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Section 49: Transferee's right under policy

Transfer of Property Act • Official Statutory Text & Practice Guide

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Act 1882
Section 48 All 137 Sections of Transfer of Property Act Section 50

Legal Commentary & Landmark Judgments: Section 49

Section 49 provides for the transferee's right under a policy of insurance against fire, entitling the transferee to require insurance money to be applied toward reinstating the damaged building.

  • Fire Insurance Benefit: Where immoveable property is transferred for consideration, and such property or any part thereof is at the date of the transfer insured against damage by fire.
  • Reinstatement Option: The transferee, in case of such damage, may, in the absence of a contract to the contrary, require any money which the transferor receives on account of such insurance, or so much thereof as may be necessary, to be applied in reinstating the property.
  • Equitable Reinvestment: Protects buyers from bearing total loss where building catches fire during the pending completion window.
Key Landmark Precedents:
  • Union of India v. Sri Sarada Mills Ltd., (1972) 2 SCC 877: The Supreme Court examined insurance subrogation and property indemnity rights, referencing Section 49 equitable principles.
  • Dahiben v. Arvindbhai Kalyanji Bhanusali, (2020) 7 SCC 366: Affirmed that property risks and statutory benefits run together upon execution of conveyance.
Courtroom Practice & Strategic Litigation Guidance:

Include an express assignment of active building insurance policies in the sale deed to ensure the insurer cannot deny Section 49 reinstatement coverage to the purchaser.

Section 48 All 137 Sections of Transfer of Property Act Section 50