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

In which of the following mortgages is the property is transferred by the mortgage absolutely with a condition for retransfer by the mortgagee?

  1. Simple mortgage

  2. English mortgage

  3. Equitable mortgage

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

English mortgage - The borrower promises to repay the borrowed money on a certain date. The borrower transfers the property to the lender. The lender will re-transfer the property when the money is repaid. The mortgaged property is absolutely transferred to the mortgagee.

Multiple choice

In the execution of mortgage decree, the decree holder can bring the mortgaged properties to sale

  1. without first seeking an order of attachment of court

  2. after seeking an order of attachment of court

  3. after obtaining an order from the court

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

Under enforcement of mortgages through court, while executing the mortgage decree, the decree-holder can bring the properties mortgaged to sale without first seeking an order of attachment from the court.

Multiple choice

X, the natural guardian of M, the minor, wants to mortgage the property in the name of M to secure a loan for the benefit of the minor.

  1. The property in the name of M cannot be mortgaged.

  2. The property in the name of M can be mortgaged if the loan is for benefit of the minor.

  3. The property in the name of M can be mortgaged if the loan is for benefit of the minor with permission of court only.

  4. The property in the name of M can be mortgaged if the loan is for benefit of the minor with permission of Registrar of Assurances.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

According to Hindu Minority and Guardianship Act, 1956, natural guardian of a Hindu minor cannot mortgage or charge any part of the property of the minor without the permission of the court.

Multiple choice

The Transfer of Property Act contains provisions relating to transfer of

  1. actionable claims

  2. movable assets

  3. goods

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

The Transfer of Property Act contains provisions relating to transfer of 'actionable claims'. The transfer of an actionable claim, whether with or without consideration, shall be effected only by the execution of an instrument in writing and signed by the transferor or his duly authorised agent, shall be complete and effectual upon the execution of such instruments and thereupon, all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter provided be given or not.

Multiple choice

Which of the following is incorrect in case of hypothecation?

  1. It is defined as per SARFAESI Act

  2. The ownership remains with the borrower

  3. The possession remains with the creditor

  4. The creditor has the right to demand possession
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Hypothecation is used for creating charge against the security of movable assets, but here the possession of the security remains with the borrower itself. Thus, in case of default by the borrower, the lender (to whom the goods/security has been hypothecated) will have to first take possession of the security and then sell the same. The best example of this type of arrangement is car loan. In this case, car/vehicle remains with the borrower but the same is hypothecated to the bank/financer. In case the borrower defaults, banks take possession of the vehicle after giving notice and then sell the same and credit the proceeds to the loan account.

Multiple choice

The lease for a purpose, other than for agricultural and manufacturing purposes, is deemed to be a lease from ______ and it can be terminated by giving ______ notice.

  1. year to year, 2 months

  2. year to year, 3 months

  3. month to month, 30 days

  4. month to month, 15 days
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A lease of immovable 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.

Multiple choice

Which of these are correct for hypothecation as per SARFAESI Act?

(a) It is a charge on movable assets. (b) It is in favour of secured creditor. (c) It is without the delivery of possession. (d) It gives right to the creditor to sell the assets.

  1. Only (b), (c) and (d)

  2. Only (a), (b) and (c)

  3. Only (a), (b) and (d)

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

"Hypothecation" means a charge in or upon any movable property, existing or future, created by a borrower in favour of a secured creditor without delivery of possession of the movable property to such creditor, as a security for financial assistance and includes floating charge and crystallisation of such charge into fixed charge on movable property.

Multiple choice

Which of the following is incorrect regarding lease of immovable property?

  1. The transferor is called the lessor.

  2. The transferor is called the lessee.

  3. The price in a lease is called the lease rental.

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

A lease is a legal document outlining the terms under which one party agrees to rent property from another party and the periodic payment made to the owner of a property for the use of said property is rent. Thus, both are different. Option 3 does not state the truth.

Multiple choice

Under provisions of Transfer of Property Act, subject to agreement between parties, a property can be sold without intervention of court if it is located at

  1. any place

  2. only Chennai, Mumbai and Kolkata

  3. only towns notified by the State Government

  4. only Chennai, Mumbai and Kolkata or towns notified by the State Government
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A property can be sold without intervention of court, if it is located at only Chennai, Mumbai and Kolkata or towns notified by the State Government. Thus, option 4 is the correct answer.

Multiple choice

In a mortgage suit, the preliminary decree becomes the final decree when the

  1. request is made by the bank as creditor

  2. borrower fails to pay the decretal amount

  3. court takes a decision on the basis of its discretion

  4. request comes from the bank and the borrower
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Preliminary decree was ordered to be drawn up. Thereafter, as the defendants had failed to pay the decretal amount, final decree proceedings were initiated. Thus, option 2 is the correct answer. 

Multiple choice

A borrower has an immovable property and he is not repaying the loan. The bank wants to recover the loan. Then, the bank can

  1. take possession of the security for the loan

  2. manage the same or appoint any person to manage the same

  3. sell or lease or assign the right over the security

  4. All of the above

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

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (also known as the SARFAESI Act) is an Indian law. It allows banks and other financial institutions to auction residential or commercial properties to recover loans. Bank may take recourse to one or more of the above measures.

Multiple choice

If the provisions of Transfer of Property Act and SARFAESI Act relating to an immovable property are different,

  1. provisions of Transfer of Property Act would prevail

  2. provisions of SARFAESI Act would prevail

  3. provisions of Transfer of Property Act or SARFAESI Act would prevail at the discretion of the creditor

  4. provisions of Transfer of Property Act or SARFAESI Act would prevail at the discretion of the debtor
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The provisions of the SARFAESI Act will prevail in case of any conflict and inconsistency of any provision therein with any provisions of the Transfer of Property Act and the CPC. Thus, option 2 is the correct answer.

Multiple choice

Lien of unpaid seller is terminated when

  1. the buyer gets possession of the goods

  2. the seller gets possession of the goods

  3. the buyer leaves the possession of the goods

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

The unpaid seller of goods loses his lien or right of retention thereon – (a) when he delivers the goods to a carrier or other bailee or custodier for the purpose of transmission to the buyer without reserving the right of disposal of the goods; (b) when the buyer or his agent lawfully obtains possession of the goods; or (c) by waiver thereof.