1. ALPINE SKI HOUSE
SECTION 118 &
119 OF TOPA,
1882
Dharmendra Chawla
SYLLB Roll No. 08

2. ALPINE SKI HOUSE
Section 118
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• When two person mutually transfer the
ownership of one thing for the ownership
of another,
• Neither thing or both things being money
only, the transaction is called an
“exchange”
DEFINITION
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ESSENTIALS
INGREDIENTS
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There must be two persons for the purpose of exchange
The Person making the exchange must be competent to contract
There must be mutual consent
There is a mutual transfer of ownership though things and interest may not
be identical
Neither party must have paid money only
Any of the thing which is getting exchanged can be any immoveable property but
not money

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EXAMPLE
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Transfer a Field worth Rs.
10000/- and Rs. 5000/- cash
Transfer a House worth Rs.
15000/-
A B
A B

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We are aware that transfer of any property against consideration is called “Sale”, and transfer without consideration is called “Gift”.
Now when a property has been exchanged with another property it is called “Exchange”.

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ALPINE SKI HOUSE
FEATURES OF
EXCHANGE
• Transfer of ownership - Exchange involves transfer
of ownership in some existing property. In transfer
of ownership, absolute interest of the owner is
transferred
• Property need not be immovable property - In
Exchange properties may be immovable or
movable. An immovable property can be
transferred against a movable property and vice
versa.
• Exchange includes “Barter” - Exchange of one
immovable property with another immovable
property is known as “Barter” and same in case of
transfer of one movable property against another
moveable property.
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ALPINE SKI HOUSE
CASE LAWS
Srihari Jena Vs. Khetramohan Jena, AIR (2002) Orissa 195
(4) Civ LJ 279
Facts –
• Persons were exchanging ownership of their properties
to hide act of crime or financial crime or benami
properties
Court Held –
• Hon’ble court held that as It was Deed of Exchange
which is not valid contract and void under Contract Act.
• The instrument of exchange became void and invalid
Balakrishnan Bhagwanji Lodi Vs. Prakash Sheshrao Lodi,
AIR 2005 NOC 89(Bombay)
Facts –
• Two brothers exchanged properties which were held by
them separately. The properties being worth more than
Rs. 100/- in value. They could exchange them only
through registered instruments.
Court Held –
• Hon’ble court held that in case of partition of joint
family property, once partition is affected, whether by
way of family arrangement or deed of partition, there is
severance of jointness of properties.
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Section 119
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• If a party has deprived from the thing,
whose ownership has been transferred in
exchanged due to defective title of other
party,
• He has two remedies under Section 119
MEANING
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REREMEDIES UNDER
SECTION 119
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He can recover for compensation
for loss suffered to him
He can take back thing
transferred by him
Second remedy is available only mentioned cases
• Where property is still in possession of other party, or
• In possession of his legal representatives, or
• A transferee from him without consideration

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ALPINE SKI HOUSE
CASE LAWS
Hari Shankar Mishra Vs. Vice Chairman, Kanpur Development Authority, AIR 2001 All 139 ;2001(42) ALL LR 839
Facts –
• Persons exchanged properties which were held by them and one party did not fulfil the said exchange
Court Held –
• When in an exchange of properties one party did not get possession of the property he was entitled to
receive in exchange
• He was held entitled to return property transferred by him
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ALPINE SKI HOUSE
CASE LAW
Jattu Ram Vs. Hakama Singh, AIR 1994 SC 1653; 1994
Facts –
• There was defect in title of land received by one party to exchange due to false entries made by patwari
and party was deprived from some portion of land as per Deed of Exchange
Court Held –
• It was held by Supreme Court that entries made by patwari in the official records do not create title,
therefore the opposite party was liable to return land(property)
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ALPINE SKI HOUSE
DIFFERENCE BETWEEN EXCHANGE AND SALE
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Exchange
• Section 118 - “when two persons mutually transfer the
ownership of one thing for the ownership of another, neither
things or both things being money only, the transaction is called
‘an exchange’.
Essential elements -
• There must be two different persons who mutually agree and
two different things.
• The property may be movable or immovable, both movable,
both immovable or one movable and another immovable.
• Each party is a seller and buyer in such type of transaction.
• The persons must be owner of things so transferred.
• No price is paid in exchange, the consideration is property and
not money.
• An exchange of immovable property of Rs. 100/- or more can be
affected only by registered deed.
Sale
• Section 54 - ‘sale is a transfer of ownership in exchange for price
paid or promised or part-paid and part promised.
Essential elements -
• The seller and buyer (parties to the sale) must be competent to
transfer: Both the seller and buyer must be competent to contract
under section 10 of contract act, i.e., the parties to transfer should
not be;
 A minor,
 A person of unsound mind and
 A person disqualified by law.
• Subject matter of sale: The subject matter of sale must be
transferable immovable property.
• Consideration of price: A transfer of ownership will be sale only
when the consideration for it is paid or promised or partly paid or
partly promised
 Sale refers to immovable property only, whereas exchange refers to both movable and immovable properties.
 The consideration in sale is price paid or promised and partly paid or partly promised, exchange on the other hand has the consideration for
transfer of one property in exchange for another property.
 The seller has the charge from unpaid purchase-money in the case of sale and in exchange there can be no seller’s charge for unpaid purchase
money.

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