Transfer of property

Assignment

Long Questions

Q1) Define the term transfer of property? explain in detail what may be transferred

and what may not be transferred? With relavant case law.

Q2) Define sale? What are the essentials elements for making a sale of immovable

property under TPA? Discuss the rights and liabilities of the buyer and seller under

the sale with relevant case law?

Short Notes :

1. Doctorine of election 2. Mode of creation or acquisition of easement

Introduction
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.

Operation of Transfer
Section 8 of the Transfer of Property Act expresses the concept of operation of the transfer.
The first paragraph states that the courts must, in the absence of a contrary intention, hold
that the transferor indented to transfer all his interests and legal incidents in the property.
Where the property transferred island, all the legal incidents such as easements, rents and
profits and things attached to earth shall be transferred. Where the property to be
transferred is a house, easements, the rents accruing after the transfer, locks, keys, bars,
doors etc. shall also be transferred. Where the property to be transferred is machinery
attached to the earth, in such a case, movable parts of the machinery shall also be
transferred. In cases where the debt is transferred, the legal incident that is securities shall
also be transferred. Where the property is money or other property which may yield some
kind of income, then the interest or income accruing after the transfer takes effect shall
also be transferred. In other words, the property and the legal incidents attached to the
property shall be transferred as part of the same transaction.

Oral Transfer
Section 9 of the transfer of property act, 1882 elaborates the concept of oral transfer. It
mentions that property may be transferred orally in cases wherein it has not been expressly
mentioned that the property must be by law transferred in writing. Writing is necessary in
the following cases:
(i) Sale of immovable property having a value of more than rupees hundred. (Provided
under section 54 of the Transfer of Property Act, 1882)
(ii) Sale or reversion of other intangible things. (Provided under section 54 of the
Transfer of Property Act, 1882)
(iii) Simple mortgage. (Provided under section 59 of the Transfer of Property Act, 1882)
(iv) All other mortgages are securing rupees hundred or more. (Provided under section
59 of the Transfer of Property Act, 1882)
(v) Leases of immovable property from year to year or for a term exceeding one year
or reserving a yearly rent. (Provided under section 107 of the Transfer of Property
Act, 1882 )
(vi) Exchange. (Provided under section 108 of the Transfer of Property Act, 1882)
(vii) Gift of immovable property. (Provided under section 123 of the Transfer of Property
Act, 1882)
(viii) Transfer of actionable claim.(Provided under section 130 of the Transfer of Property
Act, 1882)

Condition Restraining Alienation

The section 10 of the Transfer of Property Act states that where a property is transferred
subject to a condition absolutely restraining the Transferee from parting with his interest
in the property, the condition is void. For instance, if A transfers his property to B with
the condition that B shall never resell it. The condition imposed is void and B may sell or
not sell as he wishes to do. The philosophy behind this section is that a right of transfer
cannot be separated from the ownership of the property. The rule that a condition of
absolute restraint is void is based on the principle of a public policy allowing free
circulation and disposal of property.

Illustrations
A transferred a field to B with the condition that if B sold it, he must sell it to C and to
nobody else. The condition was held to be void as the name of the person who alone was
permitted to purchase might be so selected as to render it reasonably certain that he would
not buy the property at all.

Restrictions Repugnant to Interest Created

Section 11 of the Transfer of Property Act, 1882 is titled as restriction repugnant to interest
created. The section states that any condition restraining the lawful enjoyment of the
property which is transferred absolutely is void. Any such condition if imposed shall be
considered non-existent and any such transfer will operate as if no such condition was
imposed in the first place. In other words, if a man makes a transfer of property absolutely,
he shall not be allowed to impose upon the Transferee any condition which imposes a
restriction on the right of the Transferee to dispose or enjoy the property as per his own
will. The section refers to absolute interest only. Absolute interest implies that:

(i) There should be a transfer of property.

(ii) An interest in the property in favour of Transferee should be created.
(iii) The term of transfer should direct that such interest shall be applied for enjoyment in
a particular manner only.
A careful reading of section 11 helps us understand that the second paragraph of the
section states the exception that has been provided by the Act. The second paragraph states
that,
“Where any such direction has been made in respect of one piece of immovable property
for the purpose of securing the beneficial enjoyment of another piece of such property,
nothing in this section shall be deemed to affect any right which the transferor may have
to enforce such direction or any remedy which he may have in respect of a breach thereof.”
Thus the general rule provided under section 11 is subject to the above-mentioned
exception. In simpler words, the transferor may impose condition restraining the
enjoyment of land if such restriction is for the benefit of the adjoining land.

Illustrations
A makes a gift of the house to B on a condition that the gift will be forfeited if B does not
reside in it. The Condition is valid for the gift is not an absolute gift. The condition would
have been void if the gift was an absolute gift.

Conclusion
Hence, it can now be clearly understood that the transfer of property is a multi dimensional
concept. The person transferring the property and the person receiving the property
become a part of the transaction owing to their rights and legal obligations enshrined in
the Transfer of Property Act, 1882
Transferable Property and Non-Transferable
Property
What is transferable property?
Meaning of Transferable Property: – Any property which is transferable, it can be passed or moved from
one person or organization to another and used by them. Section 6 to the transfer of property act, 1882 states
that property of any kind may be transferred, except those which are provided by this act or by any
other law for the time being in force. Unless there is some legal restriction preventing the transfer, the owner
of the property may transfer it.
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 a transfer of property by an unauthorized person who
subsequently acquires an 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 authorized to transfer his interest in the property and can pass on the proper
title to any other person.

What cannot be transferred?

Exceptions to the transfer of property come under Section 6(a) – 6(i) of the act. So the following
are Non-Transferable Property under the act: –
1. Spes Succession [Section 6(a)]: –
o 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.
o The chance of an heir-apparent in succeeding of getting the property, the chance of inherited
relationship upon the death of any relative, or any other mere possibility of this nature
cannot be transferred.
o For example: – ‘A’ dies leaving his widow ‘B’, and his nephew ‘C’, here ‘C’ only have spes
succession as his succession to the estate depends upon the factor, i.e., ‘B’ leaving the
property intact.
2. Right of re-entry [Section 6(b)]: –
o 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.
o A mere right to re-entry cannot be transferred to anyone except the owner of the property
affected thereby.
 o For example: – ‘A’ grants his plot to ‘B’ on a lease, for 5 years; with a condition that ‘B’
cannot dig a tank on the land, if ‘B’ does any such act then ‘A’ has the right to re-enter. So,
here ‘A’ cannot transfer his right to re-entry to ‘C’ for the breach of the condition. If ‘A’ does
any such act of transfer of his right to ‘C’ then this transfer will be regarded as invalid.
3. Easement [Section 6(c)]: –
o 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.
o An Easement cannot be transferred except the dominant heritage.
o For example: – Right to way, right to light, right to water, etc. These rights cannot be
transferred without property which has its benefits.
4. Restricted Interest [Section 6(d)]: –
o 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.
o A person having right to a property can transfer the same either subject to a restriction or
without restriction. Where property is transferred subject to a restriction the transferee is
supposed not to act contrary to the restriction. Thus, if property is transferred to the transferee
with a restriction that it is to be enjoyed him personally, he shall have no right to transfer such
a property and if he transfers the property in violation of the restriction the transfer shall be
void under this clause. Under this clause, a trustee cannot alienate his office because his office
is based on personal confidence.
5. Right to Future Maintenance [Section 6(dd)]: –
o 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.
o The right to future maintenance is only for the personal benefit of the person to whom it has
been granted, thus it cannot be transferred.
o “A right to future maintenance, in whatsoever manner arising secured or determined, cannot
be transferred”. A right to receive maintenance is a personal right, although any particular
property or the income thereof may be charged with it. The right of maintenance is a personal
right and it is not transferable. But this right can be transfer in case of any arrears of
maintenance but as to future maintenance it is not valid.
6. Mere Right to Sue [Section 6(e)]: –
o 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.
o A mere right to sue cannot be transferred. The right to sue is personal to the party aggrieved.
o For example: – Damages for the breach of contract or tort, as it claims for past means profits
for suing an agent for his accounts, for pre-emption, etc.
o These rights cannot be transferred.
7. Public Office [Section 6(f)]: –
o 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.
 o A public office is non-transferable property therefore cannot be transferred, nor can the
salary of the public officer be transferred.
o Thus, prohibition is based on public policy as a public office is held for personal qualities.
o If the office is not public, it will be transferable, even if the discharge of its duties is
indirectly beneficial to the public.
8. Pensions [Section 6(g)]: –
o 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.
o The stipends which are paid to military, naval and air forces and civil pensions of
government and political pensions cannot be transferred.
o Pensions mean personal allowance or stipend not concerning any right of office but of
special merit.
9. Nature of Interests [Section 6(h)]: – In this, no transfer can be made in three conditions: –
o 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.
o Opposed to the nature of business: – There are things which from their very nature are not
transferable. It includes, res communes (i.e. things of which no one in particular is the owner)
or also known as res nullius (i.e. thing without an owner such as air, water of rivers etc.).
These things from their very nature are not transferable. Similarly, res extra commericum (i.e.
things which cannot be the subject of commerce) e.g. property dedicated to a idol cannot be
transferred.
o Anything with an unlawful object or consideration within the meaning of Section 23 of the
Indian contract act, 1872 cannot be transferred. A property otherwise transferable become
non-transferable when the object or the consideration of the transfer is unlawful. Thus a house
given on rent for the purpose of gambling or prostitution being immoral or opposed the public
policy is invalid.
▪ Is fraudulent
▪ It is against public policy
▪ It is prohibited by law.
▪ Is of such a nature to defeat the provisions of any law.
o A person legally disqualified to be a transferee: – A transfer cannot be made in favor of a
person who is disqualified to be transferee. Under Section 36 of Transfer of property act, a
judge, a legal practitioner or an officer connected with courts of justice are disqualified fro
purchasing any actionable claims.
10. Statutory Prohibitions on the Transfer of Interest [Section 6(i)]: –
o 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.
o The general rule is that leasehold are transferable but this clause makes an exception to this
rule and declares certain interest untransferable. A tenant having an untransferable right of
 occupancy, the farmer of an estate in respect of which default has been made in paying
revenue, or the lessee of an estate cannot assign or transfer their interest in the holding.
o This section makes it clear that a tenant cannot have an occupancy of a non-transferable right
in any way to transfer his interest.
Who is competent to transfer under Transfer of Property Act,
1882?
Following persons are competent to transfer of property: –
1. Section 7 of the transfer of property act states about the person who is competent to transfer.
Every person who is competent to contract is competent to transfer property, which can be
transferred in wholly or in part.
2. And another vital point 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.
3. He should be entitled to the transferable property or to be disposed of transferable property
which is not his own.
4. Competent to Contract: – According to Section 11 of the Indian Contract Act , 1872 every
person is competent to contract who has attend the age of majority. Under section 3 of the Indian
Majority Act, 1875 a person attains majority at the age of 18 years and if guardian is appointed,
he would attend majority at the age of 21.
5. Transferor must be entitled to transferable property: – Authorised to dispose of transferable
property not his own. One who is real owner of the property and property is free from hindrance
is capable to transfer the same. An owner of the property may authorise his power of attorney
holder to transfer the property for him and on his behalf.
6. Persons who are disqualified to transfer are: – The following are disqualified to transfer-
Convicts , Insolvent Person, Alien, Enemy. A transfer by a defective guardian of minors property
is invalid and will be hit by section 11 of Hindu minority .

Case laws for transferable property and non-transferable property

1. Official Assignee, Madras vs. Sampath Naidu, AIR 1933 Mad. 795
It was observed by the court that a mortgage executed by an heir is void even if he has subsequently acquired
the property as heir. Therefore, it can be concluded from above that the transfer of spes- succession is void ab
initio.

2. Shoilojanund vs. Peary Charon, (1902) ILR29 Cal 470

In this case, the court held that the right to receive voluntary and uncertain offerings in worship is restricted for
personal enjoyment and, therefore, cannot be transferred.

3. Ananthayya vs. Subba Rao, AIR 1960 Mad 188

In this case, the court held that where there is an agreement between two people and according to which a
person agrees to give a certain proportion of his income to his brother in consideration of having being
maintained by the later. Now in such cases, this provision will not apply.

4. Saundariya Bai vs. Union of India, AIR 2008 MP 227

It was believed that the pension is non-transferable property, as long as it is unpaid and in the hands of the
government. Another important aspect that needs to be noted is that pensions are separate from bonuses and
rewards, and on the contrary, these are transferable.
Case Laws

K.Balakrishnan v K.Kamalam (2004) [with respect to section 6 of Transfer of Property

Act]

The only substantial question of law involved in this appeal is whether the appellant, who
was minor on the date of execution of the gift-deed dated 24.9.1945, can be held to have
legally accepted the property in suit gifted to him and the said gift-deed was irrevocable.
The appellant shall hereinafter be described as 'the donee' and his deceased mother as the
'doner.'

On 24.9.1945, mother Devyani-donor executed a registered gift-deed of 1/8th share of the

property inherited by her from her maternal grandfather in favour of her minor son aged
16 years being the present appellant (donee) and her daughter Kamalam (respondent No.1
herein) who was aged four years. The 1/8th share of the property gifted is described in the
schedule of gift-deed i.e. one acre and 25 cents of property in Survey No.7481 & 7482
with school building in Mayyanad Cherry in the State of Kerala. Under the terms of the
gift-deed ownership of the property, half and half, to each of the two donees was
transferred but the donor retained during her life time the management of the school and
the income from the property.

The High Court in the impugned judgment took a contrary view and confirming the trial
court judgment dismissed the suit of the donee holding inter alia that the terms of the gift-
deed do not indicate that any property was transferred thereunder. The High Court held
that when the donor reserved to herself the right to sign the papers with respect to
management of the school and right to take usufruct from the property where the school
is situated, there arose no question of passing over ownership of the property to the donees,
which the donees could accept.

The High Court further went on to hold that the entire right in the property gifted was
reserved by the donor to herself and therefore even when the father had handed over the
documents to the plaintiff there arose no question of any acceptance of gift made in respect
of the school property. The High Court further held that the same legal position is in
respect of property gifted to the minor daughter and no question of acceptance of gift arose
in respect of that part of the property as well.

Bharat Petroleum Corporation v P.Kesavan (2004) [with respect to section 5 of

Transfer of Property Act]
A deed of lease was executed on or about 22.11.1967 by one Smt. Angammal wife of Shri
Angappa Chettiar in favour of Burmah Shell Oil Storage & Distributing Company Limited
(Burmah Shell) in respect of 23 acres and 16 cents of property/land situated in the town
of Bhavani for a period of twenty years on a quarterly rent of Rs.300/- for the purpose of
"erecting an installation and/or one or more pumps service/ filling stations together with
overhead/underground tanks and other fittings for storage of petroleum products and such
other facilities and buildings as the lessee may require and for carrying business is such
products through such facilities and other kindered motor accessories or any other trade
or business that can conveniently be carried on in the demised premises". The original
lessor allegedly executed a will bequeathing the said site to her grandson
Meenashisundaram, who expired on 3.11.1971 whereafter rent used to be paid to the
guardian and mother of the said Meenashisundaram, Smt. G. Chellammal.

The appellant herein claimed itself to be a tenant in respect of the said premise relying on
or on the basis of the provisions of the said Act. It is not in dispute that the lessor by a
notice dated 4.2.1987 purported to terminate the tenancy calling upon the appellant herein
to quit and deliver the peaceful and vacant possession as per terms of the lease dead. In
reply to the said notice , the appellant herein in terms of letter dated 26.2.1987 addressed
to its advocate invoked the provisions of Sections 5(2) and 7(3) of the Act stating that it
had no intention to vacate the site on the expiry of the existing lease on 30.6.1987 and
wish to continue occupying the same for a period of twenty years from 1.7.1987 by paying
the existing rental of Rs.500/- per quarter. By reason of letter dated 19.5.1987, the
appellant herein exercised its option to renew the lease for a further period of twenty years
commencing from 1.7.1989 on the same terms and conditions on which the Burmah Shell
held the lease immediately prior to the appointed day.

It was requested :

"May we therefore request you to let us know when it will be convenient for you to have
the lease registered on terms similar to those existing in the current lease. On receipt of
your advice in this matter, we shall take further action."

Despite the said letter, the tenancy was purported to have been terminated and as the
appellant did not quit and deliver possession unto the lessor on expiry of the said period
of lease, a suit was filed in the Court of the District Munsif, Bhawani. It appears that the
appellant herein had also filed a suit for specific performance of contract which was not
pressed.
The learned Munsif decreed the suit holding, inter alia, that although in terms of Section
5 of the Act, the lease may be renewed for the same period but as perSection 107of the
Transfer of Property Act, necessary documents had to be executed by the company. An
appeal there against by the appellant herein was dismissed by the District Judge, Erode.
The appellant herein filed a second appeal before the High Court of Madras which was
also dismissed stating:

"It is clear that the suit filed for renewal of the lease was only subsequent to expiry of the
lease and as such it cannot be said that the affidavit he has taken steps for the renewal of
the lease, especially when he kept quiet for nearly 3 years without taking any steps, in
spite of the filing of the suit by the appellant. It cannot be said that the filing of the suit
can be construed as step being taken for the renewal. When the suit for recovery of
possession is pending, as soon as filing of suit for renewal of the lease, the appellant ought
to have taken steps for joint trial. He has allowed two suits to be proceeded with,
independently. That means, he wanted to take a chance before both the courts below. This
conduct of the appellant cannot be appreciated. Hence, I do not find any error in the
findings of the Courts below that the appellant has not taken any steps to get the lease
renewed prior to the expiry of the lease. Hence, the second appeal is dismissed.