ABSTRACT:

This article deals with the concept of the rule of election enshrined in Section 35 of the Transfer of Property Act, 1882 and explains the various shades that are involved in the principle by using different landmark judgments. The conditions which are essential for the election by the original owner to take place has been given special emphasis for providing better understanding provided with the difference in the viewpoint of English Law and that of the Indian Law through analysing the provisions such as principle of compensation and the principle of forfeiture.

INTRODUCTION:

The Section 35 of the Transfer of Property Act, 1882 talks about the Rule of Election along the side of Section 180-190 of the Indian Succession Act 1925. It is applicable to both immovable as well as movable property. Election in precise terms can be written as “choosing between two rights when there is clear intention, expressed or implied, that both are not to be enjoyed.” In layman’s terms, election means a choice between two consistent rights or alternative rights.

UNDERSTANDING THE PRINCIPLE:

The person has an option to choose but cannot have both. A person is granted two rights in such a way that one is higher than the other and can choose either of them. Section 35 which talks about the principle of election is also considered as an exception to the rule of nemo dat quod non habet given in the Sale of Goods Act, 1930 under Section 27 as well as Section 7 of Transfer of Property Act. A situation where a benefit has been rejected by the person on whom it is conferred, then the property is reverted back to the transferor that was once attempted to be transferred to a person and the transferor is the one who will compensate the disappointed transferee. But in case where the transferor dies, before the election is made by the transferee, then the legal heirs of the transferor have the liability to compensate the disappointed transferee out of the inherited assets. The principle of election was enunciated by the House of Lords in the landmark case Cooper v. Cooper^[1] and explained the principle underlying this doctrine in the following words-

“…. there is an obligation on him who takes a benefit under a will or other instrument to offer full effect thereto instrument under which he takes a benefit ; and if it’s found that instrument purports to affect something which it had been beyond the facility of the donor or settlor to eliminate , but to which effect are often given by the concurrence of him who receives a benefit under an equivalent instrument, the law will impose on him who takes the benefit the requirement of carrying the instrument into full and complete force and effect .”

It states that an obligation lies on that of a person who is taking the advantage under a will or a deed or other instrument, for giving full effect to that instrument under which he is taking a benefit. In case of a situation where something is transferred by the transferor which was beyond his power but to which effect could be given by the consent of the transferee, the law provides that the person who takes the benefit must also take the obligations thereof. The principle is personified under Section 35 of Transfer of Property Act. The transferee has to either accept the deed and the contents mentioned in the deed entirely or reject the deed completely. He cannot accept only the benefits and reject or ignore the part that imposes a liability on him.

In the case of Codrington v. Lindsay^[2], it was said that the doctrine of election is based on the principle of equity. It is enshrined under a legal maxim qui approbat non reprobate which means one cannot approbate and reprobate at the same moment. In simple terms, a person who takes the advantage or enjoys the benefits by virtue of a deed or that of an instrument should be the one who also bears the burden.

IMPORTANT CONDITIONS:

Two different properties of different nature will not be barred in any case to election by the owner.^[3] A Donor’s intention should be taken into account. The testator’s intention must be clear and bonafide with respect to the disposing of the property which is not owned by him.^[4] The intention has to be prima facie clear.^[5][6] The benefit that has been bestowed on the original owner should be direct in nature and he does not need to elect in case if it is indirect.^[7] This rule is also enshrined under 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.” There are two modes of election by the owner. It can either be direct or indirect. The communication done simply about the elected option or choice is known as direct election. However, in the event of an indirect election, “the acceptance of the benefit by the original owner is subject to two conditions:

1.     He has to be aware of his duty to elect, and

2.     There must be proof of knowledge of circumstances which would influence the judgment of a reasonable man in making an election:^[8]

Enjoyment for two years of the benefit by the person on whom it is conferred with any dissent.”^[9]

In case of compensation, the estimated value of an estate which was intended to be transferred to the transferee is the approximate amount of the compensation that he is going to receive. Though, changing value of the property could perhaps arise an issue according to the time frame or the effluxion of time. Thus, this valuation becomes final not at the time of election but instead at the date of the instrument becoming operational.

It is to be noted that there is a difference in the perspectives of English Law and that of Indian Law. The English Law follows the principle of compensation which applies in situations where the original owner does not wish to validate the transfer then in that case the property can be kept by him and also he can claim the benefits ensued from that property. During the time of election, the English law is not regulated. However, in context of Indian Law, it depends upon the principle of forfeiture that in simple terms means that if the validation of transfer is not opted by the original owner then the donee suffers a forfeiture of the conferred benefit which then goes back to the transferor.^[10] In the case of Rungamma v. Atchamma^[11], Hindu Law adapted the rule which stated that one cannot forgo or ignore the demerits and just accept the benefits of the transaction. It has to be accepted as a whole.

EXCEPTIONS:

A situation where the owner is taking the election into consideration has chosen to keep the property rather than accepting a particular advantage or benefit then he is not confined to any relinquishments of any extraneous benefit that is gained through the deal.^[12] If the original owner is conscious of the responsibilities and all the situations and set of conditions that could possibly affect a prudent person into making an election then it will be considered to be as an election made by the original owner to validate the transfer once the acceptance of the benefit is made by him.^[13] This knowledge of the circumstances can be presumed if the benefit is enjoyed for a period of more than two years by the person who earns it. If the option of transfer of property is not elected by the original owner within a year, the transferor would require him to elect his choice. If he still also does not elect even after giving a reasonable time, then the original owner will be assumed to have elected the validation of the property transfer as his choice.^[14] As far as the minor is concerned, the period of election will be suspended until the time the individual attains the age of majority or unless he is represented by a guardian.^[15]

CONCLUSION:

Section 35 of the Transfer of Property Act, 1882 deals with the principle of rule of election in which a person must choose between two alternatives but cannot have both as it would be against the principle of equity. The burden should also be on the recipient who is claiming the benefits arising out of the property. With property disputes being highly common, this doctrine has also been successful in resolving many poverty conflicts while transferring estate from one individual to another. The chances of disputes and conflicts reduces drastically when the benefits and losses are divided in appropriate manner and the rights and liabilities are distributed equally amongst the parties.

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