Tej Bhan Madan v II Additional District Judge

Facts

• Original sale deed contained covenant restricting property to residential use
• Subsequent purchaser proposed commercial use
• Neighbouring owner (beneficiary of covenant) sought enforcement

Issue

1. Whether a covenant restricting use of property to residential purposes is enforceable against a successor-in-title under S.40.

Held

• The covenant was enforceable. It was: (a) annexed to ownership (related to land use), (b) neighbour was entitled to benefit, (c) purchaser had constructive notice (covenant in registered deed).

Ratio Decidendi

S.40 applies where: obligation arises from contract, is annexed to ownership, third person entitled to benefit, and transferee has notice. Registration of the original deed containing the covenant gives constructive notice to all subsequent purchasers.