INTRODUCTION

The Transfer of Property Act, 1882 governs the transfer of property in India between living persons and
lays down essential legal principles ensuring valid transactions. It applies primarily to immovable property
and certain aspects of movable property, excluding transfers by inheritance or operation of law. A valid
transfer requires a competent transferor and transferee, an existing property, lawful object and
consideration, and compliance with legal formalities like writing and registration in certain cases. The Act
defines various modes of transfer, including sale, mortgage, lease, gift, exchange, and actionable claims,
each with specific conditions. It also incorporates important legal doctrines such as Election, Lis Pendens,
Part Performance, and Accretion, ensuring fairness and legal certainty in transactions. Additionally, it
imposes restrictions like the Rule Against Perpetuity to prevent indefinite control over property. The Act
provides a structured framework to balance the rights of property owners and transferees, ensuring
transparency, security, and enforceability in property dealings.
Concept of Property and General Principles Relating to
Transfer of Property
Transfer of Property Act, 1882, regulates the transfer of property in India. It was enacted on 17th
February, 1882, and came into force from 1st July, 1882.

Concept of Property
„Property‟ has a wide connotation in its real sense and it refers to all kinds of property, movable
or immovable, tangible or intangible, anything that is a source of wealth or income.
A person, who has the exclusive right to the things that is owned by him, i.e. the proprietor, is free
to claim, use and dispose them as he pleases. He can exchange them for other things, or gift them
to any other person without taking anything in return, or just let it waste. He enjoys the right to
rent, sell, mortgage, transfer, exchange, consume or even destroy them; he can also exclude others
from doing these actions.
There are certain things like water, air, sun, etc. over which no one can claim exclusive rights and
therefore, cannot be called „Property‟.

Thus, 1the principles to property rights can be summed up as-

● Exclusive right over the use of the property any which way it shall please him
● Free to derive any benefit from the property
● Right to sell or transfer the property to whomever he shall wish
● Right to exclude others from the property
Immovable Property:
The Transfer of Property Act, 1882, does not provide an exhaustive definition of the
term „immovable property‟. It simply states that that standing timber, growing crops
and grass shall be excluded from „immovable property‟.
According to Section 3 (26)1 of the Act, immovable property shall include-
● Land- in its legal term land includes following elements-
a) A defined portion of the earth‟s surface area
b) Ground beneath the surface
c) All-natural objects that lie under the surface e.g. minerals.
● Benefits arising out of land,
● Things attached to the earth, or
● Permanently fastened to anything attached to the earth.
„Attached to the earth‟ means-
● Rooted to the earth as the trees or shrubs are;
● Imbedded in the earth as the walls or buildings; or
● Attached to what is embedded i.e. fixtures.

Movable Property Immovable Property

Can comfortably be shifted or transferred Cannot be shifted or transported to another
without its quantity, shape, capacity or quality. place with ease, and if done it will change its
Example- books, timber, vehicles, etc. shape, quantity, quality or capacity.
Example- land, buildings, trees attached to
the
ground, etc.
Mango trees cut and sold for timber purposes. Mango trees sold for fruits and nourishment.
No need to register under the Indian Mandatory to register under the Act each time
Registration the
Act, 1908. property is transferred.
Liable to pay sales tax. Liable to pay stamp duty and registration fee.
The transfer of property is considered complete The transfer of the property mandates registry
by mere delivery with intention to transfer. in the name of the transferee, mere delivery
is not
sufficient.
Does not form an accretion to an ancestral Forms an accretion to an ancestral impartible
impartible estate. estate.
Case law- Thakur Hari Singh v.
Commissioner
Conditions Restricting Transfer
Sections 10-18 of Transfer of Property Act, 1882, deals with various kinds of conditions that can
or cannot be imposed while transferring a property.
The right of disposition of the transferee shall be determined by the extent to which the person
who transfers his interest in the property decides. „2Condition Restraining alienation‟ is said to
exist where the transferee‟s power to transfer or dispose of the property held by him, is restricted.
Section 10 of the Act states that „absolute‟ restriction or limitation that restrains the buyer from
alienating the property is void.

Case Law

1. Rosher v. Rosher4
The Case: Mr. J.B. Rosher made a will in which he gifted all his real estate to his son, with a
condition that if he ever wanted to sell it, he shall offer it to Rosher‟s wife at a certain amount (that
was the one-fifth rate) and nobody else.
The Verdict: The Court held that by restricting the son from selling or by compelling him to sell
at an undervalued price resulted to absolute restraint on alienation and therefore, void.

2. Renand v. Tourangeaon5
The Case: A property was transferred with a condition that the transferee shall not sell it for 20
years.
The Verdict: The Court held that this condition amounted to absolute restriction, therefore, void.
Section 10 of the Act is based on the principle that law favors alienation to accumulation,
encouraging unrestrained circulation and disposal of properties.

There are two exceptions to the rule-

1) In cases of lease agreements, as the restraint here is for the benefit of the lesser or
the estate leased out.
2) Secondly, where the property is transferred for the benefit of a woman (who is not a Hindu,
Muslim or a Buddhist), with a condition that she doesn‟t have the power during her marriage
to transfer or create any encumbrance in the sale of property transferred to her.

Absolute and Partial Restriction

Restrictions on alienation can be absolute or partial. Absolute restrictions are void under Section
10 of the Act, but partial limitations can be permitted.
As in the case of Renand v. Tourangeaon6 if the restricting condition would have been of 2-3 years
instead of 20, it would have been partial restriction, thus, making it valid.

2
Textbook on the Transfer of Property Act by Dr. Avtar Singh
 Definition of Transfer of Property
Transfer of property is defined in Section 5 of the Act, and is stated to mean “an act by which a
living person conveys property, in present or in future, to one or more other living persons, or,
himself and one or more other living persons”.
A living person refers to an individual or a company or an association or body of individuals;
imperative of the fact that its incorporated or not.
The word „transfer‟ has a very wide range and it covers either transfer of all rights or any one or
more of the subordinate rights of the property.

Salient Points of Section 5 of Transfer of Property Act

● „Transfer‟ can happen only from living person/s to living person/s.
● It can take place in the present or future but the transferor shall be a living person.
● Living person includes company or associations, etc.
● Other laws that govern transfer are not affected by Transfer of property Act.
● The transfer of property can be implied or expressed.

Requisites of a Valid Transfer

1) Section 5 specifies that the transfer shall be between two or more living persons.
2) Section 6 states about the property shall be transferable or non-transferable.

3) Section 9 mentions that the transfer shall be done in the mode as prescribed by the
Act.
4) The transfer consideration or object shall be lawful.

5) The transfer consideration or object shall be lawful.

The Persons who are competent to Transfer

Every person is competent if-
● He is of age of majority. Generally, 18 years but in cases where a guardian has been appointed
for a minor, it is 21 years.
In the case of3 Mallikarjuna v. Mareppa7the property was bought inthe name of buyer‟s minor
son‟s name. after some years it was sold off while the son was still a minor. The sale was declared
void as the guardian had not taken the mandatory court permission needed under Section 8 of the
Hindu Minority and Guardianship Act, 1956.
Neither can a minor be a transferor, such a contract shall be void.

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.schooloflegaleducation.
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 ● a person should be of sound mind; any contract by a person of unsound mind shall be void.
● Persons can be authorized by the title holder to dispose of the property under power of
attorney.

KINDS OF TRANSFER
The Act acknowledges five kinds of transfers-
1) Sale- is a complete transfer of property rights for money.
2) Mortgage- is a limited transfer of interest in the property.
3) Lease- gives rights to immovable property for a limited period.
4) Exchange- gives complete transfer of rights like a sale but the consideration is not money but
some other thing.
5) Gift- is given free, there is no consideration involved.

b.) Transferable and Non-transferable Property

Section 6 of Transfer of Property Act, 1882, states that property of any kind may be transferred
except for those as otherwise provided by this Act or any other law that is in force at the moment.
It enumerates different kinds of property that shall not be transferred-
Clause a) Spessuccessionis
Spessuccessionis means chance or expectancy oh succession, then all such property is
not transferable.
Under this clause it means-f succession i.e. when there is a possibility of getting property in
future through
a) Chance of an heir apparent succeeding an estate,
b) Chance of a relative obtaining a legacy on the death of a kinsman, or
c) Any other mere possibility of like nature.
Clause b.) Right to Re-entry
The second exception to the general transferability states that a mere right of re-entry for breach
of a condition subsequent cannot be transferred to anyone except the owner of the property
affected. Such restriction is generally inserted in a lease, empowering the lessor and helping him
safeguard his property.
Clause c) Right to Easement
Easement is a right which exists for beneficial enjoyment of a land and is exercised upon the land
of another person. Hence, it is a right connected to the property and has no independent existence.
It cannot be transferred except for the dominant heritage.
Clause d) Restricted Interest
It says that an interest in property restricted in its enjoyment to the owner personally cannot be
 transferred. For example, if a house has been taken on rent for personal use by someone, he cannot
transfer it to another.

. Rajegowda v. H R Shankare Gowda8

It was held that as absolute right of alienation was not awarded, therefore, the person cannot pass
on such property in his will.
In another case, Ram Chandra v. Kalyan Singh12 the court disagreed with the defense of
the seller standing ground that the standing trees on the land cannot be transferred.
1) Machinery: In case of machinery, all its movable and immovable parts shall be transferred.
2) Home or house: legal incidents related to a house includes:
● Locks, keys, windows, etc. all that provide permanent use.
● Rent and profits occurring after the transfer
● An easement annexed with it

3) Debt: If the property transferred is a debt, then all securities with that debt shall pass on to the
transferee.
4) Money: When the property transferred is money or yielding money, then its legal incidents
shall include its income and interest occurring after the transfer.
In the case of Nathoo Lal v. Durga Prasad13 the Supreme Court reversed the order of Rajasthan
HC and cleared that there was no difference between a female or a male when it came to inheriting
the absolute estate.

.TRANSFER TO AN UNBORN PERSON AND RULE AGAINST PERPETUITY

Section 13 of the Act refers to „Transfer for benefit of unborn person‟. It has been imported into
Indian law from England in what has been termed as „The rule of Double Possibilities‟.

As the Act specifies in the previous section that the transfer shall take place only from a living person
to another living person; Sections 13-16 is an exception to the general rule. It gives the right to transfer
a property from the born to the unborn emphasizing that a property can be transferred to an unborn
child with certain provisions.

Transfer to an Unborn Person

4
No Direct Transfer-The Act does not provide a direct transfer of property to an unborn child. To
be legally effective it is imperative that it shall be first transferred to a living person/s if the
person is unborn on the date of transfer. A trust can be created or a living individual can be
trusted with the transfer till the child is born.
The basic principle of Section 13, is that the person who is transferring the property shall not
bind it the free disposition of the said property for more than one generation.

4
Law of Transfer of Property by V.P. Sarathi
 Prior interest- the person/s can enjoy life interest up to the time the child does not come into
existence.

Should come into existence prior to the death of the last life estate holder- The unborn person
must come into existence, means he should be in his mother‟s womb and not essentially born,
before the passing away of the last estate holder.

Instant transfer of rights- the unborn child shall become absolute owner of the said property as
soon as he comes into existence. All the rights regarding the property shall vest in the unborn child.
It is worth noting that transfer can be made to an unborn person but not to the next generation of
an unborn person.
If the gift made in favor of the unborn grandchildren where not in respect of whole interest in the
property, the gift was declared a valid document as seen in the case of Issac Nissin v. Official
Trustee
.
Under Muslim Law- This Section does not apply to Muslims and a gift to unborn is not allowed
except in the case of Wakf as was upheld in the case of Abdul Khadur v. Turner15.

Rule Against Perpetuity

Section 14 of the Act deals with rule against perpetuities. Perpetuity means indefinite period or
time and this rule is essentially against a transfer that bestows the right of making a property
inalienable for an indefinite period.

Perpetuity may arise in two ways-

1) By taking away the power of alienation from the transferor
2) By creating future remote interest
Both the situations have been countered in the Act. Section 10 bars the first condition
whereas Section 14 prohibits the second one.

Objective of Rule Against Perpetuity: There were people who had vested interest in keeping
their property in their family, from generation to generation but this would be a great loss to the
society. It would deprive the people of all the benefits arising from that property. The real motive
behind this rule is to ensure free and frequent circulation of all property, so that not only people
enjoy the benefits but also it will result in betterment of the property.
Following conditions must be fulfilled to attract Section 14-
● There must be a transfer of property
● The said transfer should be in favor of an unborn person as the ultimate beneficiary
● The vesting of interest in favor of the unborn must be preceded by limited interest or life of
living person/s
● The unborn person must be in existence at the expiration of the interest of the living person/s
In the presence of all the above conditions the vesting of interest in favor of the ultimate
beneficiary may be postponed only up to the life of living person/s plus the minority of the
ultimate beneficiary but not beyond that.
Landmark Cases
#1. Sopher v. Administrator General of Bengal16
The Case: A testator directed to divide his property among all his children and also children of
predeceased, after the death of his wife. Each child was to get income of each share for life and
later to the grandchildren till the attainment of 18 years of age, after which the grandchildren were
to get absolute entitlement of the property.
The Verdict: The Privy Council held the bequest to the children void as they observed that the
beneficiaries under the later bequest did not receive the interest in the same unrestricted form as
in which the testator held. Thus, they concluded that the condition of whole of the remaining was
not fulfilled.

Exceptions to the rule against perpetuity:

There are few exceptions to this rule-
1) Transfer for public benefit
2) Covenants of redemption
3) Personal agreements
4) Pre-emption
5) Perpetual Lease

VESTED AND CONTINGENT INTEREST

The Transfer of Property Act illustrates two types of interest-
Vested interest
Contingent interest

Difference between Vested interest and Contingent interest

Vested interest Contingent interest

Definition
Defined under Section 19. Defined under Section 21.
When on the transfer of a property in favor of When on transfer of a property in favor of a
a person an interest is created without person an interest is created and shall take
specifying any time or terms then, an interest effect only on the happening of a specified
is vested, unless the terms of transfer specify uncertain event or not happening of a specified
otherwise. uncertain event, the said person acquires a
contingent interest in the property. Such
interest becomes vested, in the former case, on
the happening of the event, in the later, when
the happening of the
event becomes impossible.
 Fulfillment of Conditions
Vested interest is not conditional and creates Contingent interest is completely dependent on
an immediate right though the enjoyment is the fulfillment of certain specified condition, if
postponed to a future date. the condition is not fulfilled, then the
interest
fails.
Impact of transferee’s death
Vested interest is not defeated by the death of Contingent interest is defeated by the death of
the the
Transferee before he obtains possession. Transferee before he obtains possession.

RULE OF ELECTION
Section 35 of Transfer of Property Act, 1882, states the doctrine of election. The doctrine of
election is founded on the theory of equity that one cannot take what is advantageous to him and
dismiss something that is against him. It can be very aptly described by the classic quote, which is
often quoted in this context, of Maitland, “That he who accepts a benefit under a deed or will or
other instrument must adopt the whole contents of that instrument, must conform to all its
provisions and renounce all rights that are inconsistent with it.”

It specifies that if a party transfers a property over which he has otherwise no right to transfer,
implies advantages bestowed on the original owner of the property, then the title holder has to
elect the option to accept or reject it.
If rejected, the relinquished property shall go back to the transferor or his representative, as if it
had not been disposed of. However, when such benefit is reverted to the transferor, the
disappointed transferee shall be compensated the value or the amount of the attempted
to be transferred to him, under two conditions-
i. Where the transfer is gratuitous, and the transferor has before election died or otherwise
become incapable of making fresh transfer; and
ii. Where the transfer is for consideration.
Illustration: X owns a farm worth Rs 8,00,00. Y by an instrument of gift avows to transfer it to Z
and Y with the same instrument gives Rs 10,00,00 to X. X opts to retain the farm and he forgoes
the amount of Rs 10,00,00.
In another scenario, if Y dies before election then his representative must give Rs 8,00,00 to Z.

Exceptions to the Rule of Election

● The owner who has the option to elect between accepting a particular benefit or retaining the
property, selects the former, then he shall relinquish the particular benefit but he is not bound to
return any extra benefits arising out of the transaction.
● If the original owner is aware of his responsibilities and the circumstances that may influence
his election, then the acceptance of benefit shall be considered as elected by him, thus,
validating the transfer.
● If the person, gaining the benefit, enjoys it for a period of more than a period of two years, then
the knowledge of circumstances shall be presumed.
 ● If the owner of the property does not confirm or dissent the transfer, within one year of the date
of transfer, then it shall be presumed that he has elected to confirm the transfer.
● In case of a minor, if he is not represented by a guardian, the period of election shall be
postponed till the individual reaches the age of majority.
● Where the person who is to make election, suffers from some disability, then the election shall
be postponed till the disability ceases or someone authorized makes the election on his behalf.

Application of the Doctrine of Election

As regards to Hindu Law: the said principle was always applicable on Hindus. In the case of
Rungammav. Atchamma21 the Privy Council while referring to the rule reiterated that affirmation
and disaffirmation both cannot be done for a particular transaction. One cannot elect to affirm the
benefits and at the same time disaffirm the disadvantages.

As regards to Muslim Law: the doctrine was applied to the Muslims too by the Privy
Council as was seen in the case of Sadik Hussain v. Hashim Ali22.

Comprehending the Doctrine

The concept that has been ingrained in the Doctrine of election incorporated in the Transfer of
Property Act, 1882, is that when faced with two options, an individual shall either accept it or
relinquish it. In short, if an individual accepts the benefits of an instrument, he shall have to carry
the burden attached to it too.
● This doctrine is universally applicable to Hindus, Muslims as well as Christians.
● The doctrine provides the benefit of voluntary choice to the owner, with all freedom, but
bound by the choice that he makes; accept it wholly or relinquish it completely.
● Thus, he cannot approbate and reprobate.
● Moreover, election is limited to the case of a will or a gift and not in case of legal remedy.

Essential conditions pertaining to the Doctrine of Election

a) The transferor shall not be the owner of the property which he transfers.
b) The transferor must transfer the property of the owner to a third person.
c) By the same instrument, the transferor shall grant some property from his own, to the owner
of the said property.
d) In the same transaction the transfer of property to the transferee and the bestowing of the
benefit to the owner shall be made. If two different instruments are used for the two purposes,
then the doctrine of election shall not be applicable.
e) It is mandatory for the owner to have a propriety interest in the property.
f) If the owner does not avail the benefit directly and instead diverts it indirectly, then he need
not elect.
g) When the benefit is given to a person in a different capacity, then the question of election does
not arise.
CONCLUSION

The Transfer of Property Act, 1882 is a crucial legislation that governs the transfer of property in India,
ensuring legal clarity and fairness in transactions. It is based on fundamental principles that safeguard
the rights of both transferors and transferees. The Act emphasizes the free transferability of property
while restricting transfers of future expectations (spes successionis) and enforcing the rule against
perpetuity to prevent indefinite restrictions on ownership. It upholds the doctrines of election and lis
pendens to maintain fairness and avoid legal disputes. Additionally, it allows conditional transfers,
provided they are legally valid. By defining clear legal frameworks, the Act prevents fraudulent
transactions and ensures that property transfers are conducted transparently and efficiently. Overall, the
fundamental principles of the Transfer of Property Act provide a strong foundation for securing property
rights and maintaining order in property dealings
REFERENCES

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://lawbhoomi.com/general-
principles-of-the-transfer-of-property-act-
1882/&ved=2ahUKEwjig5jDrZ2MAxVbTmwGHfs1FVQQFnoECBsQAQ&usg=AOvVaw17fVUgYqu2OebFexr
2yzT4

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.jkshahclasses.com/anno
uncement/TOPA1882.pdf&ved=2ahUKEwjig5jDrZ2MAxVbTmwGHfs1FVQQFnoECB0QAQ&usg=AOvVaw1
89a_
https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.schooloflegaleducation.
com/wp-content/uploads/2019/08/Property-Law-final-
.pdf&ved=2ahUKEwjig5jDrZ2MAxVbTmwGHfs1FVQQFnoECFwQAQ&usg=AOvVaw2VJKkusUqCDlE8xzY
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BOOKS

• R.K. SINHA TRANSFER OF PROPERTY ACT 1882

• TEXTBOOK ON THE TRANSFER OF PROPERTY ACT BY DR. AVTAR SINGH

• LAW OF TRANSFER OF PROPERTY BY V.P. SARATHI