Law > Civil Laws > Transfer of Property Act > Transfer of Property
Property is a very wide term and would include anything which carries some value and over which the right of ownership may be exercised. The word property in its most comprehensive sense includes all legal rights of a
person except for his personal rights, which constitute his status or personal condition. The term ‘property’ does not include the power of appointment. The provisions of the T. P. Act, 1882 are not applicable to testamentary succession. For testamentary succession, the Indian Succession Act, 1925 is applicable. A conveyance is a transfer of the property from one living person to another.
Section 5 of Transfer of Property Act, 1882:
Transfer of property defined –
In the following sections “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, or to himself and one or more other living persons; and “to transfer property” is to perform such act. In this section “living person” includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.
From the definition, we can write the following characteristics of a Transfer of a Property.
- It is an act of conveyance
- Conveyance is inter vivos means between living persons.
- Property may be conveyed to one or more other living persons, or to himself, or to himself and one or more other living persons.
- Property may be transferred in the future or in present.
- The term ‘person’ includes company or association or body of individuals, whether incorporated or not
For transfer of property, the property must be conveyed by the transferor to the transferee.
In Lionel Edwards Limited v. State of West Bengal AIR 1967 Cal 191 case, the Court held that the person conveying the property is entitled to the property sought to be conveyed to the person who has no title to it otherwise.
Where transferee already has some interest in the property prior to its conveyance in his favour, it is not conveyance and it is not a transfer of property. In A. Nadalwari v. N. Malvarayan AIR 1936 Mad 918 case, the Court held that the document of transfer shows the change of ownership.
In Subbegowda v. Thimmegowda AIR 2004 SC 2428 case, the settlement deed was found to be only an entrustment of the property with power of revocation reserved by the executant. The Court held that it is not a transfer of property and opined that it is permissible under Act to make a conditional transfer or settlement accompanied by transfer. There may be condition precedent or subsequent, covenants or restraints.
The transfer of property should be between living persons. But the Act includes company or association or body of individuals, whether incorporated or not. Hence corporations, companies, firms, idols and deity who are juristic persons can hold property. Under Section 122 of this Act, the dedication to a deity or idol does not come within the purview of this Act because of the condition that such gift should be given in the lifetime of donee and deity or idol are not living persons.
In Har Narain v. Bank of Upper India AIR 1938 Oudh 84 case, the Court held that a Court is not a juristic person. It is not a living person either, therefore the Court order for sale is not a transfer of property within the meaning of this Act.
In Usha Rani Kundu v. Agradat Sangha AIR 2008 NOC 911 Cal case, the Court held that an unregistered club or society cannot come within the definition of ‘living persons’ within the meaning of Section 5 of this Act, hence claiming the right to pre-emption on the ground of transfer of adjoining land is not maintainable.
The transferor may transfer the property with immediate effect or on a future date. When its formalities are completed then the transfer takes place with immediate effect. While if the transfer is in the future, then it is effected from the date mentioned in the sale deed.
In Jugalkishore v. Raw Cotton Co. (!955) SCR 1369 case the Court opined that in present or in future S. 5 qualify the word ‘conveys’ and not the word ‘property’.
In Purna v. Birna, ILR (1939) 2 Cal 341 case, the Court held that the expression property of any kind does not include future, non-existent property. Therefore, a transfer of future property is not, as such valid in India. But a conveyance of such property may be valid as a contract to assign, and when the property comes into existence. equity fastens upon the property, and the contract to assign becomes a complete assignment.
In Holroyd v. Marshall (1862) 10 HLC 191 case, the Court held that if the transfer is for the consideration, equity will allow the specific performance of the agreement. But if the transfer is gratuitous (i.e. a gift) there will be no enforceable contract. Thus the gift of future property is void. This decision is known as Holroyd v. Marshall Rule.
The phrase “to himself”, means the person vests the property in trust and himself becomes the trustee or when a man transfers property in one capacity, to himself in another capacity, as when a man makes a transfer in his capacity as an executor, to himself in his private capacity. Previously, the transferor was able to transfer his property to one or more other living persons, or to himself and one or more other living persons. This created difficulties for those persons who wanted to settle their properties to trust and declare themselves as a trustee to such trust. To overcome this difficulty by Amendment Act, 1929 the phrase “to himself” is added.
General provisions of this Act will not affect the provisions of any special law dealing with the property transferred by companies, or associations or body of individuals.
The property can be transferred to individuals or company or association or body of individuals, whether incorporated or not.
In Jai Narain Parasampuria v. Pushpa Devi Saraf (2006) 7 SCC 756 case the Court held that transfer of property in favour of unincorporated company is not barred.
In Umabai v. Nilkanta Dhondiba Chavan (2007) 6 SCC 243 case, the Supreme Court stated the factors to be taken into account for determining the nature of transaction and held that The true nature of the document must be determined having regard to the intention of the parties as well as the circumstances surrounding the making of the transaction and wording of the document.
The definition of the term ‘Transfer’ in Section 5 of the Act does not require the person who conveys property should necessarily be the owner of the property being transferred.
Similarly, the definition of the term ‘Transfer’ in Section 5 of the Act does not mean conveyance of all interest of the transferor in the property. e.g. in a mortgage or a lease, there is no transfer of all interest in the property.
Similarly, the definition of the term ‘Transfer’ in Section 5 of the Act does not exclude property situated outside India or the territories where the Act does not apply. It is important where the transfer is effected.
In Prethi Singh v. Ganesh AIR 1951 All 462 case the Court held that if the transfer is effected where the Act is applicable, then irrespective of the location of the property, the rights, and liabilities of parties are determined according to the Act.
Effects of Transfer of Property:
- Transfer of Right: All the rights which a person (transferor) possesses in property, are transferred to another person (transferee).
- Transfer of Ownership: In some cases like sale of the property, the ownership of property is transferred from one person (transferor) to another person (Transferee).
- Transfer of Interest: Unless a different intention is expressed or necessarily implied in the contract, transfer of property possesses all those interests to the transferee in legal incidents when the transfer is capable of passing such interests in property and legal incidents can include easement rights, rents, and benefits.
Modes of Transfer:
Under T. P. Act, 1882, there are 6 modes of transfer of property which are Sale, Mortgage, Lease, Exchange, Gift, and Actionable claim.
The acts which are not included:
Under T. P. Act, 1882, Partition, Relinquishment, Surrender, Easement, Will, Compromise, Family Settlements, are not considered as a transfer of property.
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