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6th
NOV
Know about leases of immovable property – Duration of certain leases in absence of written contract or local usage….
Posted by Rekha Prasad under Transfer of Property Act
CHAPTER V OF LEASES OF IMMOVEABLE PROPERTY 105. Lease defined. A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. Lessor, lessee, premium and rent defined.-The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent. 106. Duration of certain leases in absence of written contract or local usage. In the absence of a contract or local law or usage to the contrary, a lease of immoveable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months’ notice expiring with the end of a year of the tenancy; and a lease of immoveable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice expiring with the end of a month of the tenancy.—————————————————————————————————————1. As to persons competent to contract, see ss. 11 and 12 of the Indian Contract Act, 1872 (9 of 1872).2. Subs. by Act 20 of 1929, s. 53, for “Chapter XXXI of the Code of Civil Procedure”.————————————————————————————————————— Every notice under this section must be in writing, signed by or on behalf of the person giving it, and 1*[either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party], or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property. Leases how made 107. A lease of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Where a lease of immoveable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee: Provided that the State Government may, 5*** from time to time, by notification in the Official Gazette, direct that leases of immoveable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession. 108. Rights and liabilities of lessor and lessee. In the absence of a contract or local usage to the contrary, the lessor and the lessee of immoveable property, as against one another, respectively, possess the rights and are subject to the liabilities mentioned in the rules next following, or such of them as are applicable to the property leased – (A) Rights and Liabilities of the Lessor (a) The lessor is bound to disclose to the lessee any material defect in the property, with reference to its intended use, of which the former is and the latter is not aware, and which the latter could not with ordinary care discover:—————————————————————————————————————1. Subs. by Act 20 of 1929, s. 54, for “tendered or delivered either personally to the party who is intended to be bound by it”.2. As to limitation to the territorial operation of s. 107, see s. 1, supra. S. 107 extends to every cantonment–see s. 287 of the Cantonments Act, 1924 (2 of 1924).3. Subs. by Act 6 of 1904, s. 5 for the original paragraph.4. Ins. by Act 20 of 1929, s. 55.5. The words “with the previous sanction of the G. G. in C.” omitted by the A. O. 1937.————————————————————————————————————— (b) the lessor is bound on the lessee’s request to put him in possession of the property: (c) the lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the lease and performs the contracts binding on the lessee, he may hold the property during the time limited by the lease without interruption. The benefit of such contract shall be annexed to and go with the lessee’s interest as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested. (B) Rights and Liabilities of the Lessee (d) If during the continuance of the lease any accession is made to the property, such accession (subject to the law relating to alluvion for the time being in force) shall be deemed to be comprised in the lease: (e) if by fire, tempest or flood, or violence of an army or of a mob, or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void: Provided that, if the injury be occasioned by the wrongful act or default of the lessee, he shall not be entitled to avail himself of the benefit of this provision: (f) if the lessor neglects to make, within a reasonable time after notice, any repairs which he is bound to make to the property, the lessee may make the same himself, and deduct the expense of such repairs with interest from the rent, or otherwise recover it from the lessor: (g) if the lessor neglects to make any payment which he is bound to make, and which, if not made by him, is recoverable from the lessee or against the property, the lessee may make such payment himself, and deduct it with interest from the rent, or otherwise recover it from the lessor: (h) the lessee may 1*[even after the determination of the lease] remove, at any time 2*[whilst he is in possession of the property leased but not afterwards] all things which he has attached to the earth: provided he leaves the property in the state in which he received it:—————————————————————————————————————1. Ins. by Act 20 of 1929, s. 56.2. Subs. by s. 56, ibid., for “during the continuance of the lease”.————————————————————————————————————— (i) when a lease of uncertain duration determines by any means except the fault of the lessee, he or his legal representative is entitled to all the crops planted or sown by the lessee and growing upon the property when the lease determines, and to free ingress and egress to gather and carry them: (j) the lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it. The lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease: nothing in this clause shall be deemed to authorize a tenant having an un-transferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee: (k) the lessee is bound to disclose to the lessor any fact as to the nature or extent of the interest which the lessee is about to take, of which the lessee is, and the lessor is not, aware, and which materially increases the value of such interest: (l) the lessee is bound to pay or tender, at the proper time and place, the premium or rent to the lessor or his agent in this behalf: (m) the lessee is bound to keep, and on the termination of the lease to restore, the property in as good condition as it was in at the time when he was put in possession, subject only to the changes caused by reasonable wear and tear or irresistible force, and to allow the lessor and his agents, at all reasonable times during the term, to enter upon the property and inspect the condition thereof and give or leave notice of any defect in such condition; and, when such defect has been caused by any act or default on the part of the lessee, his servants or agents, he is bound to make it good within three months after such notice has been given or left: (n) if the lessee becomes aware of any proceeding to recover the property or any part thereof, or of any encroachment made upon, or any interference with, the lessor’s rights concerning such property, he is bound to give, with reasonable diligence, notice thereof to the lessor: (o) the lessee may use the property and its products (if any) as a person of ordinary prudence would use them if they were his own; but he must not use, or permit another to use, the property for a purpose other than that for which it was leased, or fell 1*[or sell] timber, pull down or damage buildings 1*[belonging to the lessor, or] work mines or quarries not open when the lease was granted, or commit any other act which is destructive or permanently injurious thereto: (p) he must not, without the lessor’s consent, erect on the property any permanent structure, except for agricultural purposes: (q) on the determination of the lease, the lessee is bound to put the lessor into possession of the property. Rights of lessor’s transferee 109. If the lessor transfers the property leased, or any part thereof, or any part of his interest therein, the transferee, in the absence of a contract to the contrary, shall possess all the rights, and, if the lessee so elects, be subject to all the liabilities of the lessor as to the property or part transferred so long as he is the owner of it; but the lessor shall not, by reason only of such transfer, cease to be subject to any of the liabilities imposed upon him by the lease, unless the lessee elects to treat the transferee as the person liable to him: Provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if the lessee, not having reason to believe that such transfer has been made, pays rent to the lessor, the lessee shall not be liable to pay such rent over again to the transferee. The lessor, the transferee and the lessee may determine what proportion of the premium or rent reserved by the lease is payable in respect of the part so transferred, and, in case they disagree, such determination may be made by any Court having jurisdiction to entertain a suit for the possession of the property leased. 109. Exclusion of day on which term commences. Where the time limited by a lease of immoveable property is expressed as commencing from a particular day, in computing that time such day shall be excluded. Where no day of commencement is named, the time so limited begins from the making of the lease. Duration of lease for a year.- Where the time so limited is a year or a number of years, in the absence of an express agreement to the contrary, the lease shall last during the whole anniversary of the day from which such time commences. —————————————————————————————————————1. Ins. by Act 20 of 1929, s. 56.————————————————————————————————————— Option to determine lease. Where the time so limited is expressed to be terminable before its expiration, and the lease omits to mention at whose option it is so terminable, the lessee, and not the lessor, shall have such option. Determination of lease 111. A lease of immoveable property determines – (a) by efflux of the time limited thereby: (b) where such time is limited conditionally on the happening of some event–by the happening of such event: (c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event–by the happening of such event: (d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right: (e) by express surrender; that is to say, in case the lessee yields up his interest under the lease to the lessor, mutual agreement between them: (f) by implied surrender: (g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter 1***; or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; 2*[or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event]; and in 3*[any of these cases] the lessor or his transferee 4*[gives notice in writing to the lessee of] his intention to determine the lease: (h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, given by one party to the other. Illustration to clause (f) A lessee accepts from his lessor a new lease of the property leased, to take effect during the continuance of the existing lease. This is an implied surrender of the former lease, and such lease determines thereupon.—————————————————————————————————————1. The words ”or the lease shall become void” omitted by Act 20 of 1929, s. 57.2. Ins. by s. 57, ibid.3. Subs. by s. 57, ibid., for “either case”.4. Subs. by s. 57, ibid., for “does some act showing”.————————————————————————————————————— 112. Waiver of forfeiture. A forfeiture under section 111, clause (g), is waived by acceptance of rent which has become due since the forfeiture, or by distress for such rent, or by any other act on the part of the lessor showing an intention to treat the lease as subsisting: Provided that the lessor is aware that the forfeiture has been incurred: Provided also that, where rent is accepted after the institution of a suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver. 113.Waiver of notice to quit A notice given under section 111, clause (h), is waived, with the express or implied consent of the person to whom it is given, by any act on the part of the person giving it showing an intention to treat the lease as subsisting. Illustrations (a) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice expires. B tenders, and A accepts, rent which has become due in respect of the property since the expiration of the notice. The notice is waived. (b) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice expires, and B remains in possession. A gives to B as lessee a second notice to quit. The first notice is waived. 114. Relief against forfeiture for non-payment of rent. Where a lease of immoveable property has determined by forfeiture for non- payment of rent, and the lessor sues to eject the lessee, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment, pass an order relieving the lessee against the forfeiture; and thereupon the lessee shall hold the property leased as if the forfeiture had not occurred. 114A. Relief against forfeiture in certain other cases. Where a lease of immoveable property has determined by forfeiture for a breach of an express condition which provides that on breach thereof the lessor may re-enter, no suit for ejectment shall lie unless and until the lessor has served on the lessee a notice in writing – (a) specifying the particular breach complained of; and (b) if the breach is capable of remedy, requiring the lessee to remedy the breach;—————————————————————————————————————1. Ins. by Act 20 of 1929, s. 58.————————————————————————————————————— and the lessee fails, within a reasonable time from the date of the service of the notice, to remedy the breach, if it is capable of remedy. Nothing in this section shall apply to an express condition against the assigning, under-letting, parting with the possession, or disposing, of the property leased, or to an express condition relating to forfeiture in case of non-payment of rent. Effect of surrender and forfeiture on under-leases 115. The surrender, express or implied, of a lease of immoveable property does not prejudice an under-lease of the property or any part thereof previously granted by the lessee, on terms and conditions substantially the same (except as regards the amount of rent) as those of the original lease; but, unless the surrender is made for the purpose of obtaining a new lease, the rent payable by, and the contracts binding on, the under-lessee shall be respectively payable to and enforceable by the lessor. The forfeiture of such a lease annuls all such under-leases, except where such forfeiture has been procured by the lessor in fraud of the under-lessees, or relief against the forfeiture is granted under section 114. 115. Effect of holding over. If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106. Illustrations (a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs. 100. The five years expire, but C continues in possession of the house and pays the rent to A. C’s lease is renewed from month to month. (b) A lets a farm to B for the life of C. C dies, but B continues in possession with A’s assent. B’s lease is renewed from year to year. 116. Exemption of leases for agricultural purposes. None of the provisions of this Chapter apply to leases for agricultural purposes, except in so far as the State Government 1*** may by notification published in the Official Gazette declare all or any of such provisions to be so applicable 2*[in the case of all or any of such leases], together with, or subject to, those of the local law, if any, for the time being in force.—————————————————————————————————————1. The words “with the previous sanction of the G. G. in C.” omitted by Act 38 of 1920, s. 2 and Sch. I.2. Ins. by Act 6 of 1904, s. 6.————————————————————————————————————— Such notification shall not take effect until the expiry of six months from the date of its publication.
6th
Chapter II- Transfer of property whether moveable or immoveable
Posted by Rekha Prasad under Transfer of Property Act
CHAPTER II
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
(A) Transfer of Property, whether moveable or immoveable
5. “Transfer of property” defined.
In the following sections “transfer of property” means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, 4*[or to himself] and one or more other living persons; and “to transfer property” is to perform such act.
4*[In this section "living person" includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.
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1. Added by Act 3 of 1885, s. 3.
2. Subs. by Act 20 of 1929, s. 5, for "1877".
3. Nothing in Chapter II is to be deemed to affect any rule of Muhammadan Law--see section 2, supra.
4. Ins. by Act 20 of 1929, s. 6.
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What may be transferred
6. Property of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force.
(a) The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred.
(b) A mere right of re-entry for breach of a condition subsequent cannot be transferred to any one except the owner of the property affected thereby.
(c) An easement cannot be transferred apart from the dominant heritage.
(d) An interest in property restricted in its enjoyment to the owner personally cannot be transferred by him.
(dd) A right to future maintenance, in whatsoever manner arising, secured or determined, cannot be transferred.]
(e) A mere right to sue 2*** cannot be transferred.
(f) A public office cannot be transferred, nor can the salary of a public officer, whether before or after it has become payable.
(g) Stipends allowed to military 3*[,naval], 4*[air-force] and civil pensioners of 5*[Government] and political pensions cannot be transferred.
(h) No transfer can be made (1) in so far as it is opposed to the nature of the interest affected thereby, or (2) 6*[for an unlawful object or consideration within the meaning of section 23 of the Indian Contract Act, 1872 (9 of 1872),] or (3) to a person legally disqualified to be transferee.
Click to continue reading “Chapter II- Transfer of property whether moveable or immoveable”
6th
Chapter III of sales of immoveable property know rights a liabilities of buyer a seller
Posted by Rekha Prasad under Transfer of Property Act
CHAPTER III
OF SALES OF IMMOVEABLE PROPERTY
54. “Sale” defined.
Sale how made.-”Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Sale how made.-1*Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
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1. Ins. by Act 20 of 1929, s. 16.
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1*In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
Contract for sale.-A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property.
Rights and liabilities of buyer and seller
55. In the absence of a contract to the contrary, the buyer and the seller of immoveable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following, or such of them as are applicable to the property sold:
(1) The seller is bound –
(a) to disclose to the buyer any material defect in the property 2*[or in the seller's title thereto] of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover;
(b) to produce to the buyer on his request for examination all documents of title relating to the property which are in the seller’s possession or power;
(c) to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto;
(d) on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place;
(e) between the date of the contract of sale and the delivery of the property, to take as much care of the property and all documents of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents;
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1. As to limitation to the territorial operation of paragraphs 2 and 3 of s. 54, see s. 1, supra. These paragraphs extend to every cantonment see s. 287 of the Cantonments Act, 1924 (2 of 1924).
2. Ins. by Act 20 of 1929, s. 17.
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(f) to give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits;
(g) to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all in cumbrances on such property due on such date, and, except where the property is sold subject to in cumbrances, to discharge all in cumbrances on the property then existing.
(2) The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same:
Provided that, where the sale is made by a person in a fiduciary character, he shall be deemed to contract with the buyer that the seller has done no act whereby the property is incumbered or whereby he is hindered from transferring it.
The benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the interest of the transferee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.
(3) Where the whole of the purchase-money has been paid to the seller, he is also bound to deliver to the buyer all documents of title relating to the property which are in the seller’s possession or power:
Provided that, (a) where the seller retains any part of the property comprised in such documents, he is entitled to retain them all, and, (b) where the whole of such property is sold to different buyers, the buyer of the lot of greatest value is entitled to such documents. But in case (a) the seller, and in case (b) the buyer, of the lot of greatest value, is bound, upon every reasonable request by the buyer, or by any of the other buyers, as the case may be, and at the cost of the person making the request, to produce the said documents and furnish such true copies thereof or extracts there from as he may require; and in the meantime, the seller, or the buyer of the lot of greatest value, as the case may be, shall keep the said documents safe, uncancelled and undefaced, unless prevented from so doing by fire or other inevitable accident.
(4) The seller is entitled –
(a) to the rents and profits of the property till the ownership thereof passes to the buyer;
(b) where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, to a charge upon the property in the hands of the buyer, 1*[any transferee without consideration or any transferee with notice of the non-payment], for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part 1*[from the date on which possession has been delivered].
(5) The buyer is bound –
(a) to disclose to the seller any fact as to the nature or extent of the seller’s interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest;
(b) to pay or tender, at the time and place of completing the sale, the purchase-money to the seller or such person as he directs: provided that, where the property is sold free from incumbrances, the buyer may retain out of the purchase-money the amount of any incumbrances on the property existing at the date of the sale, and shall pay the amount so retained to the persons entitled thereto;
(c) where the ownership of the property has passed to the buyer, to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller;
(d) where the ownership of the property has passed to the buyer, as between himself and the seller, to pay all public charges and rent which may become payable in respect of the property, the principal moneys due on any incumbrances subject to which the property is sold, the interest thereon afterwards accruing due.
(6) The buyer is entitled –
(a) Where the ownership of the property has passed to him, to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof;
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1. Ins. by Act 20 of 1929, s. 17.
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(b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, 1*** to the extent of the seller’s interest in the property, the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission.
An omission to make such disclosures as are mentioned in this section, paragraph (1), clause (a), and paragraph (5), clause (a), is fraudulent.
56. Marshalling by subsequent purchaser.
If the owner of two or more properties mortgages them to one person and then sells one or more of the properties to another person, the buyer is, in the absence of a contract to the contrary, entitled to have the mortgage-debt satisfied out of the property or properties not sold to him, so far as the same will extend, but not so as to prejudice the rights of the mortgagee or persons claiming under him or of any other person who has for consideration acquired an interest in any of the properties.]
Discharge of In cumbrances on Sale
57. Provision by Court for incumbrances and sale freed therefrom.
(a) Where immoveable property subject to any incumbrance, whether immediately payable or not, is sold by the Court or in execution of a decree, or out of Court, the Court may, if it thinks fit, on the application of any party to the sale, direct or allow payment into Court –
(1) in case of an annual or monthly sum charged on the property, or of a capital sum charged on a determinable interest in the property–of such amount as, when invested in securities of the Central Government, the Court considers will be sufficient, by means of the interest thereof, to keep down or otherwise provide for that charge, and
(2) in any other case of a capital sum charged on the property–of the  amount sufficient to meet the incumbrance and any interest due thereon.
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1. The words “with notice of the payment” omitted by Act 20 of 1929, s. 17.
2. Subs. by s. 18, ibid., for the original section.
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But in either case there shall also be paid into Court such additional amount as the Court considers will be sufficient to meet the contingency of further costs, expenses and interest, and any other contingency, except depreciation of investments, not exceeding one-tenth part of the original amount to be paid in, unless the Court for special reasons (which it shall record) thinks fit to require a large additional amount.
(b) Thereupon the Court may, if it thinks fit, and after notice to the incumbrancer, unless the Court, for reasons to be recorded in writing, thinks fit to dispense with such notice, declare the property to be freed from the incumbrance, and make any order for conveyance, or vesting order, proper for giving effect to the sale, and give directions for the retention and investment of the money in Court.
(c) After notice served on the persons interested in or entitled to the money or fund in Court, the Court may direct payment or transfer thereof to the persons entitled to receive or give a discharge for the same, and generally may give directions respecting the application or distribution of the capital or income thereof.
(d) An appeal shall lie from any declaration, order or direction under this section as if the same were a decree.
(e) In this section “Court” means (1) a High Court in the exercise of its ordinary or extraordinary original civil jurisdiction, (2) the Court of a District Judge within the local limits of whose jurisdiction the property or any part thereof is situate, (3) any other Court which the State Government may, from time to time, by notification in the Official Gazette, declare to be competent to exercise the jurisdiction conferred by this section.
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