Section 121 TPA: Exchange of money

Section 121 of Transfer of Property Act: Exchange of money

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

On an exchange of money, each party thereby warrants the genuineness of the money given by him.

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Section 121 governs the exchange of money, establishing that each party warrants the genuineness of the currency or money given by him.

Money Exchange Warranty: On an exchange of money, each party thereby warrants the genuineness of the money given by him.
Foreign Exchange & Coinage Application: Applies to money changers, currency swaps, and exchange of bullion or coins.
Breach Remedy: Tender of counterfeit, uncurrent, or demonetized currency constitutes a breach of warranty entitling restitution and damages.

Key Landmark Precedents:

E.D. Sassoon & Co. Ltd. v. Commissioner of Income Tax, (1955) 1 SCR 313: Discussed commercial currency exchanges under Section 121 principles.
CIT v. P.V. Kalyanasundaram, (2007) 10 SCC 1: Affirmed the statutory warranty of genuine legal tender in monetary exchanges.

Courtroom Practice & Strategic Litigation Guidance:

In transactions involving foreign exchange or currency swaps, Section 121 operates as a statutory warranty against forged or non-negotiable tender.