Meaning of Transfer of Property

Section 5 of the Transfer of Property Act, 1882 defines the term transfer of property. According
to this section, 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 and other living persons.
The phrase “living person” includes a company or association or body of individuals, whether
incorporated or not, but nothing in this section shall affect any law for the time being in force
relating to or by companies, associations or bodies of individuals.

The word property in the Act has been used in one of the following senses:

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(i) Tangible material things like house.

(ii) Rights which are exercised over material things like the right to sell or make a gift of things.

(iii) Rights which are not exercised over any material such as the right to repayment of a debt.

The expression transfer of property implies various meanings. One sense maybe transfers of
things such as the sale of a house. Another sense maybe transfer of one or more of the rights in
a thing such as mortgage of a house or transfer of a debt.

Thus, if a new title has not been created or some interest has not been transferred in favour of
the Transferee, then the transfer of property cannot take effect.

An analysis of section 5 helps us understand the meaning of the phrase, “transfer of property”.
Thus, transfer of property means an act which may take effect in the present or future. The
property in question must be in existence at the time the transfer takes place. Moreover, the
conveyance of the property must be from one living person to another.

What may be Transferred

Section 6 of the Transfer of Property Act, 1882 discusses the property which may be
transferred. The section states that property of any kind may be transferred. However, Clauses
(a) to (i) of section 6 mention the properties which cannot be transferred.

Clause (a) describes spes successionis cannot be transferred. This clause states that the
transfer of a bare chance of a person to get a property is prohibited under this section. For
example, Arun expecting that Chandini, his aunt, who had no issues, would bequeath her house
worth Rs. 50,000 transfers it to Bhushan. The transfer is invalid as it is a mere matter of chance
of receiving the property on the part of Arun. Thus, it is invalid.

Clause (b) mentions that the right of re-entry cannot be transferred. The right to re-entry implies
a right to resume possession of the land which has been given to someone else for a certain
time. The section mentions that the right of re-entry cannot be transferred by itself apart from
the land. For example, A grants a lease of a plot of land to B with the condition that if shall build
upon it, he would re-enter — transfers to C his right of re-entering in case of breach of the
covenant not to build. The transfer is invalid.
Clause (c) mentions that easement cannot be transferred. An easement is a right to use or
restrict the use of land of another in some way. For example, the right of way or right of light
cannot be transferred.

Clause (d) mentions that an interest restricted in its enjoyment of himself cannot be transferred.
For instance, if a house is lent to a man for his personal use, he cannot transfer his right of
enjoyment to another.

Clause (dd) restricts the transfer of the right to maintenance. Such a right cannot be transferred
as such right is for the personal benefit of the concerned person.

Clause (e) provides that mere right to sue cannot be transferred. The prohibition has been
imposed as the right to sue is a right which is personal and exclusive to the aggrieved party. For
example, a person cannot transfer his right to sue for the damages suffered by him due to
breach of contract by the other party.

Clause (f) forbids the transfer of public offices. The philosophy behind the prohibition is that
such a transfer may be opposed to public policy in general. A person is eligible to hold a public
office on the grounds of his personal qualities, and such qualities cannot be transferred. Thus,
the transfer of public offices is prohibited under this section.

Clause (g) of section 6 provides that pensions cannot be transferred. Pensions allowed to
military and civil pensioners of government and political pensions cannot be transferred. In
simpler terms, a pension may be understood as any periodical allowance which may be granted
in regard to any right of office but only on account of the past services offered by the pensioner.

Clause (h) of this section is titled as nature of nature. This clause prohibits transfer which will
oppose the interest affected thereby. The transfer is also forbidden if the object or consideration
of the transfer is unlawful. Moreover, a transfer by a person who is legally disqualified from
being a transferee is also forbidden.

Clause (i) of section 6 was inserted by the Amendment Act of 1885. The clause declares that
certain interests are untransferable and inalienable. For example, a farmer of an estate, in
respect of which default has been made in paying the revenue, cannot assign his interest in the
holding.

Thus, section 6 containing clauses (a) to (i) specifically mention that certain things cannot be
transferred. Such a transfer if undertaken would be invalid in the eyes of the law in India.

Person competent to Transfer

Section 7 enumerates the concept of competency of persons who may be allowed to transfer
property. According to this section, a person is allowed to transfer property if he satisfies two
conditions. The first condition is that the person must be competent to enter into contracts with
other persons. The second condition is that the person who is willing to transfer property must
have title to the property or authority to transfer it if he is not the real owner of the property.
An important point to be noted in this regard is the conditions mentioned in section 11 of the
Indian Contract Act, which specifies the category of persons who may be competent to transfer.
In the section, it is stated that the person must have attained majority, he must be of sound
mind, and he must not be disqualified to enter into contracts by any other law applicable in
India.

Rule against Perpetuity

Section 14 of the ‘The Transfer of Property Act, 1882’ (TPA) is rightly called ‘Rule against
perpetuity’ as it limits the maximum time period beyond which property cannot be transferred.
Starting from the date that the transferor transfers the property + lifetime of the last prior interest
holder’s + gestation period of the unborn beneficiary + 18 years, ( ‘Age of majority of persons
domiciled in India’ under section 3 of The Majority Act, 1875). This period is called the
perpetuity period, and vesting of the property in the transferee cannot be postponed beyond this
limit.

The above transfer is contingent to many other conditions viz. sections 5, 10, 13, 15, 16, 18 and
20 of TPA. However, it is to be borne in mind that section 18 of TPA allows transfer in perpetuity
for benefit of public, and so provisions of section 14 & 16 do not apply in such cases.

Section 14 TPA

“Rule against Perpetuity – No transfer of property can operate to create an interest which is to
take effect after the life-time of one or more persons living at the date of such transfer, and the
minority of some person who shall be in existence at the expiration of that period, and to whom,
if he attains full age, the interest created is to belong.”

After the life-time: Here again, to safe-guard against violating section 5 of TPA, transfer of
property has to take place latest; during life-time of prior interest and conception of beneficiary,
otherwise the transfer shall fail.
Attains full age: The degree of transfer of interest in favor of beneficiary can be broken into 3
stages. On conception interest is created, which becomes vested interest on birth i.e. as per
section 20 of TPA, and on attaining age of majority; absolute interest that includes enjoyment of
property, possession, alienation etc.

Essential Ingredients

. There must be a transfer of property.

• The transfer should be to create an interest in favour of an unborn person (i.e. ultimate
beneficiary).

The vesting of interest in favour of the unborn must be Preceded by life or limited interest of
living person/s (i.e. prior interest holder).

• The unborn person must be in existence (either in the mother's womb or born) at the expiration
of the interest of the living person/s.
• If all the above ingredients are present then the vesting of the interest in favour of the ultimate
beneficiary may be postponed only up to the life or lives of living persons plus the minority of the
ultimate beneficiary but not beyond that.

Minority

Minority in India terminates at the age of 18 years or when the minor is under supervision of
Court at the age of 21 years.

But in Saundara Rajan v. Natarajan, A.I.R 1925 P.C. 244, the Privy Council held that since at the
date of the transfer it is not known whether or not a guardian would be appointed by Court for
the minor in future, for purposes of S.14 the normal period of minority would be 18 years. So,
the vesting can be postponed only up to the life of the prior interest holder and the minority i.e.
18 years of the ultimate beneficiary.

Period of Gestation

• The maximum limit fixed for postponing the vesting of interest is the life or lives of the prior
interest holder/s plus the minority of the ultimate beneficiary. But when a child is in his mother's
womb at the time of the expiration of the interest of the prior interest holder and since for the
purposes of being a transferee a child in the mother's womb is a competent person, the latest
period up to which the vesting may be postponed would be the life of the prior interest holder/s
plus the period of gestation (i.e. the period during which a child remains in womb after being
conceived which is normally about 9 months or 280 days) plus minority of the ultimate
beneficiary.

• The period of gestation shall not be counted in addition to minority if the ultimate beneficiary is
already a born Person.

Example. If A (prior interest holder) dies then the ultimate beneficiary i.e. X must already be in
existence at that time either in the mother's womb or as a born child. If X is in mother's womb,
say of 6 months then the maximum period up to which vesting of period may be postponed
would be life of A plus six months (period of gestation) plus 18 years ( minority of X)

Maximum Possible Remoteness of Vesting In India, the maximum permissible possible

remoteness of vesting is - Life of the preceding interest + Period of gestation of ultimate
beneficiary (only when the child is not born) + minority of the ultimate beneficiary

Maximum Possible Remoteness

A ----- B (Life Interest)

----- S unborn (Absolute Interest to be gained on his turning major)

Maximum delay

A transfers property to B for lifetime and then absolutely to S, who is not in existence on date of
such transfer, on his turning 18. Now, when B dies S's Mother is pregnant with him. The
property will be vested after the gestation period and his minority
Examples

. A transfer his property for life to B, and then to B's first child when he attains the age of 18
years absolutely. B is living on the date of transfer but has not child. So the child should take
birth before the extinction of B's life interest.

. In case, the Child is not born, the Property would be revert back to the transferor and disposed
of in accordance with law.

Exceptions to rule of perpetuity

1. Section 18 of TPA provides protection from rule against perpetuity when the transfer is in
favor of public viz. advancement of religion, knowledge, commerce, health, safety or any other
object beneficial to mankind.

2. Does not apply to personal agreements that do not create interest in property. This rule
applies only to transfers where there is transfer of interest. Nafar Chand v. Kailash Chand - In
this case A appointed B as a Priest and allowed him and his family to perform rituals. Court held
it to be a personal agreement and not against the rule against perpetuity.

3. Renewal of lease agreements.

4. Covenant for redemption of property under mortgage.

5. Charge created over property, as this does not amount to transfer of interest.

6. Contract of pre-emption.

Doctrine of Lis Pendens and Section 52

Lis Pendens,” when translated, means “pending suit or cause.”

Lis - action or lawsuit

Pendens - matter is still awaiting resolution.

This concept finds its roots in the Latin proverb “Ut pendent nihil innovetur,” which emphasizes
that nothing should undergo changes or alterations while a legal case is ongoing.

Section 52 of the Transfer of Property Act deals with doctrine of lis pendens.

What is Doctrine of Lis Pendens?

The Doctrine of Lis Pendens, derived from Latin, translates to “pending litigation.” It is a legal
principle that pertains to immovable property and is dealt with in Section 52 of the Transfer of
Property Act, 1882, in India. This doctrine serves to protect the rights and interests of parties
involved in a pending lawsuit concerning a specific property.
One of the most fundamental rights of a property owner is the freedom to transfer or dispose of
their property as they see fit. However, certain circumstances, such as when a legal dispute or
action involving the property is ongoing, may restrict or prohibit the owner from selling or
otherwise disposing of the property for a specified period.

Section 52 of Transfer of Property Act of 1882 delineates conditions under which property
transfers are permissible. These conditions may include instances where the court grants
explicit permission or when the lawsuit itself has an element of collusion. Exceptions to the
doctrine encompass lawsuits primarily seeking monetary compensation for debts or damages,
as well as those aimed at the recovery of personal property.

Purpose

The doctrine of lis pendens is essential as it prevents Transfer of the title of any disputed
property without the Court’s consent, there can be endless litigation, and it will become
impossible to bring a lawsuit to a successful termination if alienations are permitted to prevail,
and covenants are not imposed.

The ‘Transferee pendente lite’ is bound by the verdict just as if he were a party to the suit and
the transfer shall be subservient to the result of the pending lawsuit.

Essential Conditions

1. There must be a pending suit or proceeding.

2. The suit or proceeding must be within the jurisdiction of a competent court.
3. The suit must directly and explicitly involve a right to immovable property.
4. The suit or proceeding must not be collusive.
5. Any transfer or action related to the property in dispute must involve a party to the suit.
6. Such a transfer or action must impact the rights of the other party involved in the litigation.

Hardev Singh vs Gurmail Singh

Court said that property sale will not become void, but parties will have to obey the future order
whatever court thinks fit.

When Lis Pendens cannot be used?

• If the property is sold in mortgage transaction.

• Property is not matching with the details given in the case.

• When a person who is claiming right in property, and that property is not involved directly.

Impact

❖ Person who purchased the property on which the case is going on, that transfer will not be
directly void. But that person who purchased that property and parties of that case are required
to obey that order passed.
ostensible owner

The transfer of property to an ostensible owner is dealt with under Section 41 of the Transfer of
Property Act, 1882. According to it, when a person acts on the express or implied consent of a
person who is vested in a certain immovable property, that person is deemed the ‘ostensible
owner’ of that property.

• Statutory change -

The law relating to transfer by an ostensible owner as given in section 41 of the Act is now
subject to the provisions of the Benami transactions Act, 1988.

The "Benami Transaction" means any transaction in which property by another person for a
consideration paid or provided by another person. The Act provides that where a property is
transferred Benami the person, in whose name the property is held, shall become real owner.

Necessary conditions

1. The most fundamental criterion is that the individual transferring the property must be the
ostensible owner.
2. The actual owner’s consent, which might be implied or expressed, is necessary.
3. In exchange for the property, the ostensible owner must be compensated.
4. The transferee must use reasonable caution over the transferor’s power over the property,
and whether the transferee acted with bona fide intention.
5. This section, needless to say, does not apply not to the transfer of movable property, and only
to that of immovable.

Can the property be transferred to an ostensible owner

The term ‘ostensible’ refers to what seems to be real. Therefore, the ostensible owner of a
property is not the real owner. To third parties, he just portrays himself as the legitimate owner.
Without really owning the property, an ostensible owner has all of the rights to it. By the explicit
or implied consent of such an owner, he obtains these rights from the real owner. The real
owner is the qualified owner of the property, whereas the ostensible owner is the full yet
unqualified owner.

Persons who are not ostensible owners include:

A self-proclaimed manager or agent.

A mortgagor is someone who has a small stake in a property and works as a servant.
A co-sharer in occupation in a jointly shared family property of residence.
The trustee or manager of the idol, because the idol is neither conscious nor capable of
providing consent.

Requirements of transfer by an ostensible owner

The individual must be the ostensible owner of the property.

He must hold the property with the express or implied consent of the real owner.
The transferee must acquire the property for consideration from such an ostensible owner.
The transferee must take reasonable precautions before accepting the transfer to ensure that
the transferor has the authority to make the transfer, i.e., he must act with bona fide intentions.

Ramcoomar Koondoo v. John and Maria McQueen (1872)

The notion of transferring property by an ‘ostensible owner’ was developed to defend the rights
of innocent third parties against property owners, which was initially used by the Judicial
Committee in the landmark case of Ramcoomar Koondoo v. John and Maria McQueen, and
then subsequently reflected as Section 41 in the Act.

Md. Shafiqullah Khan v. Md. Samiullah Khan (1929)

Facts
In this case, regardless of the fact that they were legally unqualified to possess the land, the
owner’s three illegitimate sons (Nuhullah, Hakimullah and Halimullah) got it after his death. The
genuine heir, the defendant Muhammad Shafiqullah Khan who is admittedly his son, filed a
lawsuit to assert his inheritance rights. The possessors, on the other hand, kept control of the
property and sold it to a third party (Samiullah, the defendant) while pretending to be the
legitimate owners.
Section 54

Section 54 of the Transfer of Property Act contains provisions with respect to the sale of
immovable property. The section is divided into the following three parts:

Definition of sale;
Execution of sale; and
Contract for sale

Essentials of a valid sale

Parties must be competent to contract.

The subject matter of sale must be immovable property.
There should be a fixed consideration or price for transferring the property.
The mode of transfer must be either registration or delivery of possession, depending upon the
kind of property.

PARTIES MUST BE COMPETENT TO CONTRACT

The first point that is to be taken into consideration before entering into an agreement is that
both the buyer and the seller should be competent to enter into a contract.

COMPETENCY OF THE BUYER

The buyer/transferor/vendee will be competent to contract if he/she conforms to the following:

Firstly, the buyer must not be disqualified from purchasing a property under any Indian law. For
example, under the Transfer of Property Act, 1882, an official of a Court is not qualified to
purchase actionable claims.
Secondly, the buyer must be a natural or juristic person. This implies that the sale includes the
property sold by a corporation or a firm.
Competency of seller
The seller/transferee/vendor will be competent to contract if he/she conforms to the following:

Firstly, the seller must have the competency or legal right to sell the property. In the case of V.
Ethiraj v. Smt. S. Sridevi (2014), a person purchased the property knowing that the seller has
only partial rights to the said property. This breached the competency rule, and the Karnataka
High Court held it to be an invalid sale of the property.
Secondly, the seller should have ownership of the property.
Thirdly, the seller must not be disqualified from purchasing a property under any Indian law.
Fourthly, the seller must not be a minor or of unsound mind.
Fifthly, the seller must be a natural or juristic person.

The subject matter of sale must be an immovable property

The Transfer of Property Act, 1882, deals with the sale of immovable property. Therefore, it is
another essential ingredient to constitute a sale under Section 54 of the Transfer of Property
Act, 1882. Immovable property can be tangible as well as intangible. A detailed explanation as
to what constitutes immovable property is provided under Section 3 of the Transfer of Property
Act. It includes things attached to the earth and excludes standing timber, growing crops, and
grass. Furthermore, examples of intangible immovable property are rights of fisheries, the right
to extract minerals, reversion, etc.

The immovable property must exist at the time when the sale is to be executed.

FIXED CONSIDERATION
As already discussed, price or money consideration is an important element of the sale. It
includes any form of money, for example, currency notes, cheques, coins, etc. However,
everything that has value does not constitute money. For example, work done on land, such as
cleaning or digging a well, cannot be considered a price within the scope of this provision.

Although it is not necessary that the price be adequate, it should be fixed at the time of
execution of the sale deed. In the case of Hakim Singh v. Ram Sanehi and Others (2001), the
validity of a sale deed was in question since the price fixed was very low compared to the
market value of the property. However, the Allahabad High Court declared the sale to be valid.
Moreover, it is not relevant that the payment of money has actually been made at the time of
execution. The consideration could be either paid or promised, or partly paid and partly
promised.

The Karnataka High Court, in the case of Smt. Rathnamma v. Smt. Shanthamma (2019),
observed that the statement “you shall execute the sale deed when we pay sale consideration”
qualifies the essential element of the presence of money consideration in the sale deed, and no
actual payment is required for proving the validity of the sale deed.

What are the rights and duties of Seller?

The rights and duties of seller and buyer are governed by section 55, ΤΡΑ.

Duties of Seller before Sale

The seller is bound to disclose all the material defects to the buyer of the property which the
buyer is not aware of

The seller is bound to produce all documents relating to property.

The seller is bound to give answer of all the question to the best of his knowledge which are put
before him.

The seller is bound to pay all the charges and rent, dues or government fees up to the date of
sale.

Duties of seller after sale

It is the seller's duty to give possession to the buyer. Buyer or such person as he directs such
possession of the property.

Seller's Rights before Sale

According to section 55(4) (a) of TPA act, seller has right to receive all the rents & profits out of
that property.

Seller's right after sale

If any amount is unpaid then seller has right to recover that amount of money out of that
property.

What are the Rights and Duties of Buyer?

Section 55 of TPA deals with rights and duties of seller and buyer.

Duties of Buyer before Sale

The buyer bound to disclose, facts which materially increases the value of property

Buyer has liability to pay price for property.

Duties of buyer after Sale

According to section 55 (5) (c) of TPA, buyer is bound to bear any loss arising from the
destruction, injury or decrease in value of the property not caused by the seller where the
ownership of the property has passed to the buyer.

According to section 55 (5) (d) of TPA, buyer is liable to pay the outgoings, e.g., Government
dues, rents, revenue or taxes.

Buyer's right before sale

A charge on the property for the purchase money properly paid by him in anticipation not the
delivery.

Conveyance
The mode of transfer is confirmed in the following two ways:

Delivery of possession; or
Registration of sale deed.
It depends on the nature and price of the property. The second part of Section 54 stipulates that
unless the property in question is a tangible immovable property of a value less than Rs. 100,
the sale is valid only through the registration of the sale deed.

How is sale affected under Section 54

As discussed above, conveyance, or mode of transfer, is one of the essentials of sale under
Section 54. Therefore, a sale can be effected only by a registered sale deed or delivery of
possession, as the case may be. This can be understood with the help of the following
discussion:

Delivery of possession
In a tangible immovable property worth less than Rs. 100, the sale can be executed without
registration, i.e., by mere delivery of possession of the property. The delivery of possession can
be proved by any act that reflects that the property has been transferred. As the immovable
property cannot be handed over to another person, therefore, the acts, such as handing over
the keys to the house, or residing at such a property are some instances where transfer of
possession can be proven.

An important observation with regard to the delivery of possession was made by the Delhi High
Court in the case of Karan Madaan and Others v. Nageshwar Pandey (2014). In this case, there
was no actual delivery of possession; however, it was mentioned in the sale deed that the
possession had been delivered. It was held by the Delhi High Court that in the case of an
executed sale deed, it is not required to look into the facts to determine whether there was a
delivery of possession or not.

Mortgage

A mortgage is a legal transaction that involves transferring an interest in a specific immovable

property to secure the repayment of a loan, whether it is an existing debt or one that may arise
in the future. The party who transfers the property is the mortgagor, while the recipient of the
property and lender of the loan is called the mortgagee.

The amount of money borrowed, including any accrued interest, is called the mortgage money.
Property transfer is typically formalized through a document called a mortgage deed. In
summary, a mortgage is a means for individuals to obtain a loan using their property as
collateral, with defined roles and terms for the parties involved.
Gift

A Gift is generally regarded as a transfer of ownership of a property where the sender willingly
brings into effect such transfer without any compensation or consideration in monetary value. It
may be in the form of moveable or immoveable property and the parties may be two living
persons or the transfer may take place only after the death of the transferor. When the transfer
takes place between two living people it is called inter vivos, and when it takes place after the
death of the transferor it is known as testamentary. Testamentary transfers do not fall under the
scope of Section 5 of the Transfer of Property Act, and thus, only inter vivos transfers are
referred to as gifts under this Act.

If the essential elements of the gift are not implemented properly it may become revoked or void
by law. There are many provisions pertaining to the gifts. All such provisions, for example, types
of property which may be gifted, modes of making such gift, competent transferor, suspension
and revocation of gift, etc. are discussed in this article.

Section 122 of Transfer of Property Act defines a gift as the transfer of an existing moveable or
immovable property. Such transfers must be made voluntarily and without consideration. The
transferor is known as the donor and the transferee is called the donee. The gift must be
accepted by the donee. This Section defines a gift as a gratuitous transfer of ownership in some
property that is already existing. The definition includes the transfer of both immovable and
moveable property.

Parties to a gift transfer

Donor
The donor must be a competent person, i.e., he must have the capacity as well as the right to
make the gift. If the donor has the capacity to contract then he is deemed to have the capacity
to make the gift. This implies that at the time of making a gift, the donor must be of the age of
majority and must have a sound mind. Registered societies, firms, and institutions are referred
to as juristic persons, and they are also competent to make gifts. Gift by a minor or insane
person is void. Besides capacity, the donor must also have the right to make a gift. The right of
the donor is determined by his ownership rights in the property at the time of the transfer
because gift means the transfer of the ownership.

Donee
Donee does not need to be competent to contract. He may be any person in existence at the
date of making the gift. A gift made to an insane person, or a minor, or even to a child existing in
the mother’s womb is valid subject to its lawful acceptance by a competent person on his/her
behalf. Juristic persons such as firms, institutions, or companies are deemed as competent
donee and gift made to them is valid. However, the donee must be an ascertainable person.
The gift made to the general public is void. If ascertainable, the donee may be two or more
persons.

Essential elements

Transfer of ownership
The transferor, i.e., the donor must divest himself of absolute interest in the property and vest it
in the transferee, i.e., the donee. Transfer of absolute interests implies the transfer of all the
rights and liabilities in respect of the property. To be able to effect such a transfer, the donor
must have the right to ownership of the said property. Nothing less than ownership may be
transferred by way of gift. However, like other transfers, the gift may also be made subject to
certain conditions.

Existing property
The property, which is the subject matter of the gift may be of any kind, movable, immovable,
tangible, or intangible, but it must be in existence at the time of making a gift, and it must be
transferable within the meaning of Section 5 of the Transfer of Property Act.

Gift of any kind of future property is deemed void. And the gift of spes successionis (expectation
of succession) or mere chance of inheriting property or mere right to sue, is also void.

Transfer without consideration

A gift must be gratuitous, i.e., the ownership in the property must be transferred without any
consideration. Even a negligible property or a very small sum of money given by the transferee
in consideration for the transfer of a very big property would make the transaction either a sale
or an exchange. Consideration, for the purpose of this section, shall have the same meaning as
given in Section 2(d) of the Indian Contract Act. The consideration is pecuniary in nature, i.e., in
monetary terms. Mutual love and affection is not pecuniary consideration and thus, property
transferred in consideration of love and affection is a transfer without consideration and hence a
gift. A transfer of property made in consideration for the ‘services’ rendered by the donee is a
gift. But, a property transferred in consideration of donee undertaking the liability of the donor is
not gratuitous, therefore, it is not a gift because liabilities evolve pecuniary obligations.

Voluntary transfer with free consent

The donor must make the gift voluntarily, i.e., in the exercise of his own free will and his consent
as is a free consent. Free consent is when the donor has the complete freedom to make the gift
without any force, fraud coercion, and undue influence. Donor’s will in executing the deed of the
gift must be free and independent. Voluntary act on a donor’s part also means that he/she has
executed the gift deed in full knowledge of the circumstances and nature of the transaction. The
burden of proving that the gift was made voluntarily with the free consent of the donor lies on
the donee.

Acceptance of gift
The donee must accept the gift. Property cannot be given to a person, even in gift, against
his/her consent. The donee may refuse the gift as in cases of non-beneficial property or onerous
gift. Onerous gifts are such where the burden or liability exceeds the actual market value of the
subject matter. Thus, acceptance of the gift is necessary. Such acceptance may be either
express or implied. Implied acceptance may be inferred from the conduct of the donee and the
surrounding circumstances. When the donee takes possession of the property or of the title
deeds, there is acceptance of the gift. Where the property is on lease, acceptance may be
inferred upon the acceptance of the right to collect rents. However, when the property is jointly
enjoyed by the donor and donee, mere possession cannot be treated as evidence of
acceptance. When the gift is not onerous, even minimal evidence is sufficient to prove that the
gift has been accepted by donee. Mere silence of the donee is indicative of the acceptance
provided it can be established that the donee had knowledge of the gift being made in his
favour.

Where the deed of gift categorically stated that the property had been handed over to the donee
and he had accepted the same and the document is registered, a presumption arises that the
executants are aware of what was stated in the deed and also of its correctness. When such
presumption is coupled with the recital in the deed that the donee had been put in possession of
the property, the onus of disproving the presumption would be on the donor and not the donee.

Where the donee is incompetent to contract, e.g., minor or insane, the gift must be accepted on
his behalf by a competent person. The gift may be accepted by a guardian on behalf of his ward
or by a parent on behalf of their child. In such a case, the minor, on attaining majority, may reject
the gift.

Where the donee is a juristic person, the gift must be accepted by a competent authority
representing such legal person. Where the gift is made to a deity, it may be accepted by its
agent, i.e., the priest or manager of the temple.

Section 122 provides that the acceptance must be made during the lifetime of the donor and
while he is still capable of giving. The acceptance that comes after the death or incompetence of
the donor is no acceptance. If the gift is accepted during the life of the donor but the donor dies
before the registration and other formalities, the gift is deemed to have been accepted and the
gift is valid.

Modes

Immovable properties
In the case of immovable property, registration of the transfer is necessary irrespective of the
value of the property. Registration of a document including gift-deed implies that the transaction
is in writing, signed by the executant (donor), attested by two competent persons and duly
stamped before the registration formalities are officially completed.

Movable properties
In the case of movable properties, it may be completed by the delivery of possession.
Registration in such cases is optional. The gift of a movable property effected by delivery of
possession is valid, irrespective of the valuation of the property. The mode of delivering the
property depends upon the nature of the property. The only things necessary are the transfer of
the title and possession in favour of the donee. Anything which the parties agree to consider as
delivery may be done to deliver the goods or which has the effect of putting the property in the
possession of the transferee may be considered as a delivery.

Suspension or revocation of gifts

REVOCATION BY MUTUAL AGREEMENT

Where the donor and the donee mutually agree that the gift shall be suspended or revoked
upon the happening of an event not dependent on the will of the donor, it is called a gift subject
to a condition laid down by mutual agreement. It must consist of the following essentials:

The condition must be expressly laid down

The condition must be a part of the same transaction, it may be laid down either in the gift-deed
itself or in a separate document being a part of the same transaction.
The condition upon which a gift is to be revoked must not depend solely on the will of the donor.
Such condition must be valid under the provisions of law given for conditional transfers. For eg.
a condition totally prohibiting the alienation of a property is void under Section 10 of the Transfer
of Property Act.
The condition must be mutually agreed upon by the donor and the donee.
Gift revocable at the will of the donor is void even if such condition is mutually agreed upon.

REVOCATION BY THE RESCISSION OF THE CONTRACT

Gift is a transfer, it is thus preceded by a contract for such transfer. This contract may either be
express or implied. If the preceding contract is rescinded then there is no question of the
subsequent transfer to take place. Thus, under Section 126, a gift can be revoked on any
grounds on which its contract may be rescinded. For example, Section 19 of the Indian Contract
Act makes a contract voidable at the option of the party whose consent has been obtained
forcefully, by coercion, undue influence, misrepresentation, or fraud. Thus, if a gift is not made
voluntarily, i.e., the consent of the donor is obtained by fraud, misrepresentation, undue
influence, or force, the gift may be rescinded by the donor.

The option of such revocation lies with the donor and cannot be transferred, but the legal heirs
of the donor may sue for revocation of such contract after the death of the donor.

The limitation for revoking a gift on the grounds of fraud, misrepresentation, etc, is three years
from the date on which such facts come to the knowledge of the plaintiff (donor).

The right to revoke the gift on the abovementioned grounds is lost when the donor ratifies the
gift either expressly or by his conduct.

BONAFIDE PURCHASER
The last paragraph of Section 126 of the Act protects the right of a bonafide purchaser. A
bonafide purchaser is a person who has purchased the gifted property in good faith and with
consideration. When such a purchaser is unfamiliar with the condition attached to the property
which was a subject of a conditional gift then no provision of revocation or suspension of such
gift shall apply.

Universal donee

The concept of universal donee is not recognised under English law, although universal
succession, according to English law is possible in the event of the death or bankruptcy of a
person. Hindu law recognises this concept in the form of ‘sanyasi’, a way of life where people
renounce all their worldly possessions and take up spiritual life. A universal donee is a person
who gets all the properties of the donor under a gift. Such properties include movables as well
as immovables. Section 128 lays down in this regard that the donee is liable for all the debts
and liabilities of the donor due at the time of the gift. This section incorporates an equitable
principle that one who gets certain benefits under a transaction must also bear the burden
therein. However, the donee’s liabilities are limited to the extent of the property received by him
as a gift. If the liabilities and debts exceed the market value of the whole property, the universal
donee is not liable for the excess part of it. This provision protects the interests of the creditor
and makes sure that they are able to chase the property of the donor if he owes them.

Provisions relating to onerous gifts

Onerous gifts refer to the gifts which are a liability rather than an asset. The word ‘onerous’
means burdened. Thus, where the liabilities on a property exceed the benefits of such property
it is known as an onerous property. When the gift of such a property is made it is known as an
onerous gift, i.e., a non-beneficial gift. The donee has the right to reject such gifts.

Section 127 provides that if a single gift consisting several properties, one of which is an
onerous property, is made to a person then that person does not have the liberty to reject the
onerous part and accept the other property. This rule is based upon the principle of “qui sentit
commodum sentire debet et onus” which implies that the one who accepts the benefit of a
transaction must also accept the burden of it. Thus, when two properties, one onerous and other
prosperous, are given in gift to a donee in the same transaction, the donee is put under the duty
to elect. He may accept the gift together with the onerous property or reject it totally. If he elects
to accept the beneficial part of the gift, he is bound to accept the other which is burdensome.
However, an essential element of this Section is a single transfer. Both the onerous and
prosperous properties must be transferred in one single transaction only then they require the
obligation to be accepted or rejected in a joint manner.

In case the onerous gift is made to a minor and such donee accepts the gift, he retains the right
to repudiate the gift on attaining the age of majority. He may accept or reject the gift on attaining
majority and the donor cannot reclaim the gift unless the donee rejects it on becoming a major.

Feeding the Grant By Estoppel

Section 43 under TPA Estoppel means when a person claims something, he cannot go back on
what he so claim.

The doctrine of feeding the grant by estoppel id derived from the legal Maxim "Nemo dat quad
non habet" which means that no one can give something which he does not himself possess to
another person.

Doctrine of feeding the grant by estoppel is mentioned in under section 43, part 5 of TPA, 1882.
Section 115 of the Indian Evidence Act 1872 deals with the concept of estoppel which means a
person said or represented something then he has to follow it, basically he stopped from
denying it.

This general rule lays down that no property can be transferred by an person who is not
authorised to do so. Thus, if a person does not have a title to property, he cannot validly transfer
the same to another. But this rule has been relaxed in practice due to "adjustment of equities"
between such person and the transferee. One of such exception to this message rule is
provided in section 43 of TP Act.

The doctrine of feeding the grant by estoppel compels a man to perform when the performance
becomes possible. It does give the transferor the option of going ahead with the transfer, it then
completely depends upon the transferee if he is still willing to go ahead with the transfer after
the transfer becomes viable options.

Section 43 enacts that:

• If a person processes to transfer an immovable property by fraudulently or erroneously that he

had authority to do so,

• The transfer is for consideration and,

• Such transferor acquires the authority subsequently,

• Then the transferee may compel the transferor to pass on the property to him.

Illustration

A, a Hindu who has separated from his father B, sells to C three fields X,Y and Z, representing
that A is authorised to transfer the same. Of these fields Z does not belong to A, it having
retained by B on the partition; but on B's denying A as heir obtains Z. C, not having rescinded
the contract of sale, may require A to deliver Z to him.

Essentials

1. The transferor makes a false representation that he’s authorised to transfer a

certainimmovable property.
2. This representation may be erroneous or fraudulent.
3. The transferor professes to transfer the property.
4. For consideration.
5. The transferee enters into a contract, acting on that representation.
6. The transferor, later on, acquires some interest in the property while the contract issubsisting.
7. The transfer would operate on any such interest acquired, at the option of the transferee.

The doctrine doesn’t apply to:

1. When the transferee is aware of the true transaction.
2. Where the transfer was forbidden by law, or
3. When the second transferee acquires rights.Transfer by minor or lunatic is not qualified to
attract the application of this section.
License Meaning

Section 52 of ‘The Indian Easements Act 1882’ says that where one person grants to another,
or to a definite number of other persons, a right to do or continue to do in or upon the
Immovable Property of the grantor, something which would, in the absence of such a right, be
unlawful. Permission to enter land belonging to another without being a trespasser.

Thus if a document gives only a right to another to come on the land or premises and use that in
some way or the other, while it remains in the possession and control of the owner, it will be a
license.

Explanation- In the case of license, possession and ownership will always remain under the
control of the licensor and the licensee would only be entitled to a license. And thus, the license
must be in a written form of documents mentioning the rights of the licensee, possession will
remain under the control of the actual ownership. A license is a personal right between the
licensor and the licensee.

Essentials Ingredients of License

The essentials are as follows-

1. There must be two different persons– One who gives permission to use and another is the
one who is given permission to use.

Example- B enters in A’s property, it will become trespass. A permits B to enter, it is called
license.

2. These must be a grant– Like A has given B the permission to enter. License is always
positive not negative.

3. License is granted to do something in or upon the Immovable property of the grantor.

4. License is granted to do act which would otherwise be lawful – If the license is not there, it
would be unlawful.

5. License is not an easement.

6. License is not an interest inland. Section 60 says that a license may be revoked by the
grantor at his pleasure unless.

Types of License
1. Bare License
Permission to enter with no consideration provided. The two fundamental types are-
Express grant- It means granting permission by the owner of the land.
Implied grant- It means transferring land.

2. License coupled with interest

License to give effect by virtue of an interest in land, where interest is to obtain profit from a
particular point. The license would not be able to enjoy interest without a license, license is
dependent upon the interest being in existence.

3. Contractual License
Granted in return for consideration. Depends on the terms of the contract. The license doesn’t
have to be in writing, since not an interest inland. There is a component as well-

Revocability – When there is a breach of the contractual terms it all depends on the term itself
the contract.
Third parties – Do not bind 3rd parties unless in the event of a constructive trust, it will not be
imposed unless matter affects purchasers conscience.

4. License by Estoppel
Assurance must be provided to the aggrieved party and must have relied on it and it must be
based on detriment.
Grant of license

Section 53 provides for the power to grant a licence. It states that – A licence may be granted by
anyone in the circumstances and to the extent in and to which he may transfer his interests in
the property affected by the licence.

Power to grant a licence is co-extensive with the power to transfer. A man can grant a license in
the circumstances and to the extent he can transfer his interest in the property affected
thereby.[xxxvi] The power to grant a license is only a personal right attaching only a personal
obligation on the grantor is more extensive than the power to impose an easement which affects
the property itself.

A licence by a mortgagee or co-tenant who is lawfully in the sole possession and enjoyment of
the property, to do a thing which he could himself lawfully do is a valid licence.

Anyone who can transfer property even if he is not the owner can grant a licence. The licence
can also be revoked by such a person.

The grant of licence may be express or implied which can be inferred from the conduct of the
grantor.[xxxix] Under Section 52, there is a grant of the right made by the grantor. Without a
grant in the general sense, no licence can be created.

An agreement for licence can subsist and continue to take effect only so long as the licensor
continues to enjoy a right, title and interest in the premises. On the termination of the right ot the
title, the agreement for licence comes to an end. If the licensor is an tenant, the agreement for
licence by him terminates with the tenancy, and the licence ceases to be licensee.

In order to grant a licence, the licensor need not be the owner of the property. The tenancy
rights are also immovable rights of the tenant and therefore, he can grant the licence. But by
virtue of Section 53, the tenant can grant the licence subject to the limitation and the extent to
which he may be able to transfer the interest, viz., the tenancy rights. A tenant is empowered to
transfer his interest but he cannot do so beyond the term of his lease.

Transferability of Licenses

While licenses are typically personal to the grantee, there are certain scenarios where
transferability comes into play. Section 56 states that unless stated otherwise, a license to
attend a public entertainment venue can be transferred by the licensee. However, apart from
this exception, a license cannot be transferred by the licensee or exercised by their servants or
agents.

Revocation of licenses

Section 60 allows the grantor to revoke a license, except in two specific scenarios:

a) If the license is coupled with a property transfer that is still in effect. b) If the licensee has
executed a permanent work or incurred expenses based on the license.