Transfer of Property Act

Unit 1 (S. 3-18)

By Pawanpreet Singh
Asst. Prof., RSOLS
 What is Transfer?
• 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. 
 Definitions Section 3
• “immoveable property” does not include standing timber, growing
crops or grass; “instrument”, means a non-testamentary instrument.

• “attested”, in relation to an instrument, means and shall be deemed

always to have meant attested by two or more witnesses each of whom
has seen the executant sign or affix his mark to the instrument, or has
seen some other person sign the instrument in the presence and by the
direction of the executant, or has received from the executant a
personal acknowledgement of his signature or mark, or of the signature
of such other person, and each of whom has signed the instrument in
the presence of the executant; but it shall not be necessary that more
than one of such witnesses shall have been present at the same time,
and no particular form of attestation shall be necessary;
 Definitions Section 3
• “registered” means registered in under the laws for the time
being in force regulating the registration of documents;

• “attached to the earth” means— (a) rooted in the earth, as in

the case of trees and shrubs; (b) imbedded in the earth, as in
the case of walls or buildings; or (c) attached to what is so
imbedded for the permanent beneficial enjoyment of that to
which it is attached; eg. nuts, door handles etc.

• “actionable claim” means a claim to any debt, other than a

debt secured by mortgage of immoveable property or by
hypothecation or pledge of moveable property, or to any
beneficial interest in moveable property not in the possession
 Who can Transfer The Property/ Persons
Competent to Transfer (Section 7)

• Every person competent to contract (major, sound mind, not

disqualified) and having ownership can transfer property or
persons who are authorised to transfer property can also
transfer property validly.

• Although a minor is not competent to be a transferor yet a

transfer to a minor is valid.
 Essential elements of a Valid Transfer:
(Section 5)
• Section 5: “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.

• 1. 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. 

• 2. 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. 

• 3. The Property must be transferable r/w Section 6.

Transfer inter vivos/ by act of the Parties
Non Transferable Properties (Section 6)
• 6. What may be transferred.—Property of any kind may be transferred, except as
otherwise provided by this Act or by any other law for the time being in force. Section 6
of the Act provides for the exceptions to the rule that property of any kind may be
transferred. The exceptions are:

• (a) The chance of an heir-apparent succeeding to an estate. Rule of Spes Successions,

means 'chance of succession‘, such an interest cannot be transferred. Eg. The chance of
a relation obtaining a legacy.

• (b) A mere right of re-entry for breach of a condition subsequent cannot be transferred.

• Eg. This right pertains to the owner of the property who has transferred limited interest
in the property to another. e.g. A house given on lease. When the lease is subject to a
condition that the owner shall have a right of re-entry to the property in case of breach
of a condition committed by the tenant. The re-entry cannot be called as a transfer
within the meaning of section 5 of the T.P Act as the possession of the property reverts
back to the original owner.
Non Transferable Properties (Section 6)
• (b) Right of Easement: An easement cannot be transferred apart from the dominant
heritage. Eg. A, an owner of a house (Dominant Heritage), has a right to way over the
land of B (Servient Heritage). Here Servient Heritage cannot be transferred.

• (c) Restricted Interest: An interest in property restricted in its enjoyment to the

owner personally cannot be transferred by him.

• (d) Future Maintenance: A right to future maintenance, in whatsoever manner

arising, secured or determined, cannot be transferred. Eg. A, the wife of B was
receiving a maintenance of Rs.3, 000/- per year. A is not entitled to recover her
maintenance for the next year in advance.

• (e) A mere right to sue cannot be transferred. A has right to recover damages from B
for a tortious liability e.g. Assault; this right cannot be transferred as it is a mere right
to sue.
Non Transferable Properties (Section 6)
• (f) A public office cannot be transferred, nor can the salary
of a public officer, whether before or after it has become
payable.

• (g) Stipends allowed to military, naval, air-force and civil

pensioners of the Government and political pensions cannot
be transferred.

• h) Illegal Transfers: No transfer can be made if it is i) having

unlawful object or consideration, ii) opposed to the nature of
interest effected, iii) to a legally disqualified transferee.
 Operation of Transfer (Section 8)
• Unless a different intention is expressed or
necessarily implied, a transfer of property passes
forth with to the transferee all the interest which
the transferor is then capable of passing in the
property, and in the legal incidents thereof.
• Such incidents include, where the property is land,
the easements annexed thereto, the rents and
profits thereof accruing after the transfer, and all
things attached to the earth;
• and, where the property is machinery attached to
the earth, the moveable parts thereof;
 Operation of Transfer (Section 8)
• and, where the property is a house, the easements annexed
thereto, the rent thereof accruing after the transfer, and the
locks, keys, bars, doors, windows and all other things
provided for permanent use therewith;

• and, where the property is a debt or other actionable claim,

the securities therefor (except where they are also for other
debts or claims not transferred to the transferee), but not
arrears of interest accured before the transfer;

• and, where the property is money or other property yielding

income, the interest or income thereof accruing after the
transfer takes effect.
Conditions restraining Alienation (S. 10)
• Alienation means transferring of property. This transfer of property can
be through gifts, sales and mortgages.

• An absolute restraint is such a restraint which completely takes away

the right of the transferee to alienate or dispose of the property.

• The transferee can now no longer transfer his interest in the property to
another person and he has no freedom to do what he wants with the
property in his capacity as the owner of the property. 

• Section 10 stipulates that any condition imposed on the transferee

which would amount to an absolute restraint on the right of the
transferee to dispose of his interest in the property shall be void. 
Conditions restraining Alienation (S. 10)
• Section 10 lays down that where the transferee is
absolutely restrained from transferring his interest in his
property to another person because of a condition which
came along when the property was transferred to the
transferee, then this condition will be made void.

• For example, A transfers some property to B as a gift but

with the condition that while A is alive, B must not transfer
the property to any other person. This condition will be
held void as it absolutely restrains B from transferring his
interest in the property to another person.
Conditions restraining Alienation (S. 10)

• This is commonly known as the ‘rule against

alienability’. The Transfer of Property Act is
based on the principle that there can be a free
transfer of property and has been specifically
made with regard to free transfer. If conditions
restraining transfer are imposed, then the free
transfer would be restricted and there would
be no use for the Transfer of Property Act.
 Exceptions to the Rule
• Lease: A lease is a transfer of property wherein the lessee only
has the right of enjoyment of the property, while the ownership
right is still with the lessor. Conditions imposing restrictions are
valid in the case of a lease, where the condition is for the benefit
of the lessor or those claiming under him. In
 Raja Jagat Ranvir v. Bagriden, AIR 1973 All 1, a condition in the
lease that the lessee shall not sublet or assign was held to be
valid. 

• Married Woman: When the property is to be transferred to a

married woman, then the condition restricting alienation can be
valid.
Conditions restraining Alienation (S. 10)
• In Rosher v. Rosher (1884) 26 Ch D 801, A made a gift of a
house to B, and gave a condition that if B decides to sell
the house during the lifetime of A’s wife, she should have
the option of purchasing it for Rs 10000, while the market
value of the house was set at Rs 10,00,000. This condition
was held to be an absolute restraint and was declared
void.

• In Mohd Raza v. Abbas BandiBibi,(1932) 59 IA 236, a

condition imposing restriction for a particular time or
transfer to a specific person has been held to be void. 
Transfer for benefit of unborn persons (S. 13)
• 13. Transfer for benefit of unborn person.—Where, on a transfer of property, an
interest therein is created for the benefit of a person not in existence at the
date of the transfer, subject to a prior interest created by the same transfer, the
interest created for the benefit of such person shall not take effect, unless it
extends to the whole of the remaining interest of the transferor in the property.

• A Person (X Property) – B (living/ alive) 2022 (B alive. C alive, D unborn)

• Property X is transferred to B (son) for his lifetime, and then to C for his
lifetime and then absolutely to C’s son - D (unborn)
• 2022 – in favor of B.
• B dies in 2023… 2023 (D is born)
• After death of B, property goes to C (2023)
• C dies in 2025 --- lifetime interest of C ---
• 2025 ------ XXXXXXX… in favour of D.
Transfer for benefit of unborn persons (S. 13)
• 13. Transfer for benefit of unborn person.—Where, on a transfer of
property, an interest therein is created for the benefit of a person not
in existence at the date of the transfer, subject to a prior interest
created by the same transfer, the interest created for the benefit of
such person shall not take effect, unless it extends to the whole of the
remaining interest of the transferor in the property.

• Thus, in order to transfer a property for the benefit of an unborn

person on the date of the transfer, it is imperative that the property
must first be transferred by the mechanism of trusts in favour of some
person living other than the unborn person on the date of transfer.

• In other words it can be said that the interest of the unborn person must in all cases
be preceded by a prior interest.
 Section 13: Essentials
• 1. No Direct Transfer: A transfer cannot be directly made to an
unborn person. Such a transfer can only be brought into existence
by the mechanism of trusts.

• 2. Prior Interest: Interest in favour of an unborn person must

always be preceded by a prior interest created in favour of a living
person. 

• 3. Absolute Interest : The entire property must be transferred to

the unborn person. The transfer to an unborn person must be
absolute and there should be no further transfer from him to any
other person
 Rule against Perpetuity (S. 14)
• Section 14 of the ‘The Transfer of Property Act,
1882’ (TPA) is rightly called ‘Rule against perpetuity’ as it
limits the maximum time period beyond which property
cannot be transferred.  

• Only if human beings had their way they shall wish to live
perpetually.  However, laws of nature prevail over mankind
and all living beings are destined to perish.  So, the next
best Homo sapiens’ desire is to preserve and pass his real
assets from generation to generation or vernacularly ‘pust
dar pust’, ‘naslan bad naslan’, ‘pidhi dar pidhi’.   
 Contd.
• Imagine an asset that shall forever continue to remain
within a family till eternity, and deprive all others from
enjoying its benefits. 
• This impedes free and active circulation of property both
for purposes of trade and commerce, as well as betterment
of the property itself.  
• Even the owner himself is denied the right to dispose it for
higher value or to tide away difficult times.
• Similarly, the state is divested from earning revenue, which
is only possible if property can change hands frequently.  
 How Perpetuity May Arise?
• Perpetuity may arise in two ways –
1. By taking away from transferee his power of
alienation (such a condition has been made
void under S.10 of the Act)
2. By creating future remote interest (which
has been prohibited under S.14 of the TP
Act).
 Two principles/ concepts associated with S.
14
• Rule against Perpetuity. (No interest of such a
nature restricted/ devolving upon generations
only).

• Rule against remoteness of vesting of interest.

(for how long remote future interest can be
delayed).
 Example of S. 14
• 2022: ‘A’ Transfers some property to ‘B’ for his lifetime, then to
‘C’ for his lifetime, then to ‘UB’/D on attaining 12 Yrs/ 16 Yrs/
Majority. (B & C alive in 2022).
• 2025: B dies. Property goes to C.
• 2030: UB/ D is Born.
• 2035: C Dies.
• 2035: D will acquire a vested interest and will acquire property
in 2042/ 2046/ 2048 accordingly.

• So, S. 14 determines maximum time period up to which the

transfer can be delayed.
 Section 14
• Section 14 of the ‘The Transfer of Property Act, 1882’ (TPA) is
rightly called ‘Rule against perpetuity’ as it limits the maximum
time period beyond which property cannot be transferred. 

• Starting from the date that the transferor transfers the property
+ lifetime of the last prior interest holder’s + gestation period
of the unborn beneficiary + 18 years, ( ‘Age of majority of
persons domiciled in India’ under section 3 of The Majority Act,
1875). 

• This period is called the perpetuity period, and vesting of the

property in the transferee cannot be postponed beyond this
limit. 
 Contd.
• Maximum Period Allowed under S. 14 -

Lifetime of Prior Interest + Gestation Period

(280 Days) + Time of Majority i.e. 18 years.
 Section 15
• Transfer to class some of whom come under sections
13 and 14.
• Example: A transfers property to B (son) for life and
then to B’s unborn children with a condition that a
female child was to get only property on attaining 25
Years of age only.
• B dies leaving 3 sons and 1 daughter.
• The interest of the daughter fails due to rules
contained in S. 14, but does not fail against the whole
class; i.e. the 3 sons.
Section 16: Failure of prior interest
• Example: A transfers property to B’s lifetime,
then to C’s lifetime, then to D (unborn) on
attaining 25 Years of age; and then to E.
• Here condition void.
• Subsequent interest fails. At death of C,
property will go back to A.
 Exception to Rule of Perpetuity
• Section 18 of TPA allows transfer in perpetuity
for benefit of public.

• The restrictions in sections 14 shall not apply in

the case of a transfer of property for the
benefit of the public in the advancement of
religion, knowledge, commerce, health, safety
or any other object beneficial to mankind.