TRANSFER OF
PROPERTY ACT,1882
Dr.V.Sivaramasethu
INTRODUCTION
Transfer of property Act Came into force 01.07.1882
This Act applies for both immovable and movable
property and also to tangible and intangible properties
DETAILS OF PROVISIONS
Part I relating to the general principles of transfer
of property
Part II relating to specific types of transactions sale,
mortgage, lease, exchange, gift, charge and actionable
claims.
General principles of Transfer Sec 5 to 53A
Sale - Sec 54 to 57
Mortgage & Charge -Sec58 to 104
Lease -Sec 105 to 117
Exchange - Sec 118 to 121
Gifts -Sec 122-129
Actionable claims –Sec 130 to 137
OBJECTIVES
The Transfer of Property Act of 1882 pertained to British
India and outlined the legal procedures for transferring
property from one person to another.
Under this Act transferring of property needed to occur
between living people, needed to happen in the present
or future and could be between single people or groups
of people. Transferable property could be movable or
immovable.
IMMOVABLE PROEPRTY
DEFINITION:
Immovable property does not include standing timber,
growing crops or grass (Sec 3 T. P Act)
Immovable shall include land , benefits arise out of
land, things attached to land (General clauses Act )
General principals of transfer
of property
TRANSFER
An act by which a living person conveys property in the
present, or in future to one or more living persons or to
himself and to himself and one or more living persons.
(Sec 5)
A to B , C and D
A to A (trust)
A to himself and to any number of living persons
T. P ACT IS NOT APPLICABLE
Court sale
Wills
Partition or family settlement
Gift to idol
Surrender or release or relinquishment
PROPERTIES CANNOT BE
TRANSFERRED UNDER T.P ACT
Spes successionis (chance of succession)
Right to re entry
Easement right
An interest in property restricted to enjoyment of owner
A right to future maintenance
Public office cannot be transferred
Mere right to sue cannot be transferred
Stipends allowed in military naval , army, civil
pensioners
No transfer opposed to nature of interest – unlawful act
(Sec 6)
WHO CAN TRANSFER PROPERTY
Any person who are competent to contract
Authorized to dispose off the property(Sec 7)
HOW TO TRANSFER
If the value of property is above 100, then only by
registered instrument.
If the property is tangible property, and of less than Rs.
100, by delivery only.
If the property is intangible – only by registered
instrument. (Sec 9)
ATTESTATION
At least 2 persons as witness
Each must see the executants sign and sign a mark to
that effect.
It is not necessary that both are present at the same time
– they may be at different times also.
Animus attestandi : the attestants must put the signature
with an intention to attest.
CONDITION RESTRAINING ALIENATION
The power of alienation of the transferee cannot be restrained
If the transferor prohibits the transferee from alienation by
putting a condition or limitation such a condition or
limitation is void(Sec 10)
Illustrations: A sells his house to with a condition that B
cannot transfer this house to any one except C. The condition
is void because C may be chosen as a person who may never
purchase the property
Exception
Lease is an exception for the above rule
A deed dedicating property to deity contained a condition
absolutely restraining transfer is valid
CONDITION RESTRAINING ENJOYMENT
If the transferor restraining the mode of its enjoyment
the condition is void and the transferee is not bound by
the condition
It is applicable only where an absolute interest or
ownership has been transferred. (In case of Sale , gift
and exchange)
Exception
A condition or direction restraining the mode of enjoyment may be
made by the transferor provided it is for beneficial enjoyment of
transferor’s own adjoining property
DIFFERENCE BETWEEN
SEC 10 AND SEC 11
Section 10 Section 11
applicable to the transfers It is applied to transfers
of absolute interest as of only absolute interest
well as limited (partial) (ownership)
interest It refers to enjoyment
It refers to a restraint on
alienation
TRANSFER TO UNBORN PERSON
Transfer cannot be made directly in favour of unborn
person (Sec 13)
RULE AGAINST PERPETUITY
Till the unborn person comes to existence there should
be a transfer in favour of living person
Transfer to ‘A” for life and then to A’s son valid
The transfer should not postpone the vesting of the
property in the unborn person beyond the attainment of
the majority (Sec 14)
Any number of living person +18 years
THE MAXIMUM LIMIT FIXED FOR
POSTPONING THE VESTING OF PROPERTY
Life or lives in existence at the date of
transfer +minority of the ultimate beneficiary + with addition of
the period of gestation provided gestation actually exists
(i.e ultimate beneficiary is actually in mother womb at
the death of the last person) (Sec 14)
Where the transferor provides that the transfer shall take
effect upon the happening of an event of must nature
which is bound to occur in future here the nature of
interest of the transferee is a vested interest (Sec 19)
Ilustration : A makes a gift of his house to B. He
simply executes the gift deed but does not specify any
date on which the ownership to be transferred .The
interest B is vested interest
Nature of vested interest
Present fixed right
Transferable and heritable interest
Time of vesting of interest
CONTINGENT INTEREST
Contingency means uncertain future event
Where the transferor provides that the transfer shall take effect upon
the happening of an event that may or may not happen here the
nature of interest of the transferee is contingent.(Sec21)
Illustration
A makes a gift of his property to B when he attains the age of 18 years or marries
under that age with the condition neither attains that age nor marries with the consent
of C the property goes to D . B and D both take a contingent interest in the property
Nature of interest
Future possible interest
Not heritable
Transferable interest
VESTED AND CONTINGENT INTEREST
CONDITIONAL TRANSFER
Transfer of property with certain conditions is called
conditional transfer
When a property is transferred conditionally, The
transfer is subject to conditions or limitations.
The legal effect of the transfer may vary according to
conditions (Sec 25)
THREE TYPES OF CONDITIONS
Condition precedent: Conditions which is required to be
fulfilled before the transfer of property taken place. It is
prior to transfer
Condition Subsequent: Condition which is required to be
fulfilled after the transfer of property has already taken
place
Collateral condition :condition which is required to be
fulfilled simultaneously with transfer
CONDITION PRECEDENT
Where transfer is dependant on any lawful Condition
precedent its substantial compliance is sufficient for the
transfer.
Here the rule is that a conditional precedent is to
interpreted liberally. (Sec 26)
Example ‘A’ makes a gift of his house to ‘B’ if ‘B’
marries ‘C’
Gift in favour of ‘B’ shall take effect only if ‘B’ marries
‘C’
If B does not marry the house cannot be transferred in
his favour
VOID CONDITION PRECEDENT
Condition precedent is void if its performance is either
impossible or unlawful.
The following conditions are void
Impossible to perform
Unlawful
Forbidden by law
Defeats the provision of the law
Fraudulent
Involves any injury to person or property
Opposed to public policy
CONDITION SUBSEQUENT
Conditions which is required to be fullfilled after the transfer of
property (Here Transfer already taken place)
Here interest of the transferree which is already been vested in
him is affected by fulfillment or non fulfillment of that condition
Illustrations:
A transfer Farm Land to B provided he shall go to England . If
B shall not go to England with in the period prescribed after the
date of transfer his interest in the form land will cease
Condition subsequent must be performed strictly.(Sec 29)
The terms of condition must be clear and must also be fulfilled
clearly.
Ignorance , illness or neglect cannot be taken as a non
compliance of condition subsequent.
COLLATERAL CONDITIONS
The condition to be fulfilled simultaneously with transfer
Example
A leases his property to B so long as B resides in the
house of A . The conditions is collateral.
The transfer(lease) remains in operation only till B
fullfills the condition.(he continues to live With A)
Election means choice
it is a obligation to choose between two inconsistent
alternative rights
If through one instrument, you have two transactions – then
you have to accept both the transactions or none. You can’t
accept one and reject other.(Sec 35)
Example: ‘The land in the Chidambaram is the property of
‘C’ and worth Rs 800/- A by instrument of gift proposes to
transfer it to ‘B’ giving by the same instrument Rs 1000 to
‘C ‘. ‘C’ elects to retain the land. He forfeits the gift of Rs
1000/-
ESSENTIALS OF DOCTRINE OF
ELECTION
Persons Who transfer a property is not the owner
Through the transfer the transferor confers
certain benefits upon the owner of the property
Two things
a. Transfer of property
b. Conferring of the benefit
forms part of the same instrument
LIMITED POWER OF TRANSFER
Transfer by person authorised only under certain
circumstances to transfer
Transferor has limited power of transfer in respect of
immovable property .His power of transfer is limited.
The authority to transfer depends on existence of only
specific circumstances.
He cannot transfer except under those circumstances
(Sec 38)
Example: The guardian of minor’s property, the manager (karta)
of joint family have limited authority of transfer.
RESTRICTIVE COVENANT
Covenant means written agreement or contract with
respect of property.
If a transferor imposes a negative covenant then such
covenant is binding and enforceable also against
transferee provided
The
covenant is for more beneficial enjoyment of transferors
own land
The subsequent transfer is for value the assignee has
notice of the covenant
.
TRANSFER BY OSTENSIBLE OWNER
(BENAMI TRANSACTION)
Ostensible owner is a person who has all the indications
of ownership and looks like a owner of a property but is
not real owner.
Benami transaction means any transaction in which
property is transferred to one person for a consideration
paid or provided by another
It provides where a property is transferred in the name
of another, the person in whose name the property is held
shall become the real owner.(Benami transaction Act,1988)
TEST FOR OSTENSIBLE OWNER
Source of purchase money (i.e who paid the price?)
Nature and possession after the purchase( who had the
possession)
Motive for giving benami colour to the transaction (why the
property was purchased in the name of other person ?)
Relationship between the parties (whether the real owner and the
ostensible owner were related to each other or were strangers )
Conduct of the parties in dealing with the property . (who
used to take care of and had control over the property )
Custody of the title deeds
Here the burden of proof lies on the person who claims
that he is the real owner
ESSENTIAL CONDITIONS FOR APPLICATION OF SECTION
41
There is a transfer of an immovable property by
ostensible owner with express or implied consent of the
real owner
The transfer is for consideration
The Transferee acted in good faith
The transferee has exercised reasonable care in finding
out the transferors power to make the transfer.
The protection bonafide transferee for value under the section is not
limited to first transferee only every subsequent transferee is entitled to the
protection .
DOCTRINE OF FEEDING THE GRANT BY
ESTOPPEL
It is the case of fraudulent transfer.
The transferor doesn’t not have ownership, yet he
transfer for consideration.
Later on the transferor gets the ownership and
the transferee has not yet rescinded the contract.
The transferor is bound to give the property to the
transferee.(Sec 43)
JOINT TENANCY
Joint tenancy is when two or more people own equal
shares of a home. If an owner dies, ownership is
transferred to the remaining owner(s)
Joint Tenancy implies Unity of titles as well as unity of
possession
If the co owners hold property, upon the death of any one
of them his share goes to the survivors (Sec 45)
TENANCY IN COMMON
Tenancy–in-common is when two or more people own a home.
Ownership does not have to be equal. If an owner dies, ownership is
transferred to the person(s) ...
Tenancy in common implies the unity of possession
If the co owners hold it as tenants in common, upon the death of
any one of them his share goes to the heir or representatives. (Sec
45)
DOCTRINE OF LIS PENDENS
Lis = dispute Pendens = pending
During the pendency of a suit or
inquiry, or a litigation, a property cannot be transferred.
The suit must be related to such property.(Sec.52)
FRAUDULENT TRANSFER
Transfer is made with bonafide intention
If transfer is made with (Malafide)fraudulent intention
(with intention defeat the creditor or any interest of
subsequent transferee) is not valid
Essential
Transfer of immovable property
Made with intent to defeat the creditor
Shall be voidable
DOCTRINE OF PART PERFORMANCE
It
is an equitable doctrine – Equity of part performance
A person has taken the possession of an immovable property
on the basis of contract of sale either performed or is
willing to perform his part of contract then he cannot of
ejected on the ground the sale is unregistered (Sec 53 A)
After 2001 in sec 53 A –(the contract though required to be registered has not
been registered) Removed
After 24.09.2001 .The contract of the transfer of immovable
property with consideration as provided in 53A is now
compulsorily registrable document.
Sec 17(1A) (to defeat the claim un registered document is not used) and Sec
49 (unregistered document cannot be an evidence in part performance)
registration Act also amended .
THANK YOU
