TITLE: AN ANALYSIS OF PARTITION, FAMILY SETTLEMENT AND COMPROMISE

UNDER TRANSFER OF PROPERTY ACT, 1882.

RESEARCH QUESTION:

1. WHETHER PARTITION IS A TRANSFER UNDER SECTION 5 OF TRANSFER OF

PROPERTY ACT, 1882?
2. WHETHER FAMILY SETTLEMENT IS A TRANSFER UNDER SECTION 5 OF

TRANSFER OF PROPERTY ACT, 1882?

3. WHETHER COMPROMISE IS A TRANSFER UNDER SECTION 5 OF TRANSFER
OF PROPERTY ACT, 1882?

HYPOTHESIS:

PARTITION IS NOT A TRANSFER UNDER SECTION 51 OF TRANSFER OF PROPERTY ACT,

1882:

A partition is a division of a property held jointly by several persons, so that each person gets a
share and becomes the owner of the share allotted to him and does not create new title. Each
divided property gets a new title and each sharer gives up his interest in the property in favour of
other sharers.2 Therefore, partition is a combination of surrender and transfer of certain rights in
the estate except those which are easement in nature. The transferee can then further deal with
the property in any manner as he may so desire. He can sell, transfer, exchange, or gift the
property as its absolute owner.

If in a property there are several co-owners having, under the law, their respective interests 3 but
the whole property is neither used nor enjoyed by them separately then, after the partition each
member gets merely the separate right of enjoyment. It simply effects a change in the mode of

1
“Transfer of property” defined.—In the following sections “transfer of property” means an act by which a living
person conveys property, in present or in future, to one or more other living persons, or to himself, 1[or to himself]
and one or more other living persons; and “to transfer property” is to perform such act. 1[In this section “living
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
Giria Bai vs. Sadashiv Dhundiral and ors., AIR 1916 PC 104
3
V.N. Sarin vs. Ajit Kumar Poplai (1966) 1 SCR 349

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enjoyment of property but it is not an act of conveyancing property from one living person to
another.4

One of the contrary views to the above preposition is that, an oral partition between members of
a joint Hindu family cannot be treated to be partition within the meaning of Section 16(3)(a) (iii)
& (iv) of the Income Tax Act, 1922.5 If a partition of the joint family property takes place by act
of parties, it would not, as seen above, be treated as "Transfer" within the meaning of Section 5
of the act. But if a suit for partition is filed and the partition is brought about through a decree of
the Court, it would amount to a "Transfer" vide Section 2(d), which specifically excludes
transfers by operation of law or under a decree or order of a Court. Section 5, which, in a way,
defines transfer, is, therefore, over-ridden by Section 2(d)6 of the Act.7

Family Settlement is not a transfer under Section5 of Transfer of Property Act, 1882

A family settlement entered into by the parties for the purpose of putting an end to the disputes
among family members does not amount to transfer, not being an alienation it does not amount
to the creation of an interest.

This Section contemplates transfer of property by a person who has a title in the said property to
another person who has no title. A family arrangement, on the contrary, is a transaction between
members of the same family for the benefit of the family so as to preserve the family property,
the peace and security of the family, avoidance of family dispute and litigation and also for
saving the honour of the family. Such an arrangement is based on the assumption that there was
an antecedent title in the parties and the agreement acknowledges and defines what that title is. It
is for this reason that a family arrangement by which each party takes a share in the property has
been held as not amounting to a "conveyance of property" from a person who has title to it to a
person who has no title.8

4
5
Commissioner of Income Tax, Gujarat vs. Keshavilal Lallubhai Patel, AIR 1965 SC 866
6
save as provided by section 57 and Chapter IV of this Act, any transfer by operation of law or by, or in execution
of, a decree or order of a Court of competent jurisdiction, and nothing in the second Chapter of this Act shall be
deemed to affect any rule of 1[***] Muhammadan 2[***] law.
7
Sk.Sattar Sk.Mohd.Choudhari vs Gundappa Amabadas Bukate, AIR 1997 SC 998
8
Infra Note 6

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A "Family Arrangement" proceeds on the assumption that the parties, in whose favour the
arrangement was made and who, under that arrangement, come to have definite and positive
share in the property, is not a transfer but is only a recognition of the title already existing in
them.9 Further, it was not necessary to show that every person taking a benefit under a Family
Arrangement had a share in the property; it was enough if they had a possible claim or even if
they are related, a semblance of a claim.10

Compromise is not a transfer under Section 5 of Transfer of Property Act, 1882

Compromise means agreement for the settlement of doubtful claims between the parties in
respect of some property. Like, Family settlement, here too the titles or interests of the parties are
antecedent or already existing; the compromise deed simply defines them since there is no
conveyance, a compromise deed is not a deed of transfer. t may or may not amount to transfer. It
depends on the facts and circumstances of each case.

In Hussiaa Banu v. Shivanarayan,11 it was held that where one of the parties to a settlement
gives up a claim to receive a certain sum of money from the other, in consideration of the latter’s
given up the right to certain property claimed by him, it would amount to a transfer.

CHAPTERISATION:

1. INTRODUCTION
2. DEFINITIONS OF PARTITION, COMPROMISE AND FAMILY SETTLEMENT
3. NATURE OF PARTITION, COMPROMISE AND FAMILY SETTLEMENT
4. PARTITION IS NOT A TRANSFER UNDER SECTION 5 OF TRANSFER OF

PROPERTY ACT, 1882

5. COMPROMISE IS NOT A TRANSFER UNDER SECTION 5 OF TRANSFER OF

PROPERTY ACT, 1882

9
Kale & Ors. vs. Deputy Director of Consolidation & Ors. AIR 1976 SC 807, Charan Das vs. Giria Nandini Devi
& Ors. AIR 1966 SC 323
10
Tek Bahadur Bhujil vs. Debi Singh Bhujil & Ors. AIR 1966 SC 292
11
AIR 1968 MP 307

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 6. FAMILY SETTLEMENT IS NOT A TRANSFER UNDER SECTION 5 OF TRANSFER
OF PROPERTY ACT, 1882

7. CONCLUSION

BIBLIOGRAPHY

BOOKS:

RK SINHA, TRANSFER OF PROPERTY ACT, 1882, 16TH EDITION, 2015

MULLA, TRANSFER OF PROPERTY ACT, 1882, 12TH EDITION, 2016

WEBSITES:

WWW.INDIAKANOON.COM

WWW.MANUPATRA.COM

WWW.LEGALBITES.COM

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