Transfer of Property Act Section 37 — Apportionment of benefit of obligation on severance
CHAPTER I PRELIMINARY
General
Summary
When a property that has an ongoing obligation attached to it—like a lease or a promise to pay rent—is divided among several new owners, the person who owes that obligation must generally pay or perform it separately to each owner, in proportion to the value of each owner’s share. This only applies if the obligation can be fairly split without making it much harder or more expensive for the person who owes it. If the obligation cannot be split, or splitting it would create a serious extra burden, then the owners must jointly pick one person to receive the full performance on behalf of all of them. The person owing the obligation is not responsible for failing to follow these rules unless they have been clearly told about the division of the property. This section does not apply to agricultural leases unless the State Government specifically says otherwise.
Official Text
When, in consequence of a transfer, property is divided and held in several shares, and thereupon the benefit of any obligation relating to the property as a whole passes from one to several owners of the property, the corresponding duty shall, in the absence of a contract to the contrary amongst the owners, be performed in favour of each of such owners in proportion to the value of his share in the property, provided that the duty can be severed and that the severance does not substantially increase the burden of the obligation; but if the duty cannot be severed, or if the severance would substantially increase the burden of the obligation the duty shall be performed for the benefit of such one of the several owners as they shall jointly designate for that purpose:
Provided that no person on whom the burden of the obligation lies shall be answerable for failure to discharge it in manner provided by this section, unless and until he has had reasonable notice of the severance. Nothing in this section applies to leases for agricultural purposes unless and until the State Government by notification in the Official Gazette so directs. Illustrations
(a) A sells to B, C and D a house situated in a village and leased to E at an annual rent of Rs. 30 and delivery of one fat sheep, B having provided half the purchase-money and C and D one quarter each. E, having notice of this, must pay Rs. 15 to B, Rs. 7½ to C, and Rs. 7½ to D, and must deliver the sheep according to the Joint direction of B, C and D.
(b) In the same case, each house in the village being bound to provide ten days' labour each year on a dyke to prevent inundation, E had agreed as a term of his lease to perform this work for A. B, C and D severally require E to perform the ten days' work due on account of the house of each. E is not bound to do more than ten days' work in all, according to such directions as B, C and D may join in giving. (B) Transfer of Immovable property