Section 35 incorporates the doctrine of election. Election means choosing between two inconsistent or alternative rights. Under any instrument if two rights are conferred on a person in such a manner that one right is in lieu of the other, he is bound to elect (choose) only one of them. A person cannot take under and against the same instrument.
Thus, where some money is gifted to A and in lieu of it A is required to transfer his house to B, then A would not be allowed to retain his house and also take the gift. He cannot enjoy both. A will have to choose :
- Either taking of the gift in which case he must transfer his house to B or
- Retain his house in which case he must relinquish the benefit of gift.
In the language of law, A shall be put to election. The doctrine of election is based on equitable principle under which a person may not be allowed to approve that part of an instrument which is beneficial to him and disapprove it’s that part which goes against him.
No one can approbate and reprobate at the same time. In other words, where a person takes some benefit under a deed or instrument, he must also bear its burden.
The doctrine of election which is based on equity is applied to every species of instrument whether deed or will and to every kind of property movable or immovable? The equitable principle of election has aptly been stated thus:
“ Election is the obligation imposed upon a party by courts of equity. to choose between two inconsistent or alternative rights or claims in case where there is clear intention …that he should not enjoy both. That he who accepts a benefit under a deed or will must adopt the whole contents of the instrument. ”
Section 35 of the Act makes the following provisions in respect of the rule of election:
- Where a person professes to transfer a property not his own, and,
- In lieu of this transfers the transferor confers certain benefits upon the owner of the property and,
- The two things, i.e., transfer of property and conferring of the benefit forms part of the same instrument.
Then, the owner of property is bound to elect (choose either to take the benefit and transfer his property or to retain his property and give up the benefit.
- Transferor Professes to Transfer Property Not His Own.- Section 35 applies where a person professes to transfer the property of another person. ‘Profess’ means purporting or making contracts. Since such a person is not the owner, he cannot transfer that property. But, he can contract or make arrangements for a transfer of that property. He can contract or make arrangements for transfer of a property which he does not own.
For instance, A may profess to transfer a property to B which is owned by C and also confer on C a benefit of Rs. 1000/-. in this contract A is not transferring C’s property, he is simply professing (contracting) to transfer a property which he does not own.
Knowledge of the fact that the transferor has no authority to transfer the property is immaterial for applicability of the rule of election.
- Benefit Conferred on the Owner of Property. – The transferor must confer any benefit on the owner of property. The word ‘owner’ in this section has a very wide meaning. It includes a person having vested interest as well as contingent interest and also a person who has even reversionary or remote interest in the property as held in the case of Dhanpatti vs Devi Prasad 1970. It is the owner of property who is put to election.Therefore, he must be given some ‘benefit’ in compensation for his ‘ownership’ of the property.
To attract the application of this rule there must be two sets of rights :
- The right of ownership;
- Benefit given under the instrument.
For the case of election, it is necessary that benefit should be direct if it is indirect than no case of election.
For instance, A professed to transfer C property to B and give rupees 5000 to wife of C. This is not a direct benefit to C and therefore C has no duty to elect. In the case of Vallimai vs Nagappa the Supreme Court held that the Coparcener could not be said to have derived any benefit under the will and was not put to election.
- Part of the Same Transaction : The rule of election operates only when the ‘transfer’ and ‘benefit’ form part of the same transaction. By same transaction is meant that the transfer of property is to be made evidently only in lieu of the benefit. Thus where the ‘benefit’ and ‘transfer’ are interdependent and inseparable, they form part of the same transaction. There is no election if the two are independent transactions. However, it is not necessary that these two transactions are provided on one instrument. It is possible that two separate instruments may be executed to carry out one and the same transaction.
In the case of Muhammad Afjal vs Gulam Kasim , after the death of nawab of tank , the government while transferring chiefship to Nawab’s eldest son , transferred some cash allowance to Nawab’s second son for his maintenance. The privy council held that since the two grants (by government and villages by nawab itself) came to the second son from two different sources, they were not part of the same transaction. The second son was not put to election.
- Owner’s Duty to Elect-The operative part of Section 35 is that if a property is professed to be transferred and in the same transaction some benefit is given to the owner of property then such owner is under a duty to elect. By his election he may either accept the instrument with its all contents or reject it altogether. He has no option to accept only the beneficial part of the instrument.
Where he elects to accept the instrument, he is entitled to get the benefit; but he is bound to transfer his property. If he elects to reject the instrument, he cannot claim benefit; but he may retain his property.
However, the duty to elect arises only when the person acts in one and the same capacity. That is to say, he is a person who gets benefits and also owns the property. No question of election can arise where a person has two different capacities but under the circumstances, they are merged for one person. Where a person has to act in two different capacities e.g. one as individual (owner) and the other vicariously e.g. as guardian or trustee, he may accept the benefit in one capacity and reject the other part of the instrument in another capacity.
- Mode of Election: Election may be expressed or implied. It is a question of intention of the owner of property who is given the benefit. He may express his intention in clear and specific words. Where election is expressed, it is final and conclusive. The intention of the owner may also be inferred from his acts or conduct. This is an implied election.
- Implied Election: Election is implied when the owner of property (donee) is
- aware of his duty to elect and;
- having full knowledge of the circumstances, accepts the benefit.
Such an election would mean that he has chosen in favour of the transaction. In other words, where the owner knowingly accepts the benefit, it amounts to his election in favour of the transaction. In the following circumstances, there is presumption that he has knowingly accepted the benefit:
- Where the owner has enjoyed the benefit for two years without doing any act of refusal or dissent if the transaction
- Where the owner of property exhausts or consumes the benefit. Thus, whether he has done some act which renders it impossible to place the parties (interested in the property) in the same condition as before, this too gives presumption of his election for accepting the benefit’.
For instance, A transfer 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 presumed to have elected to take the benefit and thereby transfer his property to B. This is so, because if C now dissents the transaction, it would not be possible for him to place the parties (A and C) in the position prior to his exhausting the said coal-mine.
- Requisition to Elect : This is a special procedure for expediting elections. After the expiry of one year, if the owner of 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, within a reasonable time after such requisition, he is deemed to have been elected in favour of the transfer.
- Suspension of Election : Where at the time of transfer, the elector (i.e. owner of 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 e.g. his guardian. Legal disability may be a minority or lunacy of the elector. Thus, his duty to elect is suspended during his minority or lunacy unless the election is made by his legal guardian.
- Election against transfer: The owner of property whose duty is to make election has freedom to elect either for the transfer or against it.Where he elects against it i.e. dissents from the professed transfer, he forfeits his claim to the ‘benefit’ conferred on him. The benefit so conferred reverts back to the transferor or his representative. However, he can claim any other benefit which is given to him independently of the transfer under the same instrument. For example, where a person is given two benefits X and Y under an instrument but only X has been given in lieu of property then, if he elects against the transfer, he forfeits only benefit X. But he is entitled to claim benefit Y.
Rights of A Disappointed Transferee :
When the owner of property elects against the transfer, the transferee to whom the property was professed to be transferred, cannot get the property. He becomes disappointed as he must have entertained some hope of getting the property. However, such a disappointed transferee is not allowed to be a helpless person. He has the following rights:
- Where the transfer is gratuitous i.e. without consideration and the transfer or dies or becomes incapable of making fresh transfer and,
- Where transfer is with consideration, whether he is alive or dead at the time of election, the transferee is entitled to get a reasonable compensation from the transferor or his representative. “Reasonable compensation” means compensation equal to the value of property professed to be transferred.
For instance, The farm of Sultanpur is the property of C and its market value is Rs. 800/-. A by an instrument, professes to transfer it to B, giving by the same instrument a benefit of Rs. 1000/- to C. C elects against the transfer and decides to retain his farm. C forfeits the benefit of Rs. 1000/- which reverts back to A or his representatives. Now, if A dies before C makes election, his representatives must compensate B (disappointed transferee) by giving B Rs. 800/- out of Rs. 1000/-.