Name: Farooque Ahmed

Bl-No: BL-1454
Section: A
Subject: Transfer of property act
Assignment: Essentials of transfer
of property

Introduction
The Transfer of Property Act came into force on 1st July 1882. This act regulates the
transfer of property in the country. It contains specific provisions regarding the
constituents and conditions attached to a transfer. The principal object of this act is
to characterize and revise the law relating to the transfer of property by
demonstrations of parties and not to transfer by the activity of law. The term
‘transfer of property’ signifies a demonstration by which an individual passes the
property to at least one person, or himself and at least one different person. The term
person includes an individual, or body of individual or association, or company. The
term transfer is defined with reference to the word “convey”. It is a process by which
something is made over to another. To make a transfer valid there are some
essentials given in the Act which have to be fulfilled, we will describe these essentials
in this article.

Essentials for Transfer

‘Transfer’ is a term with very wide meaning and it includes every transaction whereby
a party divests himself or is deprived of a portion of his interest, that portion
subsequently vesting or being vested in another party. This description of the term
transfer was given by a Judge of Rangoon High Court in the case Ma Kyin Hone v.
Ong Boon Hock (1967). There are many essentials or necessities requires for a valid
transfer, they are as follows:

1. The transfer must be between two or

more living persons 
Section 5 of the Transfer of Property Act, 1882 describes the first essential of a valid
transfer. The transfer of property must take place between two or more persons who
are living or it must take place inter vivos. The person who transfers, the transferor,
and the person to whom the property is being transferred, the transferee, must be the
living entities on the date of transfer. The property can’t be transferred to the person
who is dead. Therefore, there shall be an act of conveyance by some living person to
constitute a transfer. 

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.

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 done 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.  

2. The property must be transferable

The phrase “property must be transferable” also denotes that some types of
properties are considered to be untransferable under Section 6 of the said act. All the
properties except mentioned in Section 6 are considered transferable. There are eight
exceptions mentioned in the act:

1. An heir apparent: The likely possibility of a beneficiary prevailing to the

property of an intestate (Spes Successionis), the possibility of a connection
acquiring a heritage on the passing of a kinsman, or some other remote
chance of a similar sort will be considered as untransferable. In this way, the
exchange of Spes Successionis is void ab initio.

In the case of Official Assignee, Madras v. Sampath Naidu, it was observed by

the court that a mortgage executed by an heir apparent is void even if he
subsequently acquired the property as an heir. Hence, from above it can be
concluded that the transfer of spes succession is void ab initio.

2. Easement: An easement is a right of the owner or the occupier of the land

which he/she possesses for the beneficial enjoyment of the land, to do or to
continue doing something, or to prevent and continue to prevent something
from being done, in or upon or in respect of certain other and that is not his
own. It cannot be transferred apart from the dominant heritage.
 In Narsingh Sahai v. Bhagwan Sahai (1909) it was held that the prohibition
doesn’t touch upon the creation of new easements.

3. A right of re-entry: A mere right of re-entry for breach of a condition

subsequent cannot be transferred to anyone except the owner of the property
affected thereby. This right is a personal right of an individual and cannot be
transferred if he does so, then the same would be void.

Re Davis and Company, in this case, A purchased certain goods from B, which
was on a hire purchase agreement. This agreement contained a clause which
was that after purchase, A would take the property and would also pay the
instalments on time, and in case A fails to pay the instalments B would enter
A’s premise and take the possession of the property. The important point to be
noted here is that the right to Re-enter is a personal right of B and the same
cannot be transferred by him, and in any case, if he transfers this right to
entry, to his creditors or anyone, then the same would be void.

4. Interest restricted to personal enjoyment: An interest in the property

restricted to personal enjoyment of the owner cannot be transferred by him
and if he does so then it would be declared as void. A right to future
maintenance, in whatsoever manner arising, secured or determined can’t also
be transferred. The phrase “whatsoever manner arising” has a very wide
meaning and covers cases where the right has been created under a will,
compromise, or deed. 

In the case of Shoilojanund v. Peary Charon, it was held that a right to receive
voluntary and uncertain offerings at worship are interest restricted to personal
enjoyment and hence, cannot be transferred.

5. Mere right to sue: A right to sue is a personal right or an individual right

that only an aggrieved party can exercise and hence is not transferable. It is
not assignable to anyone.

It was in the landmark case of Sethupathi v. Chidambaram, where it was held

that a mere right to sue is something which cannot be transferred. Here the
word ‘mere’ itself means that the transferee has developed no interest than
just a bare right to sue.

6. Offices and Salaries: A public office and salary of a public officer whether
before or after it has become payable cannot be transferred. The term public
office is not defined under the act but in general terms, it means a person who
is appointed to discharge a public duty and in return receives a monetary
benefit in the form of salary which is not transferable.

In the case of Ananthayya v. Subba Rao, it was held that where there is an
agreement between two people and according to which a person agreed to pay
a certain proportion of his income to his brother in consideration of his having
been maintained by the latter, now in such cases this provision will not be
 applicable, which was held by the court.

7. Stipend: Stipend allowed to naval, civil, military, and air force pensioners of
the government and political pensions are not transferable. Only the stipend is
not transferable not the gifts or bonus by the government or an allowance
made in lieu of a presumed grant of lands, or grant of land in lieu of pension-
these things are transferable as interpreted by the judiciary in several cases.

3. Persons competent to transfer

Section 7 of the Transfer of Property Act, 1882 lays down as to who is competent to
transfer the property and if he/she is not eligible or not competent then a valid
transfer of property cannot take place. Therefore a person who is competent to the
person can validly transfer the property if he is the owner of that property or he
possesses authority sustainable in law to transfer the same. The term ‘authority’ can
be personal, under an agency or acquired under law or under the direction or
permission of the court. In order to be a competent person to transfer the property
one should have attained the age of majority

In Raja Balwant Singh v. Rao Maharaj Singh (1920) case it was held that a transfer
of property by minor is void.) and should be of sound mind at the time of
transferring the property, also he should not be disqualified to transfer the property
under any law to which he is subject to.

In Sadiq Ali Khan v. Jai Kishore (1928) case, the privy council observed that a deed
executed by a minor was null and void. It was also observed that the law of estoppel
cannot be applied to a minor and a minor is not competent to transfer yet a transfer
to minor is valid.

It is mentioned that under Section 11 of the Contract Act the given provisions of the

competency should be fulfilled in order to transfer the property. As far as the
transferee is concerned there is no provision in any law concerning the competency.
But, according to Section 13 of the Act, he should be alive at the time of transfer and
creation of prior interest is required if the transfer is made to an unborn person.

4. Must not have any conditions Restraining

Alienation
Section 10 of the Transfer of Property Act, 1882 said that when a property, subjected
to a condition or limitation, is being transferred restrains the transferee or any other
person claiming under him from parting with his interest in the property then the
condition or limitation is void except in the case of lease of the property where the
condition is beneficial of the transferor or those claiming under him. These
conditions restraining alienation are barred by the law; it can not be encroached by
anyone, not even by the transferor through a private agreement as it is one of the
basic rights of the owner. Since it is the sole prerogative of the owner he is
empowered to sell his property any time he wants and to anyone. Restraints of
alienations can be in the following ways:

1. Restraining with respect to persons: Restraining the owner of the

property through a private agreement to transfer the interest or the whole
property only after obtaining the prior permission or consent of a specific
person would be void. The condition that it can be transferred to a specific
person can be valid depending upon the facts of the case.
2. Restraining on transfer for a particular time: Restraining the owner
with a condition that the property would not be sold within five or ten years
or for any time period is totally void unless it is for a shorter period and the
transferor has a benefit with that condition such as an option of repurchase
as stipulated in the contract.
3. Restraining with respect to money: Restraining the owner that the
property can be sold only at a fixed price, or for no consideration, or at a
market price only, or at any consideration deemed appropriate by the
owner, but out of sale proceeds, either something has to be paid to a specific
person or persons, or for a specific purpose, all these conditions would be
restraints on alienation through control of money and would be void.

Relevant case laws:

In Rosher v. Rosher, a person A died leaving behind his wife W and a son S. He left
his entire property to S, under his Will. The will provided that S had to first offer the
property for sale and also had to sell her at L 3000 while the market price was L
15000. The court held that these restrictions amounted to an absolute restraint on S’s
and his heir’s power of alienation and were therefore void.

In K Muniswamy v. K Venkataswamy, a family partition was effected although one

condition in the partition deed provided that the mother and the father were to enjoy
the properties only during their lifetime and after their deaths, this property was to be
partitioned equally amongst the two sons. This creation of life interest meant that the
parents had no power to alienate the property during their lifetime. The parents sold
their property to one son. Other son challenged the validity of sale. The court held that
a restriction prohibiting them absolutely from transferring the property amounted to an
absolute restraint on alienation and was therefore bad in eyes of law.

5. Rule against perpetuity

Section 14 of the Transfer of Property Act, 1882 features that the exchange must be in
opposition to the rule against perpetuity. The literal meaning of the term perpetuity
is endlessness, time everlasting, eternity, or infinity. It alludes to the production of
an enthusiasm for the here and now which is to produce results after an extremely
prolonged stretch of time. No transfer of property can happen or work to make an
interest which is to occur after the lifetime of at least one people living at the date of
such transfer and the minority of some individual who ought to be in presence at the
expiry of that period and to whom the interest made is to have a place on the off
chance that he accomplishes the age of majority. This rule guarantees that one can’t
defer the vesting of property in a transferee past a specific limit.

Relevant Cases:
T.Subramania vs. T. Varadharayas AIR 2003
Fact of the case: – ‘A’ transfers property of which he is the owner to ‘B’ for her life
and after the death of ‘B’ to his eldest son and after the death of A’s eldest son to his
second son.
Judgment of the case: – In this case court held that the interest so created for the
benefit of the eldest son does not take effect, because the interest created in favor of
eldest son was limited only to his lifetime.

Conclusion
These were the essentials required for the valid transfer of property under the Act. If
these conditions are not fulfilled then the transfer will not be considered as a valid
one or can be declared as void. This condition is as similar to that of the validity of a
contract as if the essentials mentioned under the Contract Act, 1872 then only a
contract will be declared as valid until then it is a void contract. Even some of the
essentials are similar to that of a valid contract under the Indian Contract Act, 1872.