Sections 48-50 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
These three short sections deal with practical questions that follow a transfer. Which right ranks first when two rights over the same property clash? Who gets the fire-insurance money if the property is damaged after sale? And is a tenant who paid rent to the wrong person in good faith liable to pay again? This article reads sections 48, 49 and 50 as per the text of the Act consulted.
Section 48: where a person creates rights over the same immovable property at different times and the rights cannot all exist or be exercised to their full extent together, each later right is subject to the rights previously created, unless a special contract or reservation binds the earlier transferees. Section 49: on a transfer for consideration of property insured against fire, the transferee may, absent a contrary contract, require the insurance money the transferor actually receives to be applied in reinstating the property. Section 50: a person is not chargeable with rents or profits he paid in good faith to someone of whom he in good faith held the property, even if that person turns out to have had no right to receive them.
Section 48: priority of rights created by transfer
Section 48 reads: "Where a person purports to create by transfer at different times rights in or over the same immovable property, and such rights cannot all exist or be exercised to their full extent together, each later created right shall, in the absence of a special contract or reservation binding the earlier transferees, be subject to the rights previously created."
In plain terms: the first in time ranks first, if the rights clash.
The section applies where three things come together.
| Element | Meaning |
|---|---|
| The same person purports to create rights at different times | One owner deals with the same property more than once |
| The rights are in or over the same immovable property | They touch the same land or building |
| The rights cannot all exist or be exercised to their full extent together | They clash |
When these exist, each later right is subject to the earlier rights. The earlier transferee is not displaced. The later one takes what is left.
The one exception is "a special contract or reservation binding the earlier transferees". If the earlier transferees have agreed to rank behind, or the owner has reserved something in the first deed, the order can be different.
Example. Deepak Rao lets his shop to Manish for ten years. A year later, without telling Manish, he lets the same shop to Naina for five years. The two lettings cannot both be exercised in full together. Under section 48, Naina's right, created later, is subject to Manish's earlier right. Naina's remedy against Deepak is not provided in this section, and the text says nothing about it.
Example for a lender. A property owner mortgages the same plot twice, to Bank A and then to Bank B. The text of section 48 speaks of "rights" in general terms. The rules for mortgages have their own sections in Chapter IV, including sections on priority between mortgagees. Check the specific mortgage rules before applying section 48 to a mortgage.
Before buying or lending, a search of earlier dealings is the way to find prior rights. A legal due diligence review and a check of the encumbrance records, as described in our guide to checking an encumbrance certificate online, help here. Registered earlier dealings can give notice under section 3; see our article on section 3, notice.
Section 49: transferee's right under an insurance policy
Section 49 reads: "Where immovable property is transferred for consideration, and such property or any part thereof is at the date of the transfer insured against loss or damage by fire, the transferee, in case of such loss or damage, may, in the absence of a contract to the contrary, require any money which the transferor actually receives under the policy, or so much thereof as may be necessary, to be applied in reinstating the property."
Conditions:
- the transfer is for consideration;
- the property, or part of it, is insured against loss or damage by fire at the date of the transfer;
- there is loss or damage (fire is the peril the section names);
- there is no contract to the contrary.
If these are present, the transferee may require that the money the transferor actually receives under the policy, or as much as is necessary, be used to reinstate the property.
Three limits appear in the words: the money is what the transferor actually receives, the amount is so much as may be necessary, and the right is subject to a contrary contract.
Example. Kiran Joshi sells a godown to Harsh, and the godown is insured against fire on the date of sale. A week later, before the policy is changed, a fire damages part of the godown. The insurer pays Rs. 8,00,000 to Kiran. Harsh may require Kiran to apply that money, or so much as is necessary, to reinstate the godown. If the sale deed says otherwise, the contract prevails.
The Act does not say how the policy is to be assigned or how the insurer is to be told. For that, the policy terms and the insurance law apply; check the current law and the insurer's requirements. In practice, a buyer should ask for a copy of the policy and arrange for the insurer to be told of the transfer.
Section 50: rent paid in good faith to a holder under a defective title
Section 50 reads: "No person shall be chargeable with any rents or profits of any immovable property, which he has in good faith paid or delivered to any person of whom he in good faith held such property, notwithstanding it may afterwards appear that the person to whom such payment or delivery was made had no right to receive such rents or profits."
The protection is for someone who:
- held the property from another person;
- paid or delivered the rents or profits to that person; and
- did so in good faith, both in holding the property from that person and in paying.
If so, he is not chargeable with those rents or profits, even if it later appears that the person he paid had no right to receive them.
The Act's illustration, retold
A lets a field to B at a rent of Rs. 50, and then transfers the field to C. B, having no notice of the transfer, in good faith pays the rent to A. B is not chargeable with the rent so paid.
Present-day example. Lalita Nair lets a flat to a tenant, Omkar. Lalita sells the flat to Prakash but does not tell Omkar. Omkar pays the next two months' rent to Lalita in good faith. Under section 50, Omkar is not chargeable with that rent. Whether Prakash can claim that rent from Lalita is not answered by this section.
To protect a tenant, the buyer should tell the tenant in writing about the sale and give instructions on where to pay. To protect the buyer, a notice to the tenant, with a dated copy, helps end any later claim of good faith payment to the old owner. The ordinary rules on adjustment of rent between seller and buyer are in section 36; see our article on sections 36 and 37. Tax on rental income is outside this Act; see our income-tax guides.
Need help checking earlier rights, insurance and tenancies?
Before you buy or lend, it pays to know who has rights over the property, whether it is insured and who is collecting the rent. Our team can examine all three through legal due diligence.
Key takeaways
- Section 48: where rights over the same property created at different times cannot all be exercised in full together, each later right is subject to the earlier ones, unless a special contract or reservation binds the earlier transferees.
- Section 49: on a transfer for consideration of fire-insured property, the transferee may require the money the transferor actually receives under the policy, or so much as is necessary, to be applied in reinstating the property, absent a contrary contract.
- Section 50: rent or profits paid in good faith to the person of whom the payer in good faith held the property cannot be charged again, even if that person had no right to receive them.
- Tell tenants and insurers about a transfer promptly and in writing.
- Later amendments and State changes should be checked.
Read next
- Sections 45 to 47: joint purchase and sale by co-owners of shares
- Section 51: improvements made by holder under defective title
- Section 40: restrictive covenants and obligations running with land
- Property Transfer Compliance Checklist
Disclaimer: Based on a publisher's print of the Transfer of Property Act, 1882 showing amendments up to the Transfer of Property (Amendment) Act, 2002 (3 of 2003), as consulted on 2 October 2026. State amendments, later amendments, stamp duty and registration charges are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.