Section 25: Conditional Transfer under the Transfer of Property Act
Section 25 of the Transfer of Property Act, 1882 specifies when a transfer that depends on a condition fails because the condition is legally unacceptable or impossible. It applies to the creation of an interest that is dependent on fulfilment of a condition; not every condition in every instrument has the same legal effect.
Complete text of Section 25 - Conditional transfer
25. Conditional transfer. An interest created on a transfer of property and dependent upon a condition fails if the fulfillment of the condition is impossible, or is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of any law, or is fraudulent, or involves or implies injury to the person or property of another, or the Court regards it as immoral or opposed to public policy.
Illustrations
(a) A lets a farm to B on condition that he shall walk a hundred miles in an hour. The lease is void.
(b) A gives Rs. 500 to B on condition that he shall marry A's daughter C. At the date of the transfer, C was dead. The transfer is void.
(c) A transfers Rs. 500 to B on condition that she shall murder C. The transfer is void.
(d) A transfers Rs. 500 to his niece C if she will desert her husband. The transfer is void.
Meaning of conditional transfer
A conditional transfer is one in which the creation or operation of a property interest depends upon a stipulated condition. Section 25 identifies conditions that cannot support the dependent interest. Where the condition falls within the prohibited categories, the interest dependent on it fails. The precise operation of the transfer also depends on whether the condition is precedent or subsequent and on the other applicable provisions of the Act.
Conditions that invalidate the dependent interest
- Impossible to fulfil: The condition cannot in fact be performed, as where the stipulated act is physically impossible or depends on a person who was already dead.
- Forbidden by law: Compliance would require an unlawful act.
- Defeats a law: The condition, if allowed, would undermine or evade the provisions of an applicable law.
- Fraudulent: The condition is directed towards fraud.
- Injury to person or property: Fulfilment involves or implies harm to another person or that person's property.
- Immoral or opposed to public policy: The court regards the condition as immoral or contrary to public policy.
Explanation of the statutory illustrations
(a) Physically impossible condition
A farm is let on condition that the tenant walks one hundred miles within one hour. Because this is an impossible requirement, the illustration declares the lease void.
(b) Condition impossible when the transfer is made
A gift depends on the beneficiary marrying the transferor's daughter, who was already dead when the transfer occurred. The condition cannot be fulfilled and the illustration declares the transfer void.
(c) Condition requiring a crime
A monetary transfer conditioned on the beneficiary murdering another person fails because the condition requires an unlawful and injurious act.
(d) Immoral condition
A transfer dependent on a niece deserting her husband is declared void by the statutory illustration. The example shows how an impermissible condition can defeat the dependent interest.
Condition precedent and condition subsequent
A condition precedent must be fulfilled before the relevant interest takes effect. Section 26 deals with fulfilment of a condition precedent. A condition subsequent concerns a condition affecting an existing interest, including a later disposition; see Section 29 and Section 31. Section 32 further requires that the relevant condition must not be invalid.
Section 25 should also be read with Section 21 (contingent interest), Section 23 (specified uncertain event) and Section 27 (alternative disposition on failure).
Frequently asked questions
Is every conditional transfer void?
No. Section 25 concerns interests dependent on a condition that is impossible, unlawful, fraudulent, injurious, immoral, contrary to public policy, or intended to defeat the law. Valid conditions may be legally effective, subject to other provisions.
What if a condition cannot be fulfilled?
Where the creation of the interest depends on an impossible condition, Section 25 provides that the interest fails.
Does Section 25 govern conditions imposed after an interest has vested?
Other provisions, including Sections 29 to 32, may be relevant to conditions subsequent and the validity of later dispositions. The full instrument must be considered.
Official legal source
Consult the Government of India's India Code portal for the Transfer of Property Act, 1882, including its current text and applicable amendments. State amendments and other applicable laws may also affect particular transactions.
This article explains the statutory rule generally and does not determine the validity of any individual transfer.