Facts- In this case, the sale deed of a property include a condition that it should not be sold by the vendee to anybody outside the family of the vendor. The vendee sold the property to cousin of the vendor it was held that the first cousins very much belonged to the vendor’s stock. There was no breach of the covenant. Even assuming that there was a breach of the covenant, it was immaterial because the condition incorporate in the sale deed is void under section 10.

Issue- whether the condition put in the sale deed executed by the plaintiff in favour of the defendants is hit by section 10 of transfer of property act.

Observation & Decision-

The question was concluded by a bench division of the Allahabad high court in Gayashi ram vs Shahbuddin. In that case, the sale deed included a clause providing that the vendee would not transfer the subject matter of sale, namely a house by mortgage, gift or sale to any one excepting the vendor or his heirs, and that if the house was transferred in contravention of that term the vendor or his heirs would have a right to get back the house.

The Allahabad high court said in order to see whether there is absolute restraint or not, one has to examine the effect of all the conditions and find whether for all practical purposes alienation is prohibited. The mere fact that there may be a possibility of an alienation taking place would not necessarily take the case out of the prohibition contained in section 10.