Transfer of Property Act Section 42 — Transfer by person having authority to revoke former transfer
CHAPTER I PRELIMINARY
General
Summary
If a person transfers immovable property but keeps the right to cancel that transfer, and later transfers the same property to someone else for money or value, the second transfer acts as a cancellation of the first one, but only to the extent of the power the person kept. This cancellation happens subject to any conditions that were attached to the right to cancel. For example, if a landlord leases a house but reserves the right to end the lease if a surveyor decides the tenant is damaging the property, and then leases the house to someone else, that second lease cancels the first one only if the surveyor actually holds that opinion.
Official Text
Where a person transfers any immoveable property, reserving power to revoke the transfer, and subsequently transfers the property for consideration to another transferee, such transfer operates in favour of such transferee (subject to any condition attached to the exercise of the power) as a revocation of the former transfer to the extent of the power. Illustration A lets a house to B, and reserves power to revoke the lease if, in the opinion of a specified surveyor, B should make a use of it detrimental to its value. Afterwards A, thinking that such a use has been made, lets the house to C. This operates as a revocation of B's lease subject to the opinion of the surveyor as to B's use of the house having been detrimental to its value.