leasing arrangement provides an enterprise with the use and control over assets without receiving title to them.

Essential Points to be Observed for Drafting of Lease Documents
The essential legal elements of lease are:

  1. the parties i.e. lessor or lessee;
  2. the subject matter of lease i.e. the property to be leased;
  3. demise or partial transfer of such property;
  4. the term and period of lease; and
  5. the consideration or rent. Law requires that the lease of real estate should be expressed and duration of the lease should be pre-settled under the written contract.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 17.
In the light of judicial pronouncements, discuss the following: (d) Goodwill of a business as an intangible asset. (June 2015, 4 marks)
Answer:
Supreme Court of India in Khushall KhengarShah v. Khorshedbanu, AIR 1970 SC 1147, had opined goodwill of a business as an intangible asset being the whole advantage of the reputation and connections formed with the customers together with the circumstances which make the connections durable. It is that component of the total value of the undertaking which is attributable to the ability of the concern to earn profits over a course of years because of its reputation, location and other features.

Question 18.
Examine the following statements:
A sub-lease is an absolute assignment. (Dec 2015, 4 marks)
Answer:
A sub-lease is a demise by a lessee for lessor term than he himself has. Every lessee, however short his term may be, make a sub-lease unless he is refrained by the contract of the tenancy from subletting. If the demise is for the whole term or for a period beyond the term, it amounts to assignment. If the lessee divests himself he becomes a stranger to the demised property and he has no right to have possession delivered up to him.

It is true that a covenant against subletting will restrain the assignment, but a mere covenant against subletting does not prohibit underletting a part of the premises. As long as the lessee remains in possession he may permit another person to use the demised premises without committing a breach of covenant, namely not to assign, underlet or part with the possession of the demised premises.

The Privy Council pointed out in Hunsrai v. Bejoylal Seal, (1930) 57 Cal 1176, that in India a sub-lease is not an absolute assignment and it was further held in Akshoy Kumar v. Akman Molla, (1915) 19 CWN 1197, that there is no privity of estate as between the lessor and the sub-lessee, who does not step into the shoes of the lessee.

A sub-lease is not prejudiced by the surrender of the head lease (Section 115 of Transfer of Property Act, 1882) but the position is different in the case of forfeiture which annuls all sub-leases except in case of fraud as between the lessor and lessee.

A sub-lessee is entitled to relief against forfeiture under section 114 of the Transfer of Property Act, 1882, which is applicable only in the case of non-payment of rent.

No relief is open to the sub-lease in case of transfer of breach of covenant in restraint of transfer.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 19.
Comment on the following : (June 2016)
(a) A mortgage is a transfer of interest in any property. (5 marks)
(b) A lease of immovable property is a transfer of right. (5 marks)
Answer:
(a) Mortgage is transfer of interest in specific immovable property. Mortgage is defined under Section 58 of the Transfer of Property Act, 1882. A mortgage is a transfer of interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of a loan, existing or future debt or performance of an acknowledgement, which may give rise to pecuniary liabilities. As such, it is a limited form of transfer of interest, unlike a sale of property.

(b) According to Section 105 of the Transfer of Property Act, 1882, a lease of immovable property is a transfer of a right to enjoy property. It is the method of acquiring the right to use equipment or real property for consideration.

Lease is a contract between lessor and lessee for the fixed term for the use on hire of a specific asset selected by lessee. Lessor retains ownership of the assets and lessee has possession and use of the asset on payment of specified rental over a period. It is a sort of contractual arrangement between the two parties whereby one acquires the right to use the property called “lessee” and the other who allows the former the right to use his owned property, called the “lessor”.

Thus, lease is a contractual arrangement, it originates from a contract between the lessor and lessee and is regulated by the terms, conditions and covenants of such contract. In other words, leasing arrangement provides an enterprise with the use and control over assets without receiving title to them. This arrangement could be oral or written allowing the use of assets for a specified period of time. The written lease agreement is signed by both the owner of the assets i.e. the lessor and the user of the assets i.e. ‘the lessee’. The lessee does not get the final ownership. In other words, leasing involves the use of an asset without assuming, or intending to assume, ownership.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 20.
In the light of judicial pronouncements, discuss the following:
Surrender of lease is not a transfer. (June 2016, 4 marks)

Question 21.
Comment on the following with reference to ratio in leading case:
A sub-lease is an absolute assignment under the Indian law or the English law. (Dec 2016, 4 marks)
Answer:
An absolute assignment is the act of complete transfer of the ownership (all rights, benefits and liabilities) of the policy completely to other party without any terms and condition. Generally, Sub-lease of property is made by a person who is himself a lessee or tenant of that property. A sublease may be prohibited by the original lease, or require written permission from the owner.

A sub-lease is demise by a lessee for lessor term than he himself has. If the demise is for the whole term or for a period beyond the term, it amounts to assignment. The Privy Council pointed out in Hunsrai v. Bejoylal Seal, (1930) 57 Cal 1176, that in India a sub-lease is not an absolute assignment and it was further held in Akshoy Kumar v. Akman Molla, (1915) 19 CWN 1197, that there is no privity of estate as between the lessor and the sub-lessee, who does not step into the shoes of the lessee.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 22.
Sub-lease is not a surrender of lease. (June 2017, 4 marks)
Answer:
Sub-Lease
A sub-lease is a demise by a lessee for lessor term than he himself has. Every lessee, however short his term may be, make a sub-lease unless he is refrained by the contract of the tenancy from subletting. If the demise is for the whole term or for a period beyond the term, it amounts to assignment. If the lessee divests himself he becomes a stranger to the demised property and he has no right to have possession delivered up to him.

It is true that a covenant against subletting will restrain the assignment, but a mere covenant against subletting does not prohibit underletting a part of the premises. As long as the lessee remains in possession he may permit another person to use the demised premises without committing a breach of covenant, namely not to assign, under let or part with the possession of the demised premises.

Surrender of Leases
Surrender of lease is not a transfer but mere yielding up by the lessee of his interest under the lease to the lessor by mutual agreement. It is in effect merger of the estate of the lessee into the reversion. It is not a transfer or an assignment of any right or estate within the meaning of Section 5 of the Transfer of Property Act (Makhanlal v. Nagendranath, (1933) 60 Cal 379).

The person who surrenders is called the surrenderer and the person to whom surrender is made is called the surrenderee. A surrender must be made with clear intention to yield up as mere non-payment of rent for years together or abandonment of the site does not amount to surrender (Misri Lai v. Durga Narain, AIR 1940 All. 317). A Requisition Order by the Government does not amount to any surrender (Torabai v. Padan Chand, 62 CWN 176).

It may be expressed or implied. Except in a case of some special kinds of lease as required by special Act, no writing or registration is necessary. A surrender may be oral, if accompanied by delivery of possession.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 23.
Usufructuary mortgage is similar to English Mortgage. Whether this statement is correct? Justify your answer. (June 2017, 4 marks)
Answer:
Usufructuary Mortgage
In this mortgage, the mortgagor delivers possession of the mortgaged property to the mortgagee who retains the possession until the satisfaction of the debt. The mortgagee will take the usufruct in lieu of the interest or part payment of the principal or partly in payment of interest or partly in part payment of the principal. The mortgagor is not personally liable to pay the debt and the mortgagee is not entitled during the term of the mortgage to demand his mortgage money.

English Mortgage
In an English mortgage, a mortgagor binds himself to repay the mortgaged money on certain date and transfers the mortgaged property absolutely to the mortgagee subject to the proviso that he will re-transfer it to the mortgagor upon payment of the mortgaged money as agreed.

Hence, Usufructuary mortgage and English mortgage are not similar.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 24.
Draft a Sale Deed by a Liquidator of XYZ limited in Voluntary Liquidation? Assume facts. (Dec 2017, 8 marks)
Answer:
A Specimen of Deed of Sale by Liquidator of a Company in Voluntary Liquidation:
Liquidation means winding up of the company and Liquidator is the officer appointed to conduct the winding up of a company.

Sale Deed to be drafted for being executed by the Liquidator of a company in voluntary liquidation assumes the following form:

THIS SALE DEED is made on the ………………. day of ………………. by voluntary liquidator of ………………. Co. Ltd., (in voluntary liquidation) (hereinafter called the vendor”) of the one part, in favour of Shri ………………. son of Shri ………………. Occupation ………………. resident of ………………. (hereinafter called “the purchaser”) of the other part, under the terms and conditions mentioned below.

WHEREAS by a special resolution passed by the shareholders of ………………. Co. Ltd., at an Extraordinary General Meeting held on the ………………. day of ………………. of which notice as prescribed by law had been duly given and it was resolved that the company be wound up voluntarily.

WHEREAS the said vendor was appointed its voluntary liquidator on ………………. the notice whereof was duly submitted to the Registrar of Companies ………………. as prescribed by law, on the ………………. day of ……………….

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

AND WHEREAS in a meeting of the shareholders of the said company held in accordance with the provisions of the Companies Act, 2013 it was resolved that the properties mentioned in the Schedule annexed hereto be sold by the vendor after publishing a notice for sale in ………………. and ………………. daily newspapers twice within a period of a fortnight and pursuant to such resolution, the vendor had duly advertised the sale of the said properties in the issues of ………………. dated ………………. respectively and issue of ………………. of ………………. dated ………………. respectively and pursuant thereto have received offers, the highest whereof was that of the said purchaser.

AND WHEREAS the said vendor agreed to sell and the said purchaser agreed to purchase the said properties on the terms and conditions mentioned herein and incorporated in an agreement to sell dated ………………. between the said vendor and the said purchaser.

NOW THIS DEED OF SALE WITNESSES AND IT IS HEREBY AGREED AND DECLARED AS FOLLOWS : That pursuant to the agreement dated ………………. aforementioned and in consideration of the sum of ₹ ………………. (Rupees ……………….) paid by the purchaser before the Sub-Registrar, ………………. on presentation of this Deed of sale for registration thereof (the receipt whereof the vendor hereby acknowledges) the vendor hereby transfers by way of sale and conveys on behalf of the said company all those items of the property mentioned more particularly in the Schedule attached hereto, unto the said purchaser, his heirs and assigns to have and to hold the same absolutely and forever.

IN WITNESS WHEREOF the parties aforementioned have signed this Deed of Sale on the date, month and the year aforementioned.

Witness: Vendor
Witness: Purchaser

Item Nos
1.
3.
Schedule
2.
4.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 25.
In the light of judicial pronouncements, discuss the following: (June 2018)
(a) Surrender of lease is not a transfer but a mere yielding up by the leasee of his interest under the lease to the lessor by mutual agreement. (4 marks)
(b) Transfer of immovable property by way of sale can be effected only by a deed of conveyance. (4 marks)
Answer:
(a) Surrender of lease is not a transfer but mere yielding up by the lessee of his interest under the lease to the lessor by mutual agreement. It is in effect merger of the estate of the lessee into the reversion. It is not a transfer or an assignment of any right or estate within the meaning of Section 5 of the Transfer of Property Act [Makhanlal v. Nagendranath, (1993) 60 Cal. 379].

A surrender must be made with clear intention to yield up as more non – payment of rent for years together or abandonment of the site does not amount to surrender. (Misri Lai v. Durga Narain, A.I.R. 1940 All. 317). It may be expressed or implied. A surrender may be oral, if accompanied by delivery of possession.

(b) Usually a transaction of a sale of immovable property involves two documents, e.g., Agreement to sell and Conveyance Deed i.e. sale deed. But with only a Sale Deed the transaction of sale can be completed. In Sura} Lamp and Industries Pvt. Ltd. v. State of Harayana, the Supreme Court of India observed that it has become common practice to effect transfers of immovable property by way of either general power of attorney (GPA) sales or sale agreement, GPA or will transfers in order to evade, inter – alia, the payment of duties, taxes and other fees payable on transfer and registration.

The Apex Court held that such transactions are illegal and cannot be recognized as valid under law. The Apex Court further observed that a transfer of immovable property by way of sale can be effected only by a deed of conveyance. In the absence of a deed of conveyance, duly stamped and registered, no right, title or interest in an immovable property can be transferred.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 26.
Draft the following as per the instructions : (Dec 2019)
(i) A memorandum of mortgage by deposit of title deeds.
(ii) A Deed altering conditions in a lease. (4 marks each)
Answer:
(i) Memorandum of Mortgage by Deposit of Title Deeds :
Memorandum that this ………………. day of ………………. 2009, ‘AB’ of, etc. (the mortgagor), as beneficial owner, has deposited with ‘CD’ of, etc. (the mortgagee), the original title deeds comprised in the Schedule A hereto, relating to the premises belonging to the said ‘AB’ and situate
at …………………. etc., described in Schedule B with intent to create a charge thereon for securing repayment to the said “CD” of the sum of ₹ ………………… this day lent and advanced by the said ‘CD’ to the said ‘AB’ on demand with interest for the same from this date at the rate of ₹ ………………. percent per annum.

The said ‘AB’ do hereby undertake as and when required by the said ‘CD’ to execute and register at the costs of the said ‘AB’ a legal mortgage in such form and containing such covenants and provisions as he may reasonably require.

Dated this …………….. day of ………………… 2009.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

(ii) THIS DEED made the ………………. day of …………………..
BETWEEN AB of, etc. (thereafter called “the landlord”) of the one part
AND
CD of, etc. (thereinafter called “the tenant”), of the other part. WHEREAS by a lease (hereinafter called “the principal deed”), dated the ……………….. day of ………………….. and made between the parties hereto and registered at …………………. Registration office in Book No …………… Volume No ……………….. pages ……………… to ………………. Being No ………………….. for the year …………….., the said AB granted and demised to CD the
house (or, etc.) situate at, etc.

AND WHEREAS the parties hereto have agreed to alter and modify the terms and conditions of the principal deed in the following manner.

NOW THIS DEED WITNESSES as follows:

  1. Sub-clause (e) of clause 2 (or, etc.) of the principal deed, the following subclause shall be omitted and shall cease to have any effect.
  2. For sub-clause (b) of clause 2 (or, etc.) of the principal deed, the following subclause shall be substituted, namely: (Set out the new sub-clause)
  3. That as altered and modified as aforesaid the principal deed shall remain in full force and effect.

IN WITNESS WHEREOF etc.,
Witnesses:

…………………….. AB
……………………. CD

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 27.
Draft a deed of sale by the liquidator of a company who has gone in voluntary liquidation. Assume facts. (Dec 2020, 5 marks)

Question 28.
Draft a deed of redemption or re-conveyance of mortgage property by the mortgagee in favour of the mortgagor. (Aug 2021, 6 marks)
Answer:
THIS DEED is made the ……………… day of …………. 20..
Between
‘A’ of ptc. (hereinafter called “the mortgagee”) of the One Part
And
‘B’ of etc. (hereinafter called “the mortgagor”) of the Other Part.

WHEREBY by a mortgage deed dated …………………… the property mentioned in that deed was mortgaged by the said ‘B’ in favour of the said ‘A’ to secure payment of the amount of₹ ………………….. with interest @ ……………….. per cent per annum.

NOW THIS DEED OF RECONVEYANCE WITNESSETH:
That in consideration of all principal moneys and interest secured by the said mortgage deed dated ………………. having been paid, the receipt whereof the said ‘A’ hereby acknowledges.

The said ‘A’ as mortgagee hereby redeems or reconveys unto the said ‘B’ all the property comprised in the said mortgage deed to hold the same upto and to the use of the said ‘B’ as absolute owner discharged from all principal money and interest secured by and from all claims and demands under the aforesaid mortgage deed.

Mortgagee
Witness

Mortgagor
Witness

Date & Place

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 29.
Explain the following:
Main characteristics of the Equitable Mortgage. (Dec 2021, 4 marks)
Answer:
The main features of the Equitable Mortgage are as given below :
(a) Debt even time barred, present and future advances are covered under the equitable mortgage. In other types of mortgage, future advances are not covered. –

(b) It is not necessary for creation of mortgage that the property be located in the specified town or the company making deposit should have its registered office in that town.

(c) This deposit can be made by the Company through its nominee or agent duly authorized.

(d) Intent to create security by deposit of title deeds should be present at the time of such deposit in the mortgagor.

(e) Neither ownership nor possession of the property passes to the mortgagee under the equitable mortgage.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 30.
In the light of Judicial pronouncement(s) discuss the following:
Surrender of Lease is not a transfer. (Dec 2021, 4 marks)

Question 31.
Draft a deed of sub-lease with the permission of Vijay, the original lessor between Amar (sub-lessor) and Binod (the sub-lessee) in respect of Survey No. 786, Part I, being used as agricultural land and measuring 50 acres situated on the eastern bank of Varuna river in Varanasi District (UP) demised to the original lessor, Vijay, for a period of 30 years w.e.f. 1st January, 2012 and covenanted for renewal for three consecutive periods of 30 years each; though the sub-lease has to be initially valid for 30 years only. (June 2012, 12 marks)
Answer:
Deed of Sub-Lease

THIS LEASE made this ………………… day of ………………… (month) ………………… (year) between Amar of ………………… etc. (hereinafter called “the sub-lessor”), of the one part and Binod of ………………… etc.(hereinafter called “the sub-lessee”), of other part.

WHEREAS by a lease (hereinafter referred) to as “the original lease”) dated 1st January, 2012 and made between Vijay as owner and Amar as lessee and registered in Book I, Vol ………………… pages ………………… to ………………… bearing no ………………… for the year in the Office of Sub-Registrar of ………………… etc., the premises (or, etc.) described in the original lease were demised to the said original lessee for a period of 30 years with effect from the 1st day of January, 2012 on a yearly rent and subject to the covenants and conditions to be performed and observed as therein contained.

AND WHEREAS the original lessee has agreed to grant and the sub-lessee has agreed to accept a sub-lease of the premises (or, etc.) hereinafter described upon the conditions hereinafter contained :

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

NOW THIS DEED WITNESSES that in consideration of the rent hereinafter reserved and the covenants by the sub-lessee hereinafter contained, the original lessee do hereby grant to the sub-lessee a lease of ALL THAT premises (or, etc.) known by the name of, etc. and situate at, etc., together with the appurtenances; TO HOLD the same unto and to use of the sub-lessee for the period of 30 years, commencing with effect from the ………………… day of ………………… at the monthly rent of Rupees …………………

SUBJECT to the following conditions:
The sub-lessee hereby agree with and covenants with its lessor, viz., the lessee as follows :
(a) To pay the said rent, clear of all deductions, on the day of every current month in advance during the term of the lease.

(b) To pay all taxes and outgoings now payable or hereafter to become payable in respect of the leased premises (or, etc.).

(c) to keep the said premises (or, etc.) in good and tenantable repair and not to make any alteration therein without the written consent of the landlord.

(d) To perform all the covenants, conditions and stipulations contained in the original lease affecting the property hereby leased and to be observed and performed by the original lessee except payment of rent and not to do, execute or perform an act, deed or thing or suffer anything to the contrary whereby or by reason or means whereof the original lease may be avoided or forfeited and to allow the original lessee to enter upon the leased premises (or, etc.) for the purpose of inspection of the premises and performing any of such terms of agreement contained in the original lease, which may be necessary to prevent its forfeiture.

(e) To keep the original lessee indemnified against all actions, claims, demands and expenses on account of performances or non-performance by the sub-lessee (of any of the terms, conditions and stipulations of this agreement).

The original lessee does agree and covenant with the sub-lessee as follows:
(a) That upon the sub-lessee paying the rent hereby reserved and observing and performing the conditions and covenants herein contained, shall quietly and peacefully possess and enjoy the property, hereby leased during the said term without any interruption and disturbance by the original lessee or any person claiming under or in trust for him, provided that in case of any breach of any of the conditions and covenants to be observed and performed by the sub¬lessee, the lease shall, at the option of the original lessee, stand determined who shall be entitled to repossess the property as his former estate without prejudice to his right to recover all arrears of rent and/or any damages for breach of such conditions or covenants.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

(b) The original lessee shall duly and punctually pay the rent reserved, observe and perform all the covenants and conditions contained in the original lease and keep the same alive and in full force and virtue and will further, at all times, keep the sub-lessee and his estate indemnified against all actions, claims, proceedings and demands on account of any breach of any of the conditions and covenants contained in the original lease.

(c) The original lessee acknowledges the right of the sub-lessee as to production of the original lease and to delivery of copies thereof and undertakes for the safe custody thereof.
It is further agreed that the terms “the original lessee” and “sub-lessee” used herein shall, unless inconsistent with the context, include as well their respective successors and assigns.

IN WITNESS, etc.

Signed, sealed and delivered
Amar
Binod

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 32.
Ankush leased out his plot no. 111 in village Pilakhua, to Dinesh for three years from 1st June, 2012 for carrying out only nursery business therefrom. The plot has several Sheesham trees. A lease deed was signed by both the parties and registered as required by law. Dinesh has been doing nursery business but with effect from 1st October, 2014, he started digging earth from said plot for using it in his adjoining brick-kiln. A notice dated 5th October, 2014 served on him by Registered AD post asking him to stop digging earth from said plot, was ignored by Dinesh, the lessee. The plot continues to be damaged in this manner. It causes irreparable damage thus.

Ankush intends to institute an injection-cum-damages suit in a Court of competent jurisdiction praying for restraining Dinesh from digging earth from said plot and damages pendente lite. Interests and costs are also to be claimed. Assuming supplementary data, draft a specimen plaint. (June 2015, 8 marks)
Answer:
In the Court of Civil Judge at ………………..
Original suit no …………… of …………………

Ankush s/o …………………… aged ……………….. r/o ………………… Plaintiff
Dinesh s/o …………………. aged ………………… r/o ……………. Defendant

The above named plaintiff states as follows:
1. The plaintiff let plot no. 111 in village ….to the defendant by a deed
of lease, dated 01st June, 2012 for the purpose of a nursery for 3 years and the defendant agreed by the said deed of lease not to use the land for any other purpose.

2. The defendant has since 01st October, 2014 commenced to dig earth from the said plot for the purpose of his adjoining brick kiln.

3. The removal of earth from the land would make it unfit for cultivation for several years and would even otherwise reduce its quality and value and compensation in money would not afford adequate relief to the plaintiff.

4. The defendant threatens and intends unless restrained from so doing to continue to dig earth from the said plot.

5. That the said land is within the jurisdiction of this Hon’ble Court hence this Court has each and every jurisdiction to try and entertain this suit.

6. That the value of the suit for the purposes of jurisdiction has been fixed for ₹ ………………… and for the purposes of declaration and correct and authorized Court fee stamp of ₹ ……………… has been affixed on the plaint.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

7. That no suit has been instituted against the defendants on the same or similar cause of action in any other Court.

8. It is, therefore, most respectfully prayed that a decree for injunction restraining the defendant from digging the land over the suit plot
comprising in Khata Khatauni No. __________, Khasara No. __________ measuring _______ Biswas situated in _______ which is against the Municipal Corporation Act and Bye-Laws and Town & Country Planning Act and Rules and also directing the defendant to remove illegal and unauthorized construction over the suit land owned and possessed by the plaintiff and also directing the defendants with costs of the suit. Such other reliefs as deemed fit and proper in the facts and circumstances of the case may also be passed in favour of the plaintiff and against the defendants in the interest of justice.

AND FOR THIS ACT OF KINDNESS, THE HUMBLE PLAINTIFF AS IN DUTY BOUND SHALL EVER PRAY.
The Plaintiff claims a perpetual injunction restraining the defendant his servants or agents from digging earth from any portion of the said plot no. 111 and claims damages with interest and cost in the suit.

Place ………………..
Date ………………

Plaintiff
Through
(Advocate)

Verification .
I-Ankush, plaintiff in above suit do nearby solemnly verified that the contents of above plaints in Para 1 to 5 are true to my knowledge and belief. Nothing material has been concealed.

Verified at Pilakhua this the ………………….

Plaintiff

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 33.
Dilip, the owner of a bungalow in Salt Lake area of Kolkata, decided to let-out his bungalow with ₹ 1,000 sq. feet area abutting 60 feet wide main road to QRS Corporation, for a term of three years on a rent of ? 1,00,000 per month plus taxes, service charges, etc. thereon. The premises is to be used for office accommodation purposes only. Protecting the interests of all concerned parties, draft a specimen ‘agreement of licence’ to use the property. Assume supplementary data as may be required. (Dec 2016, 8 marks)
Answer:
AN AGREEMENT MADE this ………………. day of …………….. 2016 BETWEEN Dilip son of ……………….. R/o ……………. by faith …………….. by
occupation ………………….. herein after referred to as the “owner” of the ONE PART AND QRS Corporation represented by Mr …………………… its secretary being signatory to this agreement having its principal office at present at No ………………… hereinafter referred to as “occupiers” of the OTHER PART.

WHEREAS the occupiers approached the owner for permission for using of his property, viz. bunglow No ………………… in Salt Lake, Kolkata fully mentioned and described in the Schedule hereto for a period not exceeding three years only from the date of signing of this agreement which the owner has agreed to grant reserving for himself the care, maintenance and services to property and on the basis of leave and license only (which will stand ipso facto revoked on the expiry of the said term). Now, it is hereby expressly agreed and declared by and between the parties as follows:

1. This writing shall never be construed as any tenancy agreement or lease nor otherwise creating any other right or interest in the property in favour of the occupiers which is not at all the intention of the parties but on the contrary merely a temporary agreement or arrangement simply to allow the occupiers to use and occupy portion of the premises for their office accommodation under the control and supervision of the owner for which purpose the owner shall retain ………………. rooms, viz., one in the ground floor and another in the first floor. The owner shall have his own staff in the said rooms for the care and supervision and maintenance of and services to the property.

2. The occupiers shall, in consideration of such accommodation as hereunder provided, pay to the owner a fixed sum of ₹ 1,00,000/- per month plus taxes, service charges etc. as charges for such temporary occupation for the period of three years after deducting TDS as applicable.

3. The occupiers shall also pay to the owner on account of Corporation of Kolkata all existing and future occupiers’ share of rate and taxes of the property and also the enhancement in the owner’s share, if any, during the period of their occupation and shall otherwise keep the owner and his estate indemnified as against any loss, if any, arising out of such non-payment or non-observance of any of the covenants herein contained.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

4. The occupiers have as security deposit for such payments and observance of the covenants hereunder contained, kept with the owner a sum of ₹ ………………… to be repaid without interest on revocation of license and surrender and deliver the possession of the said portion of the property subject to such deductions as the owner shall be entitled as against the occupiers, e.g., arrears of charges provided in Clause 2, unpaid taxes,, electric bills, etc., as hereunder provided or otherwise permitted in law.

5. The occupiers shall on expiry of the period of ……………….. and license hereunder granted or earlier revocation thereof, surrender the property and deliver the same to the owner when and in such an event he will be entitled to the refund of ₹ ………………. subject to deductions provided in Clause 4 hereof.

6. Provided, however, and notwithstanding anything hereinbefore contained, it is hereby expressly agreed by and between the parties hereto that in default of any payment on the dates hereinbefore referred to above to the owner or the Corporation of Kolkata or other appropriate authorities the owner shall be entitled to and shall have always the power to revoke the license hereunder granted at his absolute discretion and reoccupy the said portion of the property without subjecting himself to any liability on that account and notwithstanding any intermediate negotiations or waiver of breach thereof when and in such an event the occupiers shall surrender the occupied portion of the property as hereunder contemplated.

7. The occupiers shall have no right to make any addition or alteration to the property except temporary removable walls by way of adjustments but shall be entitled to make interior decorations only by temporary wooden partitions which they shall remove at their own costs at the time of surrender of the said portion of the property on expiry of the term of the license hereby granted or earlier revocation thereof and repairs all the damages, if any caused to the property.

IN WITNESS WHEREOF the parties have executed this Agreement on this …………………… day of ………………….. 2016.

Signed, sealed and delivered at Kolkata
In the presence of (1), (2) and (3).

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 34.
Pravin Arora mortgaged his property in favor of Juhi Chawla in consideration of loan taken by Pravin Arora. Now the loan together with interest has been paid. Prepare a deed of redemption or re-conveyance of mortgaged property in favor of the mortgagor. (June 2017, 8 marks)
Answer:
Deed of Redemption or Re-conveyance of Mortgaged Property by the Mortgagee in favour of the Mortgagor

This Deed of redemption is made at __________ on this the __________ day of __________ between.

Mr. Pravin Arora, son of Mr. Saket Arora, aged about 50 years, residing at __________, hereinafter referred as MORTGAGOR (which expression shall, unless it is repugnant to the context mean and include his legal representatives and executors.)

And

Ms. Juhi Chawla, Wife of Mr. Jay Mehta, aged about 43 years, residing at Worli, Mumbai, Maharashtra, hereinafter referred to as MORTGAGEE (which expression shall, unless it is repugnant to the context mean and include his legal representatives and executors.)

WHEREAS, the property, more fully described in the schedule I hereto; was mortgaged by the MORTGAGOR to the MORTGAGEE as security for the repayment of a debt amounting to ₹ ________ under a deed of mortgage dated _________, registered as document number: in the office of the Sub-Registrar _________.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

The MORTGAGEE has received full and final repayment of the loan amount of ₹ ________ Borrowed by the MORTGAGOR under the aforementioned Deed of Mortgage dated _________ vide cheque number/Cash __________ dated ________ drawn on the in favour of the MORTGAGEE.

NOW THIS DEED WITNESSETH THAT in consideration of the payment of ₹ _________ to the Mortgagee by the Mortgagor paid in full of the principal sum and interest due and owing to the mortgagee on the security of the said Indenture of the Mortgage (the receipt whereof the Mortgagee doth hereby admit and acknowledge and of and from the same doth hereby acquit, release and forever discharge the Mortgagor), the Mortgagee doth hereby retransfer and reconvey to the Mortgagor all that the said mortgage property, more particularly described in the Schedule I hereto, to have and hold the same unto the Mortgagor absolutely and free from encumbrances of any kind whatsoever and discharged from all claims, demands and rights of the Mortgagee under the said mortgage and the Mortgagee hereby covenant with the Mortgagor that he has not done or knowing or willingly suffered or been party or privy to any act, deed or thing whereby or by reason of means whereof the said mortgaged property hereby reconveyed or retransferred or intended so to be or any of them or any part thereof may or shall be impeached, affected or encumbered in title, estate or otherwise howsoever.

AND THE MORTGAGEE HEREBY DECLARES AND CONFIRMS that title deeds he has delivered the title deeds in respect of the mortgaged property and the Deed of Mortgage to the Mortgagor.

SCHEDULE I
Property Details
IN WITNESS WHEREOF, the MORTGAGOR and the MORTGAGEE has hereto set their hands to this deed of redemption on the day, month and year hereinabove written.

WITNESSES:
1.
2.

Signature of the Mortgagee
Signature of the Mortgagor

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Question 35.
Mr. AB is a Karta of AB-HUF a Joint Family. Family is engaged in various businesses and one of its business suffered heavy losses. With a view to fund the losses and its debts, AB-HUF decided to sale one of its property. You are required to draft a Deed of Sale of Joint Family Property. Assume other facts, if required. (Dec 2021, 5 marks)
Answer:
THIS DEED OF SALE made on this ……………… day of …………….. between AB for self and as Karta of AB-HUF and representing all other coparceners v iz., his sons named ……………. all constituting a Hindu Mitakshara undivided family of, etc., (hereinafter called “the Vendor”) which expression shall, where the subject or context allows, be deemed to include at all times hereafter all persons being from time to time the coparceners of the said family of the one part and CD of etc. (hereinafter called “the purchaser”) of the other part.

WHEREAS the said Joint family for several years past owned and still owns and possess inter alia the Lands, hereditaments and premises described in Schedule A hereto as a part of its estate.

AND WHEREAS the said joint family also carried on and still carries on various businesses under the different name and styles. One of its business running in the name and style of ……………… which suffered a heavy loss and its capital and reserves estimated at ₹ ……………… in the year owing to out-break of fire at its godown on the day of ………………..

AND WHEREAS the joint family could not also pay its statutory dues and other capital and revenue liabilities of the said business aggregating to ₹ …………………… for the years …………………… and also its business debts estimated at ₹ ……………….

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

AND WHEREAS the said joint family has at present no funds nor any other means or resources to make up the deficit as regards to the capita loss and to pay the liability of the family as regards the said statutory dues except by sale of one of its properties.

AND WHEREAS in the circumstances aforesaid the said AB for self and as Karta of the said AB-HUF has by an agreement dated ………………. agreed with the said MN for sale of the property fully mentioned and described in the Schedule hereto at and for the sum of ₹ …………………

AND WHEREAS such sale is in the interest and for the benefit of the said joint family and its estate. AND WHEREAS the said MN after bona fide and independent enquiry is satisfied about the present financial condition of the family and in particular the debts and liabilities as aforesaid and the reasons for, circumstances behind and the necessary for the sale.

NOW THIS, INDENTURE WITNESSETH AS UNDER:
1. That in pursuance of the said agreement and in consideration of the sum of ₹ ……………….. paid by the said MN to the said AB simultaneously with the execution of these presents he, the said AB do hereby and hereunder for self and as Karta for and representing all other coparceners of the said joint family do hereby grant, sell, convey, transfer, assign and assure the said property together with all houses, buildings, fixtures etc., unto and to the use of the said MN absolutely and forever.

2. The Property sold is free from all encumbrances, charges, mortgages. Liens, prior agreement to sell, court proceedings, gift, of any nature whatsoever.

3. That from the date of execution of this Sale deed the MN becomes the sole and absolute owner of the said property under sale and shall be at full liberty to use, enjoy and utilize the said property under sale and also have right, power, absolute authority and be fully competent to sell or dispose off the same to anyone in any manner as deem fit.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

4. That after the execution of this Sale deed neither the AB and othe coparceners nor their legal heirs, may raise any objection or create any charge or demand any share in the said property under sale here after.

IN WITNESS WHEREOF the parties hereto have signed this Deed of Sale on the date mentioned against their respective Signatures.

Witness:
Signed, sealed and delivered
AB …………………….
MN …………………….

Question 36.
Draft a deed to sub-lease the. property, with the permission of the original lessor, Hanu Sisodia between Aarya (sub-lessor) and Pranita (the sub-lessee), bearing survey no. 856 part I measuring as 60 acres of agricultural land situated at the western bank of Godavari River in Nasik, for a period of 30 years w.e.f. 1st December, 2021, with a covenant for renewal of three Consecutive periods of 30 years each, though the sub-lease has to be initially valid for 30 years only. (June 2022, 8 marks)

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Drafting and Conveyancing Relating to Various Deeds and Documents-III Notes

Sale deed by Liquidator of a Company in voluntary Liquidation

  • Winding Up (or Liquidation) is a proceeding by which a company is dissolved and in the course of which its assets are realised and applied in payment of its debts and returning any surplus remaining (if any) to its members.
  • Winding Up (or Liquidation) can be by 3 types:
    1. Liquidation by Court
    2. Voluntary Liquidation
    3. Liquidation subject to the supervision of Court.

Mortgage – Meaning and its Types

  • Mortgage is (In Hindi, it’s called ‘Girvi’)
    • a transfer of interest
    • in an immovable property
    • for securing the payment of money advanced or to be advanced
    • by way of loan, debt or the performance of an acknowledgment
    • which may give rise to pecuniary liabilities.
  • The transferor is called ‘mortgagor’. The transferee is called ‘mortgagee’.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Types of Mortgages
1. Simple Mortgage:

  • Here, the mortgagor doesn’t deliver the possession of the mortgaged property.
  • He agrees that if he fails to pay the debt and interest, the property will be sold and the proceeds be applied in payment of mortgage money.

2. Mortgage by Conditional Sale:

  • Here, the possession of property is delivered to mortgagee.
  • Here, the property is sold to the mortgagee on a condition that:
  • if there’s a default in payment of mortgaged money, the sale shall become absolute, or
  • on such payment, the sale shall become void, or
  • on such payment, the buyer (i.e. mortgagee) shall transfer the property to seller (i.e. mortgagor)

3. Usufructuary Mortgage:

  • Here, the possession of mortgaged property is delivered to the mortgagee.
  • The mortgagee will take the usufruct in place of the interest or part payment of principal amount: i.e. the mortgagee will enjoy all the fruits of the mortgaged property like rent profits.
  • Ownership is not transferred.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

4. English Mortgage:
Here, the mortgagor transfers the mortgaged property absolutely to the mortgagee subject to the proviso that he will re-transfer it to the mortgagor upon payment of the mortgaged money.

5. Mortgage by Deposit of Title Deed (or Equitable mortgage):

  • It’s an oral transaction and no documents like mortgage deed are required.
  • Here, a Memorandum of mortgage by deposit of title deeds is prepared by the mortgagee to secure the mortgage money.
  • Unlike other types of mortgage, even future advances are covered under equitable mortgage.
  • Delivery of title deeds is required to be made in specified towns to which this facility is extended (e.g. Mumbai, Chennai and Kolkata).
  • Intention to create security by deposit of title deeds should be present in the mortgagor.
  • Neither ownership nor possession of the property passes to the mortgagee.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

6. Anomalous Mortgage:
It’s a combination of any of the above forms of mortgage or any mortgage other than those set out above.

Hypothecation v/s Pledge v/s Mortgage Let’s do A comparative study of these 3 related topics

Basis Hypothecation Pledge Mortgage
Meaning Hypothecation is:

  • A type of transaction whereby
  • legal property in goods passes to the money lender
  • But the possession does not pass.
Pledge is:

  • a bailment of the goods
  • as security
  • for payment of a debt or per­formance of a promise
    (Bailment = Transfer of possession)
Mortgage is:

  • a transfer of interest
  • in an immovable property
  • for securing the payment of money advanced or to be advanced.
  • by way of loan or performance of an acknowledgment, which may give rise to pecuniary liabilities.
Types of property It deals with movable property. It deals with movable property. It deals with immovable property.
Governing

Act

It’s not governed by any laws but governed by princi-ples of equity & justice., It’s governed by

Sections 172-176 of Indian contract Act, 1872.

It’s governed by the Transfer of Property Act 1882.
Possession of goods Here, the goods remain in the possession of borrower. Here, the possession of goods is transferred to the money lender. The possession of property depends on the types of mortgage.
Parties Hypothecator and Hypothecates. Pawnor and Pawnee Mortgagor and Mortgagee
Example A working capital loan given by a bank on the basis of goods which still remain in the possession of borrower is an example of Hy­pothecation. Mr. A delivers his goods to Mr. B as a security for the payment of a debt of ₹ 50,000 payable by Mr. A to Mr. B. This is an example of pledge. Mr. X borrows ₹ 1,00,000 from Mr. Y. For securing the payment of the said ₹ 1,00,000; Mr. X transfers interest in his land to Mr. Y. This is an example of mortgage.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

License – MeanIng
(i) As per the Indian Easements Act, 1882, License means:

  • “where one person grants to another,
  • a right to do or continue to do,
  • in or upon the immovable property of the grantor,
  • something which would, in the absence of such right, be unlawful
  • and such right does not amount to an easement or an interest in the property,
  • the right is called a license.”

(ii) In simple words, license means a right granted by one person to another to do something which would, in the absence of such right, be unlawful.

(iii) A license is ordinarily non-transferable, unless a different intention is expressed or implied, a license to attend a place of public entertainment may be transferred by license u/s 56 of Easement Act 1882.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Lease

  • As per the Transfer of Property Act, 1882, a lease is:
    • a transfer of a right to enjoy property
    • from one person (i.e. Lessor) to another person (i.e. Lessee)
    • either for a certain period or in perpetuity
    • in return for a consideration called as ‘lease rent’
  • Following are the essential legal elements of lease:
    • There must be 2 parties; i.e. the transferor (Lessor) and the transferee (Lessee).
    • There must be a transfer of a right to enjoy the property.
    • The term and period of the lease must be clearly defined.
    • There must be some consideration called as lease rent flowing from the lessee to the Lessor.
    • It shall be clearly identified as to whether the lease is a ‘finance lease’ or ‘operating lease’.

Sub-Lease

  • A sub-lease is demise by a lessee for lesser term than he himself has. Every lessee is entitled to make a sub-lease unless he is refrained by the contract, for example: Mr. A leases his 3 – storey building to Mr. B for 5 years. Mr. B sub-leases the 1 st floor of this building to Mr. C. This is an example of sub lease.
  • If the demise is for the whole term or for a period beyond the term, it amounts to assignment.
  • A sub-lessee is entitled to relief against forfeiture u/s 114 of the Transfer of Property Act, 1882.

Drafting and Conveyancing Relating to Various Deeds and Documents-III - CS Professional Study Material

Surrender of Leases

  • It refers to the determination or termination of lease. Surrender of lease is not a transfer.
  • It can happen in following cases :
    1. By efflux of time
    2. By happening of an event
    3. By express surrender
    4. By implied surrender

License v/s Lease

Basis License Lease
Heritable It’s a personal non-heritable right. It’s a heritable right in rem.
Forfeiture Denial of grantors title does not necessarily result in forfeiture. Denial of lessor’s title results in forfeiture.
Registration As it’s an instrument granting right, registration is optional. As it’s an instrument creating right registration is mandatory.
Governing Act It’s governed by Indian Easement Act, 1882. It’s governed by Transfer of Property Act, 1882.
Consideration Consideration is paid by way of fee. Consideration is paid by way of rent.
Rent & public nuisance The licensee is not liable for rent and public nuisance. The lessee is liable for rent and public nuisance.

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