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Transfer of Property Act, 1882 · Chapter II: Of Transfers of Property by Act of Parties · Apportionment

Section 40: Burden of obligation imposing restriction on use of land, or of obligation annexed to ownership but not amounting to interest or easement

In plain words

A right to restrict the use of another's land for the benefit of one's own land, or a contractual obligation attached to ownership, can be enforced against a transferee with notice or a gratuitous transferee, but not against one who paid value without notice.

  • This is why a buyer who knew of an earlier agreement to sell can be bound by it.

Example: A agrees to sell land to B, then sells it to C, who knows of the agreement. B can enforce the agreement against C.

A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.

Official text

Where, for the more beneficial enjoyment of his own immoveable property, a third person has, independently of any interest in the immoveable property of another or of any easement thereon, a right to restrain the enjoyment [in a particular manner of the latter property], or

Or of obligation annexed to ownership but not amounting to interest or easement.— Where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immoveable property, but not amounting to an interest therein or easement thereon,

such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation, nor against such property in his hands.

Illustration

A contracts to sell Sultanpur to B. While the contract is still in force he sells Sultanpur to C, who has notice of the contract. B may enforce the contract against C to the same extent as against A.

Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 15 October 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.

Supreme Court judgments citing the section 40