⏵ 2.1 General rules of Transferability of Property (Sec.

6)

⏵ 2.2 Competency of Parties to transfer and Effect of transfer (Sec. 7-8)

⏵ 2.3 Restrictive Conditions about the alienation of Property (Sec. 10-12)

⏵ 2.4 Transfer for the benefit of Unborn Person and Rule against Perpetuity (Sec. 13-14)

⏵ 2.5 Directions for Accumulation (Sec. 17)

⏵ Section 6 of the Transfer of Property Act, 1882 outlines the general rules regarding the
transferability of property.

⏵ This section states that property of any kind can be transferred, but it also lists certain
exceptions to this rule.

⏵ Section 6 lists specific categories of property that cannot be transferred:

⏵ Spes Successionis:

⏵ This refers to the expectation of succession (a mere hope or chance of inheriting

property).

⏵ Example: A person cannot transfer their hope of inheriting property from a relative who
is still alive. Such a transfer is void.

⏵ Right of Re-entry:

⏵ A landlord’s right to re-enter the property upon breach of the lease agreement is not
transferable.

⏵ Example: If a tenant breaches the terms of the lease, the landlord cannot transfer their
right to reclaim the property to someone else.

⏵ Easements:

⏵ Easements are the rights to use someone else's land for a specific purpose (like a right
of way). These rights cannot be transferred independently of the land.

⏵ Public Office:

⏵ Public offices and the salary or benefits attached to such offices cannot be transferred.

⏵ Example: A government official cannot transfer their office or the income they receive
from that position to someone else.
⏵ Right to Future Maintenance:

⏵ The right to receive maintenance (e.g., support for a dependent) cannot be transferred.
This is a personal right and cannot be sold or assigned.

⏵ Mere Right to Sue:

⏵ A mere right to sue someone (for damages or compensation) cannot be transferred.

This is a personal right and cannot be assigned or sold.

⏵ Interest Restricted in Enjoyment:

⏵ If the enjoyment of the property is restricted to a specific individual (such as a life

estate), that individual cannot transfer the property beyond their interest.

⏵ Example: A person who has the right to use the property for their lifetime cannot
transfer the property to someone else beyond their lifetime interest.

⏵ Right to Future Benefits under a Contract:

⏵ Any right to a benefit that is contingent on the occurrence of a future event, which
may not happen, cannot be transferred.

⏵ Pension Stipends:

⏵ Pension and stipends provided by the government, such as military or civil

pensions, cannot be transferred or assigned.

⏵ Section 7 deals with who is legally competent to transfer property. It specifies the basic
requirements for a valid transfer of property.

⏵ Competent to Contract:

◦ A person must be competent to contract under the Indian Contract Act, 1872.

◦ This means that:

• The person must be of sound mind (capable of understanding the transfer and
its consequences).

• The person must be a major (above 18 years of age).

• The person must not be disqualified by law (such as due to insolvency or other
legal restrictions).
⏵ Section 8 explains the effect of a property transfer and what is included in the transfer unless
specified otherwise.

⏵ Transfer Includes All Incidents:

◦ When property is transferred, unless explicitly stated otherwise, all the rights and
interests that are legally attached to the property are also transferred.

◦ Example: If someone transfers a piece of land, the buildings, trees, rents, rights of way
(easements), and any profits associated with that land are automatically included in the
transfer.

⏵ Effect of Transfer on Conditions:

◦ A transfer may also come with conditions (such as restrictions on use or ownership), but
these must not be illegal or violate the rules mentioned in the Act (like the rules against
perpetuity or restrictions on alienation).

⏵ Specific Exclusions:

⏵ If the transfer is subject to certain exceptions, these must be expressly stated in the transfer
deed.

⏵ For example, if a transferor wants to keep the minerals

or trees on the land, they must mention it in the deed.

⏵ Section 10: Condition Restraining Alienation

⏵ Section 10 deals with conditions that restrict or prevent the transfer of property by the
transferee.

⏵ General Rule: If a property is transferred with a condition that absolutely prohibits the future
transfer (alienation) of the property, that condition is generally void.

⏵ Absolute Restraint on Alienation:

◦ Any condition that completely restricts the transferee from transferring the property in
any way is invalid.

◦ Example: If a property owner sells a piece of land to someone and includes a condition
that the land can never be sold, the condition is void, and the buyer is free to transfer
the property.
⏵ Partial Restraints May Be Valid:

◦ However, reasonable or partial restraints on alienation, such as restrictions for a

limited time or for a specific purpose, may be valid.

◦ Example: If a property is transferred with a condition that the transferee cannot sell the
property for a specific number of years, this may be legally acceptable if the restriction
is considered reasonable.

⏵ Purpose:

⏵ The purpose of Section 10 is to ensure that property remains freely transferable and that an
absolute restraint on alienation does not burden future owners.

⏵ Section 11: Restriction Repugnant to Interest Created

⏵ Section 11 deals with restrictions that are contradictory (repugnant) to the interest being
transferred.

⏵ General Rule: If a condition is imposed that is inconsistent or repugnant to the nature of the
interest being transferred, the condition is void.

⏵ Example: If a person transfers ownership of a house to someone but adds a condition that the
new owner cannot live in the house, this condition would be void because it contradicts the
purpose of transferring the ownership (which normally includes the right to use and enjoy the
property).

⏵ Effect of Void Conditions:

◦ Even if the condition is void, the transfer of property itself remains valid. Only the
condition attached to the transfer is unenforceable.

⏵ Purpose:

⏵ The purpose of Section 11 is to prevent the imposition of conditions that would undermine the
transferee's right to enjoy the property they are receiving.

⏵ Section 12: Condition Making Interest Determinable on Insolvency or Attempted

Alienation

⏵ Section 12 addresses conditions that terminate the transferee's interest in the property in the
event of insolvency or attempted transfer of the property.

⏵ Key Points:
⏵ General Rule: Any condition in a transfer of property that provides for the termination of the
transferee's interest upon their insolvency or attempted alienation (transfer) of the property is
generally void.

⏵ Insolvency:

◦ If a condition is added that the transferee will lose their interest in the property if they
become insolvent (unable to pay debts), such a condition is unenforceable.

⏵ Attempted Alienation:

◦ Similarly, if a condition is added that the transferee’s interest in the property will
end if they attempt to sell or transfer the property, this condition is also void.

⏵ Exceptions:

⏵ There are certain exceptions to this rule, particularly in cases of leases. In leases, it is possible
for the interest of the lessee to be terminated upon insolvency under specific conditions laid
down by law.

⏵ Purpose:

⏵ Section 12 aims to protect the transferee’s interest and ensures that property interests are not
unfairly lost due to insolvency or attempts to transfer the property.

⏵ Section 13 of the Transfer of Property Act, 1882 provides that

“when for the transfer of property, an interest therein is created for the benefit of an unborn
person at the date of the transfer, a prior interest is to be created in respect of the same
transfer and the interest created for the benefit of such person shall not take effect, unless it
extends to the whole of the remaining interest of the person transferring the property in the
property to be transferred.”

The essential elements of section 13 have been discussed below. They are as follows:

⏵ 1. No Direct Transfer

⏵ A transfer cannot be directly made to an unborn person. Such a transfer can only be brought
into existence by the way of trusts.

⏵ It is an important principle of property law that every property will have an owner. Accordingly,
if a transfer of property is made to an unborn person, it will lead to a scenario wherein the
property will remain without an owner from the date of transfer of property till the date the
unborn person comes into existence.
⏵ 2. Prior Interest

⏵ If the circumstances are such that there is no trust created, then in that case the estate must
transfer in favor of some other person between the date of transfer and the date when the
unborn person comes into existence.

⏵ In simpler words we can say that the interest in favour of an unborn person must always be
preceded by a prior interest created in favour of a living person.

⏵ 3. Absolute Interest

⏵ The entire property must be transferred to the unborn person. The transfer to an unborn
person must be absolute and there should be no further transfer from him to any other person.

⏵ Legal Consequences of Transfer for the Benefit of Unborn Person under Section 13

⏵ The intermediary person (who is alive at the date of transfer) is only given a life interest. This
means they have the right to enjoy or possess the property but must preserve it like a trustee.

⏵ Upon the termination of the life interest, the entire property or interest transfers to the unborn
person who has come into existence.

⏵ If the unborn person comes into existence after the termination of the life interest, the
property reverts to the transferor or their legal heirs. This is because the property cannot
remain in abeyance.

⏵ Mr. A first transfers the land to his son, Mr. B (the unborn child's father). This is called a life
interest, meaning Mr. B can use and enjoy the property during his lifetime but doesn't own it
permanently.

⏵ Mr. A includes a condition in the transfer that after Mr. B's death, the property will pass to
Mr. B’s unborn child (Mr. A's future grandchild).

⏵ When the grandchild is born, they will automatically receive full ownership of the land once Mr.
B passes away. No other person will have any rights to the land at that point. The grandchild
will own it fully and without any conditions.

⏵ “Perpetuity means

⏵ “to hold something for an unlimited period of time.”

⏵ Therefore, it can be inferred that perpetuity under property law is holding a property for an
unlimited period of time, thereby, making it inalienable or untransferable;
⏵ The Rule Against Perpetuity is the law that prohibits the transfer of property from generation to
generation and restrains the property from becoming inalienable.

⏵ No perpetuity: The rule prohibits the creation of any interest in property that takes effect
beyond a certain period.

⏵ Life or lives in being: The rule allows property to be tied up for the duration of a person’s life or
multiple lives (as long as those people are alive when the interest is created).

⏵ This rule aims to prevent the perpetual suspension of ownership rights and promote free
circulation of property.

⏵ The Rule Regarding Direction for Accumulation is covered under Section 17 of the Transfer of
Property Act, 1882, and also in Section 114 of the Indian Succession Act, 1925. These
sections impose limitations on the accumulation of income from property, meaning a
property owner cannot direct that the income from a property be accumulated
indefinitely.

⏵ Exceptions to the Rule:

⏵ The law allows accumulation in certain cases like:

⏵ Accumulation for the payment of debts of the transferor.

⏵ If the direction to accumulate exceeds these prescribed periods, the excess portion becomes
void, but the rest of the direction remains valid. The rule ensures that property income is not
withheld from circulation for unreasonable periods, promoting the free use of property in
society.