The doctrine of election is stated in Sec. 35 of the Transfer of Property Act alongside Section 180 to 190 of the Indian Succession Act.
It states that when a party transfers a property over which he does not hold any right of transfer and entailed in that transaction is the benefit conferred upon the original owner of the property, such title-holder must elect his option to either validate such transfer of property or reject it; upon rejection, the benefit shall be relinquished back to the transferor subject nevertheless :
- “Where the transfer has been through gratuitous means and the transferor has become incapable of making a new transfer.
- In all cases where the transfer is for consideration”.
An illustration to further explain :
A owns a property that is worth Rs 800. B professes to transfer the same to C through the Rs1000 instrument to A. But the A, the owner opts/elects to retain his property and thus, forfeits the gift of Rs 1000.
When the owner who is considering the election between retaining the property and accepting a particular benefit, chooses the former, he is not bound to relinquish any extraneous benefit that he gains through the transaction.
The acceptance of the benefit by the original owner shall be deemed to be as election by him to validate the transfer, if he is aware of his responsibilities and the circumstances that might influence a prudent man into making an election.
This knowledge of the circumstances can be assumed if the person who gains the benefit enjoys it for a period of more than two years. Further discussion over this has been made under the heading of “Modes of Election”.
If the original owner does not elect his option within a year of the transfer of property, the transferor would require him to elect his choice. Even after the reasonable time, if he still does not also still elect, the original owner shall be assumed to have elected the validation of the property transfer as his choice.
In context of a minor, the period of election shall be stalled till the individual attains majority unless he is represented by a guardian.
In simple words, a person utilizing the benefits of an instrument also has to carry the burden attached. This doctrine is founded upon a model wherein 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.
This doctrine is universal and is applicable to Hindus, Muslims as well as Christians.
So, this doctrine contains the principle that the exercise of a choice by a person left to himself of his own free will to do one thing or another binds him to the choice which he has voluntarily made, and is founded on the equitable doctrine that he who accepts benefit under an instrument or transaction of his choice must adopt the whole of it or renounce everything inconsistent with it. Thus, it is a general rule that a person cannot approbate and reprobate. Also, the election is confined to the case of a gift or Will and does not apply in case of a legal remedy.
Conditions precedent for equity of election:
Dhanpatti v. Devi Prasad 1970 (3) SCC 776 (778)
- A transfer of property by a person who has no right to transfer;
- As a part of the same transaction, he must confer some benefit on the owner of the property and
- Such owner must elect either to confirm such transfer or to dissent from it.
Election over a property is not asked to made by a person unless he holds a proprietary interest which are disposed off in derogation of the person’s rights.
So, election cannot take place if the property that is decided by the transferor to be disposed does not happen to be owned by any individual to whom an interest is being provided through the transfer. Also, it cannot take place if the transferor does not provide any benefit on the individual who is the original owner of the property.
“As part of the same transaction”
One cardinal condition for the doctrine of election to be executed is that the benefit conferred upon the original owner should be as part of the same contract by which he transfers the property over which he holds no right to transfer.
In the landmark case of Ramayyar v. Mahalaxmi [AIR 1922 Mad 357 (358) : 64 IC 481], a widow had given a gift in excess of her powers and had then provided a will which stated that “ excluding the properties which I have already given away, I will make the following dispositions”. The Court ordered that the plaintiff under the will was not excluded from the election doctrine from contesting the previous gift which wasn’t the issue of the will at all.
It is to be noted that different nature of two properties is not a bar to election by the owner like in the case of Ammalu v. Ponnammal [AIR 1922 Mad 357 (358) : 64 IC 481] where a person who was managing the properties of the daughter of his deceased brother, died leaving a will bequeathing a portion of it to B. It was held that the doctrine of election did apply for the niece.
In order to create a situation of election, it is important that the intention of the testator should be clear with regard to disposing of the property which he does not own.
Parol evidence is not acceptable and thus the intention must be prima facie clear.
The benefit that the original owner is conferred with has to be direct in nature and if indirect, he does not need to elect. This principle is explained in Section 184 of Indian Succession Act, 1925 and states that “when the devisee who claims derivatively through another does not take under the deed, and is not bound by the equity attaching thereto.”
Difference in Capacity
An individual can in one capacity utilize a benefit while can dissent or reject that benefit in another capacity [Grissel v. Swinoe (1869) 7 Eq. 291 = 17 W.R. 438]. It means to explain that it is possible to facilitate two roles of an individual wherein he can for example, accept legacy for an estate while in his personal competence, he could retain the property.
Modes of Election
The election by the owner can either be direct or indirect. In direct election, it is simply through communication about the elected choice or option. Though, in case of an indirect election, “the acceptance of the benefit by the original owner is subject to two conditions:
- He has to be aware of his duty to elect, and
- There must be proof of knowledge of circumstances which would influence the judgment of a reasonable man in making an election :
Enjoyment for two years of the benefit by the person on whom it is conferred with any dissent.[Spread v. Webster, (1974) 2 Ves. 367 ; 30 ER 676]”
The election shall be presumed when the donee acts in such a manner with the property gifted to him that it becomes impossible to return it to the original owner in its original state.
Difference between English Law and the Indian Law Perspective
The English law depends upon the principle of compensation which means that if the original owner does not choose to validate the transfer, he can keep the property and also the benefit accrued, subject to compensation provided to the donee, to the extent of the property he had suffered a loss for.
But in the Indian law context, this doctrine is influenced by the principle of forfeiture which states that if the original owner does not choose to validate the transfer, the donee incurs a forfeiture of the conferred benefit which goes back to the transferor.
Estimated cost of the property which is attempted to be transferred towards the transferee is the approximation of the compensation that he shall receive. However, in context of immovable properties, there arises the issue of changing value of the property according to the lapse of time. Thus, this valuation is to take place at the date of the instrument becoming operational rather than at the time of election.
Section 35 of the Transfer of Property Ac, 1882 explains the concept of the Doctrine of Election. This project tries to deal with the various nuances involved in the doctrine through the usage of various landmark judgments. Herein, special emphasis has been placed upon providing a clear understanding of the conditions necessary for the election by the original owner to take place. The differences between the Indian Law perspective as well as the English Law perspective is brought out through critical analysis of the provisions i.e. Principle of forfeiture and Principle of compensation. Various aspects such as Proprietary Interest, Compensation estimated, indirect benefit, the intention of the donor etc have been dealt and explained for the enhanced understanding over the model of Doctrine of Election.