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II
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
(A) Transfer of property, whether movable or immovable. 5. "Transfer of property" defined. In the
following sections 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, or to himself, or to himself and one or more
other living persons, and "to transfer of property" is to perform such act.
In this section "living person" includes a company or association or body of individuals, whether
incorporated or not, but nothing herein contained shall affect any law for the time being in force
relating to transfer of property to or by companies, associations or bodies of individuals.
SYNOPSIS
Definition of Transfer of Property
an act by which,
⚫ a living person,
conveys,
in present or future, property,
to another living person.
Family settlement. Compromise.
• Partition.
Surrender
Release.
• Relinquishment.
Charge
• Property situated outside India.
Chapter II contains provisions for transfers of property by act of parties. Transfer by 'act of parties'
means a transfer between two living persons. If a transfer is made by 'act' of parties, the person who
transfers it and the person to whom it is transferred, both should be living persons at the date of the
transfer. THE TRANSFER OF PROPERTY ACT, 1882
[5.5
effect of conveying any property or any interest therein from one living person to another
The test as to whether a transaction is a transfer of property or not is whether that transaction passes
on certain new rights or interests to the transferee or not? If no new interest is created in favour of
the transferee, there cannot be transfer of property.
Conveyance necessarily implies that the transferor has the title or interest which he is transferring. He
cannot convey an interest which he himself does not have at the time of conveyance. However, it is
not necessary that the word convey or conveyance be specially used in the deed of transfer. It is
sufficient if the deed shows that there is change of title or interest from transferor to transferee."
The intention of the Legislature under Section 13 (8) is that the sale of secured asset is to be
confirmed specifically by the secured creditor, and not by an authorised officer. So long as the sale is
not confirmed by the secured creditor, the transfer of the secured asset does not become effected.
The borrower has the right to redeem property at any time before the date that the property is
transferred to the auction purchaser by confirmation of sale by the secured creditor 6a
A mere agreement to sell does not have the effect of conveying and, therefore, it does not operate as
a transfer of property The execution of an agreement of sale does not effect transfer of property from
one person to another. Similarly, delivery of possession accompanied by an agreement of sale does
not amount to transfer of an interest in the property? A transfer can be effected only by a registered
sale deed, and not merely by an agreement to sell, general power of attorney or Will.7a
Division of Partnership assets among partners of a partnership firm is not a conveyance because all of
them were already owners of such assets. A firm is not capable of owning property because it is not a
legal person in the eye of law Hence, registration of such apportionment is not necessary.7b
(iv) In Present or in Future.-A transfer of property may be made so as to take place with immediate
effect or to take place on a future date. The expression in present or in future' governs the word
'conveys'. It does not govern 'property'. The transferor can make arrangement that the property is
vested or accrues to the transferee immediately after the completion of the transfer. He may also
make such arrangements in which the vesting of the interest of the property is postponed to a future
date. He is free to transfer a property also upon the fulfilment of certain conditions.
BY ACT OP PARTIES
Illustrations
53
(a) A makes a gift of his property to B. He does not mention as to when B shall get the property and
also does not lay down any condition. The transfer is present and B gets the property with immediate
effect. (b) A transfers his property to B for life and then to C. The transfer in favour of B is present
(although he gets only life-interest) but the transfer in favour of B is future transfer.
(c) A makes gift of his watch to B provided B gets first division in the next examination. Here, although
the gift has been declared today but it shall take effect only if B gets first division. Such transfers are
called conditional transfers.
The conveyance may, therefore, be present, future or conditional.
A deed was executed by the husband and wife jointly providing that on the death of any one of them
and if the schedule property still remained available, the surviving executant was to possess the
property absolutely with right of alienation, on the death of the surviving executant the property was
to go to their children. The Court held that the deed was a will and not a settlement deed because
there was no transfer in the presenti in favour of the surviving executant or children.7
o) Property-The word 'property has been used in a comprehensive sense. It has a very wide meaning
and includes properties of all descriptions. It means movable properties such as cars or tables. It
means immovable properties such as lands or houses. It also means intangible properties such as
right to catch fish or an actionable claims or other beneficial interests in a property.
Property is essentially a bundle of rights or interests. When a property is transferred, there may be
transfer of all the rights in that property or only of some of it. All the rights in a property signifies
ownership or absolute interest. Only some of the rights or interests in a property would mean partial
or limited interest. In Sunil Sidharthbai v. Commissioner of Income-tax the Supreme Court rightly
observed that in general, transfer of property means passing of a right in the property from one
person to another In one case there may be passing of entire bundle of rights (i.e. ownership) from
transferor to transferee, but in another case there may be transfer of only some of such rights (ie.
partial interest). Thus, if A makes a gift of his house to B, there is transfer of absolute interest of the
house. It is a transfer of 'property'. On the other hand, if A transfers the right of enjoyment of his
house to B for a certain period it is called "lease". It is transfer of only partial interest in the house but
it is also a transfer of 'property'.
The property must be a present property That is to say, it exists on the date of the transfer. Transfer
of any non-existent property is void In Jugalkishore v.
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THE TRANSFER OF PROPERTY ACT, 1882
18.5
Where transfer takes place only after the death of the person whose property is being transferred,
the transfer is by operation of law (of inheritance or wills). This Chapter and also the whole Act deals
with transfers inter vivos i.e. transfers between living persons. Transfers by operation of law i.e.
testamentary transfers are excluded from this Act.
Part (A) of Chapter 11 makes it clear that provisions contained in this part of Chapter II are applicable
to transfer of properties whether movable or immovable. That is to say, although the Transfer of
Property Act deals mainly with transfer of immovable properties, but certain provisions of this Act are
applicable to the transfers of also movable properties. Sections 5 to 37 of this chapter are applicable
to transfers of movable and immovable, both kinds of properties. These provisions deal with basic
principles and concepts involved in any transfer. Nature or kind of property is not relevant or of any
importance for the application of such provisions. For example, what is meant by transfer of property
(Sec. 5) or when the interest of that property accrues to the transferee, (Secs. 19, 21) are basic
questions irrespective of the nature of property Similarly, what properties cannot be transferred (Sec.
6) or under what conditions a transfer can be made for the benefit of unborn persons (Secs. 3. 14) etc.
are also such issues where the nature of property is irrelevant. Part (B) of this chapter contains
provisions for the transfer of only immovable properties because the provisions laid down in Sections
38 to 53-A necessarily suggest that they can be applicable where the property is immovable.
Further, Chapter II contains provisions for the transfers generally i.e. irrespective of the kind of
transfer of property. Transfers of property have been given specific names on the ground of special
procedure or other differences in those transfers. For example, transfer of ownership in property in
return of money has been given specific name 'sale' whereas if there is no consideration in the
transfer of ownership, it is gift. Similarly, if instead of ownership only some of the interest in the
property (i.e. right to live or use) is transferred, it is called 'lease' These are all transfers of properties
but of specific kinds. Chapters III to VIII of the Transfer of Property Act deal with 'specific
transfers'
Definition of Transfer of Property-Section 5 defines 'transfers of property' in the following words:
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 (or to himself) and 'to transfer property' is to perform such act.
The analysis of this definition, makes it clear that transfer of property
is:-
(i) an act by which,
(a living person,
(iii) conveys,
(iv) in present or future,
(vi) property,
vi to another living person or to himself.
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OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
(i) Transfers of Property is an act-Transfer of property is an activity o process. Under this activity
something is done by the person who wants to transfer his property; it is not transferred
automatically without transferor: 'act' as is the case in wills or inheritance, Transferring property
would mear doing of this 'act' or performing such act The legal effect of this act is passing of property
from one person to another
(ii) Living Person.-Transfer of property is to be made by a 'living person'. The person who makes the
transfer is called the transferor. The transferor may be human person or a juristic person. Juristic
persons are Companies, Firms, Corporation, University, etc. which although are not human beings but
law incorporates personality to them. The living person i.e. the transferor must be in existence at the
time of making of the transfer. The transferor must also be competent i.e. of the age of majority, of
sound mind and not otherwise disqualified to transfer a property. Second paragraph of Section 5
makes it clear that transferor may be one person or a class or group of persons. It may also be
association of persons or corporations ie. juristic persons. Court has not been regarded as 'living
person' therefore, transfer made by the order to the Court (e.g. Court-sale) is not a transfer of
property within the meaning of Section 5 of the Transfer of Property Act. The transferor must be a
living person means that the transfer or properties by operation of law i.e. under wills, inheritance or
by court's order are excluded from this definition and are not to be regulated by the Transfer of
Property Act.2
(iii) Conveys. In a transfer of property the living person' i.e. the transferor conveys the property His
conveying is doing of the act' which is called transfer. There must be conveyance in every transfer of
property. Conveyance means any act of the transferor by which certain new titles or interests are
created in favour of the transferee (to whom the property is being transferred). The word 'conveys
includes any form of assurance inter vivos in which some new title or interest is created in favour of
the transferee." In a transfer of property there is actually transfer of title to or interests in that
property Before transfer of property, the transferee does not have that particular interest. After the
transfer of property, the transferee gets that particular interest which is given by the transferor
Anything done or any form of assurance by virtue of which transferee gets new title or interest which
he did not have before the transfer, is called conveyance. For example A and B are owners of their
houses. B has no title or interest in A's house. A does something (eg makes gift or sale) by virtue of
which B becomes owner also of A's house. Here A's act is conveyance because this has the effect of
creation of new title or interest (namely, the ownership also of A's house) in favour of B. Shah states
that
"In fact, the essence of the word 'transfer' is 'to convey, and therefore, a transfer of property would
include any transaction which has the
1. Reghabir Singh v. Jai Indre Bahadur Singh, [Link]. 1919 P.C. 55.
2. Under will or inheritance the property is transferred from the testator or the properties only after
their death, not when they are still alive. Court has not been regarded as a living person.
3. Official Assignee, Madres v. Tehmina Dinshan Tehrani, AIR. 1972 Mad. 187.
RANSFER OF PROPERTY ACT, 1882
[$.5
not only among heirs of a particular class, they can include persons outside the purview of
succession.20
In a family settlement since there is no creation of any new title or interest in favour of any member,
there is no conveyance; therefore, it is not a transfer of property. The suit was for possession on the
basis of a family settlement. The defendants admitted that the property was of ancestral nature.
Minor members were not parties to the settlement, nor there was anything to show how their
interests were safeguarded. The settlement deed was also not registered. One of the lady members
stated that her signature was obtained fraudulently on a blank paper by the defendants. The Court
said that the deed was not valid as it was neither read out to the plaintiff nor understood by her
before signing, 20a
Compromise.-Compromise is also not a transfer of property. Compromise means agreement for the
settlement of doubtful claims between the parties in respect of some property Like family settlement,
here too the titles or interests of the parties are antecedent or already existing; the compromise deed
simply defines them.21 Since there is no conveyance, a compromise deed is not a deed of transfer.
Partition.-Partition is not a transfer of property. Partition means separating the parts of co-owned
property. If in a property there are several co- owners having under the law, their respective interests
but the whole property is neither used nor enjoyed by them separately then, after the partition each
member gets merely the separate right of enjoyment. Accordingly, it has been held that partition is
really a process by which a joint enjoyment is transformed into an enjoyment severally, and no
conveyance is involved in the process as the conferment of a new title is not necessary.22 It simply
effects a change in the mode of enjoyment of property but it is not an act of conveyancing property
from one living person to another.23 In Mohar Singh v. Devi Charan, the Supreme Court explained the
legal nature of a partition in the following words:
"Partition is not actually a transfer of property, but would only signify the surrender of a partition of a
joint right, in exchange for a similar right from the other co-sharer or co-sharers."
For the purpose of determining whether the document is a partition deed, it is the contents of the
document that are to be taken into consideration and not nomenclature alone. There was no recital
in the whole agreement to the effect that it was recording the agreement of an earlier partition which
had already taken place. The agreement in question purported to create, declare, assign,
20 Zalute Begur v. Lal Ahmed Khan, AIR 2010 AF 1.
20. Santra Deri v. Pradeep Kumar, AIR 2015 NOC 104 (P&H), the defendant was not entitled to ession
on the basis of such a deed.
5.51
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OF TRANSFERS OF PROPERTY BY ACT OF PARTIES limit and extinguish right and interest over
immovable properties. It was held that the document required to be duly stamped and properly
registered.25
A father partitioned his property among his three sons. The agricultural land was given to one of them,
the plaintiff in the case. The pucca house was given to the two others. They were already in
possession of the property respectively as distributed under the partition and had been making
improvement in their respective shares. Thus they had been acting on the family settlement. They
became bound by it. The Court said that it was immaterial that the mutation of the agricultural land
was in the name of all the three sons 26
Once a partition is effected, whether by way of family arrangement or deed of partition, there is
severance of jointness of properties. Two brothers thereafter exchanged properties held separately
by them. It was held that such mutual transfer of separate properties, if more than one hundred
rupees in value, could be made only by a registered agreement.26a
Surrender.-A surrender is also not a transfer of property within the meaning of Section 5 of the Act.
Technically, surrender means merging of a lesser (or smaller) interest with a greater interest in such a
manner that the greater interest is not enlarged. Surrender is therefore falling of a lesser estate into a
greater For example, A is landlord and B is his tenant. A as landlord has ownership of the house.
Ownership or absolute interest is a larger interest. B as a tenant has also an interest in A's house but
A's interest is lesser interest because it is limited only to right of enjoyment. Now, if A vacates the
house before expiry of the term of tenancy, it would amount surrendering of his right of residence.
Here, the lesser for smaller interest, namely the right of residence, which was away from the absolute
interest of the landlord during tenency, comes back to ownership (larger interest). There is no
creation of any new title or interest in favour of the landlord. Thus surrender by a tenant to the
landlord or by a widow to the reversioners has not been regarded as a transfer of property.
Release.-Release is a transfer of property. If a larger interest falls into a smaller interest in such a way
that smaller interest is enlarged then, for the holder of smaller interest there is creation of a new title
or interest. Since some new titles or interest are added to his already existing interest, there is
conveyance hence it amounts to transfer of property 29 According to Mulla30 where a person in
whose favour the "release" is executed gets rights by virtue of the release, the deed amounts to
"transfer". In Muniappa Pillai v Periasami, after taking some money A executed a deed transferring his
right, title and interest in his half share of the property absolutely in favour of B The document, thus
gave B absolute rights in the share which belonged to A and to which B was not entitled. The Madras
High Court held that this document
THE TRANSFER OF PROPERTY ACT, 1882
clearly came under the definition of deed of "transfer" within the meaning of 15.6 Section 5.
Since coparcenery property is a joint-property of all the coparceners therefore, a release in favour of
only one or some coparcener would be deemed to be a transfer in favour of all the coparceners. In M.
Krishna Rao v. M. L Narasikdia Rao,32 a release deed was executed in favour of some out of several
coparceners. The Andhra Pradesh High Court held that release made in favour of some coparceners
would operate to the benefit of all the other coparceners and not only in favour of those coparceners
in whose favour release was
executed.
Release may be with consideration or without any consideration.
Relinquishment.-Relinquishment means giving up one's rights or interests. Its effect is extinction of
one's rights in a property; there is no intention that the person relinquishing his interest is conveying
that interest in favour of another person. Relinquishment is therefore, not a transfer of property
Moreover, since relinquishment connotes the extinction of a right therefore, there is nothing left to
transfer so that it may amount to a transfer of property as defined in Section 5 of the Act.
Charge. Charge is not a transfer of property Charge is created on a property for securing a payment
out of that property When the property of a person is charged for securing certain payments e.g.
maintenance, it is simply securing 'personal obligation' out of his property. A charge is, therefore, not
a transfer because the only right created under it is a right to payment out of the property subjected
to the charge.
Property situated outside India.-The definition of transfer of property given in Section 5 is applicable
also to properties situated outside India or the territories to which the Act is not applicable. It may be
noted that because of its very nature, transfer of immovable property is governed by the law of the
land where the property is situated. But, this does not mean that a person cannot claim rights under
the transfer of that property under this Act. However, his claim is subject to contrary claims or rights
of the affected party under the law of the land where property is situated. But it is for the affected
party to prove that the transfer is defective or invalid under the law of the land where the property is
situate.36
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:
(a) The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy
on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred.
32 AIR 2003 Af 498
33. Provident Investment Co. v. Commr. Income-tax, AIR 1954 Bom. 95. See also Kuppusuomy
Chettiar v. Arage, AIR 1967 SC 1395.
34. Gond v. Daarkanath. (1908) 35 Cal 837.
35 Preta Singh v. Genesh, AIR 1951 All. 462.
36 Central Bank of India v. Nusseroanji, AIR 1932 Bom. 642.
5.61
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
(b) A mere right of re-entry for breach of a condition subsequent cannot be transferred to any one
except the owner of the property affected thereby.
(An easement cannot be transferred apart from the dominant heritage.
(d) An interest in property restricted in its enjoyment to the owners personally cannot be transferred
by him.
(dd) A right to future maintenance, in whatsoever manner arising: secured or determined, cannot be
transferred (e) A mere right to sue cannot be transferred.
(1) A public office cannot be transferred, nor the salary of a public office, 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) No transfer can be made (1) in so far as it is opposed to the nature of the interest affected thereby,
or (2) for an unlawful object or consideration within the meaning of Section 23 of the Indian Contract
Act, 1872, or (3) to a person legally disqualified to be transferee.
(i) Nothing in this section shall be deemed to authorize a tenant having an untransferable right of
occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or
the lessee of an estate, under the management of a Court of Wards, to assign his interest as such
tenant, farmer or lessee.
SYNOPSIS
Transferability of property is general rule, its non-transferability is exception.
Non-transferable under any other Law. Non-transferable under Section 6. Spes-successionis:
chance of an heir-apparent.
⚫ chance of getting property under will. any other possibility of like nature. Spes-successionis under
Muslim Law. Spes-successionis in Punjab.
English Law.
Clause (b) Mere Right of Re-entry.
Clause (c) Easement apart from Dominant Heritage. Clause (d) Restricted Interest.
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THE TRANSFER OF PROPERTY ACT, 1882
156
Clause (dd) Right to Future Maintenance.
Clause (e) Mere Right to Sue.
Clause (): Public Office & Salary of Public Officer Clause (g). Pensions and Stipends.
Clause (h). Transfer Opposed to Nature of Interest etc. Transfer opposed to Nature of interest created
thereby. Transfer where its object or consideration is unlawful. Transfer made to a disqualified
transferee. Clause (1) Untransferable Right of Occupancy
TRANSFERABILITY OF PROPERTY
For a valid transfer of property, the property must be a transferable property As a general rule,
property of every kind may be transferred. But, there are certain kinds of properties the transfer of
which is not allowed under the law Such properties are called non-transferable properties. Transfer of
any non-transferable property is void. It may be stated, therefore, that transferability of property is
the general rule, its non-transferability is an exception. Exceptions to the general rule that property of
every kind may be transferred are given in Section 6 of the Transfer of Property Act. According to
Section 6, property of any kind may be transferred except:
(a) properties which cannot be transferred by any law, for the time being, in force in India, and
(b) the properties which cannot be transferred otherwise as given in this
Act.
Under Section 6 of the Act, not-transferable properties have been divided into two categories. First,
those properties which cannot be transferred under any law (other than the Transfer of Property Act)
enforced in India. Secondly, the properties which have been mentioned specifically under clauses (a)
to (1) of Section 6 of the Transfer of Property Act. In other words, non-transferable properties are not
only those properties which have been stated specifically under Section 6. Under Section 6 are
included also those properties which are made non-transferable under other laws enforced in India.
Non-transferable under any other Law
Besides the Transfer of Property Act, there are other laws eg. Hindu law, Muslim law, the Civil
Procedure Code etc. which are enforced in India. If under any such law there are certain properties
the transfer of which is prohibited by that law, those properties are non-transferable also under
Section 6. Section 6 recognises the non-transferability of any property also under other laws in force
in India. For example, under Hindu law coparcenery property is regarded as non-transferable and
there is restriction on the transfer of such property. Similarly, a property dedicated to God, being of
religious use, is also non- transferable under Hindu law. The right to receive offerings as a co-sharer is
dependent upon the right of performance of pooja. Such a right is not transferable. The sale deed was
void. But the Court said that even if the plaintiff got no right under the sale deed, he would be
entitled to share the offerings by inheritance.36a Under Muslim law, Waqf-properties and the
36a. Dani Ram v. Jamuna Das, AIR 2010 NOC 524 (All).
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
61
5.61 office of Mutawalli etc. have been regarded as properties which cannot be transferred. Section
60 of the Civil Procedure Code, prohibits the attachment of necessary cooking-vessels and the tools of
articans etc. Moreover, transfer of agricultural tenancies have been prohibited under certain local
enactments and local customs.38
Non-transferable under Section 6
Section 6 lays down ten kinds of specific properties or interests which cannot be transferred. These
non-transferable properties are given in the following clauses:
(1) Clause (a): Spes-Successionis.-Spes-Successionis means expectation of succession. Expectation of
succession is expecting or having a chance of getting a property through succession (inheritance or
will). Spes Successionis is, therefore, not any present property It is merely a possibility of getting
certain property in future. Spes-Successionis under this clause
includes-
(1) chance of an heir-apparent succeeding to an estate,
(2) chance of a relation obtaining a legacy on the death of a kinsman or, (3) any other mere possibility
of a like nature.
Chance of an heir-apparent.-Heir-apparent is apparently an heir but not legal heir Heir-apparent is a
person who would be heir in future if he survives the propositus (the deceased whose property he
inherits) and if the propositus dies intestate (without making any will). Father and son are entitled to
inherit the property of each other. If father dies first, the son becomes father's heir and inherits the
properties of his father. But if son dies first i.e. while the father is still alive, he cannot inherit father's
property. Who would die first, ie. who survives whom, is not known because it is uncertain future
event. Accordingly, during the life of father, the son cannot be called as his heir; he is simply heir-
apparent of his father. An heir-apparent has only a chance of inheriting the property subject to two
possibilities (1) he survives the propositus and (2) the propositus dies intestate ie. without making any
will. It is possible that though the son survives his father but he finds that his father had made a will
under which the property is to be given to another person after his death and not to his heirs. Thus,
before the intestate death of the propositus, the 'chance of an heir- pparent of getting the property is
merely a future possible interest. It is a bare or naked right which does not create any interest in
favour of the heir-apparent. Law cannot treat it as a present fixed right in the property. Therefore,
chance of an heir-apparent is a non-transferable property.
Illustrations
(i) A has two sons B and C. A has become very old and is also suffering from an incurable disease. But
he is still alive. Expecting that A must
37. Palikandy v. Krishnan, (1917) 40 Mad. 302: It may be noted that Section 60 of the Civil Procedure
Code is analogous to Section 6 of the Transfer of Property Act and prohibits the attachment of certain
properties given in that section.
38. Kausingh Kalusing Thakore v. Rabari Meganbhai Vashrabhei, (2006) 12 SCC 360, transfer of
property can be prohibited only by the provision of some law and not by direction or judgment. made
in a writ petition under Article 226. Ramkali v State of U. P., AIR 2009 NOC 199 (All). lease land which
was Blumdhari with non-transferable rights. No interest can be transferred in such land to another
person. The land would stand vacated and vest in the State.
15.6
THE TRANSFER OF PROPERTY ACT, 1882 die very soon and he is in need of money, B sold his half
share in A's property to X. This transfer is void because before A's death B is not legal heir, he is simply
an heir-apparent. B would be A's heir and entitled to half-share in A's property. only after A's death
and that too if A dies intestate, ie. without making any will.
(ii) A has a wife W and a daughter D During the life of A, D released her share in A's property in
consideration of Rs. 1000 which was paid to her by her father A. A dies and D claims her 1/3 share
under Muslim law of inheritance.
W (her mother) resists her claim on the ground that since D had already transferred her share by a
release-deed on consideration of Rs. 1000, she is not entitled to get 1/3 share. Held: the release is no
defence because it is a transfer of Spes-successionis. Before A's death D was merely an heir-apparent
and had no right in her 1/3 share. The release-deed was held void. D was entitled to inherit despite
the release-deed executed by ber However she is bound to bring into account Rs. 1000 which she
received from her father."
However, where a person is not heard of for a long period and is believed to have been dead, the
transfer of his properties by his brother as his legal heir would be a valid transfer because, under the
circumstances, brother is not merely an heir-apparent but a legal heir,40
Rights of reversioners under old Hindu Law-Under old Hindu law, the rights of a reversioner f.e.
'reversionery right' was merely a chance of getting properties and as such it was Spes-successionis.
Reversioner was a person who used to inherit the properties of a widow held by her for life. Such
persons were called reversioners because during the life of the widow, their rights of inheritance
were suspended but it reverted to them after widow's death provided they survived her Thus, during
widow's life the Hindu reversioner had no right or interest in praesenti in the property which the
female owner held for her life and until it vested in him on her death provided he survived her, he had
nothing to assign or transfer." Being a Spes-successionis the agreement to transfer the properties by a
reversioner was not valid. In Annada v Gour Mohan the Privy Council held that since the interest of a
Hindu reversioner is a Spes-successionis, an agreement to transfer, or a transfer of, such an interest
does not become effective; the agreement is vold.
Chance of a legacy.-Chance of a legacy means expectancy of getting certain property under a will. The
well settled law of wills is that a will operates only after the death of the testator (who makes the will)
not on the date when it is written. Further, it is the last will which prevails and if two or more wills
have been executed in favour of different persons, only the legatee under the last will is entitled to
get the property Accordingly, where a person executes any will, before the death of that testator, the
legatee has simply a chance of getting property because (1) the legatee may not survive the testator
and (2) the will in his favour might not be the last will. Before a will operates
39. Samsuddin v. Abdul Hussain, (1906) 31 Born. 165.
40. Samir Kumar v, Nirmal Chandra, (1975) 79 CWN 934.
41. Amrit Narayan v. Gaya Singh, (1918) 45 Cal. 590: 45 IA 35. 42 AIR 1921 Cal. 501: AIR 1923 PC 189.
5.61
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
63
L.e. before the death of the testator, the legatee has merely a hope of getting properties in future
provided it is the last will.
Accordingly, the chance of a relation or a friend or any person receiving a legacy is a possibility even
more remote than the chance of succession of an heir and is, therefore, not transferable."
Any other possibility of a like nature-Any other possibility of the like nature would mean any other
possible interest or property which is as uncertain as the chances of an heir-apparent or chance of a
relation of getting property under a will. The central idea behind clause (a) is that any property which
is merely a future uncertain possible interest should not be made a transferable property Therefore,
clause (a) exclude not only the chance of an heir-apparent or of a legatee but also any other 'chance
of getting future property which is not at present a fixed right of the transferor The possibility of
getting a property in future as contemplated here is like the possibility of getting a prize in a
competition or winning a lottery. 'Other possibilities of a Like nature therefore must be interpreted to
mean possibilities belonging to the same category as the chance of an heir-apparent or the chance of
a relation obtaining legacy " Thus, future wages of a servant before they are actually earned by him,
are mere possible interest and as such cannot be sold, attached or otherwise transferred. Where a
fisherman contracts to transfer the fish which he would get in his next catch before throwing his net,
the transfer would be a transfer of mere possible interest of the same kind as that of a chance of an
heir-apparent receiving property in future. The fisherman may or may not get any fish at all in his next
catch. There is no certainty that any fish will be caught and the fisherman has no interest in the fish
until they are caught.46 Customary right to scavange i.e. right to collect things from the rubbish has
been held non-transferable right.47 Similarly, chance of being paid gratuity is also held to be not
transferable.48
Right to receive future offerings.-Right to receive offerings of a temple or shrine is a proprietary right
or beneficial interest. It is, therefore, property Offerings which have actually been made in the temple
are present property Thus, share of a priest in the net-balance of the offerings already made to an
idol may be attached." But as regards the trarsferability of the right to receive future offerings, the
opinion of the Cours is divided. According to Calcutta High Court the right to receive future offerings is
uncertain future right (interest) because it is merely a chance that a worshipper offers something at
temple: he may or may not make any offerings at all. Hence it is a 'mere possibility' which cannot be
transferred. On the other hand, according to
43. Ser Mulla: TRANSFER OF PROPERTY ACT, Ed. VII, p. 59. 44 Peshapati. Venkata Subhadryamma,
(1918) 47. LC. 563 45. Drei Prasad v. Lewis, (1909) 31 All 304:1 LC 186
46. Mulla: TRANSFER OF PROPERTY ACT, E4. VII, p. 59
47 Radya v. Kaviraye, AIR 1951 M.B. 120
48. Solomon v. Official Assignee, ALR 1999 Rang. 5.
49. Digamber v. Heri, [Link]. 1927 Bom, 143
50. Punhos Thakur v. Bindemari, (1916) 43 Cal. 28; Nitya Gopal v. Navi Lal. (1920) 47 Cal. 990.
64
THE TRANSFER OF PROPERTY ACT, 1882
15.6
Allahabad High Courts: the right to receive future offerings is 'not so uncertain, variable and limited as
to pass out of the conception of the law. It is, therefore, transferable.
The Supreme Court has now settled the law. In Badrinath v Punna,32 following the view of Allahabad
High Court, the Supreme Court held that the 'right to receive the offerings being coupled with duties
other than those involving personal qualifications, therefore, transferable and could be inherited. The
Apex Court observed that it did not depend on any possibility of the nature referred to in Section 6(a)
of the T.P. Act In this case the right to receive the future offerings at the sacred temple of Shri
Vaishno Devi Ji was held to be heritable right (interest).
The 'possibilities' as referred to in this clause are in the nature of uncertain future interest subject to
several possibilities. Law cannot take the risk of recognising any interests subject to several
possibilities. It may be noted that contingent interest as provided in Section 21 of this Act is also a
possible interest depending on uncertain future event. But contingent interests are transferable
interests because here the possibilities are coupled with some interest; they are not bare
possibilities.53
Spes-successionis under Muslim Law.-Spes-successionis is not transferable also under Muslim law.
But virtue of Section 2 of this Act, the provisions of Chapter II including Section 6(a) do not apply to
Muslims.54 So, if the rule of Muslim law would have permitted the transfer of Spes-successionis, it
would have been transferable interest. But, the transfer of Spes-successionis is equally void under
Muslim law.55 In Abdul Gafoor v Abdul Razack, the Madras High Court held that since in the case of
Muslims too the transfer of an expectancy by a heir presumptive (heir-apparent) is void ab initio,
therefore, no question of an estoppel can arise by reason of the heir renouncing her claim before the
expectancy opens.
Where, however, a sum of money was received by the legal heir apparent in lieu of her share in the
property of her father during his lifetime, it was held that she was estopped from claiming her share
in the property of her father on his dying intestate. The Court said that estoppel as a rule of evidence
can be applied to estop an heir apparent from succeeding to the estate on account of his conduct.56a
The Supreme Court has also endorsed this line of decisions. The heir apparent received advantage for
giving up his future right to property It was
51. Balmukund v Tule Rams, [Link]. 1928 All. 21: Ahmaduddin v. lahi Baksh, (1912) 34. All 465: 141.C.
587.
52. A.L.R. 1979 S.C. 1314.
53. Phuluanti Kuntar v. Janeshar Das, (1924) 46 All. 575. For difference between spes-successionis and
contigent interest see comments on Section 21 in the following pages.
54. Section 2(d) and nothing in the second chapter of this Act shall be deemed to affect any rule of
Mohammadan law"
5.61
65
OF TRANSPERS OF PROPERTY BY ACT OF PARTIES held that he could not be allowed to claim the
benefit of the doctrine of spes successionis as embodied in Section 6. He was to be estopped from
claiming share in the inheritance.566
3pes-successionis in Punjab.-The Transfer of Property Act is not applicable in Punjab, therefore, Spes-
successionis is not any non-transferable property. The tra fer of Spes-successionis, i.e., transfer of
expectancy or of reversionery rig has been held valid in Punjab. In the absence of applicability of the
Transfer of Property Act in Punjab, the Courts there follow the English equitable principles. It is
submitted that although the Act does not extend to Punjab, the Courts may apply the law laid down
in Section 6(a) of this Act on the ground of their own equity, justice and good conscience instead of
following English equity. This would bring the law in Punjab in tune with the law applicable in other
parts of India.
English Law.-Under English law too, Spes-successionis is non- transferable property. But if the transfer
of Spes-successionis is supported by some consideration, the transfer is not void ab initio under the
English equity In other words, transfer of expectancy for value has been protected by equity. The
result is that if an heir-apparent transfers the property and the transfer is for valuable consideration
then, when that heir-apparent becomes legal heir and gets interest in that property, the equity shall
compel him to pass on the title to the transferee. The English equity would not allow the transferor
(heir- apparent) to plead that the transfer was void ab initio. However, where the transfer of Spes-
successionis is without any consideration, i.e., there is a gift of expectancy, the transfer would be void
because equity then cannot protect the interest of the transferee.
It may be noted that the above-mentioned equitable principle has been incorporated in Section 43 of
the Transfer of Property Act and the Supreme Court has adopted the same view,58
(2) Clause (b): Mere Right of Re-entry.-Section 6(b) provides that mere right of re-entry cannot be
transferred. "Right of re-entry' means right to resume possession. Where a person gives the
possession of his property to another for a certain period and is afterwards entitled to get it back, his
right of entering into the possession of that property once again, is technically called as his right of re-
entry. Under this clause, the right of re-entry refers to the right of a lessor or landlord to resume
possession of the property from the lessee (tenant) upon the breach of a condition subsequent. The
right referred to in this clause is similar to the right of a lessor under Section 111(g) of this Act where
a lessor is entitled to terminate the lease if lessee commits breach of any condition imposed by him
(lessor). For example, a landlord lets out his house and imposes a condition that the tenant must not
make any alteration in the house. Upon the breach of this condition by the tenant, the landlord has
right to terminate the tenancy whereby he would resume the possession before expiry of the term of
tenancy. This right of the landlord is his right of re-entry.
AIR 2011 503600 10111escc222
66
THE TRANSFER OF PROPERTY ACT, 1882
15.6
The right of re-entry is, therefore, a right connected or accompanied with interest in a land. Mère
right of re-entry means a right to resume possession not accompanied with any other interest in land.
The right of re-entry apart from or without any interest in land is simply a personal licence. Section
6(a) prohibits the 'mere' right of re-entry because personal licence cannot be transferred under the
law But right of re-entry coupled with any other interest in the land is transferable together with that
interest. Thus, where the land itself is transferred or the lessee has been given as a permanent lease,
the right of re-entry is automatically transferred to the transferee of land or the lessee, as the case
may be. The right of re-entry is an estate of reversionor i.e., the lessor's interest in the land leased to
the lessee, When that interest itself is transferred to the lessee, the right of re-entry would pass on to
him together with such interest.
Illustrations
(1) A has leased his land to 8 for a period of three years with an express condition that B shall not dig
any well on the said land. B digs a well on the land. A asks C to take possession of the said land from B
i.e. A transfers his right of re-entry upon the breach of condition by B. C cannot take possession from
B because A has transferred to him mere right of re-entry.
(ii) A lets out his house to B for five years subject to a condition that B shall not sub-let it to any other
person. B sub-lets the house in violation of the express prohibition. A has right to terminate the
tenancy. i.e. has right of re-entry But during tenancy (before expiry of the term of five years) A sells
the house to C. C has a right to terminate the tenancy of B because A transfers to C not only right of
re-entry but also other interest, namely, ownership to C. (iii) Certain goods are delivered under hire-
purchase agreement giving the bailor (seller) a right to re-enter the godown where goods are kept
and take possession in default of payment of any instalment. The bailor assigned (transferred)) his
rights under the agreement by way of security to his creditor The assignment is invalid. Creditor
cannot enforce the right of re-entry because it is merely a personal licence unaccompanied with any
interest in the goods.59
(3) Clause (c): Easement apart from Dominant Heritage.-Easement is a right which exists for the
beneficial enjoyment of a land and is exercised upon the land of another person. The land or
tenament (house) for whose beneficial enjoyment this right exists is called dominant heritage and the
land or tenament upon which the right is exercised is called servient heritage. For example, A who is
owner of a house has a right of way upon the land owned by B so that he may reach the main road.
A's house is dominant heritage and the land of B is servient heritage. A's right of way is easementary
right. Although this right is exercised by A but it exists for beneficial enjoyment of A's house; therefore,
technically, the right is not of A ie. it is not his personal right but a
59 See In re Daves & Co. ex parte, Relings, (1889) 22. Q.B.D. 193.
5.61
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
67
right attached to the house. Since this right is part and parcel of this house i.e. the dominant heritage,
it cannot be severed or detached from it. In other words, an easement cannot exist independently of
the dominant heritage. Accordingly, although it is a proprietary right and as such a property yet, its
separate transfer is prohibited.
Clause (c) provides that an easement cannot be transferred apart from the dominant heritage. But,
when the dominant heritage itself is transferred, the easementary right appurtenant (attached) to it is
by itself transferred together with the dominant heritage.
It may be noted that Clause (c) of the Act prohibits the transfer of easement; it is not concerned with
the creation of easement which is not any transfer 60 Similarly, this clause is also inapplicable where
the owner of the dominant heritage releases the easement in favour of the servient heritage. Release
of an easement is not transfer; it is extinction of the right.
(4) Clause (d): Restricted Interest-Under this clause an interest in property restricted in its enjoyment
to the owner personally has been made non- transferable Beneficial interests or an interest by virtue
of which a person derives certain benefit is the property of that person. Such property (beneficial
interest) is owned by that person but he cannot transfer it. It is restricted to his own enjoyment. As a
matter of fact, such interests are created in favour of a person only due to his (her) personal
qualifications. Such interests are, therefore, purely personal in nature and may be called personal
rights which are non-transferable. It would be against the very nature of the right and would also
defeat the purpose of its creation if such rights are made transferable. For example, a teacher's right
to teach is his beneficial interest but this right is given to him only due to his personal qualifications.
Although it is his beneficial interest, he cannot transfer it because only he, on the basis of his
qualifications, has been given this right by the institution. He can transfer his watch but he cannot
transfer his 'beneficial interest of teaching'. The reason behind making personal interests as restricted
interest (and thereby making it non-transferable) is that the transferee may not have that personal
qualification which the holder of such interest has. Such interests are, therefore, res extra
commercium (things beyond any trade or transaction).
Section 6(d) deals with 'restricted interest itself, not with ownership (absolute interest) with certain
restrictions on right of enjoyment or possession. In K. Balakrishnan v K. Kamalam,61 a lady inherited
some property from her maternal-father as owner. She gifted this property to her minor child
reserving personally the possession and the right of enjoyment to herself. It was argued that since the
gift (to the minor) was of 'restricted interest' which was prohibited under Section 6(d), therefore, the
gift-deed effectual and void. But, the Supreme Court held that it could not be said that the gift-deed
was effectual merely because the donor restricted to herself the possession and
60. Sital Chandra v. Delanney, (1916) 20 Cal. W.N. 1158:34 LC. 450.
61. ALR. 2004 S.C. 1257 Sri Siddaraja v. Sri Gangadhar, [Link]. 2012 Kar. 143, entire land transferred, a
portion retained by the settlor as life interest, a limited estate. Its transfer was not lawful, possession,
if given, was recoverable.
NSFER OF PROPERTY ACT, 1882
[5.6
enjoyment of the property gifted Explaining further the Supreme Court observed, "Clause (d) of
Section 6 which provides that all interests in property restricted in its enjoyment to the owner
personally cannot be transferred by him is not attracted on the terms of the gift-deed herein because
it was not a property, the enjoyment of which was restricted to the owner personally She was
absolute owner of the property gifted and it was not restricted in its enjoyment to herself"
Religious offices, such as the office of Shebait or Pujari who performs religious services in a temple. or,
Mahant of a Mutt 3 of Mutawalli of a Wakf are all restricted interests because these offices are held
by the persons concerned only on the ground of their personal qualifications. Briti Mahabrahmini i.e.
right of a mahabrahmini to officiate the funeral ceremonies has been held to be a restricted
interest.65 The emoluments or the right to get morley or some property only by virtue of holding a
religious office is also non-transferable. But, where the emoluments are independent of religious
office, such emoluments can be assigned to other person.67
Right to receive certain payments or something only because of some peculiar status is also restricted
interest. Thus, Kharcha-i-pandan (personal allowances granted by husband to a Muslim wife) even if a
charge has been created for its payment, is wife's personal right and cannot be assigned.
Similarly, under Muslim law, the widow's right of retention of her husband's properties in lieu of
unpaid dower, has been held a restricted interest 69.
Service tenures i.e. right in certain land which are given to a person by way of remuneration for
personal services being discharged by that person, are also non-transferable. Such tenures depend on
personal services of the holder of the lands. Watan lands in Bombay, Karnam tenures in Madras,
Ghatwal in Bengal or the Inam lands in general have been held service tenure and therefore, they are
non-transferable.
Interests may be restricted also in cases where the property is given to a person for use for some
specific purpose. Since the idea behind creating such interest is the 'specific purpose', it cannot be
transferred to any other person for any other purpose. For example, A gives the possession of his
house to B for a week so that B may perform the marriage ceremony of his daughter. B transfers the
possession of the house for the said week to C and performs the marriage of his daughter in a hotel.
The transfer of possession of the house by B to C is
62. Nagendra v. Rabindra, [Link]. 1926 Cal. 490.
63. Prayag Das v. Mahant Kriparam, (1908) C.L.J. 499.
invalid because B's interest in the house of A was an interest given to him only for some specific
purpose. It is A's restricted interest, therefore, non- transferable. (8) Clause (dd): Right to Future
Maintenance-Where a person is entitled to receive maintenance allowance, it is his personal right
because it is given or is promised to be given in future solely for his own benefit. As such, the right to
future maintenance is a restricted interest which is non-transferable under Section 6(d) discussed
earlier
Maintenance may be granted to a person either by personal contract or under a decree of the Court
of law. Where maintenance is granted by the decree of Court, it is more certain and secured than the
maintenance granted by a personal contract. Before, 1929, there was judicial controversy regarding
the transferability of the maintenance granted by decree of the court. According to Calcutta High
Court," the maintenance granted by court was not transferable because essentially right to
maintenance was a personal right whether granted by court or by personal contract. But according to
Madras High Court, right to future maintenance, when granted under a decree of Court was a secured
right and was transferable. The Amending Act, 1929 has inserted clause (dd) to resolve this judicial
conflict. Under clause (dd) the right to future maintenance is now non-transferable right even if it has
been granted under any decree of the Court of law
It may be noted that under this clause there is prohibition on the transfer of future maintenance
granted under a decree. The assignment of the decree for maintenance which has already accrued
due shall be a valid assignment?s because arrears become debt and as such, can be attached or sold.
(6) Clause (e): Mere Right to Sue.-Right to sue for a certain sum of money is actionable claim.
Actionable claim is a claim for a certain amount of money and can be transferred. But right to sue for
uncertain or indefinite sum of money is not transferable. Under Section 6 (e) 'right to sue' means right
to sue for the claim of any uncertain sum of money Claim for an uncertain sum of money arises where
the claim is for unliquidated damages either in tort or in contract or where the claim is for any
amount which is not fixed. Thus, where a person is entitled to claim damages because some tort has
been committed against him, he has a right to claim damages by way of compensation. This right to
claim damages from the wrong-doer is not a claim for any certain or fixed sum of money and shall
come within the meaning of 'right to sue' as given in this clause.73a
Illustrations
(1) A publishes defamatory statements against B. Under the law of tort B has a right to claim damages
from A. 8 thinks that he must sue A claiming Rs. 50,000/- as damages. But, instead of filing the suit
(2)
Bassigns this right to C. C sues A claiming Rs. 50,000/- from him for the defamation of B. The
assignment (transfer) of right to sue for damages by B to C is invalid because it is non-transferable
right under Section 6(e). C has, therefore, no right to claim damages from A and his suit is not
maintainable.
(ii) There is a contract between A and 8 under which A agrees to transport certain goods of B from
Calcutta to Bombay within at month. A fails to transport the said goods within the stipulated time and
thereby commits a breach of contract. Due to delay caused in transportation of goods by A, B has to
incur loss in the market. B is entitled to claim damages from A. B assigns this right to C. The
assignment being transfer of 'mere right to sue' for damages, is invalid and C cannot recover damages
from A
In the abovementioned illustrations the assignment of the claim of damages is invalid because of two
reasons. First, the right to sue is for claiming damages which are an uncertain amount. It is not certain
that the exact amount which is claimed as damages by the aggrieved party is necessarily decreed by
the court; the court may reduce the amount or even increase it. Secondly, the right to sue for
damages is personal to the party aggrieved. In the above illustrations it was B who was defamed or
who incurred loss not the transferee C. It would be against the basic principles underlying the award
of damages if compensation is received by a person who is not the aggrieved party.
In Mc Dowell & Co. Ltd v District Registrar. Vishakhapattanam,74 a manufacturing company insured
its goods with an insurance company for the loss or damage of its goods during transportation. The
insurance company in turn was entitled to proceed directly against the transporter in the event of
such loss or damage to the goods. A document, to this effect, was executed by manufacturer in favour
of the insurance company wherein the manufacturer had subrogated (substituted) its right to sue the
transporter for any loss or damage to goods in consideration of the payment of amount under
insurance policy The question arose as to whether his document was to be treated as conveyance
(transfer of property) for purposes of stamp-duty? The Andhra Pradesh High Court held that the
document was not a deed of conveyance because the right of manufacturer was 'mere right to sue'
for damages and the same right (alone). was given to the insurance company Accordingly, the Court
held that the question of treating the disputed document as a document of conveyance or
assignment would not arise; the document was a power of attorney (for stamp. duty) under which
company had been given merely a right to sue for damages.
Claim of mesne profits is also a claim for an indefinite sum of money like damages, therefore, mere
right to claim tesne profits is non-transferable under Section 6(e), Mesne profits means profits or
produce of a property which is in the unlawful or adverse possession of a person who is not entitled
to possess it. When the property comes in the possession of the person who is legally entitled to it. he
may claim mesne profits from the possessor holding property adversely to him. Such claims are
unliquidated and cannot be transferred.
74 AIR 2003 Andh. Pra. 374.
Illustration
A is the owner of a piece of land which B occupies illegally A files a suit against B to get back the
possession of land held unlawfully by B. After two years of litigation, the court decides in favour of A,
and B has to vacate the possession But, during unlawful possession (i.e., during litigation) B has
already enjoyed the profits or produce of the land say crops of paddy A is entitled to claim the mesne
profits for the period of two years. B assigns this right to C. The assignment is invalid.
The social policy underlying the non-transferability of mere right to sue for unliquidated damages is to
prohibit the praction of gambling out of litigation." Under English Law, gambling out of litigation is
known as Champerty which is forbidden there. In India, such contracts would be void as being
opposed to public policy under Section 23 of the Indian Contract Act.
Use of the word 'mere' is significant. Under this clause, it is the 'mere right to sue' which is non-
transferable. If the right to sue is not a bare or 'the only right' but involves also an interest in the
property, the right to sue is assignable. Together with the transfer of that interest, right to sue would
be transferred. Thus, a right to sue for damages due to breach of contract cannot be transferred but,
if the property for which the contract has been made, is itself transferred, the transferee gets also the
right to sue for damages. In such situation the transferee would not have the bare or naked right to
sue but would have the right to sue by virtue of ownership or beneficial interest in the property being
transferred.
In Jaffer Meher Ali v. Budge Budge Jute Mills,7% under a contract A agrees to sell certain quantity of
gunny bags to B. The gunny bags were agreed to be delivered by A to B on a future date. But before
the expiry of the due date 8 assigns his beneficial interest in the said gunny bags to C. Thus, instead of
B. the beneficial interest in the gunny bags was now with C. Thereafter A fails to deliver the bags
before expiry of the due date and thereby committed a breach of contract (between A and B). C was
entitled to sue A for damages because B had assigned to C not only the right to sue for breach of
contract but also the beneficial interest in the gunny bags.
Where the right to sue is connected with a business and the whole business is transferred, the right to
sue is automatically transferred. It is not the transfer of mere right to sue. A partnership firm entered
into a contract with Government and all partners, except X, retired later on. According to the
retirement deed al rights and liabilities of the firm were transferred to the remaining partner X It was
held by the Gujarat High Court that incidentally the right to sue for
75. For example. A is entitled to claim damages from 8. A would claim a high amount say Re 50,000/-
as damages. Now A would sell his right to sue 8 to C for Rs 30,000/-. The Court may reduce the
amount claimed (Rs. 20,000) or increase it to Rs. 60,000/-or, even dismiss the suit. All this is uncertain
and whether C would be looser or gainer would depend on 'chance' This would amount gambling out
of litigation.
76. (1900) 33 Cal. 702 on appeal 34 Cal. 289 cited in Mulla: TRANSFER OF PROPERTY ACT, Ed. IX p.
102.
ACT, 1882
[5.6
damages was also transferred and a suit by X for damages for breach of contract against the
Government was not hit by Section 6(e).77
In Amiratham Kudumbah v. Sarnam Kudimbar, the property of a minor was sold by his father as
natural guardian but the sale was neither with the permission of the court nor for legal necessity,
therefore, it was voidable at the instance of his son who was the real owner Any person purchasing
from the natural guardian obtains only defeasable title. The Supreme Court held that a purchaser of
the property form the son (after his attaining majority) would be entitled to file a suit for setting aside
the sale by guardian (father) within three years after the minor attained majority. The Supreme Court
observed that the son had transferred the property on attaining majority and together with transfer
of property his right to defeat existing adverse claim was also assignable (transferable) right.
Therefore, Section 6(e) was held not applicable.
Transfer of a decree-Decree is property of the decree holder but it is neither an actionable claim nor a
'mere right to sue'. Therefore, although the original cause of action for the claim (ie. right to sue for a
claim) is not transferable as such, but if the same claim has been established by the Court under a
decree, it is assignable. For example, assignment of decree for mesne profits is a valid transfer.
(7) Clause (f): Public Office & Salary of Public Officer.-Under this clause there is prohibition on the
transfer of a public office and the salaries of public officers. The reason why these interests are non-
transferable is, to ensure the dignity to the office held by a person appointed for qualities personal to
him and getting salary for due discharge of his public duties.
Right to hold an office by virtue of which a person derives certain pecuniary gain is his beneficial
interest whether that office is public or private. In both the cases a person is entitled to hold an office
only because of his personal qualifications. As such, this right is a restricted interest. Right to hold a
private office would come under clause (d) whereas right to hold public office comes under clause (f).
This Act defines neither public office nor a public officer. However, 'every one who is appointed to
discharge a public duty, and receives a compensation in whatever shape whether from Government
or otherwise, may be a public officer. A Government servant would be called a public servant holding
a public office A Government servant cannot assign his office to another person.
The salary of a public officer whether before or after it has become due, is also non-transferable
Attachment or transfer of the salary of a public officer is illegal and opposed to public policy. Thus, a
railway servant cannot agree to the attachment of a part of his salary. However, leaving apart a
minimum amount for bare subsistence (exempted from attachment) the remaining salary can be
attached in execution of a decree under Section 60 of the Civil Procedure Code.
77 Gujarat Water Supply & Severage Bd. v. S. H. Shivani, AIR. 1991 Guj. 171.
78. [Link]. 1991 S.C. 1256
79. MSM Railway v. Rupchand, AIR 1950 Bom. 155.
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OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
In Ananthayya v. Subba Rao, a younger brother agreed to pay a certain part of his earnings to his
elder brother in consideration of the latter (elder brother) providing him (younger brother)
maintenance and education in the past. The Madras High Court held that this agreement was not hit
by clause (f) merely because the younger brother became a Government servant. The court observed
that the agreement was not an agreement for the transfer of salary, the amount agreed to be paid
could be paid from any other source It is significant to note that the prohibition under this clause is
regarding direct transfer of salary i.e. transfer or assignment from its sourot. Once the salary comes
into the hands of a public servant, it becomes his property and is not subject to any restriction on its
disposal.
(8) Clause (g): Pensions and Stipends.-Under clause (g) the stipends allowed to military, naval, air
force and civil pensioners of the Government and the political pensions, cannot be transferred. The
pensions or stipends etc. of the Government servants whether civil or military, are non-transferable
on the same principle on which the salaries of public servants are not transferable under the
preceding clause. Pensions, stipends etc. of the Government servants or the political pensions (to the
freedom fighters) are given to the person concerned only because of his past services or personal
merits, therefore, these interests are personal to the recipient. Transferability of such interests would
defeat the very purposes for which these interests exist.
Pension means a periodical allowance or stipend granted not in respect of any right or privilege or
because of an office but on account of past services or particular merits or as compensation to the
families and dependents. The allowance given to political prisoners82 and the payments being made
by the Government of India under a treaty have been held political pensions and not assignable under
clause (g) Allowances granted by the Government to the Mysore family and to the descendants of the
Nawab of the Carnatics have been held as political pensions.
The pension of a pensioner cannot be attached in the execution of any decree against him. Under
Section 60 of the Civil Procedure Code, the pension of a pension-holder has been exempted from
attachment. However, the prohibition under clause (g) does not apply to private pensions and such
pensions can be attached or sold.
(9) Clause (h): Transfer Opposed to Nature of Interest etc.-The above mentioned clauses provide
certain kinds of interests which are non-
80 AIR. 1960 Mad. 188.
81. Secretary of State v. Khem Chand, (1880) 4. Bot. 432; Sunderbya Bai Choudhary v. Union of India,
AIR 2008 MP 227 (DB), a will can be executed only in respect of an estate, family pension is not an
estate, it could not be bequeathed by 'will other pensionary benefits, like PF, gratuity. etc. and other
retiral dues, and extra remuneration are estate of the deceased, capable of being disposed by
bequest.
82. Satraji Dongarchand v. Matho Singh, AIR. 1927 Mad, 604. 83. Dishambaar Neth v. Imdad Ali, (1891)
18 Cal. 216
84. Mahomed v. Mahomed, (1867) 7 W.R. 169
85. Mahomed v. Commandur, (1869) 4. Mad. H.C. 277
86 Bhoyrub v. Madhub Chunder. (1880) 6 Cal LR. 19.

THE TRANSFER OF PROPERTY ACT, 1882

transferable. This clause does not deal with any kind of non-transferable [S.6 interest. Under clause (h)
there is prohibition in the transfer of property under certain 'situations. Clause (h) provides that no
transfer can be made in the following cases
(i) Where the transfer is opposed to the nature of interest created thereby.
(ii) Where the transfer is for an unlawful object or consideration. (iii) Where the transfer is made to a
person who is legally disqualified to
be transferee.
(i) Transfer opposed to Nature of interest.-There are certain properties which by their very nature can
neither be owned nor transferred. For example, air, light, space, sea are such properties which in their
natural form are nobody's property. Such properties are called res communes ie. property of the
whole community of the World. Nature gives the right to use them to every individual. Their transfer
would be opposed to nature of these properties. Moreover, it is not possible to hold and possess
them separately. Thus, A who is owner of a piece of land, cannot sell only 100 sq. meters of light, air
or space above his land to B without selling hins the land."
Other things which come under this category are the properties dedicated for religious or public use.
Debutter property, for example, is non-transferable as being dedicated for religious use only.
(ii) Transfer where its object or consideration is unlawful.-Any property which is otherwise
transferable shall become non-transferable if the object or consideration of the transfer is unlawful
within the meaning of Section 23 of the Indian Contract Act 1872.7
Under this sub-clause, the object or consideration of a transfer of property is unlawful in the following
situations
(a) It is forbidden by law,
(b) It is of such nature that if permitted it would defeat the provision of any law or,
(c) It is fraudulent or,
(d) It involves injury to a person or property of the other or,
(e) It is immoral or opposed to public policy
Right to grow opium without a licence is forbidden under the Opium Act. Therefore sale of a farm for
growing opium is unlawful and the transfer is void. Similarly, sale of liquor without licence is
forbidden without a valid licence under the Excise Act. Therefore, any such sale would be void being
forbidden by
law
Where the object (purpose) of a transfer is to defeat or negative the effect of any provision of law,
the object is unlawful because law is made for being
87 LIC of India, Madras v. D. B. Kadabai, [Link]. 1987 Kant. 129.
S.61
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
75
followed not for being violated or exploited. Thus, transfer of property by an insolvent would defeat
the provisions of the Insolvency Act or, the renewal of lease (tenancy) with the object of getting
higher rent would defeat the
provisions of the Rent Acts.
Transfer of property with the only object to play fraud on the interests of a person would be
fraudulent transfer Where a debtor transfers his properties so that the creditor may not recover his
loan from his properties, the transfer would be for an unlawful object. Similarly, where a person gives
one thousand rupees to an agent in consideration of the agent granting lease of properties without
the knowledge of his principal, the transfer of rupees one thousand to the agent is unlawful.
Where a property is transferred or is agreed to be transferred in order to cause injury to a person or
his property, the transfer is for an unlawful object. If A gives to B Rs. 1000 so that B assaults C or
commits his murder or, destroys C's house by burning it, the transfer of Rs. 1000 is void being
unlawful. It has been held that payment made to a Hindu father so that he gives his son in adoption, is
unlawful because such adoption would be set aside by the Court and the son may lose his status in
both, natural family as well as in the adoptive family.
Transfer of property is void if its purpose is immoral or against public policy. Lease of a house to be
used as gambling den or as a brothel is void if the lessor (landlord) has knowledge that it is to be used
for such immoral purposes Transfer of property to a husband so that he must divorce his wife is with
an unlawful object, hence void. Similarly, trar sfer of some immovable property to a woman in
consideration of illicit relationship in future is void. But, transfer of property for past illicit relationship
has been held valid as being a gift motivated for past services (cohabitation) not with object of an
unlawful purpose.10
Property transferred as consideration for withdrawal of a prosecution or money or property given to
an official as bribe is illegal being opposed to public policy. Property given to a witness not to give
evidence is also a transfer opposed to public policy.
(iii) Transfer made to a disqualified transferee.-As discussed in Section 5 of the Act, any living person
in existence can be a competent transferee. But, the transferee must not be legally disqualified to be
a transferee Under Section 136 of this Act, Judges, legal practitioners or officers connected with any
Court of justice are incompetent transferee in any dealings of actionable claims. Thus, an actionable
claim is otherwise transferable but when it is transferred to a Judge or an officer of the Court, it
becomes a non-transferable property The object of this provision, it is submitted, is to secure and
maintain the impartiality of the judiciary However, the prohibition under this clause is only with
respect to actionable claims not for other kinds of property Thus, for
88, Narayan v. Gopalras, [Link]. 1922 Bom. 352.
89. Ghans v. Ram Chandra, ALR. 1925 All. 437.
90. Negratnamba v. Ramayya, AIR 1968 SC. 253; Pyare Mahan v. Narayani, A.I.R, 1982 Raj 43.

THE TRANSFER OF PROPERTY ACT, 1882

[5.7
a debt secured by mortgage, the Judges or the officers of the Court are not legally disqualified
transferees.
(10) Clause (i): Untransferable Right of Occupancy.-As a general rule occupancy rights or the leasehold
properties are transferable interests. But this clause makes an exception to this general rule. Similar
exception has been made in the proviso to Section 108 (j) of this Act dealing with the transferability of
leases in general. Under Section 6(1), a tenant having untransferable right of occupancy cannot
transfer his right to another person. Similarly, a farmer of an estate in respect of which default has
been made in paying revenue is not authorized to assign his interest in the agricultural holding.
Relinquishment of the agricultural holding is a transfer, therefore, it is not valid under this clause."1
Lessee of an estate under the management of a Court of Wards is also prohibited to assign his
interest.
Clause (i) was added to Section 6 in 1885 in order to remove doubts regarding the non-transferability
of occupancy rights in the agricultural lands. Occupancy rights of the agricultural lands have been
declared to be non-transferable interests also in various tenancy land laws enforced in India.
Note: When India became independent, the States of this country enacted their own land laws to
regulate their respective agricultural lands etc U.P.Z.A. & L.R. Act in Uttar Pradesh, Madhya Pradesh
L.R.C. or Rajasthan Z.L.R. etc. Therefore, Section 6(j) of the Transfer of Property Act has now become
almost irrelevant.
Person competent to transfer.-Every person competent to contract and entitled to transferable
property, or authorised to dispose of transferable property not his own, is competent to transfer such
property either wholly or in part and either absolutely or conditionally, in the circumstances, to the
extent and in the manner, allowed and prescribed by any law for the time being in force.
SYNOPSIS
Essentials of a valid transfer. Competency of the Transferor. Competent to Contract.
Age of majority
Soundness of mind.
Not otherwise disqualified
Entitled to Transfer authority for Transfer
ESSENTIALS OF A VALID TRANSFER
Transfer of property is an act by which a living person conveys certain properties absolutely or
conditionally and in present or in future, to another living person. In a valid transfer of property,
following essential conditions must be fulfilled:
91. Amar Nath Singh y. Har Prasad Singh, (1932) Oudh 79,
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
17
5.71 (1) The property must be a transferable property. According to Section 6 of the Act, there should
not be any prohibition in the transfer of that property by any law enforced in India. Section 6 also
specifies certain non-transferable interest eg., Spes-successionis, right of re-entry, easements etc. etc.
Transfer of any non-transferable property is void.
(2) Transferor must be competent. Transferor is the person who conveys property. Person may be a
human person or a juristic person such as company or corporation, or association. But at the time of
transfer, the transferor must be a competent person. According to Section 7, any person who is
competent to contract is also competent to transfer a property. Thus, any person who is adult (i.e.,
attained the age of majority), has a sound mind and is not otherwise disqualified, is competent to
transfer a property. Juristic persons e.g., companies or associations are always deemed to be adult
and of sound mind.
(3) The transferor must also have right to transfer the property being transferred Every adult person
of sound mind may have capacity to transfer but has a right to transfer only those properties or
interests in which he has ownership. According to Section 7, besides being competent, the transferor
must also have the title in the property That is to say, he should be entitled to transfer the property
concerned or be authorized to transfer it if not his own. A tenant cannot make a gift of the house in
which he is tenant because although he is sane and adult, but is not owner of the house and is,
therefore, not entitled to transfer its ownership by way of gift.
(4) Transferee must also be competent. But, the transferee need not have the capacity, ie, age of
majority and sound mind. All that is required for being a competent transferee is that the transferee
is a living person in existence at the date of the transfer. Thus, a transferee may be an insane person
or minor or even a child in mother's womb (provided it is born alive). However, the transferee should
not be legally disqualified to be a transferee. Officials of the Court or judges cannot be transferee of
actionable claims under Section 6(h) (iii) of the Transfer of Property Act. Transferee too may be a
human person or a juristic person.
(5) Necessary formalities prescribed by law for the transfer must also be completed. The Transfer of
Property Act makes provision for various kinds of transfer of property eg., sale, gift, exchange,
mortgage, lease and the transfer of actionable claims. These specific kinds of tra fer have their
respective procedure as laid down in this Act or in the Indian Kegistration Act. Generally, there are
two modes of transfer of property, registration and delivery of possession. In some cases writing is
sufficient. Where writing is not necessary, the transfer may be made without registration and writing
i.e. simply by delivery of possession. Every transfer of property must be made in the manner
prescribed for that kind of transfer and for that kind of property.
COMPETENCY OF THE TRANSFEROR
Section 7 of the Act provides for the competency of a transferor Under this section a person is
competent to transfer a property if he is (1) competent to contract and (2) entitled to transfer or is
authorised to transfer the property, if
not his own.
THE TRANSFER OF PROPERTY ACT, 1883
[S.7
(1) Competent to Contract.-According to Section 11 of the Indian Contract Act, 1872, a person is
competent to contract if he is (i) of the age of majority (ii) of sound mind and (iii) is not otherwise
disqualified from contracting by any law. A person who is competent to contract is competent
transfer a property
(i) Age of majority.-When the transfer is being made, the transferor must be an adult person i.e. must
have attained the age of majority Under Section 3 of the Indian Majority Act 1875, a person attains
majority at the age of eighteen years. But, if a guardian has been appointed under the Guardian &
Wards Act, 1890, the minor attains majority at the age of twenty- one years. A person who is below
the age of eighteen years (or twenty-one years, as the case may be), is a minor. Transfer of property
by a minor is void and cannot be validated by his subsequent ratification on attaining his age of
majority 2
(ii) Soundness of mind.-Transfer must possess a sound mind at the time of the transfer i.e. he must
not be of unsound mind. Unsoundness of mind is of two kinds, idiocy and lunacy. Idiocy is incurable
and permanent. Transfer of property by an idiot or insane person is void. Lunacy is not permanent
and a lunatic may sometimes possesses a sound mind. Such period is called 'lucid interval. Transfer of
property by a lunatic during lucid interval' is valid. However, if a person has been adjudged lunatic by
a Court, he is incompetent to make transfer even during lucid interval.
(iii) Not otherwise disqualified-The transferor must be free from any legal disqualification.
Disqualification means legal inability. Minority and insanity are legal inabilities. But, besides these,
there might be other legal inabilities of disqualifications. Here, not otherwise legally disqualified'
means that the transferor should not be legally prohibited to transfer the property by any other law
to which he is subject. For example, a judgment debtor whose property is being sold in execution of
decree, is legally disqualified to transfer his own properties. Similarly, where a person's properties are
under the management of Court of Wards, he is legally disqualified to transfer any interest in his
property or create a charge over it.
(2) Entitled to Transfer: Authority for Transfer.-The transferor must be entitled to transfer the
property concerned. He is entitled to transfer the property if he has title of the property or if he has
no such title, has got the authority to transfer it. No person is entitled to transfer any interest which
he himself does not have at the time of transfer. If a person is transferring absolute interest he must
have ownership in the property. If he is transferring partial interest he should have partial interest in
the property. For example, where a person makes a sale or gift of a property he must have ownership
(absolute interest) in the property. If a person makes a sub-lease of certain property he must be
lessee of that property Without having title or interest in the
92 Sadiq Ali Kham v. Jakishore, AIR. 1923 P.C. 152
5.81 property, the transferor has no right to transfer it,93 But a person who is not owner of a
property may have right to transfer that property under an authority given to him by the owner of
such property. Thus, an agent who is authorized by the principal to transfer certain property, has right
to transfer. that property However an agent who has not been given any express authority also to
transfer the property has no authority to transfer any property in his management. The authority to
transfer is given under power of attorney Thus, under authority of a power of attorney, any person
may be authorized to transfer a property which is not his own. Other instances where a person is
authorised to transfer property not his own are the manager of a joint Hindu family in the case of
legal necessity, a guardian of any minor appointed under the Guardian & Wards Act, an executor or
administrator having authority to transfer the property of a deceased under the Indian Succession Act.
It may be noted that in these cases, the transferor's right of disposal has been defined and limited by
the personal laws or statutory Laws.
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
An agreement for sale of an immovable property was not joined by one of the co-sharers. It was held
that the entire agreement comprising the whole of the property including the share of the signing co-
sharer was void and ineffective.94a
8. Operation of transfer.-Unless a different intention is expressed or necessarily implied, a transfer of
property passes forthwith to the transferee all the interest which the transferor is then capable of
passing in the property, and in the legal incidents thereof.
Such incident 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 movable parts thereof;
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 thereof (except where they
are also for other debts or claims not transferred to the transferee), but not arrears of interest
accrued before the transfer;
93. Attaur Rahman Fateh Md. v. Hari Birand, AIR 2005 NOC 1920 (Bom, penson not holding
transferable interest in property cannot transfer it. The transferee is not bound by an agreement
execited by such transferor. M. P Walf Board v. Subhan Shak. (2006) 10 SC 69%, the expression "title
to property has a definite connotation, it is not the same thing as uier. 94. Balai C. Mandal. Indra Debi,
AL, 1973 S.C.782
94a. Vindleshner Napappa Shet v. Noor Ahmed Sharif, AIR 2011 SC 2057: (2011) 12 SCC 658.

THE TRANSFER OF PROPERTY ACT, 1882

15.8
and, where the property is money or other property yielding income, the interest or income thereof
accruing after the transfer takes effect.
SYNOPSIS
Unqualified or, Un-conditional Transfer
Legal Incidents of Transfer.
Land.
• Machinery.
House.
Debts. Interest.
Leased property
Unless different intention is expressed or implied.
Property consists of interests. Interests of the property have several incident or things appertaining to
it. When a property is transferred, there is transfer of the interests and together with them their
incidents also pass on to the transferee. The transferor need not specify each and every incident
which shall pass on to the transferee. But, if transferor so desires, he may express that a particular
interest shall remain with him or otherwise shall not go to the transferee. Such intention must be
clearly expressed or be necessarily implied in the absence of which it is presumed that transfer of the
property passes forthwith to the transferee all the interests which the transferor is then capable of
passing in the property, and in the legal incidents thereof. Section 8 incorporates following provisions
of law respecting operation of a transfer
(1) An unqualified or, unconditional transfer conveys all the interests of the property possessed by the
transferor.
(2) Legal incidents appertaining to the property transferred also pass on to
the transferee.
(3) For any different intention of the transferor, the rule of interpretation is that it is to be inferred
from the surrounding circumstances and by construing the whole instrument
Unqualified or, Un-conditional Transfer
Transfer of property may be subject to certain conditions or reservations respecting the interests
being transferred or, without any such condition. Where the transferor does not lay down any
condition it is presumed that the transfer is unqualified. In other words, if a transferor does not
express any 'contrary intention' the transfer is deemed to be unconditional or unqualified. In an
unqualified transfer, the transferor simply expresses his intention of transferring the property by way
of some specified mode. For example, if the transferor intends to transfer the ownership of his house
without any consideration, he would execute a deed of gift. Such deed of gift results into the passing
of an absolute interests in the house to the donee and also all the legal incidents belonging to it. He
need not mention the details of the interests and their legal incidents; the law shall presume that the
transferor intends to pass
5.81
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES 81 on to the donee everything connected with the
house. It may be noted that the object of the first paragraph of this section is to establish title of the
transferee beyond any doubt as to what has been given to him and what not. If no contrary intention
is expressed or is implied, upon the registration of the deed, title passes forthwith to the transferee
with all the interest which the transferor has been capable of passing in the property and the legal
incidents thereof.5 Legal Incidents of Transfer
Legal incidents of a property are everything which belong to that property by way of its necessary
consequence or which necessarily depend on such property Thus, a house has several incidents
appertaining to it, such as, right of easement, right of enjoyment, right to get rent from it etc. etc.,
and also the duty to pay its revenue of taxes. If the owner of the house sells it, the purchaser shall get
not only the building or the material structure but also all its legal incidents. Certain properties and
the legal incidents which pass on to the transferee upon transfer are given below
Land. The legal incidents of a piece of land include (i) everything annexed to it for permanent
enjoyment, (ii) the beneficial interests arising out of the land and (iii) the things attached to the earth.
In the absence of any contrary intention, transfer of the land would include transfer of everything
annexed to it permanently i.e. everything which is part and parcel of the land and also everything
beneath the land. Thus, the transferee shall get not only the surface of the land but also the
easements annexed to the land and also the minerals beneath it.96 Transfer of land includes also the
transfer of beneficial interests arising out of land, such as, right to collect rent or other profits or
produce. However, rents and profits which accrued before the transfer do not pass on to the
transfree." Similarly, where land is transferred, all the houses, structures standing thereon including
the trees on the land pass by necessary implication and it is not necessary to mention them.8
Where a land is let out to a tenant, the right to the fruit-trees standing on that land passes in the
absence of express reservation. In Vishwa Nath v Rant Raj 99 the Allahabad High Court held that when
land is transferred, there may be a presumption that all things attached to earth, such as, trees and
shrubs are also transferred along with the land. But there cannot be such presumption vice versa.
Thus, the Court held, transfer of trees will not by itself justify the inference that the land was also
transferred.
It is to be noted that the general rule of interpretation of documents transferring interest in a
property is that if the language is plain and unambiguous only that is to be adhered to. Therefore,
whereunder a document only trees have been transferred, there cannot be a presumption that land
on which the tree stands has also been transferred.
95. Harbans Singh v. Takamani Deol, AIR 1990 Pat. 26. 96. Raja Anand v. UP. State, [Link]. 1967 S.C.
1081. 97. Bhogilal v. Jethalal, [Link]. 1929 Bom. 51.
98. Divisional Forest Officer v. Daut, A.I.R. 1968 S.C.612. 99. [Link]. 1991 All 193
1. Shyam Sunder Generiella v. Delta International Ltd, [Link]. 1998 Cal. 233.
THE TRANSFER OF PROPERTY ACT, 1882
[5.8
Machinery. Where a machinery is part of land, together with land such machinery is also transferred
and alongwith such machinery are transferred its nuts, bolts and other parts. Nut-bolts and other
accessories of a machinery are legal incidents of the machinery because without them, there is no
utility of it and machinery becomes a useless thing.
House.-Legal incidents of a house are the easements, such as, right of way, right of support, and any
quasi-easement or easement of necessity annexed to the house. House includes also the permanent
fixtures eg. doors, windows, locks, keys, bars etc. which are part of the house and have separate
existence. When a house is sold, the purchaser gets right of easements annexed to it, its doors and
windows etc. and the seller need not specify the sale of each and every part of the house.
Debts.-Legal incident of debts is the security for the debt. Thus, in an unqualified transfer of debt or
actoinable claim, the security also passes on to the transferee alongwith the debt. However, the 'debt
as contemplated here must be perfected and absolute, not of uncertain nature. Section 8 refers to
Property in existence at the date of the transfer
The word 'debt' as used in this section refers to only those debts which come within the general
definition of actionable claims. Since mortgage-debts are not actionable claims and are excluded in
the definiton, therfore, the provisions of this section do not apply to mortgage-debts. A debt secured
by a charge is not like a mortgage-debt, it may be assigned as an actionable claim by an unregistered
instrument. Thus, in the assignment of debt, the charge annexed to it also passes on to the transfree.
Interest. The last clause of Section 8 provides that where the property transferred is money or other
property yielding income, the transferee is entitled to get the interest on that money or other income
accruing to it after the transfer.
The list of incidents' of properties mentioned in Section 8 is not exhaustive. There may be other
incidents which pass on to the transferee. For example, benefit of a convenant which runs with the
land under Section 55(2) or under Section 65 or under Section 108(a) pass on the transferee with the
transfer of property to which these covenants relate.
Leased property.-The relationship of landlord and tenant comes into existence on the transfer of a
leased property. Attornment by the lessee is not necessary Termination of the tenancy by the
transferee landford on the ground of arrears of rent was held to be valid
Taxes, excise, etc.-A sale deed stipulated that the statutory liabilities arising out of land, building and
machinery was to be borne by the vendee. The Court said that excise duty is not liability arising out of
land, building or machinery. It is payable on manufacturing of excisable goods. The stipulation in the
sale deed did not cover excise dues. The purchaser was not liable to pay excise dues of the seller. a
5.81
83
may
CF TRANSFERS OF PROPERTY BY ACT OF PARTIES Unless different intention is expressed or implied-An
unqualified transfer results into transfer of all the interests and legal incidents related to the property
transferred. But, it is possible that transferor reserves some of the interests with him and provides
expressly that a particular interest or incident of the property may not pass off to the transferee.
Where transferor does not auke any express reservation or uses ambiguous words, the intention of
the transferor is gathered by construing the whole instrument. The transferur express his intention by
using an appropriate word for what he wants to transfer. For example, if he uses the word "lease, it
would mean that he intends to transfer only the right of occupancy not ownership. But sometimes
the words are not clear Here intention prevails. Thus, upon execution of the deed of sale, the
question as to whether title passes to the vendee or not depends upon the intention of the parties. In
Provosh Chandra Dalui v Bishwanath Banerjee the Supreme Court observed that in the construction
of a written instrument it is legitimate in order to ascertain the true meaning of the words used and if
that be doubtful, it is legitimate to have regard to the circumstances surrounding their creation and
the subject matter for which it was designed and intended. The section does not talk about the
specific words to be used for the transfer of any particular kind of property Intent and surrounding
circumstances prevail over the nomenclature.
What interest or property has been conveyed by the deed depends on its own terms. The Patna High
Court held that where there is a grant of mining lease and a map is annexed to the grant showing an
area lesser than what is stated in the grant, the terms of the grant must prevail over the map. In N B.
Subrahmanyam v. A. Hymavati," the deed created rights and interests in "praesenti in favour of
settlee regarding properties mentioned in it with life- estate for enjoyment of settlor's life. The settlee
was to acquire right to enjoyment, alienation etc. after the death of settlor. The Supreme Court
observed that the deed was a settlement-deed and not a will. Therefore, the Court held that the
settlor could not subsequently bequeath the same property in favour of another person.
Similarly, the nature of transaction too is to be construed in the light of intention and the surrounding
circumstance instead of specific words used for the transfer. In Sanat Kumari v Lakshmi Amma Janki
Amma,10 A, who was heavily indebted, executed a sale deed to get back his property which was sold
in the execution. B, the purchaser, executed an agreement to sell the property (after 10 years) to a
close relative of A on the same day. Both documents were executed immediately one after the other
and were also registered simultaneously one after the other. The Supreme Court observed that
surrounding circumstances and the act of parties shows that the intention was to reconvey the
property to A. Accordingly, the Court held that the transaction was not a sale but a mortgage by
conditional sale.
5. Laku No Baret v. Jagdish Singh, [Link]. 1991 Pat 99.

THE TRANSFER OF PROPERTY ACT, 1882

[5,9
The Supreme Court observed that in the matter of construction of an agreement, the heading of the
agreement is not conclusive of its character. The intention of the parties has to be gathered from the
document as a whole reading it in its entirety."1
9. Oral transfer.-A transfer of property may be made without writing in every case in which a writing
is not expressly required by law.
Modes of Transfer.
SYNOPSIS
Delivery of possession. Registration.
MODES OF TRANSFER
This section refers to modes of transfer and provides that where writing is not necessary under this
Act, the property may be transferred orally i.e without writing any deed. There are two modes of
transfer of property: (a) delivery of possession and (b) registration.
(a) Delivery of possession.-Where writing is not necessary under the Act, the property may be
transferred orally i.e. only by delivery of possession. Normally the movable properties may be
transferred by delivery of possession. But, other kinds of properties in which writing is not necessary
under the Act, may also be transferred orally. For example, sale of immovable property valuing less
than one-hundred rupees (except in Uttar Pradesh), month to month tenancy, mortgage by deposit of
title-deeds, exchange of immovable property valuing less than rupees one-hundred. Where writing is
not necessary registration is also not necessary.
(b) Registration.-Where registration is necessary, the transfer must be in writing. The Transfer of
Property Act, at appropriate places, has provided that following transfers must be made only through
a written deed duly registered. Gift of an immovable property (S. 123).
(2) Sale of an immovable property of or exceeding rupees one-hundred in value (S. 54).
(3) Sale of reversion or other intangible property irrespective of its value (S. 54).
(4) Leases from year to year or for a term exceeding one year or reserving a yearly rent. (S. 102),
(5) Simple mortgage irrespective of the amount secured (S. 59).
(6) Other kinds of mortgage (except mortgage by deposit of title-deeds) where the sum secured
exceeds rupees one-hundred (S. 59).
7) Exchange of immovable property exceeding rupees one-hundred (S. 118).
(8) Transfer of actionable claims (registration is not necessary, writing is sufficient (S. 130)
11. C. Cheriethan v. P. Narayanan Embran Thiri, AIR 2009 SC 1502.
S.10]
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
85
In the abovementioned cases the transfer cannot be made orally. Except in the transfer of actionable
claims (where writing is must but registration is not necessary) the transfers required to be made
through instruments or written deeds, registration is also necessary. Procedure for the registration of
documents and the transfers which are compulsorily registerable are given in the Indian Registration
Act, 1908 and are governed by this Act. Where writing and registration is necessary to effect a
transfer, the property cannot be transferred in any other manner. If such transfer are made without
registration the transfer is void. Gift of an immovable property must be made only by a written and
duly registered deed12 therefore an unregistered deed of gift of an immovable property cannot effect
a valid transfer. 13
A registered settlement deed was not allowed to be cancelled by the settlor all by himself. Such
unilateral deed of cancellation was not allowed to be registered: Both parties must join. Alternatively,
the aggrieved party can apply to the Court under Section 31 of the Specific Relief Act, 1963 for an
order of cancellation 13a
10. Condition restraining alienation.-Where property is transferred subject to a condition or limitation
absolutely restraining the transferee or any person claiming under him from parting with or disposing
of his interest in the property, the condition or limitation is void, except in the case of lease where the
condition is for the benefit of the lessor or those claiming under him: provided that property may be
transferred to or for the benefit of a woman (not being a Hindu, Mohammedan or Buddhist), so that
she shall not have power during her marriage to transfer or change the same or her beneficial interest
therein.
Conditional Transfer. Absolute Restraint. Partial Restraint.
SYNOPSIS
Restraint on alienation in compromises. Applicability of Section 10. Exceptions.
Married Women.
Leases.
Idol.
Conditional Transfers.-Every owner of property who is competent to transfer, has freedom of
transferring his properties either unconditionally or subject to certain conditions. In a transfer of
property where a condition is laid down by the transferor, the transfer is a 'conditional transfer 14
Conditions are
12. Except where the donor is a Muslim. Where donor is Muslim, gift may be made only by
declaration, acceptance and delivery of possession. See Section 129, TPA.
13. Hira Lal v. Gaurishankar, AIR 1928 Bom. 250.
13a. V. Ettiraj v. S. Sridevi, AIR 2014 Kant. 58.
14. For details about the conditional transfers see comments on Sections 25, 31 etc. infra.

THE TRANSFER OF PROPERTY ACT, 1882 [S. 10 limitations which limit or otherwise affect the transfer.
Condition may be (i) condition precedent or (ii) condition subsequent. Condition precedent is that
condition which is prior to the transfer of property and whether the transfer would take place or not,
is itself dependent on that condition. Condition subsequent is a condition which is required to be
fulfilled after the transfer of property has already taken place. That is to say, a condition subsequent
affects the interest of the transferee after the transfer. Sections 10, 11, 12 and 17 of the Act deal with
condition subsequent. In these sections, certain conditions subsequent have been declared void. Void
condition subsequent has no effect and the transferee is not bound by it; he may or may not fulfil it.
Right of disposal is one of the essential features of ownership. Section 10 incorporates the rule that
any restriction on the right of disposal would be against this essential feature of ownership rights.
Accordingly, Section 10 provides that if a transfer is made subject to a condition by which the
transferee (who now becomes owner) is absolutely restrained from disposing of or parting with his
interest in the property, the condition is void. In such cases since the transferee becomes owner of
that property, any restriction limiting his right of disposing the property would not be binding on him
and he would be free to transfer it to anybody by any means. For example, A makes a gift of his house
to B subject to the condition that B shall not sell it. The condition being absolute restraint on B's right
of disposal, is void and B is not bound by it. If he sells the property, the sale is valid..
ABSOLUTE RESTRAINT
Section 10 declares a condition to be void when it absolutely restrains alienation. Restraint on
alienation is absolute if it totally takes away or curtails the right of disposal. Fry LJ observed thus:
"From the earliest times, the courts have always leant against any device to render an estate
inalienable."15.
The restraint may be absolute as a restriction on the power of alienation in point of time or as to a
particular or specified person only or of any other form. Partial restraints are not prohibited. The
question whether the restraint in question is absolute or partial is to be gathered from the contents
of the deed. The words of the clause should be so interpreted as to bring them into harmony with
other provisions of the deed.16
Illustrations
(i) A sells his house to B with a condition that B cannot transfer this house to anyone except C. The
condition is void because C may be chosen as a person who may never purchase the property.
(ii) There is a partition of a joint family property between A, B, C and D in which they agree that if any
one of them have no issue, he will have no right to sell his share and leave it for the other sharers. A
sells his share and after sometime, dies issueless. The condition being absolute restraint on alienation
is void. B, C and D cannot recover the property from the purchaser
15. In re Parry and Dogs, (1886) 31 Ch. D. 130 at p. 134 cited in Mitra's TRANSFER OF PROPETY ACT.
Ed. XIII. p. 111.
In Thousas v. Dr. A.A. Henry, AIR 2008 NOC 1414 (Ker) (DB).
S. 101
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES
87
(iii) A testator makes a will of certain properties in favour of his son with a condition that if he sold it
during the lifetime of his wife she will have an option of purchasing the property at the rate of one-
fifth of the market value. This condition is an absolute restraint on the power of legatee (son) for a
particular time. Here, the condition is void because it is restraining alienation during a life time'.17
(iv) A husband settles his properties on his wives subject to a condition that they cannot transfer the
property without his consent. The condition is vold as it takes away the power of alienation of the
wives absolutely.18
(v) There is sale of certain lands through registered sale-deed. Immediately after the sale, the seller
and purchaser enter into an agreement according to which the purchaser or his heirs shall have no
right to alienate the said lands. The agreement is void as being violative of Section 10 of the Transfer
of Property Act. The purchaser and his heirs are free to transfer or otherwise dissipate the land." (vi)
An absolute right was vested in the defendant, an adopted son, in respect of properties bequeathed
to him under a "will". It was held that no further condition could be imposed, as per Sections 10 and
11, restraining alienation of the property or by creating a restriction repugnant to the interest created
in the property. The will contained a direction that the property was to be applied and enjoyed in a
particular manner. The legatee would receive it in a manner as if the will" contained no such
condition, by virtue of the provision in Section 138 of the Succession Act.19a
PARTIAL RESTRAINT
Section 10 is silent about the situation where the restraint is partia Where the restraint does not take
away the power of alienation of the transferee substantially but only limits it to some extent, the
restraint is partial. A partial restraint is valid and enforceable. In Muhammad Raza v. Abbas Bandi
Bibi,20 the condition restricted the transferee from transferring the property to strangers, i.e.,
outside the family of the transferor, the Privy Council held that the condition was merely a partial
restraint which was valid and enforceable. Similarly, where a condition was included in the sale- deed
that the property should not be sold outside the family of the vendor but the transferee sold it to the
first cousin of the vendor, the Bombay High Court held that the condition was a partial restraint and
valid. The Court observed that the first cousin very much belonged to the vendor's stock (family),21
17 Reserv. Rosher, (1884) 26 Ch. D. 801.
18. Conti Singh v. Antri Kaar, AIR 1929 All. 492. This case is based on the Hindu Law prior to the
enforcement of the Hindu Marriages Act, 1955
19. Brakes Nand v. Rosheni Devi, AIR 1989 HP 11; However, agreement in restraint of alienation is
void under Sec. 10 only if such agreement is registered; Unregistered agreement operates as personal
covenant which is binding on the parties. (See Mulla's TRANSFER OF PROPERTY ACT.
Ed. VII, p. 93).
19a Achemmal v. Rajamanickam Karthikeyen, AIR 2010 Mad 34.
20. AIR 1932 PC 158.
21. Masalar Shivam Swami v. Mehedes Guruling Swami, AIR 1988 Bom. 116; Dinesh Chhapolin v. State
of Orissa, AIR 2008 NOC 844 (On) (DB), a lease of land was heritable and transferable, a restriction
that its alienation was to be only with the permission of the Collector was treated as
void.

[5.10
A piece of land was purchased, not acquired, for the purposes of a University. Subsequently the land
was transferred to a Development Authority for housing complex The sale deed contained no
restriction on use. The University had no objection. The Court held that the erstwhile landowners who
had a decade ago transferred their land at full value could not be permitted to question the use of
land 21a
Restraint on alienation in compromises.-Section 10 provides that where a property is transferred
subject to any condition absolutely restraining the transferee from disposing of the property, the
condition is void. Compromise is not a transfer of property within the meaning of Section 5 of this Act.
Therefore, Section 10 is not applicable to compromises made in family settlements and such a
compromise is valid even if it involves any restraint on alienation In Mata Prasad v. Nageshar Sahai,22
there was a dispute over succession to the properties of the deceased between his nephew and his
widow It was compromised between them under which the widow was to hold the possession of the
property for her life while admitting the title of the nephew but nephew was restrained from
transferring the property during the life of the widow The Privy Council held that the compromise was
valid and enforceable and could not be treated as a condition restraining alienation.
Applicability of Section 10-The provisions laid down in Section 10 are based on the rule of equity, that
property should not be made inalienable permanently Therefore, the provisions of this section may
be applied also to those transfers which are not governed by this Act. For example, Section 10 has
been applied to transfers in Punjab where the Transfer of Property Act is not applicable or it has been
made applicable to a transfer to a Hindu idol which is outside the scope of this Act.24
However, the law laid down under Section 10 does not apply where the transfer is by operation of law.
Therefore, the general restriction on assignment does not apply to an assignment by order of the
Court or an assignment made under any law Restraint on alienation included in a sale by the order of
the Court under an execution would not be vold under Section 10,25 In Laxmamma v. State of
Karnataka, 26 it was held that a grant made by Government in accordance with law is not a transfer
within the meaning of this Act; therefore, a permanent restraint on alienation of the grant, if
authorized by law applicable to such grants, would be a valid restraint.
EXCEPTIONS
Section 10 makes two exceptions to the general rule that conditions absolutely restraining alienation
are void. The first exception is in respect of
21a jagar Singh v. State of Punjab, AR. 2012 & 1 145. The acceptance of the purchase by the Vice-
Chancellor of the University was an additional endorsement, not affecting the status of the State
Government as a transferee.
22. ALR 1925 P.C. 772
23 Nand Singh v. Pratap Das, [Link]. 1924 Lah. 674.
24. Rabendraji Maharaj v. Lalji Singh, AIR. 1959 Pat. 49.
25 Mahendra v. Cegan Chandra, [Link] 1925 Cal 471.
26 AIR 1983 Kam. 237
leases and the second is regarding a property which is transferred to a married
woman.
Leases.-Lease is a transfer of limited interest where the transferor (lessor) reserves the ownership and
transfers only the right of enjoyment to the transferee (lessee). Therefore, a lessor can impose a
condition on the lessee that he shall have no right to sub-lease or assign his interest to another
person. Such condition, although it is a restraint on the lessee (transferee) against alienation, is valid
and he cannot transfer his interest without the consent of
the lessor
The exception with regard to leases is applicable also to permanent or perpetual leases. In Raghuram
Rao v Eric P. Mathias," the Supreme Court held, in the case of perpetual leases, too, any condition
restraining the lessee from alienating leasehold property is not illegal or void. Explaining the law on
this point the Supreme Court observed:
"This section does not carve out any exception with regard to perpetual or permanent lease It applies
to permanent or temporary lease. In view of the specific exception carved out in case of lease, in our
view, there is no substance in the contention......that the condition which restrains the lessee from
alienating (perpetual) leasehold property is in any way illegal or void."
Thus, a condition in a perpetual lease that lessee's right is not transferable, is a valid condition. If the
lessor does not expressly say that breach of this condition would terminate the lease then, upon the
breach of such restraint (ie. where lessee transfers his interest) the remedy of the lessor is not a suit
for ejectment. The lessor can file a suit against the lessee only for injunction and damages for the
breach of condition.
Married Women-Where a property is transferred to a married woman who is not a Hindu, Muslim or
Buddhist, the transferor can validly impose a condition restraining alienation. Such condition shall not
be void under Section 10. Similar provisions are there in the Married Women's Right to Property Act,
1874 which is applicable to married women who are not Hindu, Muslim or Buddhist. The personal
laws of Hindus, Muslims and the Buddhists already provide for the validity of restraint on alienation of
the married women of these communities. Thus, a property may be transferred to a married Hindu
woman for her life with a condition that she cannot transfer it. Reason behind such a restraint is to
safeguard the interest of the married women who could be easily exploited by their unscruplous
husbands.
Idol.-A deed dedicating property to deity contained a condition absolutely restraining its transfer. The
deed was held to be valid. Section 10 did not apply as a deity is not a living person. Protection from
alienation of minors property is also available to the property of a deity. Permission of the District
Judge is necessary for alienating by manager the property of the deity Insecurity of the
27 AIR. 2002 S.C.797.

THE TRANSFER OF PROPERTY ACT, 1882 family of the shebait due to communal violence was not
regarded by the Court 1811 as a legal necessity 25
Right of repurchase.-There was an agreement that the property was to be reconveyed to the vendor
within ten years. The vendor subsequently transferred his right of taking back the property to another
person, (plaintiff in this case). It was held that the plaintiff had become entitled to repurchase the
property under the agreement of re-conveyance. There was nothing to show any restriction upon the
right of assignment or transfer. The right of repurchase could not be treated as personal.28
11. Restriction repugnant to interest, created.-Where, on a transfer of property, an interest therein is
created absolutely in favour of any person, but the terms of the transfer direct that such interest shall
be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of
such interest as if there were no such direction.
Where any such direction has been made in respect of one piece of immovable property for the
purpose of securing the beneficial enjoyment of another piece of such property, nothing in this
section shall be deemed to affect any right which the transferor may have to enforce such direction or
any remedy which he may have in respect of a breach thereof.
SYNOPSIS
Restraint on mode of enjoyment.
Transfer of absolute interest.
Exception.
Difference between Sec. 10 and Sec. 11.
RESTRAINT ON MODE OF ENJOYMENT
Section 11, provides that in the transfer of absolute interest of property, if the transferor imposes any
condition restraining the mode of its enjoyment, the condition is void and the transferee is not bound
by such condition. Absolute interest in a property means ownership. Where a property is transferred
absolutely, there is transfer of ownership and the transferee gets all the incidents of ownership
including the right to use or enjoy the property as he likes
A condition attached to the transfer of an absolute interest would affect the full ownership and would
make it something less than a full ownership. It is against the very nature of the transfer that
ownership is given to the transferee and at the same time his right of enjoyment of the property is
either postponed or curtailed.
28. Shyamal Ranjan Mukherjee v. Nirmal Ranjan Mukherjee, ALR. 2008 NOC 568 (All).
28a Raghunath Bali v. Pandit Srinius, [Link]. 2012 Utt. 100.
5.111
91
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES Transfer of absolute interest.-Section 11 is
applicable only where an absolute interest or ownership has been transferred. Where ownership is
transferred, the transferee gets ownership right which includes the right of enjoyment of the property
as he likes. Sale, exchange or gift is a transfer of ownership or absolute interest. A condition or
direction in a sale, exchange or gift that the transferee can or cannot use or enjoy the property in a
particular manner is repugnant to the ownership rights and is, therefore, void.
Illustrations
(1) A sells his agricultural lands to B with a condition that B can cultivate only wheat but cannot grow
the crops of paddy The condition is void and B is free to grow the crops of paddy.
(ii) A sells a house to B directing B that he cannot reside in it but can use it only as a godown or shop.
The condition being vold, B is entitled to use the house as his residence.
(iii) A makes a will of his properties in favour of his two sons B and C jointly with a condition that the
property cannot be partitioned till B and C attain the age of majority. Right to effect partition being an
incident of joint-ownership on the restraint imposed against this right is void because restriction on
the right of partition is regarded as a restraint on the right of enjoyment of the property. (ix) A sold his
farm to B with condition that B-pays to A Rs. 5000/- per year so long as B is in the enjoyment of the
property. The condition is void and B is not bound to pay Rs. 5000/- to A annually.30 (v) A makes a gift
of his house to B with a condition that B shall not receive any income from this house for a period of
twenty years. The condition is void as being repugnant to the right of enjoyment. This section is not
applicable where the transfer is merely of partial interest in the property. In the transfer of partial or
limited interest, there is no transfer of ownership. For example, lease is a transfer of merely a partial
interest in which the lessee gets only the right of enjoyment of the property not its ownership.
Condition imposed by a lessor restraining the mode of enjoyment of the property is valid and the
lessee is bound by it. Similarly, where A transfers his land to B only for purposes of cultivation of crops
for a period of ten years B does not get absolute interest, he gets only a partial interest namely, the
right of cultivation. Here, if A imposes a condition that B cannot plant mango-trees on the land, the
condition is valid and B is bound by it.
Where a land is transferred for life', there is no transfer of absolute interest because in such cases the
transferee gets only the right of enjoyment of the property during his life. After his death, the
property reverts back to the transferor or his heirs or passes on to any other person as directed by the
transferor. Therefore, in a transfer of property for life, the condition or direction
29. See Untro Singh v. Balden Singh, AIE 1933 Lahore 201 30. See Lili v. Firm Ram Dhari, AIR 1971 P&H
87.
30. 92
31. THE TRANSFER OF PROPERTY ACT, 1882
32. limiting the mode of enjoyment is not hit by Section 11 and the condition or 15.11 direction is
valid.
33. EXCEPTION
34. The second paragraph of this section is an exception to the rule. It provides that a condition or
direction restraining the mode of enjoyment may be made by the transferor provided it is for the
beneficial enjoyment of transferor's own adjoining property Thus, if a person owns two properties say,
a house in which he is residing and an adjacent land he can impose a condition on the purchaser that
he would not obstruct the air or light from the windows of his house which open on the side of the
land sold. This condition, though curtails the right of enjoyment of the purchaser, is a valid condition
because it is meant for the beneficial enjoyment of transferor's own property. This exception is based
on the rule laid down in Tulk v. Moxhay where such conditions were described as restrictive
covenants and are regarded as part of the property for the beneficial enjoyment of which they are
imposed on the transferee. Under Section 11 the conditions restraining the mode of enjoyment are
valid only in the following
35. cases
36. (i) Where the condition has been imposed by the transferor himself; a condition imposed by any
other person is not valid.
37. (ii) Where the condition restraining mode of enjoyment has been imposed for the beneficial
enjoyment of transferor's own property; transferor cannot impose and enforce such restrictive
conditions for the benefit of another's property. Since such restrictive covenants exist for the
beneficial enjoyment only of transferor's property, they can be enforced only by the transferor or a
subsequent assignee from the transferor of the property for the benefit of which the covenant was
made.33
38. The conditions or directions restraining the mode of enjoyment may be affirmative as well as
negative. Where the condition imposed on the transferee's mode of enjoyment is affirmative, the
transferee is bound 'to do' certain things even though it may amount to restraint on his mode of
enjoyment of the property In Indu Kakkar v Haryana State, I.D.C. Ltd.,34 there was an agreement
between an Industrial Corporation and the Industrial Units with a condition that the Industrial Units
should be established within specified time, failing which their interest was to cease. The Supreme
Court held that the condition was valid and not any restraint on mode of enjoyment. Accordingly, the
agreement between the parties was valid and binding on them. Where the condition is negative, the
transferee is restrained from doing certain things i.e. he is required 'not to do' certain things.
39. A donor gifted an entire building in favour of her daughter for life and thereafter to her sons
absolutely. By the same gift deed, a conditional right was conferred by the donor on her son to enjoy
a portion of the building. It was
40. 31. (1848) 41 ER 1143.
41. 32. The rule laid down in Tult v. Mazhay has been incorporated in Section 40 of the Act. 33 Leela v.
Ambujeshy. ALR 1989 Ker, 308.
42. 34. ALR 1999 S.C. 296
43. 5.12)
44. OF TRANSFERS OF PROPERTY BY ACT OF PARTIES held that the creation of a conditional right
simultaneously with creation of title was not violative of Section 11 The section has no application is
such a case The grant was not an encroachment on the absolute right of the daughter's
45. sons 35
46. Mlustrations
47. A is owner of two properties, a house and a land adjacent to it. A sells the land to B with a
condition that B shall spend money in repairing and maintaining the drain of his house passing
through the land sold. B is bound by this condition and A or his assignees are entitled to enforce it
against B. Here the restrictive covenant is affirmative in character
48. (ii) A sold certain houses surrounding an open piece of land to B with the condition that B and his
heirs shall not make any construction over the piece of land. B and his heirs cannot construct any
building over land. Here the restrictive covenant is negative in character. Difference between Sec. 10
and Sec. 11-Under Sections 10 and 11 both, the condition subsequent curtailing the rights of a
transferee are declared void. But the provisions of these two sections may be distinguished as under-
49. (1) Section 10 is applicable to the transfers of absolute interest as well as fimited (partial) interest
whereas, Section 11 is applied to transfers of only absolute interest (ownership).
50. (2) Section 10 refers to a restraint on alienation i.e. under Section 10 the condition is that
transferee cannot transfer the property In Section 11 the restraint is on the mode of enjoyment i.e.
under Section 11, the condition is that transferee cannot have the free enjoyment of the property.
51. 12. Condition making interest determinable on insolvency or attempted alienation.-Where
property is transferred subject to a condition or limitation making any interest therein, reserved or
given to for the benefit of any person, to cease on his becoming insolvent or endeavouring to transfer
or dispose of the same, such condition or limitation is void.
52. Nothing in this section applies to a condition in a lease for the benefit of the lessor or those
claiming under him.
53. SYNOPSIS
54. Insolvency of the transferee. Applicability to leases.
55. Section 12 provides that where a property is transferred subject to a condition or limitation that
the interest created thereby is to cease to exist on transferee becoming insolvent or on his
attempting to transfer it, the condition is
56. 35. Subal Chandra Maity v Usha Banerjee, AIR 2009 Cal 210 (DB); Prency v. Jose, AIR. 2010 Ker 1,
restriction on building anything on an identified part of the land transferred, valid, binding upon
subsequent transferee.

94
THE TRANSFER OF PROPERTY ACT, 1882
[S. 12
void This section invalidates two types of conditions (i) Conditions which limit or restrict any
attempted transfer by the transferee and (ii) Conditions which provide that the interest of the
transferee shall cease to exist when the transferee become insolvent.
The conditions which restrain any endeavour to transfer, are by way of limiting the ownership rights
of the transferee and are, therefore, void also under this section on the same principle as conditions
restraining alienations or enjoyment are void under Sections 10 and 11. The object of this provision is
to protect the interest of creditors. Although it is unjust to lay down a condition restricting transferee
from disposing of his property, it would be equally unjust if such transferee is allowed to defeat the
interest of his creditor who had advanced money only on the basis of his property In the absence of
this provision, the transferee may incur debts and is then adjudged insolvent. The result would be
that creditor can never recover his money because the property would already cease to be the
property of the debtor Section 12 avoids this
situation.
Under Sections 31 and 32 of this Act, a provision has been made that a condition subsequent which
lays down that the transferee's interest shall cease to exist upon the happening of an uncertain future
event, may validly be imposed by the transferor Section 12 is an exception to this general rule.
Section 12 is applicable whether the interest transferred is absolute interest or a partial interest. Thus
in the transfer or settlement of an interest 'for life' the condition that it shall cease to exist upon
transferee becoming an insolvent would be a void condition under this section.
Illustrations
A settles his properties in trust for his life or until he becomes insolvent and (i) upon his death, or
(ii) becoming insolvent (ie. on happening of any of these events) to his wife B. A becomes insolvent.
The condition that on A's being bankrupt the interest is to pass on to B, is void. Therefore, upon A's
insolvency, the property shall vest in the Official Receiver and not in B. Insolvency of the transferee.-A
person becomes insolvent when he ceases to pay his debts in the usual course of business and is
unable to pay them. Such person is formally declared as insolvent under the Insolvency Acts, Where a
person is adjudged insolvent his properties vest in the Official Receiver.
Applicability to leases.-Section 12 is not applicable where the transfer is by way of lease. When a
property is leased, there is transfer of only partial interest; there is no transfer of absolute interest.
The lessor, being owner of the property retains his jus disponendi or the right to dispose of the
property Therefore a lessor while granting the lease may impose any condition on the lessee upon the
non-fulfilment of which the lease would be forfeited. Thus if a lessor imposes à condition in the lease
that the lease shall be determined (or
36. For example, Provincial Insolvency Act, Presidency-Towns Insolvency Act etc.
5.13]
95
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES terminated) upon lessee becoming insolvent, the
condition is vali. However, the condition that lease is to be determined when lessee becomes
insolvent may be binding only on the lessee; the assignee of the lessee is not bound by it. Where the
lessee assigns the term and thereafter becomes insolvent, the condition shall not apply,37
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.
Illustration
A transfers property of which he is the owner, to B, in trust for A and his intended wife successively
for their lives and, after the death of the survivor, for the eldest son of the intended marriage for life,
and after his death for A's second son. The interest so created for the benefit of the eldest son does
not take effect, because it does not extend to the whole of A's remaining interest in the property.
SYNOPSIS
No transfer to Unborn Person.
Transfer for Benefit of Unborn Person Two Rules.
Prior Life-Interest.
Only Absolute Interest may be given.
Girjesh Dutt v. Data Din.
Hindu Law and Muslim Law.
English Law
TRANSFER FOR THE BENEFIT OF AN UNBORN PERSON Transfer to Unborn Person.-There cannot be
any direct transfer to an unborn person. An unbom person means a person who i. not in existence
even in mother's womb. A child in mother's womb or, a child en ventre sa mere is a competent
transferee. Property can be transferred to a child in mother's womb. But, property cannot be
transferred to any person who is not even in the mother's womb because such person is an unborn
person. Accordingly, Section 5 of this Act provides that transfer of property takes place only between
two living persons. This means that transferee must also be in existence at the date of the transfer.
There is a valid reason why property cannot be transferred directly to an unborn person. Legally
speaking, every transfer of property involves transfer of interests. When a property is transferred, the
transferor divests (or takes out from) himself of that interest and vests it immediately in the
transferee. So, if ' a property is transferred directly to a person who is not in existence, the interest
37 See Smith v. Gronow, (1891) 2. Q.B. 394, cited in Muila; TRANSFER OF PROPERTY AGE, Ed. VIL,
P.103.

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THE TRANSFER OF PROPERTY ACT, 1882
15.13
so transferred shall be divested or be away from the transferor but it would have to remain in
abeyance (void) and wait for the transferee to come into existence, in whom it could vest. Such
situation would be against the very concept of the interest. Accordingly, where A makes a gift of his
property to the eldest child of & who is unmarried, the gift is void.
Transfer For Benefit of Unbora Person.-Property cannot be transferred directly to an unborn person
but property can be transferred for the benefit of an unborn person. Section 13 provides that
property can be transferred for the benefit of an unborn person subject to following conditions
(1) Transfer for the unborn must be preceded by a life interest in favour of a person in existence at
the date of the transfer, and, (ii) Only absolute interest may be transferred in favour of the unborn. 1:
Prior Life-Interest.
The transfer for the benefit of an unborn must be preceded by a life interest in favour a living person
in existence at the date of the transfer. Where a person intends to transfer certain properties for the
benefit of an unborn person, such unborn is the ultimate beneficiary But since such unborn or
ultimate beneficiary is not in existence at the date of the transfer, property cannot be given to him
directly. There must be a prior life interest in favour of living person so that such living person holds
the property during his life and till that time the unborn would come into existence. After the
termination of this life interest i.e. after the death of the living person holding property for life, the
interest would pass on ultimately to the unborn who, by that time, comes into existence. Thus, in
between the transferor and the unborn there must be an intermediary living person who may hold
the property in trust for the benefit of the unborn In this manner successive life interests may be
created preceding (or prior to) the interest in favour of the unborn person.
Illustrations
(1) A transfers his house to X for life and thereafter to U. B who is an unborn son of A. The transfer of
house in favour of U. B is valid. Here since U. B is not in existence at the date of the transfer, A could
not transfer the house directly to him. So, A had to make a direct transfer of life interest in favour of X
who is a living person at the date of the transfer. After the death of X the interest of the house shall
pass on to U. 8 who is the ultimate beneficiary. (ii) A transfers his properties to X for life and then to Y
for life and then to Z for life and thereafter to the unborn child of Z. Here, X, Y and Z are all living
persons in existence at the date of the transfer. This disposition of property is valid. The property may
be given to more than one living persons successively for life' before it ultimately vests in the unborn
(X's unborn child)
II: Only Absolute Interest may be given
Only absolute interest in the property may be transferred in favour of an unborn person. Limited or
life interest cannot be given to an unborn person.
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OF TRANSFERS OF PROPERTY BY ACT OF PARTIES Transfer of property for life of an unborn person is
void and cannot take effect. Section 13 enacts that interest given to the unborn person must be the
whole of the remaining interest of the transferor in the property. When a property is transferred in
favour of an unborn, the transferor first gives a life interest to an existing person. After transferring
this, he retains with him the 'remaining interest of the property. This remaining interest with
transferor must be given to the unborn so that after the termination of prior life interest, the inborn
gets the whole i.e. absolute interest in the property.
In other words, whole of remaining interest' it the entire interest of the transferor less prior life
interest carved out of the ownership. The transfer in favour of the unborn and (plus) the prior life-
interest must exhaust the whole (entire) interest of the transferor in the property which is transferred
by him. If there is any other limitation which derogates or cuts short the completeness of the grant in
favour of the unborn, the transfer is void. Thus, a life-interest or other limited interest cannot be
given to the unborn.
Mlustrations
(1) A transfers his properties to X for life who is unmarried and then to the eldest child of X absolutely
The transfer in favour of eldest child of X is valid.
(ii) A transfers his properties to X for his life and thereafter to U.B. for life X is a living person at the
date of the transfer. U.B, is not in existence at the date of the transfer. Here, the transfer of life-
interest in favour of X is valid. But, transfer of life-interest in favour of U.B. is void because although
the transfer in favour of U.B. is preceded by a life interest to X but U.B. himself has not been given an
absolute interest. The result is, therefore, that X shall hold the property during his life but after his
death it shall not pass on the U.B. but shall revert back to A or (if A is dead by that time) to A's legal
heirs.
The above-mentioned two conditions namely, the transfer in favour of an unborn person must be
preceded by a life interest and that only absolute interest may be given to the unborn has following
legal consequences
(a) The intermediary person living at the date of the transfer is to be given only life interest. Giving life
interest or creating life-estate in favour of a person means giving him only the right of enjoyment and
possession. He has to preserve the property like a trustee during his life-time on behalf of the unborn.
If absolute interest is given to this living person, he may be entitled to dispose it of to anyone If he
retains it, the property after his death shall go to his legal heir and not to the unborn for whose
ultimate benefit the disposition was made.
(b) The unborn must come into existence before the death of the person holding property for life. If
the unborn comes into existence say, after one month after the death of the last living person (ie.
after termination of the preceding interest), the property is to revert back