What is property?

 Property is a bundle of rights and interest of a person has in respect of lands,

chattels or anything seen or not seen to the exclusion of others.
 The property is a generic term for all that a person has domain over. It has an
extensive application. While strictly speaking it would mean only the right a
person has in relation to some thing or a domain over it. It cannot be held to be
confined to a material object.
 Property signifies every species of property and it comprehends all a man’s
worldly possession.
 Some times the property may be owned by one person but yet another may have a
lease hold interest, an interest as a mortgagee, an interest to collect rent, an
interest to enjoy and so on so forth.
 In the modern days in contrast to the earlier period the property has a very wide
meaning. It covers various types of things or rights.
 The property should be given a liberal meaning. In fact it extends in respect of
various things which are found in a person’s day to day life
 Property cannot remain in vacuum. Someone must be there to hold it.

 Property –definition-- There is no specific definition of the word “property” in

transfer of property Act. However one has to look to its meaning in an all
comprehensive expansive manner.
 Property is either: real or immovable; or personal or movable". It then proceeds to
give the meaning of the expression "absolute property", "common property",
"intangible property", "movable property", "personal property" "private property"
and "public property” among others. The above definition shows the wide meaning
attached to the expression.
 It is said to extend to every species of valuable right and interest. It denotes
everything which is the subject of ownership, corporeal or incorporeal, tangible or
intangible, visible or invisible, real or personal. It includes "everything that has an
extendable value". It extends to every species of valuable right and interest.

AIR 1996 SC 2082 Vikas Sales Corporation

Vs.
Commissioner of commercial taxes
 Essentials of a valid transfer of property:-
1) Transfer must be between two or more living persons (including –
incorporated companies, registered and unregistered
associations ,partnership firms ,individuals)
2) The property transferred must be transferable
3) Transfer must not be opposed to nature , for an unlawful object or
consideration or to a person legally disqualified
4) Transferor must be competent to contract
5) Transfer must be in the mode prescribed by the act
6) Transfer must not offend the rule against perpetuity
7) If the transfer is conditional, the condition must not be illegal,
impossible, immoral or opposed to public policy.

List of what a property is

 Building,
 Car
 Money,
 Lease hold rights
 Right over an art piece, song, drama, story, prepared by oneself,
 Trade mark and trade names,
 Debt
 Goods or objects or things of tangible nature
 Goods or objects or things of intangible nature
 Books,
 Pen, pencil, television,
 Animals
 Gun, bombs, ammunition,
 Insignia,
 passport,
 To collect usufructs from tree till debt is wiped off,
 Claim for breach of contract
 Assets of every description whether corporeal or not, tangible or not
, deeds, instruments evidencing title,
 Actionable claims
 Property

Types of Property

Corporeal that In-corporeal

Tangible is which affects that which
Intangible
senses cannot be
seen or
e.g House, car, handled
boat or ring.
e.g shares,
Non-Intellectual Movable copyrights,
Intellectual Immovable patents,
trademarks,
stakes,

 Trade mark  Debts  House  Animals

 Copy right  Action claims.  Building  Vehicles,
 Patent  Insurance  land,
 Geographical policies.  electronic
 hereditary
indications  Money devices,
allowances,
 Industrial
 rights to ways,  jewellery
designs.
 lights,
 Lay outs  books,
 fisheries,
 Integrated  timber (wood)
 Trees
circuits
 Commercial
Goodwill
Kinds of Property
There are various types of properties under the law which is categorized as:

1. Movable Property

Movable property can be moved from one place to another without causing any damage. These are the
legislations which define movable property.

 Section 2(9) of the Registration Act, 1908- “Movable property” includes standing timber,
growing crops and grass, fruit upon and juice in trees, and property of every other description,
except immovable property."
 Section 22 of India Penal Code,1860- “Movable property” are intended to include corporeal
property of every description, except land and things attached to the earth or permanently
fastened to anything which is attached to the earth.”
 Section 3(36) of the General Clause Act, 1897- “Movable property” shall mean the property of
every description, except immovable property.”

2. Immovable Property

Immovable property is one that cannot be moved from one place to another place. This is the property
which is attached to the earth or ground.

 Section 3(26)The General Clauses Act, 1897 defines immovable property under Section
3(26), stating that the term shall include land, things affixed to earth or permanently fastened to
anything affixed to earth, and any benefits arising out of the land.

 Section 2(6) of the Registration act, 1908 states that an “Immovable property means and
includes land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries, or any
other benefit to arise out of the land, and things attached to the earth or permanently fastened to
anything which is attached to the earth, but not standing timber, growing crops nor grass.”
 This property of a value of more than Rs. 100/- is needed to be registered for which a
registration fee and stamp duty are to be paid.
 This property can be considered an ancestral joint property.

Following are recognized by courts as being immovable

property:-
(a) Right to way
(b) Right to collect rent of immovable property
(c) Right to collect dues from fairs held on a plot of land
(d) Right to fishery
(e) Office of a hereditary priest of a temple
(f) Hindu widow’s life interest of the income of the husband’s property
(g) A mortgagor’s right to redeem the mortgage
(h) Right to collect lac from trees
(i) A factory
 Following are not immovable properties
(a) A right of worship
(b) Right of a purchaser to have the lands registered in his name
(c) Royalty
(d) A machinery which is not permanently attached to the earth
(e) A decree for sale
(f) A right to recover maintenance allowance
(g) Government promissory notes
(h) Standing timber
(i) Growing crops
(j) Grass

Difference between movable and immovable property

Basis Movable Property Immovable property

Movement The movable property can easily be The immovable property cannot easily
Transported from one place to Be transported from one place to
another, without changing its shape, another. If transported, it will lose its
capacity, quantity or quality. original shape, capacity, quantity or
Quality.

Mere delivery with intention to transfer Mere delivery does not sufficient for a
the movable property completes the valid transfer. The property must be
Transfer
transfer. registered in the name of the
transferee.

Registration is optional under the Compulsorily registration under the

Indian Registration Act, 1908. Indian Registration Act, 1908, subject
Registration
to condition that its value if exceeds
Rs. 100.

Illustration Mango trees, if cut and sold for timber Mango trees, if sold for nourishment
purpose, are deemed as movable and for fruits, they are deemed as
property. immovable property.

Examples vehicles, books, utensils, timber, etc. Land, houses, trees attached to the
Ground; so long they are so attached.
ATTACHED TO EARTH
Attached to earth means anything:-
(a) Rooted in the earth as in the case of trees and shrubs.
(b) Imbedded in the earth as in the case of walls or buildings.
(c) Attached to what is so imbedded for the permanent beneficial
enjoyment of that to which it is attached .( doors, windows etc)

3. Tangible Property

Tangible property has a physical existence and can be touched. This type of property can be moved
from one place to other, without causing any damage, from this, we can say that this property is
movable in nature.

Examples: cars or other vehicles, books, timber, electronic devices, furniture, etc.

4. Intangible Property

Intangible property does not have any physical existence. These are properties with current or
potential value, but no intrinsic value of their own & cannot be touched or felt but hold value.

Examples include intellectual property like copyright, patent or GI, stock and bond certificates.
Franchises, securities, software& many more.

5. Public Property

Public property, as we can easily predict, means the property owned by the State for the Indian citizens.
It belongs to the public with no claim from an individual. The government or any assigned community
generally manages these properties for public utility.

A few common examples can be Government hospitals, parks, public toilets, etc.

6. Private Property

As the name suggests, private property permits a non-government body to own the property. It is
property owned by a juristic person for their personal use or benefit which can be of any nature
tangible or intangible, movable or immovable.

Common Examples include apartments, securities, trademarks, private wells, etc.

7. Personal Property

The personal property acts like an umbrella which includes all types of property. Individuals own this
kind of property, be it either tangible or intangible.
8. Real Property

Real property, also called real estate property, includes land and any development made on such land.
This kind of property is covered in immovable property. But why is this covered in immovable
property? See, for example, roads, mines, buildings, factory, crops, etc, which is created by development,
are all fixed with the land. This is immovable property, + any development on it, a further deliberation
of immovable property is a real property.

Other examples: Building (attached to the earth) using materials like cement, steel, mines, crops, etc.

9. Corporeal Property

Don’t get confused here. Corporeal property is any tangible property that can be touched and felt, if this
is similar to tangible property, then why a separate type of corporeal property came into existence?
This is a tangible property but it is mainly the right of ownership in material things of such property. All
kinds of tangible property can be considered corporeal property. It can be divided into two categories:
movable and immovable property and personal and real property as it is ownership rights.

10. Incorporeal Property

Incorporeal property means all kinds of intangible property. Again, then why such a category is
brought up? This type of property is also called intellectual property. It is an incorporeal right, meaning
having legal rights over things that cannot be touched or felt.
 CHAPTER I – PRELIMINARY
 1. Short title.
 2. Repeal of Acts.
 3. Interpretation clause.
 4. Enactments relating to contracts to be taken as part of Contract Act
and supplemental to the Registration Act.

CHAPTER II
TRANSFERS OF PROPERTY BY ACT OF PARTIES

TRANSFER OF PROPERTY, WHETHER MOVEABLE

OR
IMMOVEABLE

 5. “Transfer of property” defined.

 6. What may be transferred
 7. Persons competent to transfer.
 8. Operation of transfer.
 9. Oral transfer.
 10. Condition restraining alienation.
 11. Restriction repugnant to interest created.
 12. Condition making interest determinable on insolvency or attempted
alienation.
 13. Transfer for benefit of unborn person.
 14. Rule against perpetuity.
 15. Transfer to class some of whom come under Sections 13 and 14
 16. Transfer to take effect on failure of prior interest.
 17. Direction for accumulation.
 18. Transfer in perpetuity for benefit of public.
 19. Vested interest.
 20. When unborn person acquires vested interest on transfer for his
benefit.
 21. Contingent interest.
 22. Transfer to members of a class who attain a particular age.
 23. Transfer contingent on happening of specified uncertain event.
 24. Transfer to such of certain persons as survive at some period not
specified.
 25. Conditional transfer.
 26. Fulfillment of condition precedent.
 27. Conditional transfer to one person coupled with transfer to another
on failure of prior disposition.
 28. Ulterior transfer conditional on happening or not happening of
specified event.
 29. Fulfillment of condition subsequent.
 30. Prior disposition not affected by invalidity of ulterior disposition.
 31. Condition that transfer shall cease to have effect in case specified
uncertain event happens or does not happen.
 32. Such condition must not be invalid.
 33. Transfer conditional on performance of act, no time being specified
for performance.
 34. Transfer conditional on performance of act, time being specified.

ELECTION

 35. Election when necessary.

APPORTIONMENT

 36. Apportionment of periodical payments on determination of interest

of person entitled.
 37. Apportionment of benefit of obligation on severance.

TRANSFER OF IMMOVABLE PROPERTY

 38. Transfer by person authorized only under certain circumstances to

transfer.
 39. Transfer where third person is entitled to maintenance.
 40. Burden of obligation imposing restriction on use of land.
 41. Transfer by ostensible owner.
 42. Transfer by person having authority to revoke former transfer.
 43. Transfer by unauthorized person who subsequently acquires
interest in property transferred.
 44. Transfer by one co-owner.
 45. Joint transfer for consideration.
 46. Transfer for consideration by persons having distinct interests.
 47. Transfer by co-owners of share in common property.
 48. Priority of rights created by transfer.
 49. Transferee’s right under policy.
 50. Rent bona fide paid to holder under defective title.
 51. Improvements made by bona fide holders under defective titles.
 52. Transfer of property pending suit relating thereto.
 53. Fraudulent transfer.
 53A. Part performance.

CHAPTER III
SALES OF IMMOVABLE PROPERTY
 54. “Sale” defined.
 55. Rights and liabilities of buyer and seller.
 56. Marshalling by subsequent purchaser.

DISCHARGE OF ENCUMBRANCES ON SALE

 57. Provision by Court for encumbrances and sale freed there from.

CHAPTER IV

MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES

 58. “Mortgage”, “mortgagor”, “mortgagee”, “mortgage money” and

“mortgage-deed” defined.
 (b) Simple mortgage.
 (c) Mortgage by conditional sale.
 (d) Usufructuary mortgage.
 (e) English mortgage.
 (f) Mortgage by deposit of title-deeds.
 (g) Anomalous mortgage.
 59. Mortgage when to be by assurance.
 59A. References to mortgagors and mortgagees to include Persons
deriving title from them.
 RIGHTS AND LIABILITIES OF MORTGAGOR

 60. Right of mortgagor to redeem.

 60A. Obligation to transfer to third party instead of retransference to
mortgagor.
 60B. Right to inspection and production of documents.
 61. Right to redeem separately or simultaneously.
 62. Right of usufructuary mortgagor to recover possession.
 63. Accession to mortgaged property.
 63A. Improvements to mortgaged property.
 64. Renewal of mortgaged lease.
 65. Implied contracts by mortgagor.
 65A. Mortgagor’s power to lease.
 66. Waste by mortgagor in possession.

RIGHTS AND LIABILITIES OF MORTGAGEE

 67. Right to fore-closure or sale.

 67A. Mortgagee when bound to bring one suit on several mortgages.
 68. Right to sue for mortgage-money.
 69. Power of sale when valid.
 69A. Appointment of receiver.
 70. Accession to mortgaged property.
 71. Renewal of mortgaged lease.
 72. Right of mortgagee in possession.
 73. Right to proceeds of revenue sale or compensation on acquisition.
 74. Right of subsequent mortgagee to pay off prior mortgagee.
 75. Rights of mesne mortgagee against prior and subsequent
mortgagees.
 76. Liabilities of mortgagee in possession.
 77. Receipts in lieu of interest.

PRIORITY
 78. Postponement of prior mortgagee.
 79. Mortgage to secure uncertain amount when maximum is expressed.
 80. Tacking abolished.
 MARSHALLING AND CONTRIBUTION

 81. Marshalling, securities.

 82. Contribution to mortgage-debt.

DEPOSIT IN COURT

 83. Power to deposit in Court money due on mortgage. Right to money

deposited by mortgagor.
 84. Cessation of interest.

SUITS FOR FORECLOSURE, SALE OR REDEMPTION

 85. Parties to suits for foreclosure, sale and redemption. (85-90

repealed)

FORECLOSURE AND SALE REDEMPTION

 91. Persons who may sue for redemption.

 92. Subrogation.
 93. Prohibition of tacking.
 94. Rights of mesne mortgagee.
 95. Right of redeeming co-mortgagor to expenses.
 96. Mortgage by deposit of title-deeds.
 97. Application of proceeds.

ANOMALOUS MORTGAGES
 98. Rights and liabilities of parties to anomalous mortgages.

ATTACHMENT OF MORTGAGED PROPERTY

 99. Attachment of mortgaged property.

CHARGES
 100. Charges.
 101. No merger in case of subsequent encumbrance.
 NOTICE AND TENDER
 102. Service or tender on or to agent.
 103. Notice, etc, to or by person incompetent to contract.
 104. Power to make rules.
CHAPTER V
LEASES OF IMMOVEABLE PROPERTY
 105. Lease defined.
 106. Duration of certain leases in absence of written contract or local
usage.
 107. Leases how made.
 108. Rights and liabilities of lessor and lessee.

(A) RIGHTS AND LIABILITIES OF THE LESSOR

(B) RIGHTS AND LIABILITIES OF THE LESSEE
 109. Rights of lessor’s transferee.
 110. Exclusion of day on which term commences.
 111. Determination of lease.
 Doctrine of merger-
 Implied surrender-
 112. Waiver of forfeiture.
 113. Waiver of notice to quit.
 114. Relief against forfeiture for non-payment of rent.
 114A. Relief against forfeiture in certain other cases.
 115. Effect of surrender and forfeiture on under-leases.
 116. Effect of holding over.-Tenant at sufferance-
 117. Exemption of leases for agricultural purposes.
 118. “Exchange” defined.
 119. Right of party deprived of thing received in exchange.
 120. Rights and liabilities of parties.
 121. Exchange of money.
 122. “Gift” defined.
 123. Transfer how effected.
 124. Gift of existing and future property.
 125. Gift to several of whom one does not accept.
 126. When gift may be suspended or revoked.
 127. Onerous gifts. -Onerous gift to disqualified person-
 128. Universal donee.
 129. Saving of donations mortis causa and Muhammadan Law.
 CHAPTER VIII
TRANSFER OF ACTIONABLE CLAIMS
 130. Transfer of actionable claim.
 130A. Transfer of policy of marine insurance.
 131. Notice to be in writing, signed.
 132. Liability of transferee of actionable claim.
 133. Warranty of solvency of debtor.
 134. Mortgaged debt.
 135. Assignment of rights under policy of insurance against fire.
 135A. Assignment of rights under policy of marine insurance.
 136. Incapacity of officers connected with Courts of Justice.
 137. Saving of negotiable instruments, etc.

Law related to Transfer of Property Act

 Chapter 2 Rules (section 5-53A)

Section 5-37-Movable & immovable Section 38-53A- Immovable

 Chapter 1 (section 1-4)  Chapter 2 (section 38-53A)

 Chapter 2 (section 5-37)  Chapter 3 (section 54-57)
 Chapter 7 (section 122-129)  Chapter 4 (section 1-4)
 Chapter 8 (section 130-137)  Chapter 5 (section 1-4)
 Chapter 6 (section 1-4)
 CHAPTER I – PRELIMINARY

S 1. Short title.
This Act may be called the Transfer of Property Act, 1882.
Commencement- It shall come into force on the first day of July,
1882.
Extent- It extends in the first instance to the whole of India except
the territories which, immediately before the 1st November, 1956,
were comprised in Part B States or in the States of Bombay, Punjab
and Delhi.

(NOTE: - Extend to whole of India)

But this Act or any part thereof may by notification in the Official
Gazette be extended to the whole or any part of the said territories
by the State Government concerned. And any State Government may
from time to time, by notification in the Official Gazette, exempt,
either retrospectively or prospectively, any part of the territories
Administered by such State Government from all or any of the
following provisions, namely- Section 54, paragraph 2 1 and sections
3, 59, 107 and 123. Notwithstanding anything in the foregoing part of
this section, section 54, paragraphs 2 and 3, and sections 59, 107 and
123 shall not extend or be extended to any district or tract of country
for the time being excluded from the Operation of the Indian
Registration Act, 1908, (16 of 1908), under the power conferred by
the first section of that Act or otherwise.

S 2. Repeal of Acts.
Saving of certain enactments, incidents, rights, liabilities, etc- In the
territories to which this Act extends for the time being the
enactments specified in the Schedule hereto annexed shall be
repealed to the extent therein mentioned. But nothing herein
contained shall be deemed to affect-
 (a) The provisions of any enactment not hereby expressly
Repealed;
(b) Any terms or incidents of any contract or constitution of
property which are consistent with the provisions of this
Act, and are allowed by the law for the time being in
force;
(c) Any right or liability arising out of a legal relation
constituted before this Act comes into force, or any relief
in respect of any such right or liability; or
(d) Save as provided by section 57 and Chapter IV of this Act,
any transfer by operation of law or by, or in execution of,
a decree or order of a Court of competent jurisdiction,
and nothing in the second Chapter of this Act shall be
deemed to affect any rule of Muhammadan law.

S 3. Interpretation clause.
In this Act, unless there is something repugnant in the subject or
context,-
“Immoveable property” does not include standing timber,
Growing crops or grass;

‘‘Instrument” means a non-testamentary instrument;

ATTESTED

Attested in relation to an instrument means attested by two or more

witnesses each of whom has ---
(a) seen the executants sign or affix his mark to the instrument
(b) seen some other person sign the instrument in presence of and by
the direction of the executants
(c) Received from the executants a personal acknowledgement of his
signature or signature of such other person.
NOTICE OF FACT

A person is said to have a notice of a fact -----

(a) when he actually know that fact (actual express notice)
(b) when but for ---
(i) willful abstention from an enquiry or search which he ought to
have made or
(ii) Gross negligence,

He would have known it (constructive or implied notice.)

“Registered”
Means registered in any part of the territories to which this Act extends
under the law for the time being in force regulating the registration of
documents;

ATTACHED TO EARTH
Attached to earth means anything:-
(d) Rooted in the earth as in the case of trees and shrubs
(e) Imbedded in the earth as in the case of walls or buildings
(f) Attached to what is so imbedded for the permanent beneficial
enjoyment of that to which it is attached ( doors, windows etc)

“ACTIONABLE CLAIM”
Means a claim to any debt, other than a debt secured by mortgage of
immoveable property or by hypothecation or pledge of moveable
property, or to any beneficial interest in moveable property not in the
possession, either actual or constructive, of the claimant, which the Civil
Courts recognize as affording grounds for relief, whether such debt or
beneficial interest be existent, accruing, conditional or contingent;

“A PERSON IS SAID TO HAVE NOTICE”

Of a fact when he actually knows that fact, or when, but for willful
abstention from an enquiry or search which he ought to have made, or
gross negligence, he would have known it.
Explanation I
Where any transaction relating to immoveable property is required
by law to be and has been affected by a registered instrument, any
person acquiring such property or any part of, or share or interest in,
such property shall be deemed to have notice of such instrument as
from the date of registration or, where the property is not all situated
in one Sub- district or where the registered instrument has been
registered under sub-section (2) of section 30 of the Indian
Registration Act, 1908 (16 of 1908), from the earliest date on which
any memorandum of such registered instrument has been filed by
any Sub-Registrar within whose sub district any part of the property
which is being acquired, or of the property wherein a share or
interest is being acquired, is situated:
Provided that-
(1) The instrument has been registered and its registration
completed in the manner prescribed by the Indian Registration Act,
1908 (16 of 1908), and the rules made there under,
(2) the instrument or memorandum has been duly entered or filed,
as the case may be, in books kept under section 51 of that Act, and
(3) the particulars regarding the transaction to which the instrument
relates have been correctly entered in the indexes kept under section
55 of that Act.

Explanation II
Any person acquiring any immovable property or any share or
interest in any such property shall be deemed to have notice of the
title, if any, of any person who is for the time being in actual
possession thereof.

Explanation III
A person shall be deemed to have had notice of any fact if his agent
acquires notice thereof whilst acting on his behalf in the course of
business to which that fact is material:
Provided that, if the agent fraudulently conceals the fact, the
principal shall not be charged with notice thereof as against any
person who was a party to or otherwise cognizant of the fraud.

S 4. Enactments relating to contracts to be taken as part of

Contract Act and supplemental to the Registration Act.
The Chapters and sections of this Act which relate to contracts shall
be taken as part of the Indian Contract Act, 1872 (9 of 1872). And
section 54, paragraphs 2 and 3, and sections 59, 107 and 123 shall be
read as supplemental to the Indian Registration Act, 1908 (16 of
1908)
 CHAPTER II
TRANSFERS OF PROPERTY BY ACT OF PARTIES

(A) TRANSFER OF PROPERTY, WHETHER MOVEABLE OR IMMOVEABLE

SECTION -5

TRANSFER OF PROPERTY DEFINED:

Any act by which a living person (including a company or association or body of

individuals) conveys property in present or in future to ---
(a) One or more other living persons; or
(b) Himself
(c) Himself and one or more other living persons

Living persons includes:-

(a) incorporated companies

(b) registered and unregistered associations
(c) partnership firms
(d) individuals

Legal rules for a valid transfer

• Property must be transferable.

• Transferor and transferee must be competent.
• Consideration and object of transfer must be lawful.
• Transfer must take place as per method prescribed under the Act.

Note:-Exception –section 13 of TPA’1882

 SECTION-6

Subject matter of transfer – Section 6 (what may transfer –any kind of property)

Every kind of property can be transferred. But following properties cannot be

transferred:

 Chance of an heir apparent.

 Right of re-entry.
 Transfer of easement.
 Restricted interest.
 Right to future maintenance.
 Right to sue.
 Transfer of public office, salary and pension

Property which cannot be transferred – Section 6

Chance of heir apparent (Spes succession is)

This means an interest which has not arisen in future. It is in anticipation or hope of
succeeding to an estate of a deceased person. Such a chance is not property and as such
cannot be transferred, if it is transferred, the transfer is wholly void.

Example: A is the owner of the property and B is his son. B is the heir of A. This type of
property which B hopes to get after the death of the father cannot be transferred, during
the life time of A.

Right of re- entry

It means right of lessor to re-claim the leased property from lessee on breach of contract
or express condition. It is personal benefit which can't be transferred.

Example: If A leases his property to B with a condition that if he sublets the leased land,
A will have the right to reenter, i.e., the lease will terminate. This right to reenter is
personal benefit available to A, which can’t be transferred.

Transfer of easement
An easement means an interest in land owned by another that entitled his holders to a
specific limited use or enjoyment. An easement cannot be transferred.

Example: If A, the owner of a house X, has a right of way over an adjoining plot of land
belonging to B, he cannot transfer this right of way to C. But if A transfers the house itself
to C, the easement is also transferred to C.

Restricted interest

Certain rights enjoyment of which is reserved for certain person. If it is so, it is known as
restricted interest. Restricted interest can’t be transferred to another person. It includes
‘religious office’.

Example: The right of PUJARI in a temple to receive offering. The right of WIDOW under
Hindu law to residence.

Right to future maintenance

Right to future maintenance is personal benefit to whom it is granted. However arrears

of past maintenance can be transferred.

Example: The right of a Hindu widow to maintenance is a personal right which cannot
be transferred.

Right to sue

A mere right to sue cannot be transferred. The right refers to a right to damages arising
both out of contracts as well as torts.

Example: A commits an assault on B. B can file a suit to obtain damages; but he cannot
assign the right to C and allow him to obtain damages.

Transfer of public office

It is against public policy to transfer public offices, salary and pension. Pension and
salary are given on personal basis, it can’t be transferred.

Occupancy Rights

Transfer of occupancy rights of a tenant is prohibited.

Example: - Tenant can’t transfer his right of tenancy and farmer can’t transfer his right
to land if he himself is a lease.
DEFINATION OF BARE ACT-Section 7 in the Transfer of Property Act, 1882
Every person competent to contract and entitled to transferable property, or authorized
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.

SECTION-7

Persons competent to transfer

Section 7: General Explanation

Generally this section says that -

To enable a person to transfer a property, he must satisfy the following conditions:-

(1) He must be competent to contract, and

(2) He must have title to the property or authorized to transfer, if it is not his own.

The word "transfer" includes - Sale, Mortgage, Lease, Gift and Exchange.

By Sec. 11 of the Contract Act, every person is competent to contract if he fulfills these three
conditions:

(1) Age of Majority: The transferor must have attained the age of majority. Under
Section 3 of the Indian Majority Act, 1875, person attains majority at the age of 18 and, if
a guardian is appointed under the Guardians and Wards Act, 1890, he would attain
majority at the age of 21.
(2) Sound Mind: Under S. 12 of the Contract Act, a person is of sound mind for the
purpose of making a contract if he is capable of understanding it and of forming a
rational judgment as to its effect upon his interests.

(3) Disqualified Contract: A person who is disqualified from contracting by any law to
which he is subject is incapable of making a transfer also. Thus, if a person whose
property is under the management of a Court of Wards transfers such property, the
transfer is void.

Operation of transfer.

Section-8

General Explanation
This Section mainly talks about one thing that if property is transferred then legal
incidents will also transfer i.e.

1. If Land is being transferred then Easement attached to Land will also transfer.
2. If House is being transferred then locks, keys, bars, windows etc will also transfer.
3. If Machine is being transferred then the movable parts of machine will also
transfer.

Section 8: Bare Act Explanation

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 incidents 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;

Easement includes: Right of way, Right of Light, Right of Water, Right of Fisheries.

• Where the property is machinery attached to the earth, the moveable parts
thereof; and, Example - Nut, Bolt, Handle, Cover etc.
• 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;
 • where the property is a debt or other actionable claim, the securities therefore
(except where they are also for other debts or claims not transferred to the
transferee), but not arrears of interest accrued before the transfer;

In this section the word 'debt' only refers to only those debts which come within the
general definition of actionable claim.

Illustration - A, B and C are related. A borrows Rs. 10lack from B. Here A Pledge his bike
(Rs. 1 lack) to B. Here B has an actionable claim and If B transfer this actionable claim or
debt to C (Because B has taken Loan from C of Rs. 15 lack) then bike will also goes to C.

If A has also give his bike to X for security then B cannot Transfer it to C.

Where the property is money or other property yielding income, the interest or income
thereof accruing after the transfer takes effect.

Illustration - A gives a currency Note of Rs. 500 to B and B in exchange - gives Rs. 500 in
coins.

The interest which will accrue from B notes or C coins will remain with these two.

Illustration - A transfer his Fixed Deposit (Rs. 1 lack) to B. After one year of transfer Rs.
1 lack increased to Rs. 1, 10,000 then this interest (10,000) which is accruing after the
transfer will remain with B.

Section-9

Oral transfer
Oral transfer.-A transfer of property may be made without writing in every case in
which writing is not expressly required by law.

Writing is necessary in the case of the following instruments:

(a) Sale of immovable property of the value of Rs. 100 or upwards. (Sec. 54).
(b) Sale or reversion or other intangible thing.
(c) Simple mortgage irrespective of the document secured. (Sec. 59).
(d) All other mortgages securing Rs. 100 or upwards.
(e) Leases of immovable property from year to year or for a term exceeding one year or
reserving a yearly rent. (Sec. 107).
(f) Exchange (subject to the same Rules as sale). (Sec. 108).
(g) Gift of immovable property. (Sec. 123).
(h) Transfer of actionable claim. (Sec. 130)
CASE LAW:-
In the case of Keshri Mull v Sukan Ram, it was held that oral gift though permissible under
the section is not valid without delivery of possession. Validity of oral partition was
challenged in the case of Peddu Reddiar v. Kothanda Reddi and the judgment finally
upheld the validity of oral partition of property. Subsequently, there have been various
cases which established the fact that when writing is not required by Act, transfer can be
made orally.

Section-10

Restraint on transfer or Condition restraining alienation.

Section-10 in the Transfer of Property Act, 1882

Condition restraining alienation.-

• If any property is transferred subject to a condition or limitation which absolutely

restrains the transferee from parting with or disposing of his interest in the property
such condition or limitation and not the transfer itself is void.

• Restraint on alienation of property may be either absolute or partial.

• Absolute restraint is void and transfer is valid, while partial restraint as regard to time,
place or person is valid.

• Absolute restraint: If A transfers property to B and his heirs with a condition that if
the property is alienated, it should revert back to A. Such a condition, being absolute, is
void.

• Partial restraint: A transfer property to B with condition that he should not alienate it
in favour of D who is his trade competitor. It contains partial restraint and therefore
valid.

• In case of lease transition, lessor can impose condition that the lessee shall not sub
lease it.

• In case of married woman, a condition that she will not have right during her marriage,
to transfer the property.
Illustrations -
(1) A transfers his property to B with a condition that B shall never sell it. This condition
is void and B may sell it.

(2) A made a gift of a house to B with a condition that if B sold during the life time of A's
wife, she should have an option to purchase it for Rs. 10,000. The value of the house was
Rs. 10, 00,000. This was held to be in effect an absolute restraint and void. (Rosher v.
Rosher 1884)

(3) A transferred a field to B with a condition that if B sold it, he must sell it to C and to
nobody else. The condition was held to be void inasmuch as the name of a person who
alone was permitted to purchase might be so selected as to render it reasonably certain
that he would not buy the property at all.

Section-11
Restriction repugnant to interest created.

Section 11 Transfer of Property Act

[S-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.

Illustrations: (i) A sells B a piece of land with a condition that B will not build upon it. B
takes the land, and attempts to build a house on it. A cannot prevent him from doing so,
as B, as the owner has the right to enjoy it in any manner that he likes. Here, B can
rightfully ignore this condition, without affecting the validity of the transfer.

(ii) A sells a field to B with the condition that B must grow vegetables/ crops on it. After
the transfer has been effected, B may put it to any use he wants.

Absolute Transfer

Absolute interest indicates a transfer by way of sale, exchange or an unconditional gift.

Section 11, does not apply to those transfers, through which, the transferor conveys, one
or some rights in the property to the transferee, while retaining some rights in his own
favour, such as a lease or a mortgage.

Bare Act Continue:

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.

Illustration (i): A owns a house, X, and the land Y, adjoining X. He sells this Y to B, and puts
a condition, that he would leave open a four feet wide space adjoining A's own land, and
would not built upon it, so that the air and light of his house X is not obstructed. This
condition is valid and enforceable.

Illustration (ii): A owns two properties X and Y and sells X to B and imposes a condition
on B that B shall lay out money in building and repairing a drain passing over X adjoining
Y. The restriction is valid and enforceable.

Positive and Negative Conditions or Covenants

Conditions or directions that the transferor may impose upon the transferee to secure
better enjoyment of his own property can be of two types:

Positive or affirmative conditions, i.e., they direct the transferor to do something

(Illustration 2) and

Negative conditions, i.e., they restrain the transferee from doing a particular thing
(Illustration 1).These conditions are also called covenants.

Section-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 or for the benefit of any person, to cease on his becoming
insolvent or endeavoring to transfer or dispose of the same, such condition or limitation
is void. Nothing in this section applies to a condition in a lease for the benefit of the
lessor or those claiming under him.

For example, A transfers the property absolutely to B, with a condition that if B becomes
insolvent or attempts to transfer it, his interest in the property will come to an end, B is
entitled to ignore this condition without affecting the validity of the transfer.

Section 12 provides that if the transferor includes a condition in the deed that the interest
created in the transfer will be defeated if the transferee becomes insolvent, such
condition would be void.
Such a condition may deprive not only an owner a right of alienation, but also defeat,
at the same time, the rights of his creditors, who may want to enforce their claim against
this property on his attaining insolvency.

SECTION-13.
Transfer for benefit of unborn person

SECTION 13: GENERAL EXPLANATION

 The term 'unborn' here, refers to not only those, who might have been conceived but are not yet
born, i.e. a child in womb, but also includes those who are not even conceived.
 Section 13 gives effect to the general rule that a transfer can be affected only between living
persons. There cannot be a direct transfer to a person who is not in existence or is unborn.
This is the reason why section 13 uses the expression transfer 'for the benefit of' and not
transfer 'to' an unborn person.
 There are two condition to transfer property for benefit of unborn person :-
 Prior Interest:
 (i) First the Property: is given to living person for life and after his death to the person for
whose benefit the interest is created.
 (ii) Absolute Interest: The entire property must be transferred to unborn person. It is not
permissible to confer a life-interest on an unborn person.

Two types of Interest

Absolute Interest: Absolute interest refers to someone having a complete right to, or ownership of, a
property or an asset. After the death of the owner the property will be divided into his legal heirs.

Life Interest: A right to property that a person holds for life but cannot dispose of further. After the
death of life holder the Property will go to that person who is mentioned in title deed.

So Absolute Interest must be created in favor of Unborn.

SECTION 13: BARE ACT EXPLANATION

[S-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 transfer’s 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.

Section 13 provides for a specific mechanism for transferring property validly for the benefit of unborn
persons. The procedure is as follows:

(i) No Direct Transfer:-The person intending to transfer the property for the benefit of an
unborn person should first create a life estate in favour of a living person and after it, an
absolute estate in favour of the unborn person.
(ii) Enjoyment :-by person having Life Interest: Till the person, in whose favour a life interest is
created is alive, he would hold the possession of the property, enjoy its usufruct i.e. enjoy the
property.
(iii) Possession of Unborn (Now born): During his lifetime if the person, (who on the day of
creation of the life estate was unborn) is born, the title of the property would immediately
vest in him, but he will get the possession of the property only on the death of the life holder.

Illustration

(i) A, on 1 January 1980 executes a deed by which he creates a life interest in his property in favour of B
and further provides that this property is to vest absolutely in favour of his B's first child UB. B, on the
date of the transfer, was unmarried. He took the possession of the property, got married and a child was
born to him in 1985. The moment the child was born, the child took a vested interest in the property.
The possession continues with B, till his death in 2000, upon which the life estate will come to an end
and UB would take the possession of the property.

(ii) In the same example, take a situation, where B's child (UB) is born in 1985 but dies in 1987, i.e.,
during the lifetime of B. Here, since UB takes a vested interest in the property, he becomes the owner at
the time of the birth. The possession of the property will continue with B, till 2000 and on his death,
upon which the property will go to the heirs of UB.

CREATION OF PRIOR OR LIFE INTEREST

Suggested: Transfer of Property Act

As far as the creation of a prior interest is concerned, first, the property is given for life to a living
person. It is not necessary that life interest should be created in favour of only one living person. The
transferor is competent to create successive life interests in favor of several living persons at the same
time.

For instance, A transfers property to B for life, and after him, to C, and then to D again for their lives and
then absolutely to B's unborn child UB. This transfer is valid because B, C and D are living here and
there is no limit to confer life interest on living persons.

B (life interest)

C (life interest)

D (life interest)

UB (absolute interest)

On B's death, the possession would be taken by C and on C's death, by D. On D's death, the possession
would go to B's child, who should have come in existence by this time.

If he is not there, the property would revert back to A, if he is alive, else, to his heirs.

Section-14

Rule against perpetuity

Rule against perpetuity - Section 14

Perpetuity means continuing forever. Rule provides that no transfer of property can
operate to create an interest, which is to take effect after the life time of one or more
persons living at the date of such transfer, and the minority of some person who shall be
in existence at the expiration for that period, and to whom, if he attains full age, the
interest created is to belong.

Following are elements of rule against perpetuity:

• Property can be transferred to different living persons for their successive lives, before
property is transferred to unborn person.

• Unborn person must come in to existence before expiry of existing life of transferor.

• Transfer must be absolute.

Example 1:
A transfers a piece of land to his friend B for life, and afterwards to his friend C for life,
then to his friend D for life, and then to the son that may be born to B, for his son's life,
then to the son that may be born to C for his life, and then ultimately to the son that may
be born to D forever. In case of such disposition of the land, B cannot alienate the
property, because he has only a life interest therein. For the same reason, neither C nor
D, nor the sons of B and C can alienate the property. When the property finally vests in
D’s son, only he will be entitled to alienate the property. This would be certainly a
restraint on the free alienation of the piece of land for a considerable long period. Section
14 prevents this and lays down that one can tie up property and stop it’s free alienation
only for one generation, because all friends of A, now living must die within that time, as
they are all candles lighted together.

Example2:- A child is 10 year old and he will become owner of property at 18 years of
age. So the perpetuity is 8 years.

Exception to Rule against perpetuity

• When land is purchased or property is held by corporation.
• Where property is transferred by way of gift for benefit of public.
• Personal agreement.
• Agreement for perpetual lease.
• Gift to charity

Conditional Transfer
Meaning
• When an interest is created on the transfer of property but is made to depend on the
fulfillment of a condition by the transferee, the transfer is known as a conditional transfer.
• Such a transfer may be subject to a condition precedent or a condition subsequent.

Difference between condition precedent and condition subsequent

Section-15

Transfer to class some of whom come under Sections 13 and 14.

If, on a transfer of property, an interest therein is created for the benefit of a class of
persons with regard to some of whom such interest fails by reason of any of the rules
contained in sections 13 and 14, such interest fails in regard to those persons only and
not in regard to the whole class.
 Section-16

Transfer to take effect on failure of prior interest

Where, by reason of any of the rules contained in sections 13 and 14, an interest created
for the benefit of a person or of a class of persons fails in regard to such person or the
whole of such class, any interest created in the same transaction and intended to take
effect after or upon failure of such prior interest also fails.

Section-17

Direction for accumulation of income (sec-17)

Where the terms of transfer direct that income arising from property is to be
accumulated during a period longer than:-
(a) the life of the transferor, or
(b) a period of 18 years from the date of the transfer,
Such a direction is void to the extent to which the period which is so excess.

Such direction is valid and allowed:

(1) the payment of the debts of the transferor
(2) the provisions of portions for children or remoter issue of the transferor
(3) the preservation or maintenance of the property transferred
(4) When property is transferred for the benefit of the public or for the advancement
of religion, knowledge, commerce, health, safety, or any other object beneficial to
mankind.

Illustration: - X transfers his property to Z with a direction that the income of the said
properties shall accumulate during X‟s life and shall be given to M. The direction here is
valid only up to the life of Z and not after his death.

18. Transfer in perpetuity for benefit of public.

The restrictions in sections 14, 16 and 17 shall not apply in the case of a transfer of
property for the benefit of the public in the advancement of religion, knowledge,
commerce, health, safety or any other object beneficial to mankind.

VESTED INTEREST (section-19)

An interest is said to be vested when it is:-

 Not subject to any condition precedent

 When it is to take effect immediately or on happening of an event.

 The happening of event is certain.

Example:- A Hindu widow adopts a son but there is an agreement postponing the son’s
estate during the lifetime of the widow, the interest created in favour of adopted son is
vested interest

Problem:- A transfers property to B in trust for C and directs B to give possession of the
property to C, when he attains the age of 25. What interest does C take and when?

CHARACTERSTICS OF VESTED INTEREST

 does not depend upon fulfillment of condition

 creates present and immediate right

 enjoyment of the right may be postponed to a future date

 A vested interest is not defeated by the death of the transferee before obtaining
possession

 A vested interest is transferable as well as heritable.

20. When unborn person acquires vested interest on transfer for his benefit.

Where, on a transfer of property, an interest therein is created for the benefit of a person
not then living, he acquires upon his birth, unless a contrary intention appears from the
terms of the transfer, a vested interest, although he may not be entitled to the enjoyment
thereof immediately on his birth.

CONTINGENT INTEREST (S-21)

When on a transfer of property, an interest therein is created in favour of a person
to take effect:-
 Only on happening or not happening of a specified event.
 Event may be uncertain
Such person acquires contingent interest in the property.

CHARACTERISTICS.

 A contingent interest is solely dependent upon fulfillment of condition

 In case of non fulfillment of condition, interest fails.
 If the transferee dies before obtaining possession, contingent interest fails.
 It is transferable.
 There is no present right of enjoyment. Mere promise for giving such right.

Basis Vested interest Contingent interest

Condition It does not depend on It depends Upon of

fulfillment of any condition. fulfillment
condition.

Right &It present immediate right Right of enjoyment accrue

Enjoyment but its enjoyment may be on happening of an event which is
postponed to
uncertain.
Some future date.
Transferee’s It is not defeated by death It is defeated by death of
of transferee
Death
transferee

Transferability It is transferable and Contingent interest is no

heritable. n
transferable

22. Transfer to members of a class who attain a particular age.

Where, on a transfer of property, an interest therein is created in favour of such

members only of a class as shall attain a particular age, such interest does not vest in any
member of the class who has not attained that age.

23. Transfer contingent on happening of specified uncertain event.

Where, on a transfer of property, an interest therein is to accrue to a specified person if a

specified uncertain event shall happen, and no time is mentioned for the occurrence of
that event, the interest fails unless such event happens before, or at the same time as, the
intermediate or precedent interest ceases to exist.

24. Transfer to such of certain persons as survive at some period not specified.

Where, on a transfer of property, an interest therein is to accrue to such of certain

persons as shall be surviving at some period, but the exact period is not specified, the
interest shall go to such of them as shall be alive when the intermediate or precedent
interest ceases to exist, unless a contrary intention appears from the terms of the
transfer.

Illustration

A transfer’s property to B for life, and after his death to C and D, equally to be divided
between them, or to the survivor of them. C dies during the life of B. D survives B. At B’s
death the property passes to D