Law Legal Studies

Property and Trust Law

1,910 Questions

Property and trust law covers ownership rights, leases, adverse possession, and the transfer of assets. These legal principles are fundamental for judiciary exams, UPSC, and state PSCs. Practice these questions to understand property rights and related legal procedures thoroughly.

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Property and Trust Law Questions

Multiple choice

Which of the following statements represent(s) the difference between possession and ownership?

  1. Full enjoyment of the property is restricted in possession and there is no restriction in ownership.

  2. The right of ownership consists of excluding others from using it and there is no such right in possession.

  3. Both (1) and (2)

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The ownership is the de jure recognition of the right over the property. The possession has limited rights to consume, destroy and alienate. Thus, full enjoyment of the property is restricted in possession and there is no restriction in ownership.

Multiple choice

A ‘holder in due course’ is a person

  1. entitled to possess the negotiable instrument in his own name and to recover the amount

  2. who becomes a possessor of the negotiable instrument for consideration

  3. who holds the instrument as an agent of the payee

  4. who possesses the instrument only for the purpose of presentation for payment
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A ‘holder in due course’ is a person who has received a negotiable instrument in good faith and without notice that it is overdue, that there is any prior claim, or that there is a defect in the title of the person who negotiated it.

Multiple choice

A court to which decree has been transferred while executing, cannot

  1. order attachment

  2. execute the decree against the legal representatives of the deceased judgment detor

  3. send the decree for execution to another court

  4. order execution at the instance of the transferee of the decree
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A court to which decree has been transferred while executing, cannot order execution at the instance of the transferee of the decree.

Multiple choice

The transferee of a decree

  1. may enforce the decree against the legal representatives too

  2. may enforce the decree against the sureties available with the judgment debtor

  3. may enforce the decree against the securities available with the judgment debtor

  4. shall hold the quintiles which the judgment debtor might have enforced against the original decree-holder
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Option 4 is correct.

Multiple choice

Survey and inspection of a property is essential

  1. before acceptance of risk to assess the risk for rating purpose

  2. to find out the true value of asset

  3. to find out how the asset came into the owner’s possession

  4. to know whether any other property in the neighbourhood can be insured
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Survey and inspection of a property is essential before the acceptance of risk to assess the risk for rating purpose.

Multiple choice

On foreclosure of a policy, which of the following is incorrect?

  1. Nothing is payable to the policyholder.

  2. Excess amount (subsisting cash value after deducting loan/interest) is payable.

  3. Notice has to be given to the policyholder by the insurer.

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender, by forcing the sale of the asset used as the collateral for the loan. On foreclosure of a policy, nothing is payable to the policyholder.

Multiple choice

Mortgage is _____________ in the immoveable property.

  1. transfer of title

  2. transfer of interest

  3. pledge

  4. hypothecation
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Mortgage is defined in Transfer of Property Act, 1882, Section 58. It involves the transfer of interest in a specific immovable property for the purpose of securing an existing or future debt or for the performance of an engagement which may give rise to a pecuniary liability. In other words, mortgage means transfer of some interest in property while the legal ownership continues with the mortgagor.

Multiple choice

A mortgage where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money is known as

  1. simple mortgage

  2. usufructuary mortgage

  3. english mortgage

  4. anomalous mortgage

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Simple mortgage is where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money and agrees expressly or impliedly that in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money.

Multiple choice

Mortgage, where the mortgagor binds himself to repay the mortgage-money on a certain date and transfers the mortgaged property absolutely to the mortgagee is known as

  1. english mortgage

  2. usufructuary mortgage

  3. anomalous mortgage

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

English mortgage is where the mortgagor binds himself to repay the mortgage-money on a certain date and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed.

Multiple choice

Which of the following statements is/are true?

(i) The mortgage deed is the evidence of the interest transferred to the mortgage holder. (ii) There are three parties to a mortgage. (iii) A deed of trust involves two parties. (iv) Preference shares have the advantage of a higher priority claim to the assets of a corporation in case of insolvency

  1. (i)

  2. (i) and (ii)

  3. (ii) and (iii)

  4. (i) and (iv)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

(i) The mortgage deed is the evidence of the interest transferred to the mortgage holder. Often simply referred to as the mortgage, the mortgage deed is the document transferred to the mortgage holder.

(ii) There are two parties to a mortgage: the mortgagor (the borrower) and the mortgagee (the lender)

(iii) A deed of trust involves three parties:      (a) the trustor (the borrower)      (b) the beneficiary (the lender)      (c) the trustee. 

(iv) Preference shares, also known as preferred shares, have the advantage of a higher priority claim to the assets of a corporation in case of insolvency and receive a fixed dividend distribution. Thus, (i) and (iv) are true.

Multiple choice

Which of the following statements is correct?

  1. Lien is the right to deliver possession

  2. Hypothecation is the right to possession

  3. To constitute a pledge, delivery of possession to the pledge is necessary

  4. Pledge and hypothecation are the same
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Lien is a right to keep possession of property belonging to another person until a debt owed by that person is discharged. To constitute a pledge, delivery of possession, actual or constructive, to the pledge is necessary. If the person entitled to the security is in possession of the movable property, it is a pledge, carrying with it a power of sale on default of payment on the due date or if no date is fixed after notice. No particular formality is required to be done regarding creating charge on pledged movable property. 

Multiple choice

Which of the following is/are the right(s) of the borrower as per SARFAESI Act, 2002?

  1. The borrowers can at any time before the sale is concluded, remit the dues and avoid loosing the security.

  2. In case any unhealthy/illegal act is done by the Authorised Officer, he will be liable for penal consequences.

  3. The borrowers will be entitled to get compensation for such acts.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Rights of the borrower as per SARFAESI Act, 2002: 

  • The borrowers can at any time before the sale is concluded, remit the dues and avoid loosing the security.
  • In case any unhealthy/illegal act is done by the Authorised Officer, he will be liable for penal consequences.
  • The borrowers will be entitled to get compensation for such acts.
  • For redressing the grievances, the borrowers can firstly approach the DRT and thereafter, the DRAT in appeal. The limitation period is 45 days and 30 days, respectively.