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THE TRANSFER OF PROPERTY ACT, 1882
CHAPTER II1 TRANSFERS OF PROPERTY BY ACT OF PARTIES
Chapter II of the Transfer of Property Act, 1882 deals with transfers of property by act
of parties. This chapter has been divided into two parts:
Part-A—provides for rules regarding transfers of property in general, whether movable
or immovable.
Part-B—provides for rules regarding transfers of immovable property.
(A) TRANSFER OF PROPERTY, WHETHER MOVABLE OR IMMOVABLE
Part-A consists of definition of property what may be transferred, competency of
persons, operation of transfers, oral transfers, restrictions on transfers, vested interest,
contingent interest, conditional transfers, transfers for benefit of unborn persons and
elections, etc. All these provisions will be taken up under the following headings:—
I. General provisions
II. Restrictions
III. Transfer for the benefit of unborn person
IV. Transfer to a Class
V. Vested Interest
VI. Contingent Interest
VII. Conditional Transfer
VIII. Election
IX. Apportionment
IX. APPORTIONMENT
[s 36] Apportionment of periodical payments on determination of interest of
person entitled.—
In the absence of a contract or local usage to the contrary, all rents annuities, pensions,
dividends and other periodical payments in the nature of income shall, upon the
transfer of the interest of the person entitled to receive such payments, be deemed, as
between the transferor and the transferee, to accrue due from day to day, and to be
apportionable accordingly, but to be payable on the days appointed for the payment
thereof.
Comments
[s 36.1] Apportionment of Periodical Payments (Section 36)
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"Apportionment" means division. "Apportionment" is a division of a whole into parts
proportionate to the rights of more claimants than one."209 Story in his Equity
Jurisprudence210 has explained that the term apportionment is used in two senses:
(1) to denote the distribution of a common fund among the several claimants, and
(2) to denote contribution made by several persons having distinct rights to
discharge a common burden.
According to the Transfer of Property Act, 1882, apportionment is of two kinds:—
(i) Apportionment by time—Section 36 deals with apportionment of periodical
payments as between the transferor and the transferee.
(ii) Apportionment by estate—Section 37 deals with apportionment of an obligation
in the event of the division of property to which it relates.
When any property yielding periodical income is transferred the question arises how
this income is to be divided between the transferor and the transferee. In this respect,
section 8 provides that the transferee is entitled to the interest or income accruing after
the transfer takes effect. The income which accrues from day to day, like interest,
creates no problem in distribution between transferor and transferee but the income
which accrues only at stated periods section 8 becomes unable to divide that. To
overcome this difficulty, section 36 provides that all periodical payments in the nature
of rent, annuities, dividends and pensions shall be deemed to accrue from day-to-day
and be apportioned between the transferor and transferee on that basis. Section 36
says that all rents, annuities pensions, dividends and other periodical payments in the
nature of income shall, upon the transfer of interest of the person entitled to receive
such payments, be deemed, as between the transferor and the transferee, to accrue
due from day-to-day, and to be apportionable accordingly, but to be payable on the days
appointed for the payment thereof. For example, A lets his house at a rent of Rs 100
payable on the last day of each month. A sells that house to B on 15th June. On 30th
June, A is entitled to Rs 50 of the rent from the 1st to 15th June and B is entitled to Rs
50 of the rent from 15th to 30th June. This is apportionment by time.
[s 36.2] Inter vivos Transfers
This section is applicable to inter vivos transfers between transferor and transferee
only. It has no application where third parties are involved. It does apply to transfers by
operation of law.
[s 36.3] Local Usage or Contract
This rule can be excluded by a local usage or a contract to the country. For example, in
any certain area there may be local usage or custom prevalent which may debar the
operation of this section in that area. In such areas, this rule will not apply. Similarly, A
while selling his tenanted house to B in the middle of the month may agree that B
should have the whole rent for that month which might be payable at the month end
under a tenancy contract.
[s 36.4] Other Periodical Payments
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The expression "other periodical payments" occurring in this section are to be
construed according to the "ejusdem generis" rule according to which same type of
payments like rents, annuities, pensions, dividends are to be included. Therefore, this
expression does not include the profits of partnership which accrue only after the
adjustment of accounts211 and profits in the share of a village.212
[s 36.5] Payable
The apportionment does not affect the date when the payment is to be made by the
person liable. Therefore, if under a lease, rent is payable at the end of the year but the
lessor transfers or assigns his interest in the middle of the year, both the transferor and
transferee will become entitled to half of the rent but the lessee will remain liable to pay
only at the end of the year.213
Now some cases relating to apportionments:
(i) Lakshmi Naranappa v Melothraman214—In this case, the lessor had only a life
interest and died a month before the rent of the half year was payable. Here there
was no question of a transfer, yet the assignee of the lessor was held to be
entitled to an apportionment of rent for the period up to the death of the lessor.
(ii) Rangappa v Shiva215—This case deals with the Hindu widow's right to
maintenance which accrues from day-to-day. On the death of a Hindu widow, her
heirs were held entitled to recover the maintenance allowance up to the day of
her death, although the allowance had been expressed to be payable on a fixed
date for the convenience of the parties.
(iii) Subba Raju v Seetharamaraju216—The rule of apportionment applies only to
inter-vivos transfers; it is not applicable to execution sales. A mortgagee
brought the mortgaged property to sale and bought the property himself at the
court sale in November, 1922. The rent for the year was payable on 1 April 1923.
The mortgagor claimed that the rent should be apportioned and that he should
receive the rent from 1 April 1922 till November, 1922. But as it was an
execution sale, section 36 did not apply, the mortgagee was held entitled to the
whole year's rent payable on 1 April 1923.
1 Nothing in Chapter II is to be deemed to affect any rule of Muhammadan Law, see section 2,
Act 20 of 1929.
209 Wharton's Law Lexicon, 14th Edn, 1938, p 70.
210 2nd Edn, p 305.
211 Jones v Ogle, (1872) 8 Ch App 192 (198).
212 Gobind Rao v Bhagirathi, (1901) 14 CPLR 84.
213 Lala Ganga Ram v Mewa Ram, AIR 1922 All 275 .
214 (1903) 26 Mad 540.
215 (1933) 65 Mad LJ 410.
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216 (1916) ILR 39 Mad 283 : 28 IC 232 : AIR 1916 Mad 323 .
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THE TRANSFER OF PROPERTY ACT, 1882
CHAPTER II1 TRANSFERS OF PROPERTY BY ACT OF PARTIES
Chapter II of the Transfer of Property Act, 1882 deals with transfers of property by act
of parties. This chapter has been divided into two parts:
Part-A—provides for rules regarding transfers of property in general, whether movable
or immovable.
Part-B—provides for rules regarding transfers of immovable property.
(A) TRANSFER OF PROPERTY, WHETHER MOVABLE OR IMMOVABLE
Part-A consists of definition of property what may be transferred, competency of
persons, operation of transfers, oral transfers, restrictions on transfers, vested interest,
contingent interest, conditional transfers, transfers for benefit of unborn persons and
elections, etc. All these provisions will be taken up under the following headings:—
I. General provisions
II. Restrictions
III. Transfer for the benefit of unborn person
IV. Transfer to a Class
V. Vested Interest
VI. Contingent Interest
VII. Conditional Transfer
VIII. Election
IX. Apportionment
IX. APPORTIONMENT
[s 37] Apportionment of benefit of obligation on severance.—
When, in consequence of a transfer, property is divided and held in several shares, and
thereupon the benefit of any obligation relating to the property as a whole passes from
one to several owners of the property, the corresponding duty shall, in the absence of a
contract, to the contrary amongst the owners, be performed in favour of each of such
owners in proportion to the value of his share in the property, provided that the duty can
be severed and that the severance does not substantially increase the burden of the
obligation; but if the duty cannot be severed, or if the severance would substantially
increase the burden of the obligation the duty shall be performed for the benefit of
such one of the several owners as they shall jointly designate for that purpose:
Provided that no person on whom the burden of the obligation lies shall be answerable
for failure to discharge it in manner provided by this section, unless and until he has
had reasonable notice of the severance.
Nothing in this section applies to leases for agricultural purposes unless and until the
State Government by notification in the Official Gazette so directs.
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Illustrations
(a) A sells to B, C and D a house situated in a village and leased to E at an annual
rent of Rs 30 and delivery of one fat sheep, B having provided half the purchase-
money and C and D one quarter each. E, having notice of this, must pay Rs 15 to
B, Rs 7.50 to C, and Rs 7.50 to D and must deliver the sheep according to the
joint direction of B, C and D.
(b) In the same case, each house in the village being bound to provide ten days'
labour each year on a duke to prevent inundation. E had agreed as a term of his
lease to perform this work for A. B, C and D severally require E to perform the ten
days' work due on account of the house of each. E is not bound to do more than
ten days' work in all, according to such directions as B, C and D may join in
giving.
Comments
[s 37.1] Apportionment of Benefit (Section 37)
Where on a transfer a property is given to several persons by portions, each transferee
is entitled to all the advantages accruing from the property in proportion to his interest
in it. This rule is subject to two conditions:—
(i) the person on whom the burden of the obligation lies must have notice of the
severance. In simple words, the person who has to perform the corresponding
duty must have information that the original single owner has divided his
property,
(ii) the obligation must be such which can be severed, and
(iii) the severance should not increase the burden of his obligation; the person with
corresponding duty must perform the duty to several owners.
(i) Notice of Severance.—The section says that the persons on whom the burden of
obligation under apportionment lies must have reasonable notice of severance. The
person on whom the burden of obligation lies shall not be answerable for failure to
discharge it in the prescribed manner unless and until he has had reasonable notice of
the severance. Notice to the tenant is sufficient to convert the single obligation to pay
rent to all into several obligations to pay rent to each co-sharer. On receipt of the notice
the tenant is under an obligation to pay each sharer his proportionate part of the rent
but if a suit is necessary it is still necessary to join all the sharers as parties.217
(ii) Severable Obligation.—The obligation must be such that it can be severed and can
be performed in parts in favour of each of the several owners. If the obligation cannot
be severed, it must be performed for the benefit of such one of the several owners as
they shall jointly designate for the purpose.
(iii) No Additional Burden.—It is necessary that the severance does not increase the
burden on the person who has to perform the obligation. The section says that if the
severance would substantially increase the burden of the obligation the duty shall be
performed for the benefit of such one of the several owners as they shall jointly
designate for that purpose.
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[s 37.2] Agricultural Purposes
This section does not apply to leases for agricultural purposes unless and until the
State Government directs the application of this section by Notification in the Official
Gazette.218
1 Nothing in Chapter II is to be deemed to affect any rule of Muhammadan Law, see section 2,
Act 20 of 1929.
217 Prem Chand v Mokshoda Debi, (1887) 14 Cal 201 .
218 See Illustrations.
