Section 35 of Transfer of Property Act 1882: The Doctrine of Election Simplified

Frederick William Maitland, the father of English Legal History, has given the classical definition of Doctrine of Election as follows:

"He who accepts a benefit under a deed or will or other instrument must:

(a) adopt the whole content of the instrument

(b) conform to all its provisions

(c) renounce all rights that are inconsistent with it"

The Doctrine of Election has been laid down in Section 35 of the Transfer of Property Act 1882.

Key Ingredients of Section 35

1. A person should profess to transfer property not his own.
2. In lieu of this transfer, he confers certain benefits upon the owner of the property and
3. The two things i.e. the transfer of property and conferring of the benefit form part of the same instrument.
4. In such a scenario, the owner of the property is bound to elect either to take the benefit and transfer his property or to retain his property and to give up the benefit.

4 Rules of Section 35

1. Where the owner retains the property and gives up the benefit, the disappointed transferee has been conferred by law the following rights:

(i) where the transfer is gratuitous i.e. without consideration and the transferor dies or becomes incapable of making a fresh transfer, and

(ii) where the transfer is for consideration, whether he is alive or dead at the time of election

The transferee is entitled to get compensation equal to the amount or value off the property professed to be transferred.

2. Belief of the transferor is immaterial. If the transferor in fact confers a property of someone else, it is immaterial whether he does or does not believe such property to his own. 

3. A person taking no benefit directly under a transaction, but deriving a benefit under it indirectly, need not elect.

4. A person who in his one capacity takes a benefit under the transaction may in another capacity dissent therefrom.

Illustration 

The farm of Sultanpur is the property of C and worth Rs. 800. A, by an instrument of gift professes to transfer it to B, giving by the same instrument Rs. 1,000/- to C. C elects to retain the farm. He forfeits the gift of Rs. 1,000/-.

In the same case, A dies before the election. His representative must, out of the Rs. 1,000/- pay Rs. 800/- to B.

Principles emerging out of Section 35

1. You cannot approbate and reprobate at the same time (Allegans contraria non-est audiendus).

2. Equity

(i) In the context of the election, the disappointed transferee will have to be taken due care of.

(ii) The owner to whom the benefit has been conferred by the transferor, should not approbate and reprobate at the same time.

Exception to the 4 Rules

• Where a particular benefit is expressed to be conferred on the owner of the property which the tranferor professes to transfer, and
• such benefit is expressed to be in lieu of that property and
• if such owner claims the property,

he must relinquish the particular benefit, but he is not bound to relinquish any other benefit conferred upon him by the same transaction.

For example, Mr. B is the owner of the property worth Rs. 5 crore in Vasant Kunj, Delhi. Mr. A professes to transfer the property to Mr. C and in lieu of the property, confers a benefit of Rs. 6 crore on Mr. B. He also transfers 500 shares of Tata Consultancy Services worth Rs. 1,00,000/- to Mr. B by the same transaction. These 500 shares are not in lieu of the property. These shares are ancillary measures to ensure that the owner concerned accepts the benefit in lieu of the property. Mr. B is not bound to relinquish them.

What amounts to an election?

Implied Election - Election is implied when the owner of the property:

(a) being aware of his duty to elect;

(b) having full knowledge of the circumstances,

accepts the benefit. Such election would mean that he has chosen in favor of the transaction.

Presumption of Election - In the following circumstances, there is presumption of election:

(i) where the owner has enjoyed the benefit for two years without doing any act of refusal or dissent of the transaction; it is presumed that he has waived from enquiry.

(ii) where the owner of the property exhausts or consumes the benefit which renders it impossible to place the parties in the same position as before.

Illustration

A transfers to B an estate owned by C and as part of the same transaction gives to C a coal mine. C does not elect in express words, but takes possession of the coal mine and exhausts it. C is resumed to have elected to take benefit and thereby transfer his property to B.

Requisition to Elect - There is a special procedure for expediting election. After the expiry of one year, if the owner of the property does not elect i.e. neither confirms nor dissents from the transfer, the transferee may require him to make such election. And, if he does not elect it within a reasonable time after such requisition, he is deemed to have elected in favour of the transfer.

Suspension of Election - Where, at the time of transfer, the elector (owner of the property) is legally disabled, the election is postponed until such disability ceases or until the election is made on his behalf by a competent authority such as his guardian. Legal disability may be minority or lunacy of the elector. Then, his duty to elect is suspended during his minority or lunacy unless the election is made by his legal guardian.

Conclusion

In Cooper v. Cooper (1874) Lord Hather explained the principle underlying the doctrine of election as follows:

1. A person who takes benefit under a will or instrument has an obligation to give full effect to the instrument.

2. If it is found that the instrument deals with property which was beyond the power of donor to dispose, but which can be given effect to by the concurrence of the owner of the property, who accepts the benefit under the instrument, the law will impose the obligation on such owner to give full effect to the instrument.