Valid restrictions repugnant to interest created: Section 11 of the Act states that where, on a transfer of property, though an interest is created absolutely in favor of any person, the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner. The transferee, in such case, shall be entitled to receive and dispose of such interest as if there was no such direction.
However, there is one exception to the above provision. Where any such direction has been made in respect of one piece of immovable property, for the purpose of securing the beneficial enjoyment of another piece of such property, the above provisions of Section 11 do not affect such direction.
For instance A makes an absolute gift of a house to B with a direction that B shall reside in it.
The gift is absolute and the direction is void. B may live in the house, or not, as he pleases because such a direction is invalid.
Similarly, according to section 12, if a condition is imposed that, on insolvency of a transferee or, that, on endeavour to alienate property, the transfer becomes ineffective, such a condition is void.