Sale

Introduction
A transfer refers to a conversion of a thing from one person to another person. Property may be
defined as anything physical or a virtual entity owned by an individual or a group of people. A
property can be transferred from one person to another person by transferring rights, or interest, or
ownership, or possession the party can satisfy either or all the ingredients.

The transfer of property can be made in the two following ways:

First: act of the parties;

Second: by law.

Transfer of property is defined under Section 5 of the Transfer of Property Act, 1882. It refers to an
act done by a living person conveying property to one or more person or by himself or by one or
more living persons in the present or the future. Living people include a company, an association, or
body of individuals whether incorporated or not.

Illustration

A is the grandson of G and A owns three estates of which he wanted to transfer one estate to his
grandpa D but he died two years ago the transfer won’t be held valid because the transfer of
property should happen between two living persons.

Sr. No Property Transfer between Act

1 Immovable property Living to living Transfer of property Act, 1882

2 Movable property Living to living Sale of goods Act, 1930

3 Immovable property and Movable property Dead to living Indian Succession Act, 1925

Background of the Transfer of Property Act,

1882
Before the advent of the British Raj system in India, Hindus, and Muslims were governed by their
personal laws for the transfer of property. When Britishers were actively involved in the Indian Legal
system they established informal Courts in which clear and concrete law was absent as compared to
the law that was prevailing in England. Various High Court expressed the need for creating specific
acts related to the transfer of property. As the principle of a good conscience, equity, and justice was
confusing and created various uncertainties, the privy council noted the uncertainties and also told
the authorities to take immediate action.

So, the first commission was appointed by the British Queen Elizabeth II to remove uncertainties. On
matters related to the transfer of property. The draft was sent in India after certain amendments were
introduced in the legislative Council in 1877. It was then sent to the selection committee but it was
reversed due to the public criticism. The Bill was redrafted by the Second law commission. Some of
the provisions were borrowed from English law on real property, the Law of Conveyancing and
Property Act, 1881. Mostly the law was shaped in such a manner that suits the Indian population and
can be easily understood by a non-professional judge.

Despite various amendments made by the Second Commission, there was an expansion of the law.
Therefore a special committee was appointed to make the amendments in the prevailing act. So
various amendments were made in the act to expand its scope and correct the existing errors.

Important concepts highlighted in the Act

• Immovable property: According to the General Clauses Act, 1897 immovable property
includes land, benefits arising out of the land, things that are attached to the land. Under
transfer of property, the immovable property can be defined as all property are immovable
property other than standing timber, growing crops, or grass.
Narayana Sa vs. Balaguruswami (1923)

In this case, large artillery was fixed for blowing liquor. The Court held that it would be considered
as movable property if it was fixed in the land, not with an intention for beneficial enjoyment.

• Mortgage debt: After the amendment of 1900 mortgage debt was excluded from
actionable claims. In Peruma animal vs. Peruma Naicker, Wallis C.J.held that before 1900
mortgage debts could be transferred as actionable claims, it was excluded from the
actionable claims, the legislature intended that the mortgage debt must be transferred in
mortgagee’s interest through a registered instrument.
• Instrument: According to the transfer of property Act, 1882 instrument refers to a non-
testamentary instrument. It acts as evidence of the transfer of property between living
parties. According to the legal dictionary, an instrument refers to a formal legal
document.
• Attested: It refers to a formal document signed by a witness. The transferors of the
property are known as the executant. The amendment act was introduced in 1926 which
mentioned that there must be two or more witnesses who must sign the document in
 presence of the executant not necessarily at the same time but they shouldn’t be the party
to the transfer.
• Registered: According to the transfer of property Act, 1882 registered refers to any
property registered where the act is operative. One must comply with various procedures
of registration.

1. The description of the property should be mentioned.

2. Avoid fraud.
3. Deeds should be presented by a competent person.
4. The property must be registered in the same territory where the registered office is
situated.

• Actionable claims: A claim to any debt, other than the debt secured by mortgage of
immovable property or by hypothecation or pledge of movable property or to any
beneficial interest in a movable property or to any beneficial interest in movable property
not in the possession, either actual, or constructive possession of the claimant which the
civil courts recognize as affording grounded of relief, whether such debt or beneficial
interest be existent, accusing, conditional or contingent.
Illustration: A has given his house to B for rent but B hasn’t paid the rent because this would amount
to an actionable claim.

• Notice: Notice refers to knowledge of the fact. The person has knowledge of facts about
various circumstances. According to the Transfer of Property Act, 1882 it prescribed two
kinds of notices
Actual or implied notice: The person having actual knowledge about a particular fact.

Essential elements of the Transfer of Property Act,

1882
• To be a living or juristic person: For a transfer of property, there must be a transfer
between living or a juristic person. In Shiromanigurudwara Prabhakar committee,
Amritsar v. Sri Somnath Dass (2000) the court defines a juristic person which can be an
individual firm, corporate, company society, association, but not a partnership. Anyone
who can sue or can be sued would satisfy this requirement.
• Transfer through Conveyance: Conveyance of property can be either done in the
present or in the future. It is necessary to ensure nothing is transferred before the title.
• The Property must be transferable: According to Section 6 of transfer of property Act,
1882 there are properties which cannot be transferred:
 1. The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining
a legacy on the death of a kinsman, or any other mere possibility of a like nature cannot
be transferred.
2. The mere right to re-entry for breach of a condition subsequent cannot be transferred to
anyone except the owner.
3. The easement right cannot be transferred.
4. The interest of the property restricted in its enjoyment to the owner cannot be transferred.
5. Political pensions, public office, the salary of the public officer cannot be transferred.
6. The right to sue cannot be transferred.
7. Stipends to military, navy or the airforce, political pensioners, and civil pensioners cannot
be transferred.
8. No transfer cannot be made as opposed to the natural interest or if the object or the
consideration is unlawful then the transfer cannot be held valid.
9. The right to future maintenance cannot be transferred.
10. Tenants having an untransferable right to occupancy, the farmer of an estate in respect of
which default has been made in paying revenue or lessee of an estate under the
management of the court of wards, to assign his interest as the tenant, farmer, or lessee.

• Transfer of property must be done by a competent person: For a valid transfer, it is

necessary that the property transferred should be of a sound mind, should not be
intoxicated, must be a major or he is not a person disqualified by law cannot enter into a
contract of transfer of property with another person.
• The transfer should be made in a prescribed form: The transfer of property need not
be in be made in writing however certain property to transfer then it must be in writing:

1. Sale of movable property value more than a hundred rupees.

2. Sale of intangible must be in a written format.
3. All mortgages which are more than a hundred rupees should be transferred in a written
form.
4. The transfer of actionable claims must be in a written form.
5. A gift in a form of immovable property.
6. Lease of immovable property exceeding more than one year.
7. The rule against perpetually: It is necessary that the property must be transferred during the
lifetime of an individual perpetuity rule should not be followed during the time of transfer of
property.
8. Property cannot be transferred to an unborn child: A property cannot be transferred to
an unborn child necessary to consider that while transferring the interest of the property
person should be above the age of 18 years.
 9. Conditional transfer of property: Under Section 25 of the transfer of property Act,
1882, the property can be transferred complying to the condition mentioned. If the condition
becomes impossible, forbidden by law, opposed to public policy, or is immoral the transfer
would be held void.
Illustration: A is interested in purchasing B’s property but B sets a condition that A in order to
purchase B’s property has to kill C here the transfer is through unlawful act, therefore, the transfer
would be held void.

Kinds of transfer under the Transfer of Property

Act, 1882
1. Sale of immovable property: There is a transfer of ownership from the buyer to the
seller in exchange for the price. Delivery of tangible property from the seller to the buyer.
2. Mortgage of immovable property: The property gets transferred from the buyer to the
seller in the form of a mortgage where the immovable property is mortgaged to secure a
loan. The mortgagor has to pay the principal loan along with the interest to release the
immovable property from the mortgage.
3. Leases of immovable property: The possession of the property is being transferred from
one person to another person for a fixed price in this scenario there is no transfer of
ownership.
4. Exchange of immovable property: When two persons mutually decide to transfer
immovable property it would be referred to as an exchange of property.
5. Gift of immovable property: According to the transfer of property Act, 1882, gift
refers to a transfer of movable or immovable property violently or without the
consideration, by one person that is donee, to donor transfer is accepted by and on behalf
of the donee.

Features of Transfer of Property Act, 1882

• The preamble of the transfer of property Act lays down that it is related to the transfer of
property by the act of the properties.
• The transfer of property act, 1882 provides a uniform and a clear law concerning the
transfer of movable property from one living person to another living person by the act of
parties.
• The Transfer of Property Act, 1882 is an extension of the Indian Contract
Act,1872 because the contract act was recognized as an inexhaustive code.
• The transfer of property law is not a copy of the English transfer of property laws that was
enacted based on socio-economic conditions of the country.
• The transfer of property Act, 1882 cannot be considered as totally exhaustive; it covers
the transfer of immovable property from the act of parties.
 • Transfer of property is subject to the concurrent list that provides power to both the state
legislature and the parliament to pass laws related to the matter of transfer of property.
• The act covers five types of transfer of immovable property they are as follows: a)
Mortgage b) gift c) sale d) actionable claims e) lease.
• The transfer of property Act, 1882 is a law that applies lex-loci to all people living in that
jurisdiction, not like personal laws that differ from person to person.
• The transfer of property Act, 1882 is governed by various principles like justice, equity,
and good conscience.
• Initially, at the time of implementation, the act didn’t apply to the State of Bombay,
Punjab, and Delhi as because they had their own acts related to property matters.
Currently, the transfer of property act doesn’t apply in Punjab; it complies with the rule of
good conscience, equity, and justice.
• Transfer of property Act, 1882 highlights the provision of inter-vivos parallel to the
existing laws relating to the testamentary and interstate transfer.
• The transfer of property act, 1882 is a general law and therefore it cannot prevail over the
special laws passed by the parliament.
• Under the Transfer of Property Act, 1882 it mentions that absolute conditional restraint is
void and partial conditional restraint on the transfer of property is valid.

Conclusion
The Act was introduced with an intention to create a comprehensive Act which provides information
about the transfer in a very simple language during the time of introduction it was not complete and
had various uncertainties. It has gone through various amendment processes and the act has proved it
time and again about its effectiveness. In India, many more such acts like transfer of property Act,
1882 are still in need to be implemented.

References
[1] https://blog.ipleaders.in/transfer-property-act/

[2] https://www.lawctopus.com/academike/transferability-immovable-property/

[3] https://shodhganga.inflibnet.ac.in/bitstream/10603/31643/13/13_chapter%205.pdf

[4] https://fklinknotes.wordpress.com/2019/01/17/objects-characteristics-features-of-transfer-of-
property-act-1882/