Basic rules relating to transfer of Property

The Transfer of Property Act of 1882 (“The Act“) took effect on July 1, 1882. It establishes procedures for the transmission of property between living people that are consistent with the rules governing its devolution after death. In terms of immovable property, it also completes the code of contract law. This Act does not cover all aspects of property transfer; it only addresses the transfer of immovable property between live people.

The Act only applies to property transfers that occur as a result of the actions of parties, such as sales, exchanges, gifts, actionable claims, mortgages, and leases. It does not include property transfers by operation of law. It deals with the transfer of immovable property between live people, or inter vivos. It only applies to consensual transfers between parties and excludes transfers by operation of law such as inheritance, insolvency, forfeiture, or sale in execution of a decree. The Act does not apply to the disposition of property by will, and it does not include cases of property succession.

Property transfer rules under the Act are-

1. It is critical to distinguish between immovable and movable property.

Under the terms of this Act, only immovable property and, in exceptional situations, moveable property can be legally transferred. The definition of immovable property is defined in Section 3 of this Act. Standing timber, growing crops (in the form of vegetable produce that has a separate existence except for its produce), and grass are all examples of immovable property. As a result, the definition is exclusive.

The court concluded in Babu Lal v. Bhawani Das and Ors that section 3(25) of the General Clauses Act, which specifies immovable property, can be applied to the 1882 Transfer of Property Act. Immovable property is defined as land, benefits arising from the land (for example, the right to catch fish), things attached to the land (for example, trees and shrubs with no independent use other than to produce, such as mango trees and orange trees), or things permanently fastened to anything that is attached to the earth under the General Clauses Act (like windows, doors, walls etc.).

The Transfer of Property Act of 1882 does not define the phrase “movable property.” However, in a broad sense, movable property is everything that may be transported from one location to another without causing harm to its surroundings. The General Clauses Act defines mobile property as any type of property that is not immovable.

2. To properly transfer a property, certain requirements must be met in order to protect the property from future disputes and to provide evidence.

A valid instrument, executed in writing by the transferor and attested and registered, must be used to transfer a property. Where the law does not require it, a property transfer can be completed without the use of a written instrument. Some documents, such as the sale of immovable property valued at rupees 100 or more, exchange, and gift, are required to be in writing under the Act even if they are not registered. There are also items that must be in writing and recorded with the appropriate official, such as the sale of tangible immovable property worth more than Rs 100, charges, and gifts of immovable property.

Sai Vishnu vs. Narasimha Rao and others Even if it is for a collateral purpose, an unstamped instrument is not admissible as evidence, according to the Court. However, if an instrument is not stamped at the time of its creation and is stamped afterwards, it can be admitted as evidence even if it is unregistered for a collateral purpose, but the terms stated in the instrument cannot be considered.

3. The Act defines Transfer of Property in Section

A living person transfers property to one or more living persons, or to himself or to himself and one or more living persons, in the present or in the future. The term “person” does not only refer to human beings; it also refers to a corporation, a group of people, or a group of people. Thus, an act of conveyance by live persons is required for a legitimate transfer. It might be a complete or partial transfer of a property’s interest.

The transfer of property includes a property located outside of India where the Act does not apply, according to Prethi Singh v. Ganesh. The Act’s provisions will govern the parties’ rights and responsibilities in this situation. It makes no difference that the property is outside of Indian territory.

4. The Act recognises various types of property transfers.

A sale is the exchange of ownership of a property for a price paid or promised, or a portion of a price paid or promised. The transaction is called an exchange when two people mutually transfer ownership of one thing for the possession of another neither thing nor both things being money simply. The third type is a gift, which is defined as a voluntary and without consideration transfer of existing moveable or immovable property from one person to another recognised by the done.

This acceptance must occur during the donor’s lifetime and while he is still capable of contributing. The following type is a mortgage, which is a transfer of an interest in specific immovable property to ensure the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the execution of an engagement that may result in a pecuniary liability. A lease is a transfer of immovable property with the right to use it for a specific period of time or in perpetuity in exchange for a price paid or promised in money, a share of crops, a service, or any other valuable thing to be rendered to the transferee on a regular or periodic basis by the transferor who accepts the transfer on such terms. Finally, an actionable claim is a claim to any obligation other than a debt secured by a mortgage or a beneficial interest in immovable property backed by hypothecation or pledge of movable property not in the claimant’s possession.

5. Section 6 specifies 13 types of property that cannot be transferred; however, all other types of property can be transferred-

a. The possibility of an heir-apparent inheriting an estate, also known as spes succession. As defined by the Act, such a chance is not property. It alludes to a mere expectation of succession.

b. A relation’s possibility of inheriting a kinsman’s estate when he or she dies cannot be transferred.

c. Any other mere possibility of a similar nature to the ones listed above cannot be transferred.

d. A right of re-entry can only be transferred to the owner of the property that is affected.

e. An easement that is not part of the dominant heritage cannot be passed down.

f. A property interest that is restricted in its enjoyment to the owner personally, such as religious offices, service tenures, an inalienable raj, and so on, cannot be transferred.

g. No right to future maintenance can be transferred, regardless of how it is secured or determined.

h. A purely legal right to sue cannot be transferred. Past mesne profits claims, damages for breach of contract claims, suing an agent for accounts claims, and pre-emption claims are all bare rights to sue that cannot be transferred.

i. A public office or a public officer’s salary, whether earned before or after it became payable, cannot be transferred.

j. Stipends granted to government military, naval, air force, and civil pensioners, as well as political pensions, are not transferable.

k. No transfer can be made that is incompatible with the nature of the interest affected. Thus, the Inamdar’s attempted ‘transfer’ of a service inam or a putative ‘transfer’ of res nullius, such as air or water from a river, will be null and void.

l. No transfer of an illegal object or consideration is permitted.

m. Finally, no transfer can be done to someone who is legally ineligible to receive it.

The transfer of property cannot be prohibited by a judgement or any other directive; only the laws of law can do so.

6. Transfer-competent individuals

The transferor must be legally capable of contracting and able to transfer or dispose of transferable property that is not his own. A person will be competent to transfer a property under section 7 of the Act if he meets the requirements of section 11 of the Indian Contract Act 1872. Section 11 states that a person is competent to contract if he meets the requirements of being a major, which include being at least 18 years old, of sound mind, capable of comprehending the contract’s terms and ramifications and formulating a reasoned judgement, and not being disqualified by law. As a result, the following will be competent to transfer or approve the disposition of transferable property that is not his own, either entirely or partially, and unconditionally or conditionally. A minor is someone who has not reached the age of eighteen. He can’t be a competent transferor, but there’s no legislation that says a minor can’t be a transferee.

7. Oral transmission

An oral transfer is a property transfer that does not require written documentation. The law does not stipulate that a written instrument must be used to complete such a property transfer. It must be specifically mentioned in the law to qualify as an oral transfer. If there is no express requirement for a written instrument, the law will allow the transfer to be made without it, and vice versa.

8. How valid is the transfer of future property?

Section 5 of the Act defines Transfer of Property. A living person transfers property to one or more living persons, or to himself or to himself and one or more living persons, in the present or in the future. Property transfer excludes the transfer of future, non-existent property. As a result, a subsequent property transfer is not as legitimate in India. However, a conveyance of such property could be lawful as a contract to assign, and if the property exists, equity attaches to it, and the contract to assign becomes a complete assignment.

REFERENCES
1.)https://lawtimesjournal.in/rules-relating-to-transfer-of-property/#:~:text=4.-,The%20transferor%20must%20be%20competent%20to%20contract%20and%20entitled%20to,registration%20must%20be%20complied%20with
2.) Transfer of Property Act, section 9
3.) Transfer of Property Act, section 6

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