DAMODARAM SANJIVAYYA NATIONAL

LAW UNIVERSITY
SABBAVARAM, VISAKHAPATNAM, A.P.,
INDIA

PROJECT TITLE

Transfer of Title

SUBJECT

TRANSFER OF PROPERTY

NAME OF THE FACULTY

MR. JOGI NAIDU

NAME OF THE CANDIDATE

GANTA EDIGA RAKESH GOUD
18LLB028

SEMESTER IV

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ACKNOWLEDGEMENT:
I am highly indebted to my Hon’ble Family Law Professor, MR.JOGINAIDU for giving me a
wonderful opportunity to work on the topic: “TRANSFER OF PROPERTY” and it is because
of his excellent knowledge, experience and guidance, this project is made with great interest
and effort. I would also like to thank my seniors who have guided my knowledge of doing
research on such significant topic. I would always also take this as an opportunity to thank
my parents for their support. I have no words to express my gratitude to each person who
have guided and suggested me while conducting my research work.

-GANTA EDIGA RAKESH GOUD

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 TABLE OF CONTENTS

INTRODUCTION......................................................................................................................4
PROPERTY AND INTEREST IN PROPERTY.......................................................................5
MOVABLE AND IMMOVABLE PROPERTY....................................................................5
INTEREST IN PROPERTY...................................................................................................6
MEANING OF ‘TRANSFER’...................................................................................................7
Charge-...................................................................................................................................7
Compromise-..........................................................................................................................7
Deed of Appointment –..........................................................................................................7
Exchange-...............................................................................................................................8
Will-........................................................................................................................................8
PERSON COMPETENT TO TRANSFER-..............................................................................9
Authority to dispose off property-..........................................................................................9
Conditional transfer-...............................................................................................................9
DISQUALIFIED TO TRANSFER-.........................................................................................10
Minor as a transferor-...........................................................................................................10
Lunatic as a transferor-.........................................................................................................10
Person not authorised to dispose off minor’s property.........................................................10
WHAT PROPERTY CAN BE TRANSFERRED?..................................................................11
Property which cannot be transferred:..................................................................................12
DIFFERENT WAYS IN WHICH PROPERTY CAN BE TRANSFERRED.........................14
Sale of immovable property:................................................................................................14
Mortgage of immovable property:........................................................................................14
Leases of immovable property:............................................................................................14
Exchange of property:..........................................................................................................14
Gift of Immovable Property:................................................................................................14
CASE ANALYSIS
CONCLUSION........................................................................................................................23
BIBLIOGRAPHY....................................................................................................................24

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 INTRODUCTION

“Life, liberty, and property do not exist because men have made laws.  On the contrary, it
was the fact that life, liberty, and property existed beforehand that caused men to make laws
in the first place.”  -Frederic Bastiat

By its very existence, society mandates interaction, exchange or transfer. A property,

movable or immovable, is transferred from one person to another under various different
situations and circumstances and for different values. The transfer may be a gift, an
inheritance or an asset acquired by paying full value.

When a movable property is transferred inter-vivos (between two living persons), Sales of
Goods Act, 1930 comes into play. When an immovable property is transferred from living
person to living person(s), the Transfer of Property Act, 1882 comes into play. In case, the
property is transferred from a dead person to a living person(s), the law applied will be the
Law of succession. Should a person die without leaving a will (intestate), the law of intestate
succession is applicable and in cases where a person dies leaving a will, the law of
testamentary succession is applicable.1

Property has a very wider meaning in its real sense. It not only includes money and other
tangible things of value, but also includes any intangible right considered as a source or
element of income or wealth. It is the right and interest which a man has in lands and chattels
to the exclusion of others. It is the right to enjoy and to dispose of certain things in the most
absolute manner as he pleases, provided he makes no use of them prohibited by law.2 The
research paper would be an analysis of the scope of the Transfer of Property Act, 1882 in
relation to its applicability over movable and immovable property in India. It would
essentially seek to prove or disprove the hypothesis that “Transfer of Property Act deals only
with immovable property.” Most of the provisions of the Act relate to immovable property,
though some of them provide for movable property as well. All these aspects would be
looked into and the thus, the research work would provide an insight into the kinds of transfer
dealt with in the Act and their applicability to movable and immovable property as such.

PROPERTY AND INTEREST IN PROPERTY

1
https://kanwarn.wordpress.com/2010/08/27/introduction-to-transfer-of-property-act-1882/ [last accessed:
04/10/2015].
2
http://www.legalservicesindia.com/article/article/definition-&-concept-of-property-502-1.html [last accessed:
05/10/2015].

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The legislature has not attempted to define the word ‘property’, but it is used in the Transfer
of Property Act, 1882 in its wider and most generic legal sense. 3 Section 6 says that property
of any kind may be transferred. Thus, an actionable claim is property and so is a right to re-
conveyance of land.4 Property is anything which is the subject-matter of ownership, but also
includes dominum or the right of ownership or partial ownership.5

MOVABLE AND IMMOVABLE PROPERTY

Property may be movable and immovable.

Immovable Property: The Act states that “Immovable Property does not include standing
timber, growing crops or grass”.6 The General Clauses Act defines “Immovable Property” as
under: “Immovable property shall include land, benefits to arise out of land, and things
attached to earth, or permanently fastened to anything attached to the earth.” 7 An equity of
redemption is immovable property8and so is the mortgagee’s interest in the immovable
property mortgaged.9

There are many conflicting decisions as to whether a mortgage debt is immovable property,
but since mortgage debt has been excluded from the definition of an actionable claim by Act
2 of 1900, it seems that a mortgage debt is for all intents and purposes, immovable property, 10
though for the purpose of attachment it is treated as movable property.11 A full Bench of
Rangoon High Court has said that a mortgage, being transfer of an interest in immovable
property, is immovable property, and that a suit to enforce a mortgage is a suit for land under
the Letters Patent of the Chartered High Courts.12 Standing timbers are tree and therefore,
they are not falling under the definition of immovable property.13 However, a fruit bearing
tree is not a standing timber and therefore can be classified as immovable property.14

3
Matta Din v. Kazim Hussain, (1891) ILR 13 All 432 p.473
4
Narasingariji v. Panaganti,(1921) Mad WN AIR 1921 Mad 498.
5
http://thepeopleschronicle.in/?p=1289 [last accessed: 06/10/2015].
6
Section 3, Transfer of Property Act, 1882.
7
Section 3(26) , Transfer of Property Act, 1882.
8
Mahalavu v. Kasuji,(1984) ILR 18 Bom 739; Parasram v. Govind ,(1987) ILR 21 Bom 226; Kanti Ram v.
Kutubuddin,(1895) ILR 22 C l 33.
9
Paresh Nath v. Nabogopal,(1902) ILR 29 Cal 1.
10
Sakiuddin v. Sonullah, (1917) 22 Cal WN641.
11
Taruadi v. Bal Kashi ,(1904) ILR 26 Bom 305.
12
Vermnct Chettyar v. ARARRM Chettyar Firm ,(1934) ILR 12 Rang 370.
13
Sukrey v. Goondakul, (1872) 0 6 Mad HCR 71.
14
Alisaheb v. Mohidin, (1911) 13 Bom LR 874.

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 Movable Property: There is no definition of movable property in Transfer of Property Act,
1882, Movable property has been defined in the General Clauses Act,1897 to mean ‘property
of every description except immovable property’. The Registration Act, 1908 defines
movable property to include property of every description except immovable property, but
including standing timber, growing crops and grass.15

INTEREST IN PROPERTY

As ownership consists of bundle of rights, the various rights and interests may be vested in
different persons, eg. A mortgager and a mortgagee, a lessor and a lessee, or tenant for life.
An absolute ownership is an aggregate of component rights such as the right of possession,
the right of enjoying the usufruct of the land, and so on. 16 The subordinate rights, the
aggregate of which make an absolute ownership, are referred in the Transfer of Property Act
as interest in property. In section 58, however, the word interest is not distinguished from
absolute ownership.

MEANING OF ‘TRANSFER’

The word ‘transfer’ is defined with reference to the word ‘convey’. This word in English law
in its narrower and more usual sense refers to the transfer of an estate in land; but it is

15
Seeni Chettiar v. Santhahantham, (1897) ILR 20 Mad 58.
16
Inder Sen v. Naubat Sen,(1885) ILR 7All 553 p.556.

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sometimes used in a much wider sense to include any form of an assurance inter vivos. The
word ‘convey’ in section 5 of the Transfer of Property Act is used in the wider sense referred
to above. Transferor must have an interest in the property. A lease comes within the meaning
of the word ‘transfer’.17

A transfer of property does not exclude property situated outside India or the territories where
Transfer of Property Act, 1882 does not apply. 18 If the transfer is effected where the Transfer
of Property Act, 1882 is in force, the right of the parties are to be determined by the Court
under the Transfer of Property Act.

Charge- A charge is not a transfer of property. For the charge no right is transferred but a
personal obligation is created or a right to payment out of property specified can be
generated.19 In the insolvency Acts, a transfer of property, however, defined as including a
charge.20 The definition is wider because any obligation incurred by a debtor affecting his
property may be voidable as a fraudulent preference.21

Compromise- A compromise of doubtful rights is not a transfer, but based on assumption

that there was an antecedent title of some kind in the parties which the agreement
acknowledged and defined. The position would be different if such a compromise also
transferred properties to a person who has neither a pre-existing title, nor a claim to such
title.22

Deed of Appointment – A transfer is not necessarily contractual, and includes a deed of

appointment.23 Section 5 of the Transfer of Property Act does not require that the ‘living
person’ who conveys should necessarily be the same person as who owns, or owned, the
property conveyed. All that is required is that there should be an act of conveyance by some
living person; under the section there may be a transfer by a person exercising powers over
the property of another. Thus, where the donee of power of appointment, having power to
appoint a beneficial interest in the property, exercises that power, it would amount to a
transfer.24

17
Krishna Kumar Khemka v. Grindlays Bank PLC, (1990) 3 SCC 699 p.674.
18
Prethi Singh v. Ganesh ,AIR 1951 All 462.
19
Gobinda Chandra v. Dwarka Nath ,(1908) ILR 35 Cal 837.
20
Presidency Town Insolvency Act 1909, s 2(i).
21
Ex Parte Lancaster, Re Marsden, (1883) 23 Ch D 311.
22
Reddiar, MP v. A Ammal ,(1971) 1 Mad LJ 225.
23
Joshua v. Alliance Bank ,(1895) ILR 22 Cal 185 p.202.
24
U Theta v. Aresena, 199 IC 903.

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Exchange- An exchange is a mutual transfer of the ownership of one thing for another. 25 The
main factor that distinguishes an exchange from a sale is that in an exchange, no monetary
consideration is involved. Exchange of one property for money is a sale, and an exchange of
movable property with another movable property is barter. An exchange of one stamp for
another,26 or shares in a limited company, as consideration, is an exchange.27

Will- Will operates from the death of testator. Transfer of shares or interest in a co-operative
society to the nominee of its member operating on his death would also be executed like
transfers by will.28 Where the beneficiary is not a living person, the expression used is the
creation of an interest in an unborn person contemplated under section 13 of the Transfer
Property Act, 1882. A Muslim person executed a document styled as ‘will’’. By virtue of the
executed document he delivered certain properties amongst his daughter and nephew in his
life time and gave possession to person named. It was held that it was a conveyance and not a
will, even though it described the beneficiaries as heirs. Not being a registered document, it
was invalid.29

PERSON COMPETENT TO TRANSFER

Every person competent30 to contract and entitled to transferable property, or authorised to

dispose off transferable property not his own, is competent to transfer such property either

25
Section 118, Transfer of Property Act, 1882.
26
Kedar Nath v. Emperor, (1903) ILR 30 Cal 921.
27
Saxena Poonam Pradhan, “Property Law”, LexisNexis, New Delhi, Second edn., 2015(Reprint), p. 537-38.
28
Kusum Debi Jhinjani v. Pushpa Devi ,AIR 1990 Cal 204.
29
Vaizer v Putti Begam, AIR 1986 AP 159.
30
Section 7, Transfer of Property Act, 1882.

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wholly or in part, and either absolutely or conditionally, in circumstances, to the extent and in
manner, allowed and prescribed by any law for the time being in force. This means that the
parties must:

a. have attained the age of majority i.e., 18 years;

b. be of sound mind; and

c. not be disqualified to enter into a contract by some other law applicable to them.

The Act, the Transfer of Property passes forthwith to the transferee all the interest which the
transferor is capable of passing and the legal incidents thereof. The Act also allows for oral
transfer except in cases where writing is expressly required by law.31

Authority to dispose off property- If the transferor has no title to the property, he must have
authority to transfer it.32 As instance of authority to transfer the property of another, the
following may be cited:- ‘An agent acting under power of attorney, the donee of power of
appointment, the guardian of a minor duly authorised by the Court in that behalf, the manager
of a Hindu family in case of necessity or for the benefit of the family, the committee of
manager of lunatic, a receiver when empowered by the Court, an executor or administrator
having authority to dispose off the property of the deceased regulated by section 307 of the
Indian Succession Act, 1925.33

Conditional transfer- An interest created on a transfer of property and dependent upon a

condition fails if the fulfilment of the condition is impossible, or is forbidden by law, or is of
such nature that, if permitted, it would defeat the provisions of any law, or is fraudulent, or
involves or implies injury to the person or property of another, or the Court regards it as
immoral or opposed to public policy.

DISQUALIFIED TO TRANSFER-

31
Section 9, Transfer of Property Act, 1882.
32
Chintu v. Charan Singh ,77 IC 705, AIR 2001 SC 1754.
33
Muninanjappa v. P Manual, (2001) 5 SCC 363, AIR 2001 SC 1754.

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 A statutory disqualification to contract imports, as in the case of a minor, inability to
transfer. Such a disqualification ensues when the owner’s property is under the management
of the Court of wards,34 or of an officer appointed under Encumbered Estates Act.35

Minor as a transferor- The transferor must have attained the age of majority according to
the law to which he is subject. The Privy Council has held that a contract by minor is void. 36
Prior to the decision of the Privy Council, it was generally assumed that a minor’s contract is
voidable and could be ratified. These decisions are now absolute, and as the contract is void
there is no question of ratification. The rule of estoppels is not applicable in case of minor as
it could have the effect of enlarging powers of the minor to contract.37 Although a minor is
not capable to contract, a transfer to minor is valid.38

Lunatic as a transferor- In terms of the provisions of the Indian Contract Act, 1872, a
person is of sound mind for the purpose of making a contract if he is capable of undertaking
it, and of forming a rational judgement as to its effect upon his interest. 39 A contract made by
lunatic person is void under section 11 of the Indian Contract Act 1872, and so also, a
transfer by him of his property is void. A lunatic is competent to contract during his lucid
interval, and a transfer by a lunatic during a lucid interval would be valid. However, a person
adjudged a lunatic would be incapable of making a transfer even during a lucid interval. 40 The
unsoundness of mind may be established by proving such conduct as was not in keeping with
the character of the person concerned, but such that it could not be explained on any
reasonable basis. Burden to prove or establish at least on balance of probability the
transferor’s action in executing transfer deed in favour of the transferee was outcome of an
unsound mind, is on the person who alleges it.

Person not authorised to dispose off minor’s property- Where the de facto guardian of the
minor’s property sells it, the sale is invalid, and will be hit by section 11 of the Hindu
Minority and Guardianship Act, 1956. Even subsequent ratification by the natural guardian
does not validate it.41

34
Jivan Lal v. Gokul Das ,(1904) 17 CPLR 13.
35
Radha Bai v. Kamod ,(1908) ILR 30 All 38.
36
Mohari Bibee v Dhurmo das Ghose, (1903) ILR 30 Cal 539 30 IA 114.
37
Bramho v Dharmo ,(1898) ILR 26 Cal 381.
38
Section 6 (h) , Transfer of Property Act, 1882.
39
Sonal Bala Bora v Jyotirindra Bhattacharjee ,(2005) 4 SCC 501 para 20.
40
Re Walker ,(1905) 1 Ch 160.
41
K. Kamama v. Appana, AIR 1973 AP 201.

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 WHAT PROPERTY CAN BE TRANSFERRED?

The Transfer of Property Act specifies that property of any kind may be transferred, except as
otherwise provided by the Act or by any other law in force. 42 Depending on the type of
property to be transferred, transfer of property would include:

1. When the property is land:

a. The easements annexed thereto;

b. The rents and profits thereof accruing after the transfer; and

c. All things attached to the earth.

2. Where the property is a house:

a. The easements annexed thereto;

b. The rent thereof accruing after the transfer;

c. The locks, keys, bars, doors, windows; and

d. All other things provided for permanent use therewith.

3. Where the property is a debt or other actionable claim, the securities therefore (except
where they are also for other debts or claims not transferred to the transferee), but not arrears
of interest accrued before the transfer. Actionable claim is defined as a claim to any debt,
other than a debt secured by mortgage of immovable property or by hypothecation or pledge
of movable property, or to any beneficial interest in movable property not in the possession,
either actual or constructive, of the claimant, which the Civil Courts recognize as affording
grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional
or contingent.

4. Where the property is money or other property yielding income, the interest or income
thereof accruing after the transfer takes effect. 43

Where property is transferred subject to a condition or limitation absolutely restraining the

transferee or any person claiming under him from parting with or disposing of his interest in

42
Section 6, Transfer of Property Act, 1882.
43
Section 8, Transfer of Property Act, 1882.

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the property, the condition or limitation is void, except in the case of lease, under Section 10
of the Act. Also, where, on a transfer of property, under Section 11, an interest is created
absolutely in favour of any person, but the terms of the transfer direct that such interest shall
be applied or enjoyed by him in a particular manner, he shall be entitled to receive and
dispose of such interest as if there were no such direction.

Property which cannot be transferred:

The Act specifically provides for the properties which cannot be transferred under the
provisions of the Act. The same are as follows:44

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.

b. A mere right of re-entry for breach of a condition subsequent cannot be transferred to

anyone except the owner of the property affected thereby.

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

d. An interest in property restricted in its enjoyment to the owner personally cannot be

transferred by him.

e. A right to future maintenance, in whatsoever manner arising, secured or determined,

cannot be transferred.

f. A mere right to sue cannot be transferred.

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

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

i. No transfer can be made (1) insofar as it is opposed to the nature of the interest affected
thereby, or (2) for an unlawful object or consideration within the meaning of Section 23 of
the Indian Contract Act, 1872 (9 of 1872), or (3) to a person legally disqualified to be
transferee.

44
Section 6, Transfer of Property Act, 1882.

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j. Nothing in this section shall be deemed to authorise a tenant having an untransferable 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. According to Section 8 of the Act, the transfer of
property passes to the transferee all the interest the transferor is capable of passing.45

DIFFERENT WAYS IN WHICH PROPERTY CAN BE TRANSFERRED

Mulla D. S., Dr. G. C. Bharuka(ed.), “The Transfer of Property Act”, LexisNexis, New Delhi, Tenth edn.,
45

2008(Reprint), p. 127.

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 Sale of immovable property: Chapter III of the Act, treats transfer of ownership in
exchange for a price paid or promised or part-paid and part-promised as sale of immovable
property. A contract for the sale of immovable property is a contract stating that a sale of
such property will take place on terms settled between the parties. Delivery of tangible
immovable property takes place when the seller places the buyer, or such person as he
directs, in possession of the property.46

Mortgage of immovable property: Mortgage, defined by Section 58 in Chapter IV, is an

instrument to secure a loan. The transferor is called a mortgagor, the transferee a mortgagee.
The principal money and interest on which payment is secured for the time being are called
the mortgage-money, and the instrument (if any) by which the transfer is effected is called a
mortgage-deed.

Leases of immovable property: Chapter V also states that a lease of immovable property is
a transfer of a right to enjoy such property for a certain time, in consideration of a price paid
or promised, or of money or service or a share of crop or any other thing of value, that is
rendered periodically or as specified by the agreement between the transferor and the
transferee.47

Exchange of property: As per Chapter VI, when two persons mutually transfer the
ownership of one thing for the ownership of another, neither things or both things being
money only, the transaction is called an “exchange”. A transfer of property in completion of
an exchange can be made only in manner provided for the transfer of such property by sale.48

Gift of Immovable Property: Chapter VII of the Act covers the transfer of property by gift.
Accordingly, a gift is the transfer of existing movable or immovable property made
voluntarily and without consideration, by one person, called the donor, to another, called the
donee, and accepted by, or on behalf of the donee.49 The Act states that State Governments,
through notification in the official gazette, may exempt provisions under Section 54,
paragraph 2 and 3, 107 and 123, but any district or tract of country excluded from the
operation of the Indian Registration Act, 1908, cannot be covered by this exemption.50

46
Section 4, Transfer of Property Act, 1882.
47
Section 105, Transfer of Property Act, 1882.
48
Section 118, Transfer of Property Act, 1882.
49
Section 122, Transfer of Property Act, 1882.
50
Section 1, Transfer of Property Act, 1882.

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The Act specifically deals with priority of rights created by transfers.51 It lays down that
where a person purports to create by transfer at different times rights in or over the same
immovable property, each later created right shall, in the absence of a special contract or
reservation binding the earlier transferees, be subject to the rights previously created.52

When the property is in dispute and in which any right to immovable property is in question,
the property cannot be transferred during the pendency in any Court having authority
within the limits of India excluding the State of Jammu and Kashmir or established beyond
such limits by the Central Government, of any suit or proceeding which is not collusive
and in which any right to immovable property is directly and specifically in question,
the property cannot be transferred or otherwise dealt with by any party to the suit or
proceeding so as to affect the rights of any other party thereto under any decree or order
which may be made therein, except under the authority of the Court and on such terms as it
may impose.53

For this purposes, the pendency of a suit or proceeding is deemed to commence from the date
of the presentation of the plaint or the institution of the proceeding in a Court of competent
jurisdiction, and to continue until the suit or proceeding has been disposed of by a final
decree or order, and complete satisfaction or discharge of such decree or order has been
obtained, or has become unobtainable by reason of the expiration of any period of limitation
prescribed for the execution thereof by any law for the time being in force.

Krishna Kumar Khemka v Grindlays Bank P.L:C. And Ors.

Supreme Court of India
02 May 1990

51
Singh Avtar, “Textbook on The Transfer of Property Act”, Universal Law Publishing Co. Pvt. Ltd., New
Delhi, Third edn., 2012, p. 130.
52
Section 48, Transfer of Property Act, 1882.
53
Section 52, Transfer of Property Act, 1882.

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 Case Analysis
Bench
K. Jayachandra Reddy, S. Ratnavel Pandian

citation
1990 Indlaw SC 696; (1990) 3 SCC 669; AIR 1991 SC 899;
1990 (2) BankCLR 345; 1991 (1) CalLT(SC) 13; 1990 (2)
CCC 222; JT 1990 (3) SC 58; 1990 (2) RCJ 35; 1990 (2)
RCR(Rent) 137; 1990 SCALE 70; [1990] 2 S.C.R. 961; 1990
(2) UJ 128

Acts involved  Civil Procedure - Rent Control - Land & Property - Practice & Procedure -
Code of Civil Procedure, 1908 - Bengal Premises Tenancy Act, 1956

Facts
Grindlays Bank Limited ('Grindlays' for short), respondent No. 1 herein was the original
tenant and they were occupying four flats and they surrendered a portion of the tenancy
namely two flats i.e. Flats Nos. 1 and 2 which came into effect from 1st April, 1978. The
receiver let out these two flats to M/s Tata Finlay Ltd. ('Tatas' for short) with Effect from
February 7, 1979 pursuant to a letter written by Tatas. Questioning the Action of the receiver
an application was filed in the High Court contending that the receiver had no authority to
create any tenancy and that the receiver has virtually created two new tenancies terminating
the original tenancy of Grindlays and it was contended before the learned Single Judge of the
Calcutta High Court that neither Grindlays nor Tatas were entitled to occupy the premises and
they are liable to be evicted summarily. The learned Single Judge was not inclined to order
summary eviction as prayed for but, however, observed that the respective contentions of
the parties as to the validity of the tenancy created in favour of Tatas have not been finally
decided by the High Court and that the parties are at liberty to agitate the same grounds in
any action that they may be advised to proceed for eviction of Tatas and Grindlays. As
against the order of the learned Single Judge, an appeal was filed before a Division Bench. It
was contended before the Division Bench that upon surrender of Flats Nos. 1 and 2 by the
Grindlays a fresh tenancy was created by the receiver from 1st April, 1978 and the other
tenancy in favour of Tatas is beyond the powers of the receiver and that the receiver had no
authority to create any tenancy either in favour of Grindlays or Tatas. 

Issues- Whether receiver had authority to create any tenancy as alleged?

Subject: Land & Property; Rent Control.

Submission is that act of receiver in leasing out flats in above manner beyond three years
and in that view of matter lease should be cancelled and tenants should summarily be evicted
- Held, surrender of a part does not amount to implied surrender of entire tenancy and rest of
tenancy remains untouched - Thus, no new tenancy was created in favour of original tenant
and are entitled to protection under Act - In case a new tenancy came into being which is
legally barred - Tenancy created in favour of new tenants was in breach of order of court and
consequently new tenants cannot claim any protection under provisions of Act and they are
liable to be evicted
JUDGEMENT
In this case of Tatas the tenancy created in their favour by the Receiver is in
violation and contrary to the injunction order and such an act is subject to the directions and
orders of the Court appointing the Receiver. Therefore the tenancy created in favour of the
Tatas was in breach of the order of the court and consequently the Tatas cannot claim any

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protection under the provisions of the Act and they are liable to be evicted. In the counter
affidavit filed on their behalf, it is no doubt stated that they were inducted into possession
and even sending the cheques. The case of the appellant is that cheques were never
encashed. In any event as observed above, the new tenancy created in their favour contrary
to the orders of the Court does not create a fight and is liable to be cancelled. Consequently
the provisions of the Act cannot be invoked by them. The appeal is therefore dismissed as
against respondent No. 1 Grindlays and allowed as against respondent No. 2 Tatas. In the
circumstances of the case, parties are directed to bear their own costs.

Sona Bala Bora and Others v Jytirindra Bhatacharjee

Supreme Court of India
11 April 2005
Case Analysis
Bench
Ruma Pal, C.K. Thakker
citation
2005 Indlaw SC 306; (2005) 4 SCC 501; 2005 (2) AWC
1593; JT 2005 (4) SC 418; 2005 (2) RCR(Civil) 655;
2005(4) SCALE 43; [2005] 3 S.C.R. 454; 2005 (Supp) RD
146; 2006 (Supp) RD 187
Acts involved; Land & Property - Contract & Commercial - Code of Criminal Procedure,
1973, s. 107 - Indian Contract Act, 1872, ss. 11, 12
Facts
The first appellant is the widow of Bhogirath Bora. The appellants 2-4 are their children. They
reside in a bungalow which is situated in an area of .176 acres of land at Shillong. There are
two other bungalows on the same plot which are tenanted. The respondent claims to have
purchased the three bungalows and the land from Bhogirath in 1977 for a consideration of
Rs. 69,000/-
2. In 1978, the respondent filed a title suit against, inter alia the appellants and Bhogirath,
(who was named as a proforma defendant) claiming a declaration that he was the absolute
and exclusive owner of the land and buildings, for a decree for vacant possession by evicting
the appellants and the tenants therefrom, for mesne profits, interest thereon and costs.
3. The appellants also filed a suit against the respondent and Bhogirath claiming a declaration
that Bhogirath did not have the absolute right to transfer the property to the respondent, that
the sale made to the respondent was void and should be set aside, for a declaration that
Bhogirath was bound by the terms of a compromise petition dated 10 June 1977 filed in Ct.
case no. 3/1977 and that the appellants had a preferential right and a right of pre-emption to
purchase the other two houses on the land.
4. It is an admitted position that in 1977, Bhogirath had filed a complaint (Case No.3/1977)
against some of the appellants before the Magistrate u/s. 107 of the Code of Criminal
Procedure. The complaint case was compromised on 10 June 1977 by filing of terms of
settlement before the Magistrate. In terms of the compromise Bhogirath was inter alia to
make a gift of the bungalow and land in which the appellants were residing, to the first
appellant. The deed of gift was required to be executed and registered at the same time
when Bhogirath sold the other two houses to purchasers. Bhogirath also agreed to build a
cement brick wall at his expense as a boundary separating the other two houses with the
house to be gifted to the first appellant. He also agreed to build and construct a sanitary
latrine for the house which was given as a gift to his wife. Additionally, Bhogirath was to open
a Savings Bank Account of Rs. 10,000/- in his wife's name out of the sale proceeds of the
other two houses.
5. In consideration for the aforesaid the appellants agreed not to put any hindrance in the
sale of the other two houses by Bhogirath to a purchaser of his own choice. They also agreed
to give vacant possession of the two houses to be sold to Bhogirath on or before 20th June
1977 after obtaining the same from the tenants occupying the two houses.

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6. In breach of this agreement, Bhogirath sold the entire property together with all three
houses standing thereon to the respondent inter alia without executing a gift deed to the first
appellant. In fact according to the appellants they were not aware of the transaction nor were
they given any notice of the mutation which was then effected in respect of the property at
the instance of the respondent.
7. In both the suits, Bhogirath filed a written statement supporting the respondent and
denying the claim of the appellants. Both the suits were clubbed together and heard. Two
separate sets of issues were framed. After evidence was led by both sides, counsel agreed
that the suits could be decided only on one issue namely whether on the evidence the
respondent was entitled to get the suit property.
8. The District Judge delivered a common judgment in both the suits on 12 July 1985. He
held that:
(1) Bhogirath was mentally imbalanced from 1971.
(2) The sale and mutation of the property was without the knowledge of the appellants.
(3) Although the respondent had had Bhogirath's mental capacity tested by a Doctor, the
Doctor was not called.
(4) The mutation of the suit property had been allowed in favour of the respondent without
possession.
(5) The respondent had deposed that he was willing to give up his claim to the property on a
refund of the money.
9. In these circumstances and as the appellants would have to suffer serious hardship in case
they were evicted since they did not have any other house for their living whereas the
respondent had his own house at Umpling, the respondent's suit was dismissed and the
amount of Rs. 69,000/- was directed to be repaid by the appellant No.1 to the respondent
within six months. In default the respondent was entitled to execute the decree for 69,000/-.
10. The respondent preferred an appeal to a single Judge of the High Court. While the appeal
was pending, Bhogirath died on 18 August 1988. The appeal was dismissed on 3 March
1994. 

ISSUES

1) Whether late Bhogirath Bora- Respondent No. 6 was the sole owner of the suit property
and had saleable right, title over the property?
2) Whether the time of execution of the registered sale deed the respondent No.6 was not
mentally sound and whether execution of the sale deed conferred right, title and interest to
the appellant?
3) Whether the appellant obtained possession of the property?

REASONING
On the first issue, the learned Single Judge came to the conclusion that the land was settled
on Bhogirath for the welfare of his family and that the houses standing on the land were
constructed out of substantial monetary contributions of the first appellant. In the
circumstances, it was held that Bhogirath was not the sole owner of the property and he
could not transfer the entire land to the respondent. On the second issue, the appellants'
case that Bhogirath was mentally unbalanced when the impugned sale deed was executed
was believed. This conclusion was based on the fact that the respondent had failed to show
that Bhogirath was mentally sound to execute the sale deed. On the other hand, the first
appellant had deposed that rent from the two houses were being collected by her since 1971
when Bhogirath had developed fits of insanity during which he threatened to sell the
residential house, that he had become disinterested and detached from the family, that his
conduct was not normal, that he instituted a case against his wife and children, that he was
violent and quarrelsome, that he remained away from the house for long periods that he
secretively transferred the entire property by way of sale rendering the members of his
family homeless and finally that he had tried to forcibly dispossess his family. The learned
Single Judge however was conscious of the fact that these factors may not necessarily show
that a person was mentally unstable but he was of the opinion that viewed as a whole
Bhogirath was not mentally sound and as such the sale deed executed by him did not confer
any right, title or interest on the respondent.
The third issue was also decided against the respondent by holding that Bhogirath was
never in a position to deliver the entire property to him.

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 The respondent's further appeal before the Division Bench of the High Court, however
met with success.
Firstly- the Division Bench wrongly proceeded on the basis that there was no pleading of the
mental imbalance of Bhogirath in the appellant's plaint or written statement. In fact in both
the written statement and plaint the appellants had pleaded that after Bhogirath's retirement
from service in 1968, Bhogirath became "abnormal and detached from his family" and
showed signs of insanity and was quarrelsome and violent. It was pleaded that although
Bhogirath's mental condition improved, it had deteriorated again in 1977 and that during his
fits of insanity, Bhogirath always threatened to sell the property.
16. It is true that the respondent asserted in evidence that at the time he purchased the
land, Bhogirath was a normal man and did not suffer from any mental defect. At the same
time in cross- examination he said that:-
"I got examined Sri Bora by doctor to determine whether he had any mental insanity. He was
examined in the mental hospital only for half an hour and obtained certificate of his
normalcy. I got him examined because I came to know from some people that Sri Bora was
suffering from mental insanity. Being satisfied I purchased the property".
17. Therefore, it was the admitted case that Bhogirath was at least reputed to be insane
which was why the respondent thought it necessary to have him medically examined before
he purchased the property. It is in this background that the First Appellate Court had
examined the facts and had held that respondent should have produced the doctor who
certified that Bhogirath was mentally normal.
18. It cannot be disputed that a contract of sale like any other contract would be vitiated if
the consent of either party is given by a person of unsound mind as provided in S. 11 of
the Contract Act 1872. U/s. 12 of that Act, a person is said to be of sound mind for the
purpose of making the 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 interests. A
person of unsound mind is thus not necessarily a lunatic. It is sufficient if the person is
incapable of judging the consequences of his acts.
Black's Law Dictionary says:-
"As a ground for voiding or annulling a contract or conveyance, insanity does not mean a
total deprivation of reason, but an inability, from defect of perception, memory, and
judgment, to do the act in question or to understand its nature and consequences ."
19. It must be remembered that in a civil matter the issues have to be decided on a balance
of probabilities. The question of the capacity of Bhogirath to execute the conveyance did not
have to be established only by medical evidence. The unsoundness of the mind may be
established by proving such conduct as was not only not in keeping with the concerned
person's character but such that it could not be explained on any reasonable basis.
20. The appellants' evidence to the effect that whenever Bhogirath suffered from a fit of
depression, he would become violent and angry, seek to sell the property and dispossess his
entire family had not been rebutted by the respondent by cross-examination. It is said
insanus est qui, abjecta ratione, omnia cum impetu et furore facit he is insane who, reason
being thrown away, does everything with violence and rage. Neither the action of
surreptitiously selling the residential house and depriving his entire family nor the initiation of
criminal proceedings against his wife and children without cause is in accord with natural and
normal affection. This should have been seen by the Division Bench as an irrational action or
the outcome of mental disorder. Had it been alleged and proved either that the relationship
between Bhogirath and every member of his family was strained or that he required money
necessitating an immediate sale of his and his family's only residence, his action would
perhaps have been in keeping with sanity. In the absence of any such reason, the act of
dispossessing his family from property and putting his family on the streets must be seen as
intrinsically that of an unsound mind.
21. Interestingly the respondent, a stranger to the family, said in evidence that if he could
not get the possession of the land he was willing to take back the money that he had paid
and that he did not desire the appellants "to go to the street after vacating the house". The
reaction of the respondent when compared with the conduct of Bhogirath would highlight the
extent of the irrationality and abnormality of Bhogirath's conduct. The general reputation of
Bhogirath as suffering from mental disorder was acknowledged by the respondent himself
and the Appellate Court erred in not giving appropriate weight to this admission of the
respondent. The assessment of evidence is inevitably subjective because "we see the
evidence with nobody's eyes but our own". If the assessment of the lower Courts is such that

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it cannot be reasonably sustained, the decision can and should be set aside on appeal. But
where this is not so, the Appellate Court should be slow to interfere with a concurrent factual
inference merely because the eyes of the Appellate Court are different . The learned single
Judge had opined that a "normal" man would not initiate criminal proceedings against his
family, particularly when there was no evidence of any ill-feeling or discord between the two.
22. He was also of the view that it was not normal for a man to leave his house and withdraw
from his near and dear ones for no discernible reason. If in these circumstances, a Court
comes to the conclusion that the irrational conduct was indicative of a mental imbalance and
that the degree of irrationality was such that without proof to the contrary it would mean that
Bhogirath was incapable of rational and controlled thought, the conclusion cannot be faulted.
23. No doubt the burden to prove or establish at least on a balance of probability that
Bhogirath's action in executing the sale deed in favour of the respondent was the outcome of
an unsound mind was on the appellants. But unrebutted evidence of an unnatural and
inexplicable animosity to his wife and children as well as of an unnatural and inexplicable
fixation on selling of all his properties probabilses that the sale was effected by when
Bhogirath was incapable of rational behaviour. This was sufficient to discharge the appellants'
burden. The onus then shifted to the respondent to adduce evidence either to show that the
ostensibly irrational conduct of Bhogirath had a rational explanation or that the conveyance
was executed by Bhogirath in a lucid interval. The respondent had, if his statement is to be
accepted, a certificate of a Doctor who had medically examined Bhogirath just before the
conveyance was executed. The respondent did not seek to call the Doctor or prove the
certificate.
24. We would therefore hold that the Division Bench erred in reversing the decision of the
lower Courts on this issue.
25. Secondly, the Appellate Court wrongly rejected the evidence given by the appellants that
the first appellant had made substantial contributions towards the erection of the three
bungalows without rejecting the lower Courts finding that this statement was not challenged
in cross-examination by the respondent. Perhaps that was why in the compromise petition,
Bhogirath agreed to gift one bungalow, erect a boundary wall and pay Rs. 10,000/- to the
first appellant.
26. In any event and assuming Bhogirath was compos mentis, what the Division Bench
overlooked was that the appellants sought enforcement of the compromise which has never
been challenged either by Bhogirath or the respondent. In other words they sought specific
performance of the agreement whereby Bhogirath had bound himself to transfer one of the
bungalows to the first appellant. This being so the Appellate Court should have at least
applied its mind to this aspect of the matter

JUJDGEMENT:
For all these reasons the appeals are allowed and the decision of the trial Court as
affirmed by the Single Judge of the High Court is restored. The respondent's suit is
accordingly dismissed. However the amount of Rs.69,000/- must be paid by the appellants to
the respondent with interest at 6% per month simple interest from 01 September 1985
(being approximately 6 weeks from the date of the judgment of the Trial Court) until
payment is made. No costs.

Md. Mustafia vs. Haji md. Isa

Patna High Court

25 September 1985

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 Case Analysis

Bench
RAM NANDAN PRASAD

Subject: Land & Property

Keywords: Bonafide purchaser, Non execution

ACTS INVOLVED: Land & Property - Agreement to sell - Non execution - Bonafide purchaser

FACTS : Appellant was tenant of house which belonged to respondent no.1 - Deed of
agreement to sell was executed between appellant and respondent no.1 to sell suit house to
appellant - On basis of said agreement appellant advanced certain sum towards consideration
- Meantime father of minor respondent nos.2 and 3 brought sale deed which executed by
respondent no.1 in name of minor respondents into existence - Appellant instituted suit for
specific performance against respondents before Trial Court which was dismissed - Aggrieved
appellant filed appeal before HC to set side judgment and decree passed by Trial Court -
Hence instant appeal.
Issues:

(1) Whether the agreement entered with the Plaintiff is a valid document or not?

(2) Whether the defendants 2 and 3 are bona fide purchasers for value without notice of
the prior agreement or not?

Reasoning: so far as burden of proof regarding plea of purchasers being bonafide

purchasers without notice of prior contract is concerned, burden initially lies on subsequent
purchasers to prove want of notice. But this burden is somewhat light and even mere denial
may suffice for shifting burden upon appellant to prove that purchasers had knowledge about
his prior contract before he purchased property. In any event, initial burden of proof
regarding want of knowledge of alleged prior agreement of plaintiff has been discharged by
DW9 who is father and guardian of purchasers. DW9 stated on oath that he had absolutely no
knowledge about said agreement before he purchased building in question. Ordinarily one
cannot expect any corroboration of such denial and in face of this denial it was for appellant
to prove. PW2 himself is solitary witness who has deposed on this point and he too has made
only vague and general statement in his examination in chief. PW2 deposed that these
respondents and their father were aware of his agreement, but he has not explained as to
how they could know about it. In absence of any statement regarding any circumstance from
which he could gather about their knowledge, it is difficult to accept his bald evidence in face
of the denial of DW9. Mere fact that DW9 was also resident of same locality is not such
circumstance which alone can lead to irresistible conclusion that he must be aware of said
agreement.

Judgement :
Trial Court was quite justified in holding that respondent nos.2 and 3 and their father
had no prior knowledge about alleged agreement. When they had no prior knowledge about
said agreement, appellant cannot enforce his agreement as against them even his agreement
would have been valid and genuine document. Because bona fide purchaser for value without
notice cannot be bound by any prior agreement between his vendor and appellant. Thus
appellant is not entitled to decree for specific performance of contract and cannot claim
refund of consideration money in view of finding that his agreement is not genuine and valid.
Appeal dismissed.

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Cases Citing this Case
Gita Devi W/o Late Lall Dhari Prasad and others Vs Sobha
Agarwalla W/o Milchand Agarwalla and others
2016 Indlaw JHKD 839
Twilight Properties Private Limited and another Vs Romola
Bhattacharjee and others
2013 Indlaw CAL 995
Legislation Cited
Transfer of Property Act, 1882
Transfer of Property Act, 1882 s. 3

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 CONCLUSION

The Transfer of Property Act, 1882 mainly deals with transfer of immovable property. Except
for certain instances, the Act does not govern the transfer of property by operation of law,
such as sale by the order of court, auction or forfeiture as well as transmission of title under
other laws like Hindu Succession Act. As such, transfers by will and inheritance are not
governed by the Act.

The researcher has thus, come to the conclusion that the hypothesis stands disproved. The
Transfer of Property Act does not exclusively deal with immovable property; it essentially
deals with transfer of immovable property. Sections 1-37 of the Act state the general
provisions which apply to movable property as well as immovable property. Thereafter, all
the provisions of the Act deal with the transfer of immovable property.

The 137 sections contained within have been divided into 8 chapters. Interestingly, nowhere
does the Act define ‘What is a transfer of property’. But it does define ‘transfer’ as a
standalone in Section 5. There are various modes of transfer of property contained in the Act,
though it does not incorporate rules for all modes of transfer in existence. The Act does not
even claim to be a complete code as apparent from omission of the term ‘consolidate’ from
its Preamble.

As per the Preamble of the Act, the Transfer of Property Act, 1882 is to amend or regulate the
law relating to transfer of property by the acts of the parties. The Act provides a clear,
systematic and uniform law for the transfer of immovable property. The Act completes the
Code of Contract since it is an enacted law for transfers that take place in furtherance of a
contract. With provision for inter-vivos transfers, the Transfer of Property Act, 1882 provides
a law parallel to the existing laws of testamentary and intestate transfers. The Act is not
exhaustive and provides scope to apply the principles of Justice, Equity and Good Conscience
if a particular case is not governed by any provision of law.

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 BIBLIOGRAPHY

BOOKS:

 Dr. Avtar Singh, “Textbook on The Transfer of Property Act”, Universal Law
Publishing Co. Pvt. Ltd., New Delhi, Third edn., 2012.

 Dr. Poonam Pradhan Saxena, “Property Law”, LexisNexis, New Delhi, Second edn.,
2015(Reprint).
 D. S. Mulla, Dr. G. C. Bharuka(ed.), “The Transfer of Property Act”, LexisNexis,
New Delhi, Tenth edn., 2008(Reprint).

WEB RESOURCES:

 http://www.academia.edu/6331085/The_transfer_of_property_act_1882
 http://www.lawctopus.com/academike/transferability-immovable-property/
 http://legal-dictionary.thefreedictionary.com/property
 https://kanwarn.wordpress.com/2010/08/27/introduction-to-transfer-of-property-act-
1882/
 http://www.legalservicesindia.com/article/article/definition-&-concept-of-property-
502-1.html
 http://thepeopleschronicle.in/?p=1289

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