Sections 25-26 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Property is often transferred on a condition. Sections 25 and 26 of the Transfer of Property Act, 1882 say which conditions make the interest fail, and how strictly a condition that must be met first has to be carried out. This article reads them as per the text of the Act consulted, with the Act's own illustrations retold.
Section 25: an interest that depends on a condition fails if fulfilment of the condition is impossible, forbidden by law, would defeat the provisions of any law if permitted, is fraudulent, involves or implies injury to the person or property of another, or the Court regards it as immoral or opposed to public policy. Section 26: where a condition must be fulfilled before a person can take an interest, it is deemed fulfilled if substantially complied with.
Section 25: conditions that make the interest fail
Section 25 begins: "An interest created on a transfer of property and dependent upon a condition fails if..." and then lists six situations. The table shows them in plain words; agreement drafting support can test a draft deed against them before it is signed.
| Situation in the text | What it means |
|---|---|
| Fulfilment of the condition is impossible | It cannot be done at all |
| Fulfilment is forbidden by law | Doing it would break a law |
| It is of such a nature that, if permitted, it would defeat the provisions of any law | Allowing it would undo what a law provides |
| It is fraudulent | The condition is a fraud |
| It involves or implies injury to the person or property of another | Harm to another is part of it |
| The Court regards it as immoral or opposed to public policy | A judgment about morals or public policy |
Note that the interest fails, not just the condition. This is the difference from some other sections, such as section 10, where the condition is void and the transfer stands. Our article on sections 10 to 12, conditions restraining alienation covers that group.
The Act's illustrations, retold
- (a) A lets a farm to B on condition that B shall walk a hundred miles in an hour. The lease is void. The condition is impossible.
- (b) A gives Rs. 500 to B on condition that B shall marry A's daughter C. At the date of the transfer C was dead. The transfer is void. The condition cannot be fulfilled.
- (c) A transfers Rs. 500 to B on condition that B shall murder C. The transfer is void. The condition is forbidden by law and involves injury to another.
- (d) A transfers Rs. 500 to his niece C, if she will desert her husband. The transfer is void.
The amounts and the setting belong to the old text. The Act's wording is quoted as it stands; the modern reader should focus on the rule, not the amounts.
Present-day examples
- Sunita Rao gives a flat to her nephew Aman "if he lands on the moon within a year". The condition is impossible for all practical purposes, so the interest fails.
- Bharat Oberoi transfers a shop to his manager on condition that the manager forges a signature on a land paper. The condition is fraudulent and forbidden by law. The interest fails.
- A deed makes a gift depend on the donee harming a neighbour's crop. The condition involves injury to the property of another. The interest fails.
The last ground, "immoral or opposed to public policy", is tied to what the Court regards. The section does not list examples. It is wise to avoid conditions that could be described in that way. A short review before the deed is signed helps remove them.
The link with the Contract Act
The Transfer of Property Act, by section 4, is read with the Indian Contract Act, 1872 where it deals with contracts. Unlawful object and consideration are covered in the Contract Act; see our article on lawful consideration and lawful object under section 23 of the Indian Contract Act, 1872 and check the current text of that Act. Section 25 of the Transfer of Property Act is not the same provision as section 25 of the Indian Contract Act, 1872, which is about agreements without consideration.
Section 26: fulfilment of a condition precedent
A condition precedent is a condition to be fulfilled before a person can take an interest. Section 26 says it "shall be deemed to have been fulfilled if it has been substantially complied with."
The rule is not about perfect performance. It asks whether the condition was substantially met.
The Act's illustrations, retold
- (a) A transfers Rs. 5,000 to B on condition that B shall marry with the consent of C, D and E. E dies. B marries with the consent of C and D. B is deemed to have fulfilled the condition.
- (b) A transfers Rs. 5,000 to B on condition that B shall marry with the consent of C, D and E. B marries without the consent of C, D and E, but obtains their consent after the marriage. B has not fulfilled the condition.
The difference between the two is that in (a) the consent of the living persons was obtained before the marriage and one person had died, so the condition was substantially complied with. In (b) the consent came after the event, so the condition as to prior consent was not complied with.
Present-day example
Meghna Pillai transfers a house to her son Rahul on condition that he obtains his professional degree and a certificate from the board before taking possession. Rahul completes all coursework and passes, but the board's certificate is delayed by a few weeks for administrative reasons. A court asked to apply section 26 would look at whether the condition was substantially complied with. The safer course is to draft the condition so that the required document and the date are clear.
Drafting checklist
- Test every condition against the six grounds in section 25. If one applies, the interest fails.
- State the condition precisely. A clear condition makes "substantial compliance" easier to judge.
- Say who decides whether the condition has been met and by when.
- Do not rely on later consent or later performance if the condition requires it to come first, as illustration (b) of section 26 shows.
- Keep proof that the condition was fulfilled.
- Consider related rules. Conditions that end an interest are in sections 27 to 34; see our articles on sections 27 to 30 and sections 31 to 34.
For the effect of a contingent event in a transfer more generally, see our article on sections 22 to 24.
Need help drafting a conditional gift or transfer?
A condition that fails can bring down the whole interest. If you are drafting or reading a transfer that depends on a condition, our team can help you word it clearly through agreement drafting.
Key takeaways
- Under section 25, an interest dependent on a condition fails if the condition is impossible, forbidden by law, would defeat a law, is fraudulent, involves injury to another, or is regarded by the Court as immoral or opposed to public policy.
- The interest fails; this differs from section 10, where the condition is void and the transfer stands.
- Under section 26, a condition precedent is deemed fulfilled if substantially complied with.
- Prior consent that arrives only after the event does not meet a condition requiring prior consent.
- Draft conditions clearly and keep proof of performance.
- Later amendments and State changes should be checked.
Read next
- Sections 22 to 24: transfers to a class on uncertain events and to survivors
- Sections 27 to 30: ulterior dispositions and condition subsequent
- Sections 10 to 12: conditions restraining alienation and enjoyment
- Introduction to the Transfer of Property Act, 1882
Disclaimer: Based on a publisher's print of the Transfer of Property Act, 1882 showing amendments up to the Transfer of Property (Amendment) Act, 2002 (3 of 2003), as consulted on 2 October 2026. State amendments, later amendments, stamp duty and registration charges are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.