PART A – Sale of Immovable Property

(Secs. 54–57, TPA)

Section 54 – Sale Defined

Definition:

 Sale is a transfer of ownership in exchange for a price, paid or promised, or part-paid

and part-promised.

Modes of Sale:

1. Tangible immovable property (value ≥ ₹100):

Must be by registered instrument.
2. Tangible immovable property (value < ₹100):
May be transferred by delivery of possession.
3. Intangible property (like reversion, future interest):
Must be by registered instrument.

Contract for Sale (Agreement to Sell):

 A mere contract does not transfer ownership; only creates a right to obtain transfer
in the future.
 Ownership passes only after execution of sale deed + registration + delivery of
possession.

Case Laws:

 Narandas Karsondas v. S.A. Kamtam (1977): Contract for sale does not create interest
in the property.
 CIT v. Podar Cement (1997): For taxation, ownership includes possession and
enjoyment even if legal title not yet transferred.

Section 55 – Rights and Liabilities of Buyer and Seller

Seller’s Duties:

1. Disclose defects in title/property.

2. Produce title deeds for inspection.
3. Answer relevant questions about property.
4. Execute proper conveyance deed.
 5. Take care of property until delivery.
6. Pay all charges and rent due until sale.
7. Give possession.

Buyer’s Rights:

1. Get possession.
2. Get title documents.
3. Benefit from improvements after ownership passes.

Buyer’s Duties:

1. Disclose facts affecting property value.

2. Pay agreed purchase price.
3. Bear loss after ownership passes.
4. Pay public charges from date of ownership.

Case Laws:

 Kamal Kishore v. Bhairab Chandra (1935): Seller must disclose latent defects.
 R.K. Mohammed Ubaidullah v. Hajee C. Abdul Wahab (2000): Failure of seller to
hand over possession is breach.

Section 56 – Marshalling by Subsequent Purchaser

 If a seller owns multiple properties and mortgages them, and later sells one of them,
the buyer can insist that the mortgage debt be satisfied first from properties not
purchased by him.
 Protects subsequent purchaser from unfair burden.

Example:
A mortgages properties X and Y to M. Later, A sells X to B. B can insist that M satisfy his
claim first from Y.

Section 57 – Provision in case of Sale by Court

 When a property is sold under Court’s order, Court may:
1. Allow sale free of encumbrances.
2. Direct encumbrances to be paid off from sale proceeds.
 Ensures clear title for purchaser in judicial sales.
PART B – General Rules Relating to
Transfer (Secs. 1–14, TPA)

Section 1 – Short Title, Extent, Commencement,

Application
 Extends to all India (except J&K before 2019).
 Applies only to transfers made by act of parties (not succession, wills).

Section 2 – Repeal of Acts

 Earlier enactments relating to property transfer repealed.

Section 3 – Interpretation Clause

 Defines key terms:
o Immovable property = excludes standing timber, growing crops, grass.
o Instrument = written document.
o Attested, Registered, Actionable claim, Notice defined.

Section 4 – Enactments relating to contracts

 Provisions in TPA relating to contracts are deemed part of the Indian Contract Act,
1872.

Section 5 – Transfer of Property defined

 Transfer = act by which a living person conveys property in present or future to one
or more living persons, or to himself + one or more others.
 “Living person” includes individual, company, association, body of individuals.

Section 6 – What may be transferred

  General Rule: Property of any kind may be transferred.
 Exceptions:
1. Spes successionis (chance of heir apparent).
2. Mere right to sue.
3. Public offices and salaries.
4. Pensions.
5. Easements (apart from dominant heritage).
6. Restricted interests (personal service).
7. Future maintenance.

Case Law:

 Ramaswamy v. K.M. Venkatachalam (1958): Spes successionis cannot be transferred.

 CIT v. Smt. Kasturi (1999): Right to maintenance is not transferable.

Section 7 – Persons competent to transfer

 Must be:
1. Competent to contract (major, sound mind, not disqualified).
2. Entitled to transferable property.

Section 8 – Operation of transfer

 Transfer passes all interest and legal incidents the transferor is capable of passing
(ownership + rents + profits + attached rights).

Section 9 – Oral Transfer

 Oral transfer valid unless law requires written instrument (e.g., sale deed for property
> ₹100).

Section 10 – Condition restraining alienation

 Any condition absolutely restraining transferee from transferring property is void.
 Exception: Lease conditions or property transferred for benefit of women (Hindu
widow).

Case Law:

 Rosher v. Rosher (1884): Restraints on alienation are void.

Section 11 – Restriction repugnant to interest created
 When property is transferred absolutely, transferee gets full ownership.
 Any condition inconsistent with such enjoyment is void.

Section 12 – Condition making interest determinable on

insolvency
 Transfer cannot end merely because transferee becomes insolvent.
 Prevents fraudulent evasion of creditors’ rights.

Section 13 – Transfer for benefit of unborn person

 Property can be transferred for benefit of unborn person, but interest must be given
absolutely (not life interest).

Illustration:
A transfers property to B for life, then to unborn son of C absolutely. Valid.

Section 14 – Rule against perpetuity

 No transfer can create an interest that takes effect beyond the life of one or more
living persons + minority of an unborn person.
 Purpose: Prevent property from being tied up forever; ensures free circulation of
property.

Case Law:

 Tagore v. Tagore (1872): No estate can be created in favor of unborn person which is
inconsistent with laws of inheritance; laid basis for doctrine of perpetuity.
 Girjesh Dutt v. Data Din (1923): Life interest to an unborn person is invalid.

✅ Quick Summary
 Secs. 54–57: Define sale, rights/duties of buyer & seller, marshalling, and judicial
sales.
  Secs. 1–14: Lay foundation of property law – who can transfer, what can be
transferred, restrictions on alienation, transfer to unborn persons, and rule against
perpetuity.

Comparative Table – Transfer of Property

Act, 1882
Section Rule Explanation Case Law Illustration
Applies to India (except A sells land to B by
Short title, extent,
Sec. 1 J&K earlier), to transfers – deed → covered by
commencement
by act of parties TPA
Defines immovable
Growing crops ≠
Sec. 3 Definitions property, attested, –
immovable property
registered, notice, etc.
Act by which a living
person conveys property A transfers land to
Transfer of
Sec. 5 to one or more living – himself + his minor
property
persons, or to himself + son
others
Spes successionis, mere
right to sue, public A cannot sell his
What may not be Ramaswamy v.
Sec. 6 offices, pensions, chance of inheriting
transferred Venkatachalam
maintenance, etc. cannot father’s estate
be transferred
Must be competent to
Persons Minor cannot
Sec. 7 contract & entitled to –
competent transfer property
property
Sale of land passes
Operation of Transfer passes all interest
Sec. 8 – ownership +
transfer with legal incidents
rents/profits
House worth <
Valid unless law requires
Sec. 9 Oral transfer – ₹100 can be
written instrument
transferred orally
A sells land to B
Condition Absolute restraint void
with condition “B
Sec. 10 restraining (except leases, benefit of Rosher v. Rosher
shall never sell” →
alienation women)
void
A gives land to B
If property is transferred
Restriction absolutely but says
Sec. 11 absolutely, inconsistent –
repugnant “only for farming”
conditions void
→ void
Sec. 12 Determinable on Condition ending rights – A transfers house to
insolvency on insolvency void B, “to end if B
becomes insolvent”
Section Rule Explanation Case Law Illustration
→ void
A to B for life, then
Transfer for Valid only if interest is Girjesh Dutt v.
Sec. 13 to unborn son of C
unborn person absolute, not life interest Data Din
absolutely → valid
A to B for life, then
Interest must vest within to C’s unborn son
Rule against
Sec. 14 lifetime of living persons Tagore v. Tagore on attaining 25 →
perpetuity
+ minority of unborn void (beyond
perpetuity)
Transfer of ownership for
Narandas A sells house to B
price (paid/promised).
Sec. 54 Sale defined Karsondas v. SA for ₹1,000 → must
Tangible property ≥ ₹100
Kamtam be registered
requires registration
Seller: disclose defects,
Seller hides defect
Rights & duties of give possession. Buyer: Kamal Kishore v.
Sec. 55 in title → buyer can
buyer/seller pay price, disclose Bhairab Chandra
rescind
material facts
Purchaser may require A mortgages X & Y
Marshalling by
mortgagee to satisfy debt to M, later sells X to
Sec. 56 subsequent –
out of properties not B → B can insist
purchaser
purchased by him debt be paid from Y
Court may direct sale free Court sale of
from encumbrances & mortgaged property:
Sec. 57 Sale by Court –
discharge them from purchaser gets clear
proceeds title