DHARMASHASTRA NATIONAL LAW

UNIVERSITY, JABALPUR
(Session 2022-2023)

Topic

ESSENTIALS OF A VALID TRANSFER UNDER

TRANSFER OF PROPERTY ACT, 1882

Submitted To: Submitted By:

Ms. Sristi Yadav Sanskrati Jain

[Assistant Professor Section B

of Law] BALLB/116/20

Semester -VI
 ACKNOWLEDGEMENT

The completion of this project required counselling and assistance from many people and I’m really
thankful towards them for their counselling in my project.

I would like to express my deep gratitude towards my teacher Assistant Professor Ms. Sristi Yadav,
who took acute interest in my project and guided me all along. I am feeling extremely privileged to
have her as my instructor in the project. I owe my deep gratitude to the vice-chancellor Prof. V.
Nagraj for his valuable support throughout the project. This project helped me in gathering a lot of
knowledge and becoming more aware of things related to my topic.

I would like to extend my gratefulness to my parents and friends for their valuable support and
advice.

I am making this project not only to get marks but also to enhance my knowledge. At the end I
would like thank everyone who helped me and invested their valuable time for this project.

Sanskrati Jain
 TABLE OF CONTENTS

Introduction..........................................................................................................................................4
The Transfer Of Property Must Take Place Between Two Or More Living Person....................5
The Property Must Be A Transferable Property..............................................................................6
Person Must Be Competent To Transfer Under Section 7...............................................................9
The Transferor Cannot Convey A Better Title To The Transferee That The Transferor
Himself Possess...................................................................................................................................10
Necessary Formalities Prescribed By Law Must Be Completed...................................................11
Conclusion...........................................................................................................................................14
 INTRODUCTION
Transfer of Property Act, 1882 regulates the provisions relating to the transfer of property by the
parties as opposed to the transferring by operation of law. Under TPA, act relates transfer of
property inter vivos that is between living persons. In Ma Kyin Hone v. Ong Boon Hock,1 it was
held that the word “transfer” is a word of very wide meaning and includes every transaction
whereby a party divests himself or is divested of a portion of his interest, that portion subsequently
vesting or being vested in another party. Thus, the term transfer includes transfer through lease,
sale, mortgage, actionable claim, exchange, or gift.

This legislation specifically deals with the transfer of immovable property. The Legislature has not
attempted to define the word ‘property’ anywhere in the act. Though the word is used in most
generic legal sense.2 In Sunil Sidharthbai v. Commissioner of Income Tax3, the Supreme Court
rightly observed that in general, transfer of property means passing of a right in the property from
one person to another. In one case there may be passing of entire bundle of rights from transferor
to transferee, but in another there may be transfer only some of such rights.

In Prethi Singh v. Ganesh4, the court held that the term property also includes property situated
where the Act does not apply. If the transfer is affected at a place where the Act is in force, the
rights and liabilities of the parties will be determined by the Act and the location of the property
will be immaterial.

For any transfer to be valid, there are some essential conditions which should be fulfilled. This
article will be dealing with such essential’s conditions. These conditions are: -

 The transfer must be between 2 or more living persons (section 5).

 The property must be transferable property (section 6).
 The transferor and transferee must be competent (section 7).
 The transferor must also have the right to transfer the property (section 8).
 Necessary formalities prescribed by law must be completed (section 9 and section 10).
The conditions of valid transfer can be known by analyzing the above sections. The essentials are
discussed below: -

1
AIR 1937 Rang. 47
2
Bansigopal v. V.K. Banerji AIR 1949 All. 433.
3
AIR 1986 SC 368
4
AIR 1951, ALL 462
THE TRANSFER OF PROPERTY MUST TAKE PLACE BETWEEN TWO OR
MORE LIVING PERSON
According to Section 5 of Transfer Property Act, 1882 both the transferor and the transferee must
be living, which includes under Section 13 a person not in existence at the date of the transfer.
Under this section the words ‘In Present or in Future’ mean that the conveyance may be one which
takes effect immediately on execution or at some distant date the interest of the transferee arises
immediately on the execution of the document of at the date fixed by the parties. In Jugal Kishore
v. Raw Cotton Co.5 case the Court opined that in present or in future S. 5 qualify the word
‘conveys’ and not the word ‘property’.

In simple terms, Section 5 of Transfer of Property Act defines transfer of property as an act in
which a living person transmits property to one or more other living persons, or to himself, or to
himself and one or more other living persons, in the present or in the future; and "to transfer
property" refers to the act of doing such act. The term "living person" in this section includes a
company, association, or body of persons, whether incorporated or not, but nothing in this section
shall change any legislation already in force related to the transfer of property to or by
corporations, associations, or bodies of individuals.

The transfer of proper must take place inter vivos, i.e., living persons. The word ‘living person’
can only mean a human being, who is alive and conveys his property to another person. A person,
who disposes of his property by will does not convey it as a living person. This is because the
transfer takes effect after his death. There is no present transfer.13

The word ‘transfer’ is defined with the reference to the word ‘convey.’ The word ‘conveys’ under
section 5 of the TPA, 1882 is used in the winder sense. Every transferor must have an interest in
the property. He cannot transfer the property if he does not have an interest in the said property.
Thus, he cannot server himself form it and yet convey it.6 A ‘lease’ comes within the meaning of
the word ‘transfer’ in the act.

A transfer of property may take place not only in present, but also in the future. The condition is
that the property must be in existence. The words “in present or in future” qualify the word
“conveys,” and not the word “property.” A transfer of property that is not in existence operates as
a contract to be performed in the future which may be specifically enforced as soon as the property
comes into existence.
5
(1955) SCR 1369
6
Mulla, The Transfer of Property Act, 9th Ed., LexisNexis Butterworths, 2004, p. 73.
 THE PROPERTY MUST BE A TRANSFERABLE PROPERTY
Section 6 of the TP Act lay down what may be transferred. According to this act any kind of
property may be transferred, except 8 exceptions as mentioned within Section 6 itself. As a rule,
property and property interests are transferable and is based on the maxim alienation rei prefecture
juri accrescendi, which means that the law favors alienation to accumulation. Therefore, any
attempt to interfere with the power of the owner to alienate his interest in the property is frowned
upon by the law.

 Heir Apparent (Clause (a)):

The chance of an heir apparent succeeding to the property of an estate is called Spes successions.
The transfer of spes succession is void ab initio.7 Also, chance of a relation obtaining the legacy on
the death of a kinsman, or any other probability of similar nature is not a property and any such
transfer if happens is void ab initio.

In Sundariya Bai Chaudhary v. Union of India8 the court held that the family pension of the
deceased was not in the nature of an estate and it was not transferable so it could not be
bequeathed by a will. The court observed that other benefits like provident fund, gratuity, and extra
remunerations would be included in the category of an estate.

 A Right of Re-Entry (Clause (b)):

Property of any kind may be transferred 9, but interest in property arising in future cannot be
transferred.10 A transfer of future property only amounts to a contract, which may be enforced
when the property comes into existence.11 The right of re-entry is a personal right and cannot be
transferred by an individual. If he transfers the right to entry, the same would be void.12

 Easement (Clause(c)):

An easement is a right which exists for beneficial enjoyment the owner of certain land possesses,
to do or to continue doing something, or to prevent and continue to prevent something from being
done, in or upon or in respect of certain other and that is not his own. An easement cannot be
transferred apart from dominant heritage to which by the nature of the right, it is attached. 13 But if
7
Meek vs. Kettlewell, (1843) 1 Ph 342;
8
AIR 2008 MP 227
9
Except as provided by the TP Act or any other law for the time being in force.
10
Samsuddin v. Abdul Husein, (1909) 31 Bom 165
11
Rajah Sahib Perhlad vs. Brudhoo, (1869) 12 MIA 275
12
Re Davis & Co. 22 QBD 194
13
Sital vs. Delanney (1916) 20 Cal WN 1158, 34 IC 450
 dominant heritage rights are itself transferred then the easement rights are transferred with it too.
Though there is no prohibition upon the creation of new easements.14

 Interest Restricted to Personal Enjoyment (Clause (d)):

An interest in property restricted in its enjoyment to the owner personally cannot be transferred by
him.15 As the right is personal in character, it is transferable. If such a transfer occurs, the same is
held to be void.

Similarly, a right to future maintenance [section 6 (d) (dd)] in whatsoever manner arising, secured
to determined cannot be transferred.16 This is for the benefit of the person to whom it is granted.
This term ‘whatsoever manner arising secured or determined’ is very exhaustive and covers cases
where this right has been created either under a will, deed, or compromise.

 Mere Right to Sue (clause (e):

A mere right to sue cannot be transferred. 17 ‘Mere’ means that the transferee has acquired no
interest than a bare right to sue. A right to sue is a personal right that only an aggrieved party can
exercise to seek a remedy in a court of law. Therefore, it is not assignable.

There is a distinction between property, an interest in property and a right to sue. A transfer of
right to recover profits which arise out of land along with a transfer of land, is assignable. 18
Similarly, where the property is transferred along with a right to recover damages or compensation
in respect of the property, the assignment is valid.19 However, these are mere exceptions.

 Offices and Salaries (Clause(f)):

A public office cannot be transferred. The salary of a public officer cannot be transferred whether
before or after it has become payable. The term public office or public officer is nowhere defined
by the TP Act. By ‘public officer’ it is meant a person who is appointed to discharge a public duty
who receives a monetary return for it in the form of a salary. As the salary is a return for discharge
of his personal services. If transferability is allowed it will defeat the purpose for which these
interests exist.

14
Bagwan vs. Narasingh AIR 361 All 612
15
Basangowda v. Irogowda AIR 1923 Bom 276
16
Haliman v Umadatunissa AIR 1939 Pat 506
17
Venkatram vs. Venkatswami, AIR 1921 Mad 56
18
Murlidhar vs. Rupendra AIR 1953 Cal 231
19
Ganguraju vs. Gopala AIR 1957 AP 190
 Stipends (Clause (g)):

Stipends allowed to military, air force, naval, civil pensioners of the government and political
pensions are non-transferable. What is made non-transferable is the stipend paid to civil pensioner
and not the pension of a civil pensioner. A bonus given by the government 20, or an allowance made
in lieu of a presumed grant of lands 21, or grant of land in lieu of pension is not pension 22 and
therefore, they are transferable.

 Transfer Opposed to the Nature of Interest (Clause (h)):

No transfer can be made insofar as it is opposed to the nature of the interest affected thereby. Thus,
things dedicated to public or religious uses 23, or nature in form of air, light, and space cannot be
transferred. Such property is called res communes, i.e., property of whole community of world

No transfer, which is for an unlawful object or consideration is permissible. According to Section 23

of the Indian Contract Act, 1872 a consideration or object is unlawful if:

i. It is forbidden by law; or
ii. Is of such a nature that it violates the provisions of any law; or
iii. Is fraudulent; or
iv. Involves or implies injury to the person or property of other person; or
v. The court regards it is immoral; or
vi. Is opposed to public policy; or

Furthermore, a transfer to a person legally disqualified to be a transferee is not permitted. Under

section 7, the transferee must be competent to contract and should not have been disqualified legally.
While competency to contract involves the twin elements of attainment of the age of majority and
soundness of mind, legal disqualifications refer to certain disabilities that have been imposed
specifically by the statutes preventing certain category of persons to be transferees in certain cases
and in specific capacity. For e.g., the TP Act prohibits a judge, a legal practitioner, or an officer
connected with a court from purchasing an actionable claim.24

20
Kasim vs. Karlier (1882) ILR 5 Mad 273
21
Shah Md. Habibul vs. Abdul AIR 1926 All 521
22
Ganpat Rao vs. Anant Rao (1910) ILR 32 All 148
23
Raja Verma Valia vs. Kettayath.
24
TP Act Section 136.
 PERSON MUST BE COMPETENT TO TRANSFER UNDER SECTION 7
Section 7 lays down the perquisite as to who is competent to transfer, and if this essential is not
satisfied, then a valid transfer of property cannot take place. Therefore, a person is competent to
transfer the property if;

 He is Competent to Contract;

For a person to be competent to contract, section 11 of Indian Contract Act, 1872 lays certain
necessary conditions i.e., he should have attained majority, he should be of sound mind, should not
be disqualified to transfer property under the law to which he is subject to. A minor is not competent
to transfer a property but transfer made to a minor will be valid 25. Also, a lunatic if transfer his own
property, then such transfer becomes void. 26 Guardian is merely a manager and cannot dispose of the
property of a minor. Such sale would be invalid.27

 If he is entitled to Transfer or is Authorised to Transfer in case the Property is not his own.

The transferor must be entitled to transfer the property concerned. He is entitled to transfer the
property if he has the title of the property or if he has got the authority to transfer it. As a rule, no
person can transfer something which does not belong to the person.28

The term ‘authority’ can be personal, under an agency or acquired under a law or under the direction
or permission of the court. It can be in the shape of a power of attorney or in the capacity of an
agency. For e.g. An executor or administrator can dispose of the property of a deceased. 29 In absence
of a title, a person should not have authority to transfer the property. For e.g. An agent managing the
property of the principal30, or a de facto guardian of a minor 31, is not competent to sell the property
until they are given express authority.32

The competency of transferee is not mentioned anywhere in the act. The only necessity attached with
transferee is that he must be a living person in existence at the date of the transfer. Thus, a transferee
may be an insane person or minor or even not born.

25
Nawab Sadiq Ali Khan vs Jai Kishori, (1928) 30 BOMLR 1346.
26
Musammat Amina Bibi and Anr. vs Saiyid Yusuf and Ors, 70 Ind Cas 968.
27
Kanchi Kamamma And Ors. vs Yerramsetti Appanna, AIR 1973 AP 201
28
Attaur Rahman Fateh Md. vs Hari Birand, AIR 2008 NOC 1920(Bom.).
29
Sadiq vs. Jai Kishore AIR 1928 PC 152
30
BC Mondal v. Indurekha Devi AIR 1973 SC 782
31
K Kamamma vs Appanna AIR 1973 SC 782
32
Balai C. Mandal v. Indurekha Devi, AIR 1973 SC 782.
 THE TRANSFEROR CANNOT CONVEY A BETTER TITLE TO THE
TRANSFEREE THAT THE TRANSFEROR HIMSELF POSSESS
Section 8 lays down the operations of a transfer and reads as “Unless a different intention is
expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the
interest which the transferor is then capable of passing in the property and in the legal incidents
thereof.” Section 8 of Transfer of Property Act deals with effect of transfer. It speaks 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 class of property are passed along with the property
when it is transferred-

1) For land, the incidents are easements, rents, profits and all the things attached to earth;
2) For house, the easements, rents after transfer, locks, keys, bars, doors etc., which are provided
with the house for permanent use;
3) For machinery, its movable parts;
4) For debt, it is security; and
5) For money, it is interest after transfer.

Therefore, the clause ‘unless a different intention is expressed or necessarily implied’ shows that the
section operates in the absence of an express or implied contract between the parties and if the
contract provides otherwise, the provisions of this section would not have any application. If the
transferor transfers all the interest that he possesses in the property that he possesses on that date, the
entire interest that he had, will pass. If A transfers a land on which there are trees or a well. If
nothing contrary is specified, the trees or the well would pass along with the land to the buyer. 33
Where the property is land, the easements annexed thereto and the land and the minerals beneath it
will also pass with the transfer. 34 The general rule therefore is that whatever interest the transferor
had in the property, passes to the transferee with the transfer, unless a different intention is
expressed.

33
Arkkani vs. Subramniam. AIR 2007 (NOC) 2118 (Mad)..
34
Raja Anand vs. State of Uttar Pradesh, AIR 1967 SC 1081.
 NECESSARY FORMALITIES PRESCRIBED BY LAW MUST BE
COMPLETED
 Attestation and Registration of the Transfer Deed:

For the transfer of immoveable property, the owner must comply with three basic formalities. The
execution of a proper written transfer deed is the first. It must be executed i.e., signed by the
transferor. The second is that it should be properly attested, and the third is that it should be duly
registered. Till all three requisites are met, no title or right would pass from the transferor to the
transferee.

 Methods of transfer (oral transfer):

Section 9 of the TP Act lays down that a transfer of property can be made orally and can be made
without writing in every case in which a writing is not required expressly by the law.

Under the TP Act, the transfer of every tangible property, reversion, or other intangible thing where
its value is more than R. 100; by mortgage (other than a mortgage by deposit of title deeds) where
the principal money secured by way of a loan is more than Rs. 100, by gifts irrespective of the value
of the property, or lease for more than a year or were rent for more than 12 months must be taken in
advance must be made in writing.

Where the law requires a transfer to be made in writing, an oral transfer will not convey any right
from the transferor to the transferee.35

An instrument of transfer is required to be in writing in the following cases:

a) Transfer of immovable property for a value of Rs.100 and above;

b) An interest in an estate that reverts to the grantor or his heirs at the end of some period or
other intangible thing;

c) Simple mortgage irrespective of the amount of security;

d) All other kinds of mortgages where amount secured is Rs.100 or above.

e) Leases of immoveable property from year to year, or for any term exceeding one year, or
reserving a yearly rent;

f) Exchange (where two persons mutually transfer the ownership for the ownership of another);
35
Munnala vs. Atmaram AIR 2008 (NOC) 843(MP).
g) Gift of immovable property; and

h) Transfer of actionable claim, that is, claim to any unsecured debt or any interest in any
immovable property which is not in the possession of the claimant.

For example, A sells his to B for Rs 50,000 based on an oral agreement, by delivery of the keys for
the same. B does not acquire a title as the consideration being more than Rs 100, the transfer must
take place with the help of a written, attested, and registered document. Similarly, A, an old man of
80 years, gives to his friend’s son B, the keys to all the rooms in his house in which both were living,
as the latter had looked after him when he was sick. A expressly told him to retain the possession of
the same, as the owner in presence of all his relatives when he gave the keys. This desire expressed
by the owner, coupled with the delivery of the keys and property papers would still not make B the
owner of the property as the gift of immoveable property has to be executed with a written, attested
and registered document.36

 There must not be any restraining alienation:

Section 10 of TP Act lays down that it is essential that when property is transferred subject to a
condition or limitation which is absolutely restraining the transferee or any person under him from
parting with or disposing off his interest in the property, then such condition or limitation is void.
Though this section is silent regarding the partial restraint.

Thus, such conditions restraining alienation are barred by the law as the right of alienation is one of
the basic rights of the owner, cannot be unreasonably encroached upon by anyone through a private
agreement. This is the general rule despite there being an express contract to the contrary, and
prevents the transferor form controlling the power of alienation of the transferee once the interest in
the property is transferred.

Suppose A is the owner of house X, transfers it for consideration to B. In the transfer deed, A outs a
condition that B should not sell it to anyone and keep the possession of the property to himself. B
agrees to this condition and pays consideration. After the title passes and property vests in B, B sells
it to C. Then A, files a suit claiming possession of the property on the ground that B has committed a
breach of the contract. Thus, the sale in favour of C is void. Here. The suit of A would fail, as he was
attempting to restrain B from absolutely transferring the property even when the interest has vested
in B. Here, even if the transferee had expressly consented to abide by the terms of the contract, this
condition being void under section 10 of the act, he is entitled to ignore it as if it did not exist on
36
Rajeshwar Prosad vs. Bhupendar Narayan AIR 1927 Cal 956; Keshrimal vs. Sukan Ram AIR 1933 Pat 264.
paper. At the same time, a contravention of this condition would not affect the validity of the original
transfer through which the property was acquired by the transferee.

Conditions repugnant to the estate previously given are void and for this reason the courts have
always leaned against a restraint on alienation. 37 According to S. 10, therefore, a condition
incorporated in the transfer deed which absolutely restrains the transferee form transferring his
interest in the property is void. Categorisation of Restraints: -

Since alienation is the sole prerogative of the owner of the property, he is empowered to sell it at any
point of time, for any consideration, to any person and for any purpose. Restraints on alienation
appear in the following ways: -

 Restraints on transfer for a particular time – Restrictions with respect to time i.e., the
condition that the transferee would not sell it for any time period whatsoever would be void,
unless it is for a short period of time and is coupled with the benefit to the transferor, such as
an option of re-purchase, at a consideration stipulated in the contract. This option of
repurchase is personal to the transferor and cannot be extended to anyone else.38
 Restrictions with respect to persons – Restrictions directing the owner that the property
should be transferred only after obtaining the prior permission or consent of specific persons
would be totally void but a condition that it can be transferred to specific persons can be
either partial or absolute, depending upon the facts and circumstances of the case.
 Restraints with respect to money- Where the transferor stipulates that the property can be sold
by the transferee only at a fixed price specified by him beforehand, or where he directs that
the property should be transferred for no consideration, or at market price only, or at any
consideration deemed appropriate by the owner, but out of sale proceeds, either something
has to be paid to a specific person or persons, or for a specific purpose, all these conditions
would be restraints on alienation through control of money would be void.

Section 10 makes two exceptions to the general rule that absolute restraining alienation are void. The
first exception is in respect of lease and the second is regarding a property which is transferred to a
married woman.

37
Stogden vs. Lee (1891) 1 QB 661.
38
Loknath Khound vs, Gunaram Kalita AIR 1986 Gau 52.
 CONCLUSION
Transfer of Property act was specifically drafted to regulate the transfer of immovable property. For
the valid transfer to take place certain essential conditions were mentioned. If any of the 5 conditions
were left unchecked it will amount for the transfer for being a void transfer. Some of these essential
conditions are same as mentioned under Indian Contracts act. While section 5 talks about between
who and when the transfer of property may take place, Section 6 of the talks about which kind of
property may be transferred. Also, section 6 of TP act also mentions certain instances where the
immovable property cannot be transferred. Section 7 of legislation is like section 23 of Indian
contract act regarding what a competent person is. Section 8 talks about the rights which are
transferred with the property. As a rule, all rights invested in the property are transferred until and
unless specified. Section 9 and 10 talks about the procedure which are essential constituting a valid
transfer apart from above sections.