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Conditions restraining Alienation under the Transfer of Property Act, 1882

February 14, 2020
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This article has been written by Ishaan Banerjee from Vivekananda Institute of Professional Studies, affiliated to Guru Gobind Singh Indraprastha University. This article explores the basics of the Transfer of Property Act 1882, along with the concept of alienation. We will also examine the conditions and exceptions relating to the restriction of alienation under this Act.  

Introduction

The Transfer of Property Act, 1882 is an Act laying down the rules and regulations regarding the transfer of property among persons in India. It explains how a transfer of property is completed and the conditions under which transfer may be carried out. An understanding of the basic terms of this Act along with exploring alienation and its history would be important in understanding the conditions and exceptions involved in the restraint of alienation.

What is the transfer of property according to law?

Section 5 of the Transfer of Property Act, 1882 has several conditions for an act to be defined as a ‘transfer of property’-

What can be transferred?

It is not explicitly stated in the Act regarding what is ‘property’ or what can be transferred. Rather, the Act states that property of any kind may be transferred subject to exceptions given under Section 6. The property that can be transferred includes both movable and immovable property, as well as intangible property like tenancy, copyrights etc.

Who is competent to transfer?

Section 7 of the Transfer of Property Act categorizes persons competent to transfer as-

This property can be transferred wholly or partly, absolutely or conditionally, with regard to the extent of the law and circumstances. The property, as stated above may be conveyed to any living person including a company, association or a body of individuals whether incorporated or not. Under Section 13, even an unborn child can be the transferee of the property. 

What is alienation?

Alienation means transferring of property. This transfer of property can be through gifts, sales and mortgages. Under Hindu Law, no person of the Joint Hindu family, not even the Karta, has the full power to alienate the joint family property or his own interest in the joint family property without the consent of all coparceners. In the case of separate property, a Hindu can alienate that property whether it comes under Dayabhaga or Mitakshara school. This power is absolute. 

Earlier, under the classical law, the father or the Karta had the power to alienate the whole joint family property without the consent of the other coparceners, and that is why there have been certain conditions added for the situation where a Karta or father can do so.

Can alienation of property be restrained?

Section 10 to 18 of the Transfer of Property Act, 1882 state the rules for alienation of property-

This is commonly known as the ‘rule against alienability’. The Transfer of Property Act is based on the principle that there can be a free transfer of property and has been specifically made with regard to free transfer. If conditions restraining transfer are imposed, then the free transfer would be restricted and there would be no use for the Transfer of Property Act.

However, only conditions mandating ‘absolute restriction’ are void. There are conditions which call for partial restraint to be observed with regard to the transfer of property. If we are to determine whether a condition is absolute or partial, then one must look at the substance of the condition, and not merely the words. Therefore, restraints can be classified into two categories.

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Types of restraints

Absolute Restraints

Partial Restraints

Exceptions to the restraints

Lease

A lease is a transfer of property wherein the lessee only has the right of enjoyment of the property, while the ownership right is still with the lessor. Conditions imposing restrictions are valid in the case of a lease, where the condition is for the benefit of the lessor or those claiming under him. In Raja JagatRanvir v. Bagriden, AIR 1973 All 1, a condition in the lease that the lessee shall not sublet or assign was held to be valid. 

Married Woman

When the property is to be transferred to a married woman, who is not a Hindu, Mohammedan or Buddhist, then the condition restricting alienation can be valid.

Repugnant conditions

An exception to Section 11

If the transferor has another piece of immovable property, he may, for the benefit of that property, impose conditions of restrictions on the transferee’s right of enjoyment. For example, A has two properties: X and Y. A sells them to B with the condition that a portion of X, adjoined to Y, shall be kept open for the benefit of Y. This condition will be valid.  

Positive and negative conditions

Difference between Section 10 and Section 11

Condition of insolvency

Conclusion

The Transfer of Property Act, 1882 has been made for the regulation of the free transfer of property in India. This transfer can be in the present or the future and must be between living persons. This article also explores what can be transferred under this Act, and who are the ones competent to transfer. The concept of alienation was also explored. Earlier, under the classical law, the father or the Karta had the right to alienate the joint family property without the consent of the coparceners, but now conditions have been introduced to regulate this. 

Section 10, 11 and 12 contain certain conditions under which restraining of alienation of the property by the transferee is void. It also has exceptions where these conditions may be valid. Primarily, under Section 10, conditions of restraint can be classified into two categories: absolute and partial. Whether a condition is absolute or partial is determined by the substance of that condition, not merely the words. This article explored other conditions such as positive and negative and insolvency, along with their exceptions.

References

[1] https://www.lawctopus.com/academike/restraints-on-transfer/#_edn40

[2] https://www.legalbites.in/restraints-transfer-section-10/

[3] https://www.lawctopus.com/academike/alienation-of-property/


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