NATIONAL LAW INSTITUTE UNIVERSITY

PROPERTY LAW – II

TRANSFER OF IMMOVABLE PROPERTY

BY THIRD PERSON

SUBMITTED TO:
Asst. Prof. Vijay Kumar

SUBMITTED BY:
Syed Azam Uddin
2014BALLB38
 ACKNOWLEDGEMENT

I am deeply grateful to Professor Vijay Kumar, for giving me the opportunity of working on
this project. I am indebted to him for providing me with essential guidance and knowledge of
the concepts of Property Law without which this project would not have been possible.

I would also like to thank the Director of the National Law Institute University and the
Library for the provision of resources necessary for the research and publication of this
project.

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 CONTENTS

OBJECTIVES ............................................................................................................................ 4
INTRODUCTION ..................................................................................................................... 5
TRANSFER OF IMMOVABLE PROPERTY .......................................................................... 8
Transfer must be by a living or juristic person. ..................................................................... 8
The transfer must be through a conveyance. ......................................................................... 8
The property itself must be transferred. ................................................................................. 8
It must be made to a living or a juristic person. ..................................................................... 8
MODES OF TRANSFER OF IMMOVABLE PROPERTY ................................................... 10
Sale....................................................................................................................................... 10
Mortgage .............................................................................................................................. 10
Charge .................................................................................................................................. 11
Lease .................................................................................................................................... 11
Other ways ........................................................................................................................... 11
TRANSFER OF IMMOVABLE PROPERTY BY THIRD PERSON .................................... 13
Transfer by Ostensible Owner: ............................................................................................ 13
Transfer by Power of attorney ............................................................................................. 17
Minor.................................................................................................................................... 19
Insane Person ....................................................................................................................... 21
CONCLUSION ........................................................................................................................ 23

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 OBJECTIVES

 Provide information on the Transfer of Property Act 1882 and interpret the meaning
of property.
 Talks about immovable property in detail and the various ways by which transfer of
immovable property can take place.
 To understand the concept of transfer of immovable property by third person and the
various modes and conditions under which such transfer of property can take place.

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 INTRODUCTION

The Transfer of Property Act 1882 is an Indian legislation which regulates the transfer of
property in India. It contains specific provisions regarding what constitutes transfer and the
conditions attached to it. It came into force on 1 July 1882.

According to the Act, 'transfer of property' means an act by which a person conveys property
to one or more persons, or himself and one or more other persons. The act of transfer may be
done in the present or for the future. The person may include an individual, company or
association or body of individuals, and any kind of property may be transferred, including the
transfer of immovable property.

Interpretation of "property"

Property is broadly classified into the following categories:

1. Immovable Property (excluding standing timber, growing crops, and grass)

2. Movable Property

The Interpretation of the Act, says "Immovable property does not includes standing timber,
growing crops or grass". Section 3(26), The General Clauses Act, 1897, defines, " immovable
property" shall include land, benefits to arise out of land, and things attached to the earth, or
permanently fastened to anything attached to the earth. Also, according to The Registration
Act,1908, 2(6) "immovable property" includes land, buildings, hereditary allowances, rights
to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached
to the earth or permanently fastened to anything which is attached to the earth, but not
standing timber, growing crops nor grass. A transfer of property passes forthwith to the
transferee all the interest which the transferor is then capable of passing in the property,
unless a different intention is expressed or implied.

According to Section 43 of the Transfer of Property Act 1882, in case a person either
fraudulently or erroneously represents that he is authorised to transfer certain immovable
property and does some acts to transfer such property for consideration, then such a transfer
will continue to operate in future. It will operate on any interest which the transferor may
acquire in such property.

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This will be at the option of the transferee and can be done during the time during which the
contract of transfer exists. As per this rule, the rights of bona fide transferee, who has no
notice of the earlier transfer or of the option, are protected. This rule embodies a rule
of estoppel i.e. a person who makes a representation cannot later on go against it.

Every person, who is competent to contract, is competent to transfer property, which can be
transferred in whole or in part. He should be entitled to the transferable property, or
authorised to dispose off transferable property which is not his own. The right may be either
absolute or conditional, and the property may be movable or immovable, present or future.
Such a transfer can be made orally, unless a transfer in writing is specifically required under
any law.

Section 5 of Transfer of property act where transfer of property has been defined.

—In the following sections “transfer of property” means an act by which a living person
conveys property, in present or in future, to one or more other living persons, or to himself,
[or to himself] and one or more other living persons; and “to transfer property” is to perform
such act. [In this section “living person” includes a company or association or body of
individuals, whether incorporated or not, but nothing herein contained shall affect any law for
the time being in force relating to transfer of property to or by companies, associations or
bodies of individuals.]

According to Section 6 of the Transfer of Property Act, property of any kind may be
transferred. The person insisting non-transferability must prove the existence of some law or
custom which restricts the right of transfer. Unless there is some legal restriction preventing
the transfer, the owner of the property may transfer it. However, in some cases there may be
transfer of property by unauthorised person who subsequently acquires interest in such
property.

In case the property is transferred subject to the condition which absolutely restrains the
transferee from parting with or disposing of his interest in the property, the condition is void.
The only exception is in the case of a lease where the condition is for the benefit of the lessor
or those claiming under him. Generally, only the person having interest in the property is
authorised to transfer his interest in the property and can pass on the proper title to any other
person. The rights of the transferees will not be adversely affected, provided: they acted in

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good faith; the property was acquired for consideration; and the transferees had acted without
notice of the defect in title of the transferor.

It should be noted that these conditions must be satisfied:

1. There must be a representation by the transferor that he has authority to transfer the
immovable property.
2. The representation should be either fraudulent or erroneous.
3. The transferee must act on the representation in good faith.
4. The transfer should be done for a consideration.
5. The transferor should subsequently acquire some interest in the property he had
agreed to transfer.
6. The transferee may have the option to acquire the interest which the transferor
subsequently acquires.

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 TRANSFER OF IMMOVABLE PROPERTY

Transfer of a property can be made in two ways, firstly by act of parties and secondly by law.
Under act of parties, Transfer of Property Act (TOPA) exists, which gives us further divisions
that is whether the property is movable or immovable, transfer for movable property and
immovable property.

Immovable property is divided into six parts-

1. Sale
2. Mortgage
3. Actionable claims
4. Lease
5. Exchange and gifts
6. Charge.

Transfer must be by a living or juristic person.

A juristic person was defined in the case Shiromani gurudwara Prabhakar committee,
Amritsar v. Sri Somnath Dass. In this case the court said that a juristic person can be an
individual, firm, corporate company, association, society, not including partnership firm. Any
individual who can sue or be sued under law would satisfy this requirement.

The transfer must be through a conveyance.

Conveyance can be present or future. However conveyance can take place only if there is
creation of new title. Therefore, there should have been nothing with the transferee before the
title. In addition to this the term future is used to define the future interest in the property and
not the future property itself. Therefore, the word future property itself must be transferred.
Therefore, the word future is for the conveyance.

The property itself must be transferred.

It must be made to a living or a juristic person.

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Any kind immovable property can be transferred. Any kind of immovable property can be
transferred other than that which are given in section 6 of the Transfer of Property Act. In the
case Samsudden v. Abdul Husen 1it was held that the chance to transfer couldn’t be
transferred. The right to re-entry, easement can’t be transferred. Specific rights cannot be
transferred, as there are only certain people who should enjoy the right. The right to sue,
public office, unlawful objects cannot be transferred.

The third element is competency as under section 7 of Transfer of Property Act. The
individual must not be a minor or an insane person. The person must have the title of
property or the person must have the authority to transfer; in part or in whole, as held in the
case Krishna khurhai v. Grindlays bank2, if transfer is made ultra virus to the authority vested
in the agent, the transfer will be void.

The fourth element being that under section 6(h)(3) the person must not be a legally
disqualified transferee. For example under section 136 of Transfer of Property Act judges,
legal practitioners and officers connected to the court are disqualified from purchasing
actionable claims.

The fifth element being that a valid transfer can also happen under section 9 of Transfer of
Property Act as an oral transfer.

1
(1906) 8 BOMLR 252
2
1991 AIR 899, 1990 SCR (2) 961

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 MODES OF TRANSFER OF IMMOVABLE PROPERTY

Transfer of immovable property may happen only in certain ways. They can either be through
sale, mortgagee, lease, and gifts or through actionable claims. These are the following modes
of transfer.

Sale
Contract of sale of immovable property is basically a contract, which states terms for the
permanent transfer of property. The sale takes place in accordance to the terms, which are
settled by both the parties in the contract itself. Such contract of sale does not create any
interest in or charge on such immovable property. A kind of obligation is created in respect of
the ownership of the property. Essentials of a contract of sale are several. The parties to the
transfer or the vendor should be competent enough to contract under Section 2 of the Indian
Contract Act. Price is another essential ingredient for all transactions of sale and in the
absence of this price, which constitutes consideration, the transfer will not be regarded as a
contract of sale. Delivery of property is necessary for a transfer by way of sale. In case of
tangible property worth less than Rupees one hundred, the transfer can be made by a
registered instrument or putting the purchaser in possession of the property. If it is more than
rupees one hundred then the instrument has to be registered under Registration Act, 1908.
There are certain rights and duties of the buyer and the seller, which are subject to the
contract. These rights and duties are governed under Section 55 of the Transfer of Property
Act.

Mortgage
Transfer of immovable property can also take place through mortgage. Section 58(a) of the
Transfer of Property Act says, a mortgage is the transfer of an interest in specific immovable
property for the purpose of securing the payment of money advanced or to be advanced by
way of loan, an existing or future deist, or the performance of an engagement which may give
rise to a pecuniary liability. Ingredients of mortgage; in a mortgage, the mortgagor transfers
any one of his interests in specified immovable property to the mortgagee. Money to be
advanced by way of loan arises in the case of a running account between the parties. Future
debt is a contingent liability, which arises on the happening of some contingency. If the
promise not competed an obligation to pay arises. These may be a pecuniary liability.

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An under taking be a person borrowing money not to alienate his property until the money is
repaid is not a mortgage, because there is no transfer of interest in property.

Charge
Transfer of immovable property can also take place through charge. According to Section
100 when a person by the act of parties or operation of law creates a security for the payment
of money to another, and the transaction should not be a mortgagee, the latter is said to have a
charge on the property. Charge is created by operation of law, this distinguishes mortgage,
which is created by act of parties.

Lease
Transfer of immovable property can also take place though lease. Section 105 defines lease.
According to it, lease of immovable property is a transfer of a right to enjoy such property,
made for a certain time, express or implied or in perpetuity in consideration of a price paid or
promised, or of money, share of crops, service or any other thing of value, to be rendered
periodically or on specified occasions to the transferor by the transferee, who accepts the
transfer on such terms.

Other ways
Immovable property can also be transferred by way of law that is if there is insolvency,
succession or the absence of a will. In the situation of the absence of a will, the court shall
declare the transfer of property by way of interstate.

However, there are some things that cannot be transferred. Section 6 of the Transfer of
Property Act discusses the immovable properties, which cannot be transferred. Spec
successions cannot be transferred. According to section 6(a) it is void. In the case Annada
Mohan Roy v. Gom Mohan Mullick3, the appellant purchased the rights expectant upon the
termination of the surviving widows rights from the respondents and further on there was a
compromise between the widow and the respondents as a result of which the respondents got
certain properties. Thus it was held in the case that compromise is void and cannot be
transferred.

In the case Karpagathachi v. Nagarathinathachi4, two-widows had divided the husband’s

property into two shares and took possession of respective shares. Under the partition deed

3
(1923) 25 BOMLR 1269
4
1965 SCR (3) 335

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each widow gave up her life interest. When one of the widow died her daughter took over the
possession. The other widow filed a suit against the daughter claiming for the share, which is
in possession of the daughter of the other widow. The court held that each widow transfer her
right of survivorship according to section 6(a) of transfer of property act.

Charge cannot be transferred because it is a right, which is a part of property. Compromise

cannot be transferred. Easement cannot be transferred because these are the rights or interest
arising of land, which is a part of the property but cannot be transferred. Family arrangement
may be transferred. A will cannot be transferred because it does not operate by act of parties.
Auction sale cannot be transferred because property is in possession of another.

Are benefits arising out of land immovable? Yes, benefits like crops from your land, fish and
the lake and anything 12nm from the main land are immovable and can be transferred. In the
case Anand Bahera v. State of Orissa5, it was held that profit arising out of land is immovable
property. The right to walk on the land and to draw fish from the lake and taking it away is
immovable property as it is the profit arising of the land. Grazing of cattle on the land is also
immovable property as it is profit arising of the land.

5
1955 SCR (2) 919

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 TRANSFER OF IMMOVABLE PROPERTY BY THIRD PERSON

Transfers of property to minors create significant problems. To begin with, most transferors
do not wish to place valuable property under the control of inexperienced children. The
probability of mismanagement, or no management whatsoever, remains a significant spectre
to those who would make such transfers. Somehow, control of the property must be retained
in competent hands. Although certain transfers to minors are very advantageous, particularly
for the purposes of estate planning.

Transfer by Ostensible Owner:

Section 41 of the Act deals with ostensible owner and it has been defined as:

Where, with the consent, express or implies, of the persons interested in immovable property,
a person is the ostensible owner of such property and transfer the same for consideration, the
transfer shall not be voidable on the grounds that the transferor was not authorized to make it:
provided that the transferee, after taking reasonable care to ascertain that the transferor had
power to make the transfer, has acted in good faith.

The section lays down certain requirements to avail the benefit of this section. They are:

1. The primary condition is that the person who is transferring the property should be
ostensible owner.
2. There should be consent form the real owner, which can be implied or express form.
3. The ostensible owner should get some consideration in return of the property.
4. Reasonable care has to be taken by the transferee about the authority of transferor to
the property and the transferee had acted in good faith.
5. This section is applicable only to transfer of immovable property and not in case of
movable property.

Ostensible owner is not the real owner but who can represent himself as the real owner to the
3rd party for such dealings. He has acquired that right by the wilful neglect or acquiesces by
the real owner of the property thereby making him an ostensible owner. A person who has
gone abroad for some years has given his property to his family relative for making use of it
for agricultural purpose and for all other purposes as he may deem fit. In this case the family
relative is the ostensible owner and if during that period he sells the property to a third party,
then the real owner after coming back cannot claim his property and say that the person was
not authorized to transfer his property. An alternative case can be when the property is in

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wife’s name but husband used to take care of it and the other dealings related to the property.
If the husband thereby sells this property, the wife cannot claim her property back. Or as in
the Mohamad Shakur v Shah Jehan6, in which the real owners lived in a different village, and
had authorized a widow to use the property as she liked and afterwards she sold it. The real
owner lost the case and the transfer was a valid one. Transfer of property by an ostensible
owner is a concept which was incorporated to protect the rights of innocent third parties vis-
à-vis the property owners. In the landmark judgment of Ramcoomar Koondoo v. John and
Maria McQueen, the decision which found its way to be codified as Section 41 of the
Transfer of Property Act. It also examines the various aspects and essentials that must be
fulfilled for the plaintiff to avail of the benefits of this principle. This doctrine seeks to
protect the interests of innocent third parties.

Ramcoomar Koondoo v. John and Maria McQueen7

In this case, the plaintiff who had inherited a property by way of a will came to know that
someone else had already purchased this property in her name and subsequently sold this
property to a third person, by making him believe that he had good title over that property.
The whole transaction was a ‘benami’ transaction but was not known to anyone except the
person who sold the property. The plaintiff sued the third party for recovery of the possession
of the land but the committee held that:

“ It is a principle of natural equity, which must be universally applicable, that where one
man allows another to hold himself out as the owner of an estate, and a third person
purchases it for value from the apparent owner in the belief that he is the real owner, the man
who so allows the other to hold himself our shall not be permitted to recover upon his secret
title, unless he can overthrow that of the purchaser by showing, either that he had direct
notice, or something which amounts to constructive notice, of the real title, or that there
existed circumstances which ought to have put him upon an inquiry that, if prosecuted would
have led to discovery of it.”

It was there by held that the plaintiff cannot take back the property form the third party and
that the transfer was a legitimate transfer in the eyes of the law. This wordings used in this
case can be seen in the S. 41 of the Act which deals with Ostensible owner.

6
63 IC 125
7
(1872) 11 Beng LR 46, p 52.

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Implied Consent

Implied consent can be made out from the conduct of the real owner. It is not required that
the real owner has to give express consent or give his consent in writing. Therefore, where
another person is dealing with the property of the real owner, as if the property was his own,
and the real owner knows about it, then it will said to be implied consent on the part of the
real owner. In the case of Shamsher Chand v Bakshi Meher Chand8, it was held that if a party
is not aware of his rights or is silent about them, then in such case it cannot be said that the
real owner had consented to the transfer of the property.

It is required that a person who is not aware of his rights could never have consented to that
and such a transaction will not be valid. It is not stated in the section that the real owner must
have actually consented to the transfer, because if that was the case, then the real owner could
never have made any objection to such transfer. It is just that the real owner is unaware of
this transaction or is negligent. Silence may amount to consent if the silence on the part of
real owner leads the third party to believe that the ostensible owner is the real owner of the
property.

In the case of Gurucharan Singh v. Punjab State Electricity Board Patiala9 , where the land
in contention was transferred to someone else and such person had perfected his right to the
property by paying the money. The new owner which is the real owner had not taken the
possession of the land and the previous owner after having waited for 12 years, sold the land
to third party. The real owner then comes forward and claim his right over the land and the
court said that the real owner was a minor at the time of transfer of land and therefore could
not take the possession of the land and therefore it would not amount to silence on the part of
the real owner as he could never have consented to the transfer. Therefore the subsequent
transfer was held to be invalid.

8
AIR 1947 Lah 147.
9
[1989]A.I.R. 127 (P&H).

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Reasonable Care

Reasonable care can be understood as the care which a reasonable and ordinary man would
have taken. He has a duty to check the title of the transferor. Like in the case of Nageshar
Prasad v. Raja Pateshri10 where there was an error in the revenue records regarding the name
of the owner. The name written was of some other person and the real owner had already
made a complaint about this error. The person whose name was in the revenue records
subsequently sold it to a third person and the third person without making proper inquiries
took the property and the real owner afterwards objects to it. The court held that the third
party has not taken reasonable care which was required of him and therefore he will not be
protected by this section. The advice of solicitor will not be enough to prove that the third
party has taken reasonable care in determining the title of the property. The third party is
required all the available documents which can possibly give some more information
regarding the title of the property and these documents may include police registers,
municipal registers apart from other documents.

There is also a safeguard for the real owner. In the case of Mathura v. Ambika11, where the
real owner had sold the property to another person and got it registered before the transfer by
the ostensible owner could be registered, then it was held that the transfer by the real owner
would be held valid as he has a greater title over the property than the ostensible owner and
the rights of third person who had purchased this property from the ostensible would not be
protected under this section.

10
(1915) 265 , (20 Cal WN).
11
(1914) 993 (All) LJ.

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Transfer by Power of attorney

A power of attorney is not an instrument of transfer in regard to any right, title or interest in
an immovable property. The power of attorney is creation of an agency whereby the grantor
authorizes the grantee to do certain acts specified therein, on behalf of grantor, which when
executed will be binding on the grantor as if done by him. It is revocable or terminable at any
time unless made irrevocable in a manner known to law. Even an irrevocable attorney does
not have the effect of transferring title to the grantee. So, power of attorney does not convey
ownership. An attorney holder may however execute a deed of conveyance in exercise of the
power granted under the power of attorney and convey title on behalf of the grantor.

The legal definition of the GPA is that it is a mere agency whereby the grantor authorizes the
grantee to do certain acts specified therein; this he does on behalf of grantor, which when
executed will be binding on the grantor as if done by him. Interestingly, GPA is revocable or
can even be terminated at any time unless made irrevocable in a manner known to law.

In 2012, the Supreme Court of India, in the case of Suraj Lamps and Industries (P) Ltd vs
State of Haryana12, among other things, expressed certain reservations as regards the validity
of a GPA Sale in situations where the transactions were not genuine, pursuant to which, the
Delhi Government issued a circular dated 27 April 2012 directing the relevant registration
authorities not to register any GPA Sales in Delhi. As a result, no transfer of immoveable
property could take place in Delhi on the basis of a GPA Sale. This move witnessed a
significant drop in the number of sale transactions in Delhi.

Honble Apex Court dealt with is whether immovable property can be legally transferred or
conveyed through a General Power of Attorney, Agreement to Sell and a Will? Before we
embark upon this question, it is very essential to know as to why such kind of indirect sales
came into existence. The most dominant reasons for such kind of Indirect Sales were to
avoid prohibitions/ conditions regarding certain transfers (as some deeds of conveyance
contain the clauses that the property can only be sold after 15 years from the date of
construction of some building on the plot/property), to avoid payment of stamp duty and
registration charges on deeds of conveyance, to avoid payment of capital gains on transfers,
to invest black money etc. The seller of the immovable property in these indirect sales after

12 SPECIAL LEAVE PETITION (C) NO.13917 OF 2009

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receiving the agreed consideration, deliver the possession of the said property and executes
some or all of the following documents:

(1) An agreement of sale (containing the terms which would be similar to terms of sale)
by the seller in favor of the purchaser and undertaking to execute any document as
and when required in future.
(2) An agreement of sale agreeing to sell the property with the separate affidavit
confirming receipt of full price and delivery of possession and undertaking to execute
sale deed whenever required.
(3) An Irrevocable General Power of Attorney in favour of the purchaser or his nominee.
(4) A Special Power of Attorney either to sell or to manage the property.
(5) A Will bequeathing the property to the purchaser (as a safeguard against the
consequences of death of the vendor before transfer is effected).

The Honble Apex Court noted that such kind of Indirect Sales adversely affected the
economy, civil society and law and order. Firstly, it enables large scale evasion of income
tax, wealth tax, stamp duty and registration fees thereby denying the benefit of such revenue
to the Government and Public. Secondly, such transactions enable persons with undisclosed
wealth/income to invest their black money and also earn profit/income, thereby encouraging
circulation of black money and corruption. The Supreme Court in the case had however,
observed that GPA transactions may also be used to obtain specific performance or to defend
possession under section 53A of Transfer of Property Act, 1882.

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Minor
Transferring property to a minor is through the use of a trust for the minor's benefit. In order
to secure tax savings, the trust has to satisfy the following Internal Revenue Service
requirements. First, the transfer has to be for the benefit of a minor, meaning an individual
who has not attained age 21 as of the date of the transfer. The trust must provide that trust
income and principal may be used for the donee's benefit prior to his reaching age 21 and any
income and principal not expended for the donee's benefit during his minority must pass to
the donee upon his attainment of age 21. If the donee dies before reaching age 21, such
unexpended income and principal must be paid either to the donee's estate or as the donee
might appoint. The trust can provide that when the minor reaches age 21 he has a limited
period in which he can force immediate distribution of the trust fund. If such power is not
exercised, the trust can continue on its own terms.

If the foregoing requirements are met, the donor of the trust is allowed the advantage of an
Internal Revenue Code gift tax provision that has become a familiar feature of gift-giving
programs. A donor is permitted to exclude from the total gifts made in the tax year the first
$10,000 of a gift made to an individual. If the donor's spouse joins in the gift (the spouse
need not have any interest in the property being transferred), the exclusion is $20,000. Stated
simply, either $10,000 or $20,000 worth of property can be transferred by a donor free of
federal gift tax to a single individual in a given tax year. Such a gift can be repeated in each
succeeding year.

SEC. 6 Hindu Minorities and Guardianship Act. 1956 defines Natural guardians of a
Hindu minor.-

The natural guardians of a Hindu, minor, in respect of the minor's person as well as in respect
of the minor's property (excluding his or her undivided interest in joint family property), are:

1. In the case of a boy or an unmarried girl-the father, and after him, the mother:
provided that the custody of a minor who has not completed the age of five years shall
ordinarily be with the mother.
2. In the case of an illegitimate boy or an illegitimate unmarried girl-the mother, and
after her, the father.
3. In the case of a married girl-the husband.

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Provided that no person shall be entitled to act as the natural guardian of a minor under the
provisions of this section-

1. If he has ceased to be a Hindu.

2. If he has completely and finally renounced the world by becoming a hermit
(vanaprastha) or an ascetic (yati or sanyasi)

Explanation.- In this section, the expressions 'father' and 'mother' do not include a step-father
and a step-mother.

The Natural Guardian/Guardian has no power to mortgage or charge, or transfer by sale, gift,
and exchange or otherwise any part of the immovable property of the minor whether it is for
the benefit of the minor or otherwise both under the provisions of Guardianship and Wards
Act. 1890 and Hindu Minority and Guardianship Act. 1956, except with the permission of the
court.

If the Natural Guardian/ Guardian of a minor has transferred the property in contravention of
Sec. 8 (1) and (2) of Hindu Minority and Guardianship Act, 1956 or in contravention
of Sec.29 of Guardianship and Wards Act. 1890, the same is voidable at the option of a
minor under Sed. 8(3) of Hindu Minority and Guardianship Act. 1956 and Sec. 30
of Guardianship and Wards Act. 1890 as the case may be.

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Insane Person
In the case of insane person a person needs to be appointed as the legal guardian of the insane
person and then with the permission of the court that guardian can sell the property. Section
47 and 49 of The Indian Lunacy Act, 1912, talks about how legal guardians can take care of
the property.

Section 47: Powers of manager in respect of management of lunatic's estates.

The Court, on the appointment of a manager of the estate of a lunatic, may direct by the order
of appointment, or by any subsequent order, that such manager shall have such powers for the
management of the estate as to the Court may seem necessary and proper, reference being
had to the nature of the property, whether moveable or immoveable, of which the estate may
consist;

Provided that no manager so appointed shall without the permission of the Court—
(a) Mortgage, change or transfer by sale, gift, exchange or otherwise, any immoveable
property of the lunatic ; or
(b) Lease any such property for a term exceeding five years. Such permission may be granted
subject to any condition or restriction which the Court thinks fit to impose.

Section 49: Power to dispose of lunatic's property for certain purposes.

The Court may, if it appears to be just or for the lunatic's benefit, order that any property,
moveable or immovable, of the lunatic, and whether in possession, reversion, remainder, or
contingency, be sold, charged, mortgaged, dealt with or otherwise disposed of as may seem
most expedient for the purpose of arising or securing or repaying with or without interest
money to be applied or which has been applied to all or any of the following purposes,
namely :

(1) The payment of the lunatic's debts or engagements

(2) The discharge of any encumbrance on his property ;
(3) The payment of any debt or expenditure incurred for the lunatic's maintenance or
otherwise for his benefit;

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(4) The payment of or provision for the expenses of his future maintenance and the
maintenance of such members of his family as are dependent on him for maintenance,
including the expenses of his removal to Europe, if he shall be so removed, and all expenses
incidental thereto;
(5) The payment of the costs of any enquiry under this Chapter, and of any costs incurred by
order or under the authority of the Court.

In the case of Sonal Bala Bora v Jyotirindra Bhattacharjee13, the court said 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. Therefore, the legal guardian of the insane person can alienate the
property on behalf of the lunatic with the permission of the court that guardian can sell the
property for the purposes mentioned in Section 49 of the Indian Lunacy Act, 1912.

13
(2005) 4 SCC 501 para 20

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 CONCLUSION

Transfer of property means an act by which a person conveys property to one or more
persons, or himself and one or more other persons. The act of transfer may be done in the
present or for the future. The person may include an individual, company or association or
body of individuals, and any kind of property may be transferred, including the transfer of
immovable property. Immovable property is divided into six parts- Sale, mortgage, actionable
claims, lease, exchange and gifts, charge.

Transfer of immovable property by third person can be done in certain ways:

1. Transfer by ostensible owner.

2. Transfer by power of attorney.
3. Transfer for minor.
4. Transfer for lunatics.

In this project work the following points have been discussed in detail, giving us an in depth
knowledge about how in certain cases, property can be transferred by a third person for the
benefit of the owner or for other purposes.

The usual background for the transfer of property by a third party includes the idea that such
transaction should be done only for the benefit of the owner or people who have interest in
the property. The guardian should not pursue personal benefits out of such transfers of
property.

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 BIBLIOGRAPHY

1. Textbook on the Transfer of Property Act, Avtar Singh.

2. www.indiankanoon.com
3. www.manupatrafast.in

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