Essential conditions of transfer of property under Transfer of Property Act, 1882 (Act 4 of 1882)
1. Transfer of property by act of parties (i) The object of the Act is to define and amend the laws relating to transfer of
property by act of parties. (ii) Transfer of property by act of parties further can be inter vivos or testamentary.
Inter vivos transfer means transfer between two living persons whereas the testamentary transfers mean transfer by will etc. The Transfer of Property Act covers only inter vivos transfers. So the transfer has to be between two living persons by act of parties. (iii) The term ³Living persons´ also includes Juristic person e.g., a company, or
association or body of individuals, whether incorporated to not. (iv) The transfers where the living persons are involved but are beyond the purview of
Transfer of Property Act. a) A transfer by Operation of law, which includes intestate succession, forfeiture, court sales and insolvency. b) Mutation- Mutation of property is the recording in the revenue records the transfer of title of a property from one person to another. The mutation in the municipal records is for the purpose of payment of property taxes and it does not mean a legal title to the person to whom the property has been mutated. c) Family arrangement or partition. d) A release of relinquishment of one¶s right in favour of another. e) A surrender or merger. f) When easement is created (v) By the transfer of property an interest in the property can be created only for
present or for future and not for past.
The above features are prescribed in Section 5 of Transfer of Property Act, 1882 (Act 4 of 1882), which reads as following: 1
³Transfer of property´ defined In the following sections ³transfer of property´ means as act by which the living person convey property, in present or in future, to one or more other living persons, or to himself, or to himself and one or more other living persons; and to ³ to transfer property´ is to perform such act ..-
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In this section ³living person´ includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals .
2. Registration The Transfer of Property has to be done by a registered non -testamentary instrument. The term ³registered´ as mentioned in section 3 of Transfer of Property Act, 1882 means registered in any part of the territories to which the Act extends under the law for the time being in force regulating the registration of documents. For registration, it is necessary that the instrument has been registered and its 1 registration completed in the manner prescribed by Indian Registration Act, 1908 .
3. Property that can be transferred Section 6 of Transfer of Property Act, provides a list of cases wherein a property is not transferable, which reads as ±
roperty P roperty
of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force, ±
Clause (a) - S pes Successionis pes successionis means expectation of succession, it is a possibility of getting S property in future through succession. Under this clause the spes successionis includes:(i) chance of an heir apparent succeeding to an estate, (ii) chance of a relation obtaining legacy on the death of a kinsman, or 1
According to Registration Act, the description of the property must be sufficiently given so that in can be easily identified, registration must be done in the area where the property is situated and registration must be done by prescribed authority and the document for registration must be presented by proper person. 2
(iii) any other mere possibility of a like nature.
Clause (b) - a mere right to re -entry for the breach of a condition subsequent; Clause (c) - an easement (apart from dominant heritage); Clause (d) - restricted interest interest i.e., when the the interest interest in property is restricted in its enjoyment only; Clause (dd) - a right to future maintenance; Clause (e) - a mere right to sue; Clause (f) - a public office and salary of a public officer; Clause (g) - stipends allowed to military, naval, air force and civil pensioners of the Government and political pensioners; Clause (h) - Nature of interest, unlawful object, disqualification of transferee. This clause deals with three cases. It says no transfer can be made (i) in so far as it is opposed to the nature of the interest affected thereby; or (ii) for an unlawful object or consideration within meaning of section 23 of 2 Indian Contract Act, 1872 ; or (iii) to a person legally disqualified to be transferee. Clause (i) ± Untransferable interests This clause removes doubts regarding the non -transferability of occupancy rights. Under this clause, any tenant having an transferable right of occupancy cannot transfer his interest as such tenant. The farmer of an estate in respect of which default has been made in paying revenue cannot transfer his interest as such farmer and the lessee of an estate under the management of the Court of Wards cannot assign his interest as such lessee to any other person.
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Section 24. Agreements void, if consideration are objects unlawful in part If any part of a single consideration for one or more objects, or any one or any part of any one of several consideration of a single object, is unlawful, the agreement is void. 3
4. Competence of transferor Section 7 of Transfer of Property deals with this aspect, which reads as ± to transfer Every person competent to contract and entitled to transferable property, or authorized to dispose of transferable property not absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed by any law for the time being in force ersons competent P ersons
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(a) The competence to contract is defined in the section 11 of Indian Contract Act, 1872, which prescribed that every person is competent to contract ± (i) who is of the age of majority according to the law to which he is subjected, 3 (ii) who is of sound mind , and (iii) is not disqualified from contracting by any law to which he is subject. (b) Any person who is authorized to dispose of the property is competent to transfer it too.
5. Competence of the transferee Nowhere it is said that the transferee must be a competent person in respect of his age, soundness of mind etc. (a) Only he must be alive at the time of transfer. (b) Transfer to unborn person requires creation of a prior interest: Section 13 of Transfer of Property Act which reads as Transfer for the benefit of unborn person Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends the whole of the remaining interest of the transferor in the property .-
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Section 12 of Indian Contract Act describes sound mind, which says that - A person is said to be of sound mind for the propose of making a contract, if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interest 4
6.
Operation
of transfer
Section 8 of Transfer of Property Act deals with effect of transfer. It says that a transfer of property passes forthwith to the transferee all the interest which the transferor, then capable of passing in the property, and in the legal incidents thereof. The transferor cannot convey a better title to the transferee that the transferor himself possesses. Operation of transfer is considered complete on the date of execution of registered instrument itself. Section 8 defined what legal incidents of each particular class of property are passed along with the property when it is transferred (a) For land, the incidents are easements, rents, profits and all the things attached to earth; (b) For house, the easements, rents after transfer, locks, keys, bars, doors etc., which are provided with the house for permanent use; (c) For machinery, its movable parts; (d) For debt, it is security; and (e) For money, it is interest after transfer.
7. Conditions for Oral and Written transfer The transfer of property can be made in oral or in written. (a) Oral transfer: Section 9 of Transfer of Property Act deals with oral transfer, which reads as Oral transfer A transfer of property may be made without writing in every case in which a writing is not expressly required by law ..-
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Transfer of property which requires oral transfer is transferred by delivery of possession, e.g. (i) Generally the movable properties may be transferred by delivery of possession, (ii) Month to month tenancy, (iii) Mortgage by deposit of title -deeds, exchange of immovable property value less than rupees one hundred, etc.
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(b) Written transfer (by Registration): Where registration is necessary, the transfer must be made in writing. According to Transfer of Property Act, following transaction must be made in written: (i) Sale of an immovable property exceeding rupees one hundred (section 54). (ii) Simple mortgage irrespective of the amount specified (section 59). (iii) All other mortgage (except mortgage by deposit of title deeds) securing sum exceeding rupees one hundred (section 59). (iv) Lease from year to year (section 107). (v) Exchange of immovable property exceeding one hundred rupees in value (section 118). (vi) Gift of an immovable property (section 123). (vii) Transfer of actionable claims (section 130), where only writing is sufficient, and registration is not necessary.
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