This article is written by Harshit Bhimrajka currently pursuing B.A.LLB (Hons) from the Rajiv Gandhi National University of Law, Patiala. This article talks about all the necessities/essentials required for a valid transfer of property under the Transfer of Property Act, 1882.
Table of Contents
Introduction
The Transfer of Property Act came into force on 1st July 1882. This act regulates the transfer of property in the country. It contains specific provisions regarding the constituents and conditions attached to a transfer. The principal object of this act is to characterize and revise the law relating to the transfer of property by demonstrations of parties and not to transfer by the activity of law. The term ‘transfer of property’ signifies a demonstration by which an individual passes the property to at least one person, or himself and at least one different person. The term person includes an individual, or body of individual or association, or company. The term transfer is defined with reference to the word “convey”. It is a process by which something is made over to another. To make a transfer valid there are some essentials given in the Act which have to be fulfilled, we will describe these essentials in this article.
Necessities/Essentials for Transfer
‘Transfer’ is a term with very wide meaning and it includes every transaction whereby a party divests himself or is deprived of a portion of his interest, that portion subsequently vesting or being vested in another party. This description of the term transfer was given by a Judge of Rangoon High Court in the case Ma Kyin Hone v. Ong Boon Hock (1967). There are many essentials or necessities requires for a valid transfer, they are as follows:
The transfer must be between two or more living persons
Section 5 of the Transfer of Property Act, 1882 describes the first essential of a valid transfer. The transfer of property must take place between two or more persons who are living or it must take place inter vivos. The person who transfers, the transferor, and the person to whom the property is being transferred, the transferee, must be the living entities on the date of transfer. The property can’t be transferred to the person who is dead. Therefore, there shall be an act of conveyance by some living person to constitute a transfer.
The property must be transferable
The phrase “property must be transferable” also denotes that some types of properties are considered to be untransferable under Section 6 of the said act. All the properties except mentioned in Section 6 are considered transferable. There are eight exceptions mentioned in the act:
- An heir apparent: The likely possibility of a beneficiary prevailing to the property of an intestate (Spes Successionis), the possibility of a connection acquiring a heritage on the passing of a kinsman, or some other remote chance of a similar sort will be considered as untransferable. In this way, the exchange of Spes Successionis is void ab initio.
- Easement: An easement is a right of the owner or the occupier of the land which he/she possesses for the beneficial enjoyment of the land, 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. It cannot be transferred apart from the dominant heritage. In Narsingh Sahai v. Bhagwan Sahai (1909) it was held that the prohibition doesn’t touch upon the creation of new easements.
- A right of re-entry: 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. This right is a personal right of an individual and cannot be transferred if he does so, then the same would be void.
- Interest restricted to personal enjoyment: An interest in the property restricted to personal enjoyment of the owner cannot be transferred by him and if he does so then it would be declared as void. A right to future maintenance, in whatsoever manner arising, secured or determined can’t also be transferred. The phrase “whatsoever manner arising” has a very wide meaning and covers cases where the right has been created under a will, compromise, or deed.
- Mere right to sue: A right to sue is a personal right or an individual right that only an aggrieved party can exercise and hence is not transferable. It is not assignable to anyone.
- Offices and Salaries: A public office and salary of a public officer whether before or after it has become payable cannot be transferred. The term public office is not defined under the act but in general terms, it means a person who is appointed to discharge a public duty and in return receives a monetary benefit in the form of salary which is not transferable.
- Stipend: Stipend allowed to naval, civil, military, and air force pensioners of the government and political pensions are not transferable. Only the stipend is not transferable not the gifts or bonus by the government or an allowance made in lieu of a presumed grant of lands, or grant of land in lieu of pension- these things are transferable as interpreted by the judiciary in several cases.
- Opposed to the nature of interest: The property which is opposed to the nature of interest is non-transferable. Transfer for an unlawful object or consideration or opposed to public policy is also not permissible. For example, a transfer of property takes place and it is used as a brothel, then it will not be considered as a valid transfer. Section 23 of the Indian Contract Act, 1872 provided that consideration or object is unlawful if it is: forbidden by law; or is fraudulent or immoral; or it defeats the provision of any law; or is opposed to public policy; involves or implies injury to the person or property of another.
Persons competent to transfer
Section 7 of the Transfer of Property Act, 1882 lays down as to who is competent to transfer the property and if he/she is not eligible or not competent then a valid transfer of property cannot take place. Therefore a person who is competent to the person can validly transfer the property if he is the owner of that property or he possesses authority sustainable in law to transfer the same. The term ‘authority’ can be personal, under an agency or acquired under law or under the direction or permission of the court. In order to be a competent person to transfer the property one should have attained the age of majority in Raja Balwant Singh v. Rao Maharaj Singh (1920) case it was held that a transfer of property by minor is void.) and should be of sound mind at the time of transferring the property, also he should not be disqualified to transfer the property under any law to which he is subject to. In Sadiq Ali Khan v. Jai Kishore (1928) case, the privy council observed that a deed executed by a minor was null and void. It was also observed that the law of estoppel cannot be applied to a minor and a minor is not competent to transfer yet a transfer to minor is valid.
It is mentioned that under Section 11 of the Indian Contract Act the given provisions of the competency should be fulfilled in order to transfer the property. As far as the transferee is concerned there is no provision in any law concerning the competency. But, according to Section 13 of the Act, he should be alive at the time of transfer and creation of prior interest is required if the transfer is made to an unborn person.
Methods of Transfer
Section 9 of the Transfer of Property Act, 1882 deals with the method of transfer of property that can be made orally in every case in which writing is not required expressly by the law. Under the said act, these following transfers must be made in writing:
- Transfer of every tangible property, reversion, or other intangible things where its value is equal or more than 100 INR;
- Mortgage of property irrespective of the amount of security;
- All kinds of mortgages where the principal is equal to or more than 100 INR;
- Exchange;
- Gift of immovable property;
- Lease of immovable property annually or for any term more than a year;
- When rent for more than 12 months is required in advance;
- 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.
Must not have any conditions Restraining Alienation
Section 10 of the Transfer of Property Act, 1882 said that when a property, subjected to a condition or limitation, is being transferred restrains the transferee or any other person claiming under him from parting with his interest in the property then the condition or limitation is void except in the case of lease of the property where the condition is beneficial of the transferor or those claiming under him. These conditions restraining alienation are barred by the law; it can not be encroached by anyone, not even by the transferor through a private agreement as it is one of the basic rights of the owner. Since it is the sole prerogative of the owner he is empowered to sell his property any time he wants and to anyone. Restraints of alienations can be in the following ways:
- Restraining with respect to persons: Restraining the owner of the property through a private agreement to transfer the interest or the whole property only after obtaining the prior permission or consent of a specific person would be void. The condition that it can be transferred to a specific person can be valid depending upon the facts of the case.
- Restraining on transfer for a particular time: Restraining the owner with a condition that the property would not be sold within five or ten years or for any time period is totally void unless it is for a shorter period and the transferor has a benefit with that condition such as an option of repurchase as stipulated in the contract.
- Restraining with respect to money: Restraining the owner that the property can be sold only at a fixed price, or for no consideration, or at a 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 and would be void.
Rule against perpetuity
Section 14 of the Transfer of Property Act, 1882 features that the exchange must be in opposition to the rule against perpetuity. The literal meaning of the term perpetuity is endlessness, time everlasting, eternity, or infinity. It alludes to the production of an enthusiasm for the here and now which is to produce results after an extremely prolonged stretch of time. No transfer of property can happen or work to make an interest which is to occur after the lifetime of at least one people living at the date of such transfer and the minority of some individual who ought to be in presence at the expiry of that period and to whom the interest made is to have a place on the off chance that he accomplishes the age of majority. This rule guarantees that one can’t defer the vesting of property in a transferee past a specific limit.
Conclusion
These were the essentials required for the valid transfer of property under the Act. If these conditions are not fulfilled then the transfer will not be considered as a valid one or can be declared as void. This condition is as similar to that of the validity of a contract as if the essentials mentioned under the Indian Contract Act, 1872 then only a contract will be declared as valid until then it is a void contract. Even some of the essentials are similar to that of a valid contract under the Indian Contract Act, 1872.
References
- https://www.planetofstudents.com/blog/indian-law/essentials-of-a-valid-transfer-under-transfer-of-property-act/
- https://lawtimesjournal.in/essentials-of-transfer-under-transfer-of-property-act-1882/
- https://www.indiacode.nic.in/bitstream/123456789/2338/1/A1882-04.pdf
LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:
