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A and B agree to transfer ownership of a house worth ₹2,000 and a field worth ₹1,200 to one another. B…

This is an exchange under section 118. Each party transfers ownership of property in return for ownership of the other property, and the extra cash only equalises their…

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A and B agree to transfer ownership of a house worth ₹2,000 and a field worth ₹1,200 to one another. B pays ₹800 solely to balance the difference in value. How is this single transaction classified under the Transfer of Property Act, 1882?

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Answer and explanation

Correct answer A

This is an exchange under section 118. Each party transfers ownership of property in return for ownership of the other property, and the extra cash only equalises their values.

Option feedback

Option A

The properties are the reciprocal consideration. The cash only balances their values.

Option B

Section 54 requires a money price. This bargain calls for reciprocal transfers of property with a cash adjustment.

Option C

A gift is a voluntary transfer without consideration. Each party here gives consideration.

Option D

A mortgage transfers an interest as security. Neither property is transferred as security here.

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