DOCTRINE OF ELECTION BY ROHIT PRADHAN

Author : Rohit Pradhan, Student at Symbiosis Law School, Hyderabad.

Introduction

This article will talk about the Doctrine of Election within the lenses of Section 35 of the Transfer of Property Act (TOPA).

Concept

As the phrase only says ‘Doctrine of Election‘; ‘Election’, The basic crux is that there is a requirement of selecting an option.

Through an instrument, if I confer two rights on you; and you have to select only one, this mechanism is the Doctrine of Election.

Example

Let’s assume that, I offer you Rs 1 Crore to you. In return, you have to give up your sports car to your best friend. Now you have two options, first one is, if you accept Rs 1 Crore, you have to give up your sports car to your best friend; secondly, if you deny taking Rs 1 Crore, you keep your Car. This mechanism of election is the Doctrine of Election.

The moment he takes Rs 1 Crore, he will automatically give up his rights on his car. He cannot have both of the benefit. This is the crux of the Doctrine of Election.

What is the Doctrine of Election?

It is a doctrine based on an equitable principle which has been conceptualized under Section 35 of the Transfer of Property Act, 1882 (TOPA); and within 180-190 of the Indian Succession Act, 1925. It means to have a choice between the two rights. Selecting one right will render the person ineligible for the other one.

Ingredients of the Doctrine of Election

Following are the ingredients of the valid election[1]

  1. A person who has no right to transfer the property, transfers it to someone;
  2. On same transaction, it would confer some benefits to the owner of the property;
  3. Such owner must elect either to confirm such transaction by accepting the benefit; or dissent such transaction by rejecting any benefit.

Example

I have no right to sell a property which is own by you. I made a deal with some stranger to selling your property to him at Rs 50 Lakhs. In return, I will be giving you a Rs 10 Lakhs as a gift. You are knowing that I have the intention to sell the property for which I am also offering you the gift.

Now you have to elect. If you choose to get the gift of Rs 10 Lakh, the transaction with that stranger will become valid, as you confirmed the transaction. If you reject the gift, that would mean that you haven’t accepted the transaction of the property with that stranger.

Applicability

It applies to persons governed by Hindu[2] as well as Mohammedan law[3]. It applies to both the movable and immovable property. The doctrine of election is founded on the equitable principle that where a person persuades another to act in a manner to his prejudice and derives any advantage from that; then he cannot turn around and claim that he was not liable to perform his part as it was void. It applies where a vendor or a transferor of property tries to take advantage of his own wrong[4]. This principle does not require any ratification.[5] It is applicable in the cases of gift or will and generally does not apply in cases of legal remedy.[6]

Section 35 of the Transfer of Property Act recognizes the Doctrine of Election. It applies where a person professes to transfer property which he has no right to transfer. Similarly, on the principle that a person may not approbate and reprobate, “a species of estoppel has arisen which seems to be intermediate between estoppel by record and estoppel in pais.

The principle that a person may not approbate and reprobate express two propositions :

(1) that the person in question, having a choice between two courses of conduct, is to be treated as having made an election from which he cannot resile, and

(2) that he will not be regarded, in general at any rate, as having to elected unless he has taken a benefit under or arising out of the course of conduct which he has first pursued and with which his subsequent conduct is inconsistent”.[7]

Commentary

When is Election necessary?

There will be two transactions, one where the property of the owner will be subjected to the transfer to any third person by non-owner of the property. Other transaction will be where a benefit will be conferred to the owner of the property. If the transaction dealing with the conferment of benefit to the owner is direct as the result of the earlier transaction; then the election is necessary.[8]

Meaning of Benefit

For the election, there need to have a benefit conferred to the owner of the property. There will be no election if he does not obtain any benefit. Moreover, the transferee, in this case, would not get any property as the owner declined to obtain the benefit. The disappointed transferee does not get any compensation as the result of the real owner not obtaining any benefit.

Example

I being the owner of the property came to know that my friend is selling it to B. My friend gave me the offer to have his supercar in return to allow him to sell my property. I declined it. Any loss that B has or might have faced due to the promise of my friend will be on his own risk.

Exception to the Rule of Compensation

Following are the instances:

(1) where the transfer is gratuitous and the transferor has died before the election or otherwise become incapable of making a fresh transfer,

(2) where a transfer is for consideration. Neither the section nor the illustration refers to interest on the amount of compensation.

Belief of Transferor

It will be immaterial. It will not matter whether if the transferor honestly or dishonestly wanted to transfer the property believing it to be his own. The doctrine of election will be applicable in both cases.[9]

Right to Information

The person who is going to do election is entitled to know the relevant information; which would be required for him to come to a decision.[10] If he has a misunderstanding about the value of the benefit, he will not be bound to go for the election.[11] This rule is stricter for purdanashin woman.[12]

What constitute as an Election?

The following rule :—

(1) Acceptance of a benefit by the person on whom it is conferred constitutes an election by him to confirm the transfer. But this is subject to two conditions :

(a)he must be aware of his duty to elect, and

(b)there must be proof of knowledge of circumstances which would influence the judgment of a reasonable man in making election or proof of waiver of inquiry into such circumstances.

(i)Enjoyment for two years of the benefit by the person on whom it is conferred without doing any act to express dissent raises a presumption of knowledge or waiver.

(ii)Such knowledge or waiver may be implied by acts when the person whose property is transferred renders it impossible to place the person interested in the property professed to be transferred in the same condition as if such act had not been done. Hence no person can be put to the election unless he has knowledge of both funds or properties and the necessity of electing.[13]

Forcing the election

If a party is liable or supposed to elect but abstains from doing it; for one year post-transfer of the property, the transferor or his representative may force the election.

Deaths

Death of transferor

The death of the transferor will not affect an election made after his death when the real owner elects to confirm the transfer, but if he dissents from it the benefit relinquished by him shall revert to the transferor’s representative as if it had not been disposed of, subject to the charge of making good to the disappointed transferee the amount or value of the property attempted to be transferred to him.

Death of transferee

If a transferee dies before the election his representative would be entitled to take the benefit under the transfer for there is nothing so far as the rule is concerned which requires his active part.

Death of the owner of the property before the election

There is no provision in the section when a party bound to elect has died before the election. It is submitted that no election in that event can be made. In England, where a husband devised the wife’s jewels to the wife for life, the remainder to his son, and the wife made no election or to have the jewels as her paraphernalia, it was held that her administrator could not make this claim.[14]

Distinguished from this is the case of a son; who died before his mother under whose deeds of appointment and will an election had to be made by him, where it was held that as between his estate and the disappointed legatees of his mother’s will the latter were entitled to put the son’s estate to the election or, in other words, require the estate to make good the benefits intended for them by the will.[15]

References

[1] Dhanpatti v Devi Prasad, 1970 (3) SCC 776 (778)

[2] Rajamannar v Venkatakrishnayya, (1902) 25 Mad 361

[3] Sadik Husain Khan v. Hashim Ali Khan (1916) 38 All 627

[4] Prashant Ramchandra Deshpande v Maruti Balaram Haibatti, 1995 Supp (2) SCC 539 (541) : 1995 (2) UJ 305 .

[5] K Shanmugham Pillai v S Shanumugham Pillai, AIR 1968 Mad 207

[6] Nihar v Anath Nath, AIR 1956 Pat 223 (226) (DB)

[7] Prashant Ramchandra Deshpande v Maruti Balaram Haibatti, 1995 Supp (2) SCC 539 (541)

[8] Mahammad Afzal Khan v Ghulam Kasim Khan, (1903) 30 Cal 843 : 30 IA 190.

[9] Coutts v Ackworth, (1870) LR 9 Eq 519

[10] Whistler v Webster, (1874) 2 Ves. 267

[11] Pusey v Desbouvrie, (1734) 3 P. Wms. 315

[12] Husain v Hashim Ali, (1916) 38 All 627

[13] Whistler v Webster, (1794) 2 Ves. 367

[14] Clarges v Albemarle, (1691) 2 Vern. 245 : 23 ER 758

[15] Pickersgill v Rodger, (1877) 5 Ch. D. 163

 

Note : This post first appeared here.

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