Doctrine Of Election: Elect Between Two Alternative And Conflicting Rights

Contents

• Key Takeaways
• Introduction
• Doctrine of Election
• When does Election arise
• Modes of Election
• Mohd. Kader Ali fakir V Lukman hakim

Key takeaways

• Doctrine of Election is about choosing or electing between two alternative or inconsistent rights.
• It is based on the Principle of Equity where the parties are to be equally distributed with rights and liabilities and one cannot claim both alternative rights.
• Doctrine of Election is enshrined in Section 35 of the Transfer of Property Act, 1882.
• Muhammad Kader Ali Fakir v Fakir Lukman Hakim [1956] PLR Dacca 370, the court held that if an instrument has an invalid part in it, the person has to elect within the valid parts of the instrument. One must bear the weight of the instrument too.

Introduction

Election means choosing between two given alternatives. One has to compulsorily elect one option and can’t have both. The recipient must choose between two alternative rights that are more favorable to him. The doctrine of election has been derived from the principles of equity which states that an individual cannot be benefitted from both sides. It would be against the principle if the individual claims both rights as the aim are to divide it between the parties in equal ratio. Section 35 of the Transfer of the Property Act, 1882 deals with the doctrine of election. Anyone taking a benefit or right from the instrument is to bear the liability too.

If a benefit is being conferred from an instrument, he must also bear the burden. One has to take both the right and liability, they cannot refrain to accept the benefit alone without the duties.

Doctrine of Election

Section 35 of the Transfer of Property Act deals with the doctrine of election [Election when necessary]. Elections mean choosing between two options of contradicting rights. The applicant has to choose either of the rights that are alternatives to each other. One has to take the reward and risk that comes along with the right. This was based on an equity principle that a person shall not retain all benefits of a transaction and still retain the property. One cannot withhold or retain all the advantages of the transaction and simultaneously continue to yield the benefits as well. They are either supposed to elect for or against specific rights in the instrument. An individual deriving benefit indirectly from the transaction need not elect. The Latin maxim that relates to the doctrine is “quod approbo non reprobo” which means “no one may praise and criticize at the same time”. For an election to uphold its validity, an individual must be fully apprised of the rights or interests at stake. It is also to be noted that only one election may be held at a time and he can’t switch over to another if the chosen option fails or is not beneficial for him.

Say, A promises to transfer a house worth 45lakh rupees to B that C is entitled to and gives C 50lakhs rupees in cash under the same transaction. Here C has to elect between his two given choices. If C opts or elects to retain the house then he forfeits the 50lakhs rupees and if he agrees to the transfer to B, he shall receive the aforementioned amount. C has to elect between the two alternatives. C must agree on the transfer to B to acquire the 50lakhs amount provided their terms and agreements are abided by and the transfer is complete with all vested rights. If A dies before an election is made by C, then his representative is to compensate B with the actual value of the property, 45lakhs rupees.

Section 35 of the Transfer of Property Act, 1882 reads as follows:

35. Election when necessary.—Where a person professes to transfer property which he has no right to transfer, and as part of the same transaction confers any benefit on the owner of the property, the such owner must elect either to confirm such transfer or to dissent from it; and in the latter case he shall relinquish the benefit so conferred, and the benefit so relinquished shall revert to the transferor or his representative as if it had not been disposed of, subject nevertheless, where the transfer is gratuitous, and the transferor has, before the election, died or otherwise become incapable of making a fresh transfer, and in all cases where the transfer is for consideration, to the charge of making good to the disappointed transferee the amount or value of the property attempted to be transferred to him.

The crux of the section is that when a party transfers a property to which he does not possess any right of transfer, the original owner of the property must elect to recognize the transfer involving transmission of property and advantage/benefit, in accepting or dissenting from it.

When does Election arise

There are certain pre-requisites for election:

• The transferor is not the owner of the property.
• The two transactions must be in the same transfer (transfer of ownership and benefits to be in the same transmission). The right to elect does not arise when the transfer is in two separate instruments.
• The transaction should be accepted wholly.
• One must elect to accept or refrain to accept the benefits. (If the offer is not accepted, then the benefits need to be returned.)
• The original owner of the property must get some benefit from the transferor.
• Direct benefit must be derived at the receiving end.
• The offer when not accepted shall revert to the transferor.

An election by a disabled person takes effect when the disability ceases to exist or when someone else makes an election on his behalf. When a minor is involved in the transaction, the election is postponed until he attains majority unless a guardian does it on his behalf.

There is an obligation for a person to choose and the knowledge of the circumstances will affect the decision one has to make. If the owner does not accept the transfer, then he should surrender the benefits conferred to him back to the transferor or his representative as if they had not been given to him ever. Upon rejection of the election, the transferor must compensate the disappointed donee. Other circumstances where the disappointed donee is eligible for compensation are when:

1. Transfer is gratuitous
2. The transferor dies before the transfer of the property
3. The transferor is unable to make a new transfer before the transfer of the property
4. Transfer of property was for a consideration
5. The first three instances mostly associate with will and the last is in the case of contract.

On the flip side, if the benefit has been enjoyed for more than 2 years and no evidence to contrary, it is assumed that the transfer has been accepted and no compensation can be claimed in lieu thereof. The compensation is usually paid the equivalent of the value of the property. The valuation takes place when the instrument comes into effect.

Acceptance or rejection can be inferred. The owner is to inform the transferor or his representative within one year from the date of transfer and upon lack of election, he is deemed to have elected to confirm.

Modes of Election

There are two types of election namely direct and indirect. In the case of direct election, individuals are elected based on their choice of alternatives. To constitute a direct election, one must be conscious and aware of his responsibility to elect, and the presence of evidence that the individual was aware of the conditions or circumstances that might affect his decision like a reasonable man.

In an indirect election, the election is deemed to have taken place from the conduct of the transferee. Election arises when the transferee avails direct benefit from a transaction. Acceptance of benefit under the transfer amounts to a confirmation of election to assent to the same, provided he is aware of his duty to elect or waives inquiry deprived of reasonable judgment. The waiver in absence of evidence to the contrary shall be presumed if the individual has been enjoying the benefit for at least 2 years. Two years post the receipt of the benefit if the receiver has not shown any sign of rejection, presumably, he has chosen to affirm it, being aware of the conditions that tag along with it. This is a presumption as to election.

Mohd. Kader Ali fakir V Lukman hakim

The doctrine was reinstated and established in this case. The basis of the doctrine of election or choice is to bear the benefits and burdens under the instrument. The fictional intent was that the law implies for the person manifests something from the instrument. An obligation rests on the person using a will or any instrument to make the instrument gain full effect that neither the donors nor the settlers can have. The issue was what effect can an agreement that involved receiving benefits over the same instrument have. It was held that the law shall apply to the applicant’s obligation to use the instrument with full effect. If it is partially invalid, the election shall be made for the remaining part.

In this case, the court held that those who are involved in the transfer of the instrument and use it must bear the weight. Both cannot be done at the same time nor can it be called a breach of universal norms. The creator of the instrument would strive the manifest the content in the instrument even though the law does not expressly state so. Thus anyone using a legal document has to ensure that it’s absolutely effective. The validity of voting remains intact even if only a part of the instrument is tainted with flaws.

The core of the judgment is that any person availing the benefit must carry the burden with it and must adhere to the said terms and conditions once the instrument is in effect. This doctrine of election presumes that there is an obligation on the person acquiring benefit from the instrument has a duty to work his side of promises to the instrument. If any part of the instrument is declared null, the gains made from the instrument have to be returned.

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