The Transfer of Property Act, 1882 (hereinafter “TOPA, 1882”) governs the laws related to the transfer of property from one person to another. The act provides the rules and provisions related to the valid transfer of property and what property can be transferred i.e. transferable and non-transferable property and who can transfer the property etc. It regulates the transfer of property occurred by the act of the persons and not by the operation of law. The act specifically deals with the transfer of immovable property from one living person to another living person.
1.2 Kinds of Property
The definition of ‘property is not defined under any statute. The TOPA, 1882 has specified about two types of property namely-
- Movable Property
The term movable property means every type of property which is not immovable.
- Immovable Property
The term immovable property can be defined as the “property which doesn’t include standing timber, growing crops or grass.” The Immovable property also includes the land, benefits from the land, things that are attached to the earth or permanently fastened or attached to the earth.
- Kinds of Transfer
TOPA, 1882 specifies various kinds of transfer of property which includes (i) Sale, (ii) Mortgage (iii) Exchange, (iv) Gift, and (v) Lease. Sale includes the actual transfer of rights on the property from one person to another, the lease is the transfer of rights on the property for a specific period of time, the exchange is a type of sale but differs in consideration, and in gift, there is no consideration. If in the release deed the intention of transfer of property rights of the owner are stated then it would amount to a valid transfer.
Section 5: Transfer of Property
Section 5 of TOPA, 1882 states the definition of Transfer of Property.
2.1 Meaning and Definition
According to the provisions of Section 5 which states that an act of transferring of property by one living person to (i) one or more other living person(s) (ii) to himself, or (iii) to himself or one or more other living person(s) and performing the act of the transfer of property either in present or in future is known as Transfer of Property.
The word ‘property and ‘transfer’ are not defined under the said act. The major elements which constitutes the ‘Transfer of Property’ are-
- The transfer must take place from one living person to another living person. Section 13 of TOPA, 1882 is an exception to the clause in the case when the transfer is made to an unborn person.
- Transfer can take place either in the present or future.
- Living person includes juristic persons like company, organization (not necessarily be registered)
- There must be an act of conveyance i.e. creation of a new title in the favour of the transferee. In the case of A. Nadalwari v. N. Malvarayan the court held that there must be a change of ownership/title in the document pertaining to the transfer of property.
- The various other laws governing the transfer of property are not hit by The Transfer of Property Act, 1882.
2.2 Essentials of Valid Transfer
There are six main essentials of a valid transfer of the property which are as follows-
- Section 5 of The Transfer of Property Act, 1882 –Transfer of property must be inter vivos i.e. between two living persons.
- Section 6 of The Transfer of Property Act, 1882 –The property must be of transferrable nature as per TOPA, 1882.
- Section 7 of The Transfer of Property Act, 1882 – The person transferring the property must be competent to transfer.
- Section 8 of The Transfer of Property Act, 1882 – The transfer of property must fulfil the act of conveyance of property and change of title
- Section 9 of The Transfer of Property Act, 1882 – The transfer must be made in the manner prescribed whether written or expressed.
- The consideration paid in transferring the property must not be illegal.
- The transfer of property must not oppose the nature of interests of the parties.
Section 6: What may be transferred?
The transferability of property is the rule of law and is the general rule but non-transferability is an exception to that rule. The transferability of property is based on a legal maxim; ‘alienation prae fertur juri accrescendi which means that “alienation is favoured by the law rather than accumulation”. Section 6 of TOPA, 1882 enumerates that any property can be transferred except to the exceptions mentioned under clause 6(a) to 6(i) of TOPA, 1882.
3.1 Rule of Spes Successionis-Section 6(a)
The term Spes Successionis means exception of succession. The following mentioned cannot be transferred as per the rule of Spes Successionis-
- The chance of an heir-apparent succeeding to an estate;
- The chance of a relation obtaining a legacy on the death of kinsman;
- Any other mere possibility of a like nature.
Illustration: X is the father of Y. X owns a property and X died. So, now Y will get the property being the legal heir of X. But if Y when X was alive has transferred the property to another person thinking him to be the legal heir of the property then this transaction will be void as per the rule of spes successionis,
In the case of Official Assignee, Madras v. Sampath Naidu the court held that the transfer of property by the heir apparent is void even if the property is acquired by the legal heir. Thus, the transfer of spes successionis is void-ab-initio.
3.2 Right of Re-Entry–Section 6(b)
Under this right, it means to gain/hold back the possession of the land which was given to some other person for a period on a breach of condition. The right to re-entry is the personal right of the owner and cannot be transferred to a third person on mere breach of conditions. e.g. in the cases of the lease.
3.3 Right of Easement–Section 6(c)
An easement is right for the beneficial enjoyment of another person’s land and it cannot be transferred except by dominant heritage. The court opined that even the transfer of easement right by dominant heritage only the existing rights are transferred and not the created right.
3.4 Restricted Interests–Section 6(d)
A person cannot transfer a right wherein his expertise or interests lie or is for his/her enjoyment. Various kinds of interest are (i) a religious office (ii) Emoluments to a priestly office (iii) pre-emption right (iv) service tenure etc.
3.5 Right to Future Maintenance–Section 6(dd)
Future Maintenance is personal and cannot be transferred even by the way of execution of the decree by a person as held in the case of Ashfaq Mohammad Khan v Nazir Banu.
3.6 Right to Sue–Section 6(e)
The mere right to sue cannot be transferred as the transferee has no interest in the subject transferred to him by the transferor. In the case of Sethupathi v. Chidambaram the court held that the right to sue cannot be transferred and the word ‘mere’ signifies that there is no interest involved in transferring a right to use to the transferor.
3.7 Public Offices–Section 6(f)
This clause states that the public office neither the salary of public officials is transferable whether before or after the payable clauses Even the clause is not applicable to the arrears of the family.
- Stipends and Pensions–Section 6(g)
As per Sundariya Bai Chaudhary v UOI, the court held that the stipends allowed to the military, naval, air force, and civil pensioners of Government and Political pensions are not transferable.
- Nature of Interests–Section 6(h)
According to this clause, the property cannot be transferred if it is against the interest of the person, or is for an unlawful object and considering or the transferee is a legally disqualified, person.
3.10 Statutory Prohibitions on the Transfer of Interest–Section 6(i)
Un-transferrable interests such as transferring property rights by a tenant to another person are prohibited under the statute and cannot be transferred.
Section 7: Who may Transfer?
Section 7 of TOPA, 1882 deals with the competency of the persons as to who all persons are allowed to transfer the property. According to this section, the person will be competent to transfer the property when he/she fulfills the below mentioned two conditions-
- The person transferring the property should be competent to enter into a contract with another person.
- The person who shall be transferring the property must hold the title of that property.
4.1 Competency of Person
The competency of a person in a contract includes-
- Age of Majority
The age of majority according to laws is 18 years but if the court appoints a guardian to a minor person or property then it is 21 years. Transfer of property by minor is void.
- A person with a sound mind
The person who is capable of understanding his interest and actions and can make a rational judgement as per his interest is known as per with sound mind. If a person is occasionally of sound mind but generally is unsound mind then he can make a contract while is a sound mind.
- Not disqualified by law
An insolvent person and or an alien enemy are disqualified persons by law. A transfer of property by the de facto guardian of a minor person is void as per section 11 of HMGA, 1956 as held in the case of Johri vs Mahila Darupati.
4.2 Person Having Title of Property
The transferor of the property must hold the title of the property which is to be transferred. If the person has no title to the property then he must possess the authority of transferring the property e.g. Power of attorney.
Section 8: Operation of Transfer
Section 8 of TOPA, 1882 deals with the effects of the transfer of property unless any contrary intention all the rights, interests, and legal incidents attached with the property are transferred by the transferor to the transferee. This section doesn’t apply to mortgaged debts.
5.1 Effects of Transfer of Property
Section 8 confers that all the legal incidents attached with the property are also transferred and not only interest as held in the case of Bishwanath Prasad Singh vs. Rajendra Singh.
Legal incidents in various types of property include-
When the immovable property is transferred by one person to another in Land then the legal incidents attached to it are (i) easement rights (ii) rents and profits (iii) everything attached to the earth of that land.
A legal incident includes all parts whether movable or immovable which are attached to machinery shall be transferred.
Legal incidents attached to a house are (i) right of easement (ii) Rents and profits (iii) things attached for permanent use like windows, doors etc.
Securities attached to the transferred debt will be the legal incidents in transferring from transferor to transferee.
Income and interests associated with the transferrable money or things/property which shall be providing money will be counted as legal incidents. A debt under this section includes debts coming from the actionable claim. When a money decree of secured debt is transferred from transferor to transferee that the securities attached to the debt shall not be transferred or claimed by the transferee as held in the case of Ganpat Rai v. Sarupi.
Section 9: Oral Transfer of Property
Section 9 of TOPA, 1882 deals with the oral transfer of property wherein the transfer of property is made without writing and the law doesn’t expressly mention the transfer of property in written form. There are following cases where the transfer of property requires writing like-
- Section 54 of The Transfer of Property Act, 1882 includes the sale of immovable property with a value of more than Rs.100/-.
- Section 54 of The Transfer of Property Act, 1882 includes the sale of intangible things or their reversion.
- Section 59 of The Transfer of Property Act, 1882, at the time of mortgaging a property or mortgaged property with a valuation of more than Rs-100/-.
- Section 107 of The Transfer of Property Act, 1882 includes lease from year to year, more than one year or yearly rent.
- Section 123 and Section 108 of The Transfer of Property Act, 1882 include immovable property as a gift and exchange of property respectively.
- Section 130 of The Transfer of Property Act, 1882 includes the transfer of actionable claims.
Thus, the above-mentioned points are an exception to section 9.
The present research article dealt with the concept of Transfer of property and Transferability rights and the effects of the transfer of property. The article scrutinized the legal obligation in transferring property between two vivos and also describes what property cannot be transferred and who is the competent person while transferring a property. In addition to this, the article also briefly explained the kinds of properties and kinds of transfer and has also enshrined what will be the effect of the transfer of property from one person to another with the help of judicial interpretations. The article for clear and better understanding has briefly explained the exceptions to all the sections.
Thus, in the present article, the author has enumerated the basic concepts of property law w.r.t transferability. The article has explained the legal obligations, rights, and transactions between the transferor and transferee as per the provisions mentioned under Section 5 to Section of the Transfer of Property Act, 1882.