TRANSFER OF PROPERTY ACT, 1882; BASIC CONCEPTS

 

PROPERTY:

In general property can be defined as:

“Anything which is capable of being transferred from one person to another”.

Property may be:

1)     Intangible Property: which cannot be touched (i.e property not having physical existence). It may be in the form of certain rights and interests.

     e.g IP Rights, Right to way , Right to receive rent etc.

 

2)     Tangible Property: which can be touched (i.e property having physical existence). It is further divided into:

 

Ø Movable property:

                                  The form of tangible property which can be moved from one place to another without losing its form/shape (i.e  can be moved from one place to another without being destroyed).

 e.g car, plane , money etc.

Movable property has not been defined in the Transfer of Property Act,1882. However, General Clauses Act 1897, define movable property as , “property of every description except immovable property”.

 

Ø Immovable property:

                                It is the type of tangible property, which cannot be moved without losing its form/shape (without being destroyed).

e.g agricultural land,  a building constructed on land, dams etc.

 

According to the Transfer of Property Act 1882:

“immovable property" does not include standing timber, growing crops or grass.

 

This definition of immovable property is not exhaustive, so we borrow definition from General Clauses Act 1897:

"Immovable property includes land, benefits arising out of land and things attached to the earth or permanently fastened or anything attached to the earth."

Explanation:

1. Land:

it means a determinate portion of earth's surface, which may be covered by water, the column of space above the surface. Land is a considered as a immovable property.

2. Benefits to arise out of land:

apart from physical point of view, every benefits arise out of land is also regarded as immovable property.

3. Things attached to earth:

Section-3 of transfer of property act defines the expression "attached to earth as including:

Ø  Things rooted in earth e.g trees , plants

Ø Things embedded in the earth e g walls, buildings etc

Ø Things attached to what is so embedded e g roof attached to wall etc.

 

THE FOLLOWING HAS BEEN JUDICIALLY RECOGNISED AS IMMOVABLE PROPERTY:

Ø Right to collect rent of immovable property.

Ø Right to dues from a fair on a piece of land.

Ø A right of fisheries.

Ø A right of ferry.

Ø A right of way.

Ø Hereditary Offices

Ø The interest of mortgagee in immovable property.

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DEFINE TRANSFER OF PROPERTY, ACCORDING TO THE TRANSFER OF PROPERTY ACT, 1882:

ACORDING TO TRANSFER OF PROPERTY ACT 1882 (SECTION-5)

Transfer of property means an act by which a living person conveys property to one or more persons, or to himself and one or more living persons:

Ø The act of transfer may be done in the present or in the future.

Ø The person may include an individual, company, or association or any body of individual.

Ø  Any kind of property can be transferred including tangible or intangible, movable and immovable etc.

 

Parties To Transfer:

There are two parties i.e transferor and Transferee.

Transferor:  a person who transfers his property to another.

Transferee:  a person to whom the property is conveyed (transferred).

 

 

Who Can Transfer Property, Or , Competency Of Transferor: (Section  7)

Any person is competent to transfer property, if he is:

1)    competent to contract U/S 11 of the Contract Act, 1872.

i.e, He must be major, sound mind and not disqualified by law.

                    And,

2)     entitled to transferable property, or,  authorized to dispose of transferable property not his own.

 

 

 

Competency Of Transferee:

·      Any person capable of holding property.

·      Not disqualified by law.

 

 

 

ESSENTIALS OF VALID TRANSFER:

 

There are seven essentials of Transfer of Property , which are as follows -

1): Transfer must be between two or more living Persons (Section.5)

The Transfer must be inter vivos.  Therefore there cannot be a transfer to person not in existence at the time of transfer. The living person including company or Association or body of individuals whether incorporated or not .

 

2)    Existence Of Property:

For a valid transfer, the property must be in existence at the time of transfer.

 

 

3):The property must be transferable (Section. 6)

Property of any kind of may be transferred, excepts as otherwise mentioned in S.6(a) to (I) cannot be transferred. These are  restrictions on the Transfer of Property and any transfer in contravention of any of the clauses given in Section 6(a) to (I) is null and void.

 

 

4): The Transfer must not be -

     1) opposed to the nature of interest affected thereby Section.6 (h)

2)     unlawful object and consideration as per provision of Section    23 of the  Contract Act 1872, which provides a consideration or object is unlawful if -

 

              a) It is Forbidden by law, or

 

               b) It is of such a nature that it defeats the provision of any law,     or

              c) is fraudulent,  or

              d) it involves or implies injury to the person or property of  

                another,  or

              e) the court regards it as immoral or opposed to public policy.

 

3) To a person legally disqualified to be a transferee. As per Section 136. of Transfer of Property Act, a Judge, a legal practitioner etc are the officers connected with Court of Justice , and are disqualified from purchasing in actionable claim. This prohibition is only with respect to actionable claim. It does not apply to any other kind of property.

 

5): The Transfer must be made in the mode prescribed by the Act, (under section 9)

Section 9 of Transfer of property provides for oral transfer, A Transfer of Property may be made without writing in every case in which a writing is not expressly required by law.

 

Writing is necessary in case of following instruments -

1) sale of immovable property of the value of  rupees hundred or upwards (S.54),

2) leases of immovable property from year to year for a term exceeding one year or reserving a yearly rent (Section 107)

3) simple mortgage irrespective of amount secured (Section 59 ),

4) All other mortgages securing Rs100 or upwards (section 59)

5) Exchange ( section 108)

6) Gift of immovable property (section 123)

7) Transfer of actionable claim (section 130)

 

6): If on transfer an interest in created in favour of an Unborn person (under section 13)

a) When an  interest is  created in favour of unborn person, then the Unborn person shall be born before expiry of Limited interest,

c) Once the Unborn person is born, he shall be given absolute interest on attaining the age of majority.

 

 

 

7):The Transfer must not be contrary to the rule against perpetuity (section 14)

S.14 provides that vesting cannot be postponed beyond the life of living person or minority of unborn person. Such transfer if made is void.

 

8): Conditional transfer:

If transfer is conditional, the condition must not be illegal, impossible, immoral or  opposed to public policies.

 

 

 

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WHAT PROPERTIES  MAY BE TRANSFERRED UNDER TPA 1882 ?

According to section 6 of transfer of property act 1882, Property of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force.

Properties which cannot be transferred:

a)    The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred.

For Example: A is the owner of a property, if he dies his son B will get the property as he is the legal heir and here it can be said that B is the heir-apparent. But this same property cannot be transferred to B during the lifetime of A.

 

b)   A mere right of re-entry for breach of a condition subsequent cannot be transferred to any one except the owner of the property affected thereby.

For example: Mr. A and Mr. B have a contract in which Mr. A gives his agricultural land on a lease to Mr. B for 10 years. There is a land on the tree and Mr. A has asked Mr. B that if he cuts the tree that is there on the land, Mr. A will have a re-entry. Mr. A has now put a condition on Mr. B after the transfer of property and that is why it is known as condition subsequent. Mr. A has the right of re-entry and this right cannot be transferred.

 

c)    An easement cannot be transferred apart from the dominant heritage.

For example : M, the owner of the house has the right to way over the adjoining land with N. Hence, M cannot just transfer his right of way to Z, without transferring the house.

 

d)   All interest in property restricted in its enjoyment to the owner personally cannot be transferred by him .

For example:

Ø Service tenure;

Ø  right of pre-emption;

Ø Emoluments;

Ø Religious office.

Ø Future maintenance etc, cannot be transferred.

 

e)    A mere right to sue cannot be transferred.

For example: X published defamatory statements against Y and Y filed a suit against X. But Y cannot transfer his right to Z to recover damages for him. If Y transfers his right to Z then this transfer will be held void.

 

f)      A public office cannot be transferred, nor can the salary of a public officer, whether before or after it has become payable.

For example: If you hold a public office such as judge, inspector, doctor, etc, then you cannot transfer your public office to anyone.

 

g)   Stipends allowed to military, naval , air-force  and civil pensioners of the government and political pensions cannot be transferred.

 

 

NO TRANSFER CAN BE MADE:

in so far as it is opposed to the nature of the interest affected thereby,      or,

 for an unlawful object or consideration within the meaning of section 23 of the  Contract Act, 1872 (9 of 1872),

or

to a person legally disqualified to be transferee; (Nothing in this section shall be deemed to authorize a tenant having an transferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate, under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee).

 

 

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OPERATION OF TRANSFER: (SECTION 8 OF TPA 1882)

As a general rule , whenever a person transfers his property to another person, all the interest that a transferor has in the property is transferred to the Transferee. However, if a different intention is expressed or, necessarily implied, the whole interest in the property will not pass to the Transferee on the transfer of property.

    Section 8 defined what legal incidents of each particular class of property are passed along with the property when it is transferred.

Ø For land: The incidents are easements, rents, profits and all the things attached to earth.

Ø For house: The easements, rents after transfer, locks , keys , bars, doors etc, which are provided with the house for permanent use.

Ø For machinery: It’s movable parts.

Ø For debt: it’s security ; and

Ø For money: It is interest after the transfer.

 

 

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