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General Reference To The Transfer of Property Laws In India -Section 5

Meaning of Transfer of Property (Sec 5):
Section 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, 1[or to himself] and one or more other living persons; and "to transfer property" is to perform such act. 1[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.]

Movable and Immovable property differences:

Movable Property

It can be transferred from one place to another. Registration is optional as per the Indian Registration Act, 1908. The Sales and Central Sales taxes are applied,

Immovable Property

It cannot be transferred without causing extensive damage to the property. The damage relates to the nature of the property. Registration is compulsory under the Indian Registration Act, 1908 if the value of the property is more than Rs. 100. The property needs to be registered at the Sub-Registrar's office. The appropriate stamp duty and the registration fee have to be paid.

What Is Included In Immovable Property / What Is Not Included In Immovable Property
What is included:
  • A right to collect rent from an immovable property;
  • A right to receive future rents and profits of land;
  • A tenancy right;
  • Coal mines;
  • A borewell that has been fastened in a permanent way to the earth;
  • Hereditary Offices;
  • Right to use water of a perennial stream.

What is not included:
  1. A right to worship;
  2. A copyright;
  3. The interest of a partner in a partnership firm;
  4. A right to get maintenance;
  5. A right to obtain the specific performance of an agreement to sell;
  6. Government promissory notes;
  7. A machinery that is not permanently attached to the earth and can be shifted from one place to another.

Meaning of "things attached to earth":
Concept of "Doctrine of fixtures":
A fixture is something fixed. In Transfer of Property Act, a fixture is a chattel which is affixed to the soil or land. But a chattel by merely being affixed to the land will not become an immovable property. There are two things which has to be considered for arriving at the point whether a chattel is an immovable property. This can be called the doctrine of fixtures.
  1. Mode of annexation
    If the chattel remains on the land by its own weight and is not affixed to the land there is a presumption that it is only a movable property. Here the criteria is the intention to make whether it a fixture or not. If the intention was to make it part of the land it is treated as a fixture.

    If the chattel is fixed to the land by means of nails or such things the presumption is that it is a fixture and become an immovable property.
  2. The Purpose for Annexing
    The tenure of beneficial enjoyment of the land is a necessary criterion to hold whether the chattel is an immovable property.
    If the purpose of annexation is the permanent beneficial enjoyment of the land the presumption is that it is a fixture.
Registration as Notice
The doctrine of constructive notice applies also in case of documents which are required by law to be registered. Where any transaction relating to immovable property is required by law to be, and has been, effected by a registered instrument, any person acquiring such property, shall be deemed to have notice of such instrument from the date of registration. It must be noted that registration amounts to notice only in those cases where the instrument is required law to be registered.

That is to say where the registration of a transaction is of a transaction is optional, the fact of registration does not amount to notice. Finally, it must be noted that the instrument must have been registered in the manner prescribed by the Indian Registration Act, 1908. If the instrument has been registered in the same registration sub-district as that in which the property is situate, it operates as notice from the date of registration.

If, however, the property is situate in several sub-districts, or if the registration has been effected in another district, the registered deed will not operate as notice until memorandum of such registration has been received and filed by the Sub-Registrar of sub-district in which the property is situate.

Actual Possession as Notice
Explanation II says that any person acquiring any immovable property shall be deemed to have notice of the title, if any, of any person who is in actual possession thereof.
In order to operate as constructive notice possession must be actual possession. Thus, if a tenant is not in the actual occupation of the land, his occupation is not constructive notice.

Where a certain party is not in possession, the presumption under the explanation to Sec. 3, does not arise, that the person purchasing the property title shall be deemed to have notice of the title, if any, of any person who is not in actual possession.

Notice to Agent
Explanation III, of Section 3 which dealt with notice to an agent ran as follows:
"A person is said to have notice of fact. When the information of fact is given to, or obtained by, his agent under the circumstances mentioned in Section 229 of the Indian Contract Act, 1872."

The general principle of the agency law is that an agent stands in the place of the principal for the purpose of the business in hand, his acts and knowledge being considered as the acts and knowledge of the principal.

Scope of the Rule:
The general rule that the knowledge of the agent is the knowledge of the principal has certain limitations.
The notice should have been received by the agent:
  1. As an agent
  2. During the agency
  3. In the course of the agency business
  4. In a matter material to the agency business

Fraudulent concealment of fact by agent.
The knowledge of an agent will not be imputed to his principal if the agent fraudulently conceals the facts. It is not sufficient to show that the agent concealed the fact. It must be shown that the party charging the principal with notice was party to the fraud or otherwise knew of the fraud.

Important Case Laws For References:

Right to Property:
Right to obtain shares of a company is a "property" and the donee's right to such shares cannot be thwarted only because such shares in the name of the donee was not entered into the register of the company;

Meaning of 'Transfer of Property' under the Act;

Transfer Of Property

Transfer of Property has been defined in S. 5 of the Transfer of Property Act meaning 'an act by which a living person conveys property, in present or in future to one or more other living persons and "to transfer property" is to perform such act'.

'Living person' has been defined to include a company or association or body of individuals whether incorporated or not, but nothing herein contained shall effect any law for the time being in force relating to the transfer of property to or by companies, associations or bodies of individuals.

The Legislature has not attempted to define the word 'property', but it is used n this Act in its widest and most generic legal sense. Section 6 says that 'property of any kind may be transferred', etc. thus an actionable claim is property; and so is a right to a re conveyance of land.It is used in this dual sense of the thing and the right of the thing in S. 54 which contrasts, 'tangible immovable property' with 'a reversion or other intangible thing'.

Property includes rights such as trade marks, copyrights, patents and personal rights capable of transfer or transmission such as debt. A share in the company is a movable property freely alienable in absence of any express restrictions under the Articles of Association of the company. The shares are, therefore, transferable like any other movable property and the vendee of the shares cannot be denied the registration of the shares purchased by him on a ground other than stated in the Article.

The words 'in present or in future' in S. 5 qualify the word 'conveys' and not the word 'property'. A transfer of property not in existence operates as a contract to be performed in the future which is specifically enforceable as soon as the property comes into existence.

Where the operative portion of the sale-deed recorded that all rights and privileges in the concerning the property either in present or accruing in future as vesting in the vendor were the subject matter of the sale and that the vendor retained no right of any kind, it was held that even the right of the vendor of re conveyance of the property was transferred by the sale-deed.

Interests in Property
As ownership consists of a bundle of rights, the various rights and interests may be vested in different persons. Absolute ownership is an aggregate of component rights such as the right of possession, the right of enjoying the usufruct of the land, and as on. These subordinate rights, the aggregate of which make up absolute ownership, are called in this Act interests in Property. A transfer of property is either a transfer of absolute ownership or a transfer of one or more of these subordinate rights.

The word 'transfer' is defined with reference to the word 'convey'. This word in English Law is its narrower and more usual sense refer to the transfer of an estate in land; but it is sometimes used in a much wider sense to include any form of an assurance inter vivos. Transfer must have an interest in the property. He cannot sever himself from it and yet convey it. A lease comes within the meaning of the word 'transfer'.

The definition of transfer of property in this section does not exclude property situated outside India or the territories to which the Act applies. It matters not that the property is situated outside India, or in the territories where the Act does not apply; for it the transfer is effected where the Act is in force, the rights of the parties are to be determined by the court under the Act leaving it to the party to prove that by the lex rei sitae, ie by the law of the land where the property is situated, the transaction in invalid or defective.

A transfer is not necessarily contractual, and included a deed of appointment. The section does not require that the 'living person' who conveys should necessarily be the same person as he who owns, or owned, the property conveyed by some living person; under the section, there may be a transfer by a person exercising powers over the property of another. Partition of joint Hindu family or Deed of partition of joint family property. A partition is not actually a transfer of property.

held that, partition does not give a coparcener a title or create a title in him; it only enables him to obtain what is his own in a definite and specific form for purpose of disposition independent of the wishes of his former co-sharers." A partition effects a change in the mode of enjoyment of property but is not an act of conveying property from one living person to another. Partition is not a transfer. It is only renouncement of existing rights in common properties in consideration is only renouncement of existing rights in common properties in consideration of getting exclusive right and possession over the specific plots. Partition is only a process of mutual renunciation by which common unspecified rights in larger extents are converted into exclusive right over specific plots.

The true effect of partition is that each coparcener gets a specific property in lieu of his undivided right in respect of the totality of the property of the family'. The Supreme Court in that case was considering the provisions of Rent Control Act and did not express any opinion on the correctness of certain decisions holding that a partition is a transfer within the meaning of S. 53. The correct view, it is submitted, is that a partition is not a transfer and therefore, strictly not governed by the Act, but that many of the provisions of the Act may govern partition as embodying rules of justice, equity and good conscience.

Partition of property does not amount to 'transfer' as contemplated by S.5. Doctrine of part performance therefore does apply to partition. Partition is really a process, in and by which a joint enjoyment is transformed into a enjoyment severally. Each one of the co-sharers had an antecedent title and, therefore, no conveyance is involved in the process, as the conferment of a new title is not necessary. The doctrine of part performance does not apply to an unregistered deed of partition.

A partition is possible between two co-owners who may not have absolute or equal rights, but are limited owners. A document executed in settlement of disputes between two persons who are entitled to the same properties and who agree to divide the properties amongst themselves is a partition, and not a settlement.

Where a joint family property is subject to mortgage, there is no transfer of ownership and the coparceners, being its lawful owners, are competent of allot the mortgaged property in an oral partition to any of the coparceners. The coparceners to whom the mortgaged property is allotted, becomes its absolute owner and is entitled to redeem the mortgage.

Consequently, where the right to redeem is transferred by that coparcener, the transferee is also entitled to redeem the mortgage. Property, subject to mortgage can be allotted in an oral partition to a coparcener, particularly when such oral partition is not going to interfere with the scheme of the mortgage.

Living Person: Will
These words exclude transfers by will, for a will operates from the death of the testator. Transfer of share or interest in a co-operative society to the nominee of its member operating on his death would also be excluded like transfer by will. When the beneficiary is not a living person, the expression used is the creation of an interest in an unborn person.

The words 'living person' include a juristic person such as a corporation. A court is not a juristic person.

In present or in future
A transfer of property may take place not only in present, but also in the future, but the property must be existence. The words 'in present or in future' qualify the word 'conveys', and not the word 'property'. A transfer of property that is not in existence operates as a contract to be performed in the future which may be specifically enforced as soon as the property comes into existence.

Transfer inter vivos:
 Transfer between living persons ( both juristic & natural people)

Living person distinguished from Juristic person;
The term 'juristic person' includes a firm, corporation, union, association, or other organisation capable of suing and being sued in a court of law." A juristic person is a bearer of rights and duties that is not a natural person (that is, not a human being) but which is given legal personality by the law is a juristic person - for example, a company.
Juristic persons are entities other than human beings on which the law bestows legal subjectivity.

This does not mean that they assume the guise of natural persons, but that the law for the sake of economic or social expediency recognises a thing or community or group of persons as having legal personality and therefore the capacity to be the bearer of rights and duties and the ability to participate in the life of the law in its own name.

They are called juristic persons because it is the law that accords them the status, in certain respects at least, of persons: they are artificial persons created by the law. God is a juristic person - property transferred to God governed by relevant religious or charitable endowment Acts

Natural Person
  • A natural person is a human being.
  • He has characteristics of the power of Thought speech and choice.
  • A natural person is a real and living person.
  • Slaves were also natural persons.
  • The layman does not recognize idiot, company, corporation, idol etc. as persons.
  • The only natural persons are human beings.
  • He is also a legal person.
  • Natural persons perform their functions and also perform the function of legal persons.
  • Man is the only natural person.
  • There is no such division in natural person.
  • Natural person can live for a limited period. i.e. he cannot live more than 100 years.

Legal Person

  • Legal person is being, real or imaginary.
  • A legal person is any being whom the law regards as capable of rights or duties.
  • Legal persons are also termed "fictitious", "juristic", "artificial" or "moral".
  • In older law, "slaves" were not recognized as persons.
  • In law, idiots, dead men, unborn persons, corporations, companies, idols, etc. are treated as legal persons.
  • There are several categories of legal persons recognized by law.
  • "Although all legal personality involves personification, the converse is not true".
  • The legal persons perform their functions through natural persons only.
  • There are different varieties of legal persons, viz. Corporations, Companies, Universities, President, Societies, Municipalities, Grama panchayats, etc.
There are two classes of corporation's corporation sole and corporation aggregate.

Legal person can live more than 100 years.

  1. The post of "American President" is a corporation, which was created some three hundred years ago, and still it is continuing.
  2.  "East India Company" was established in sixteenth century in London, and now still is in existence.

Status of partition of JF property; - Partition is not a transfer of property - because nothing new is obtained by co-sharer on partition - his specific share vested in him earlier is simply separated

On Partition a coparcener gives eviction notice to tenant who was inducted before partition - tenants contests on the same on the basis that the landlord acquired the premises through transfer - hence it comes u/s 14(6) of Delhi Rent Control Act which doesn't entitle landlord to demand possession till 5 yrs - SC held that a partition is not transfer of property but would only signify the surrender of a portion of a joint right in exchange for a similar right from the other co-sharer or co-sharers hence S 14(6) DRCA doesn't apply here.

[Bequeathing of tenancy rights by a tenant under his Will to his heirs amounts to 'parting with possession' though such parting of possession does not amt to transfer within the meaning of Sec 5 TP Act] - dispute related to tenancy rights of the tenant which he had bequeathed under his Will in favour of his heirs - on the death the beneficiaries under the Will took possession of the tenanted premises as the contract of the lease was still subsisting.

The landlord filed a suit for eviction on the ground that this transfer of the premises amounted to violation of the provisions of the Delhi RCA, as the tenant had parted with the possession of the premises in dispute without the permission of the landlord - Issue was whether a person parts with possession of the property (u/ DRCA) through a devise of Will & not whether such parting amounts to transfer within meaning of S5 TPA - Observation & Decision - The lessee by her act of bequeathing the tenancy rights by means of the Will in favour of the appellant had parted with possession. Thus a violation of the lease agreement had taken place - the landlord was therefore entitled to claim eviction.

Though partition of a JF Property does not amount to a transfer within meaning of S5 TPA, S109 TPA is applicable to partition on the principle of justice, equity & good conscience - Partition of JFP(part of which was tenanted) between two co-owners - one co-owner filed a suit for eviction on grounds of bonafide need - prescribed authority ordered release of premises & made an order granting possession - Appeal to HC - it was contended that landlord cannot seek to split the integrity & unity of the tenancy coz it is impermissible in law- HC accepted the argument - Appeal to SC - held that S109 provides statutory exception to the above rule and enables an assignee of a part of the reversion to exercise all rights of the landlord in respect of the opinion.

  • whether bequest of a prop under a Will is a transfer of property
  •  whether direction to a party to maintain status quo in regard to a property, prohibits him from making a testamentary disposition(via Will) & whether a Will made during the operation of an order of status quo regarding a property is void & non est in so far as the bequest relating to such property. - claim over property by A named in will & B succeeding as legal heir - A files suit of temporary injunction against B to stop from alienation - Judge passes status quo - B dies bequeathing the property to C in her Will - TC Judge holds that Will is against the status quo order - HC reversed TC Judge contention - held will does not amount to transfer as per TPA and is governed by testamentary succession laws
  • Vasudev Ram Chandra Shelat v. P.J. Thakkar, (1974) 2 SCC 323.
  • The Privy Council in Girja Bai v. Sadashiv Dhundiraj
  • In V. N. Sarin v. Ajit Kr. Poplai
  • V.N. Sarin v Ajit Kumar Poplai, AIR 1966, SC 432: (2006) 1 SCR 349
  • Kenneth Solomon v Dan Singh Bawa, AIR 1986 Del 1
  • Mohar Singh v Devi Charan, AIR 2008 SC 1365: (1988) 3 SCC 63
  • N. Ramaiah vs Nagaraj S, AIR 2001 Kant. 395 (A will does not amt to transfer within meaning of S5 TPA)

Award Winning Article Is Written By: Ms.A.Jonah Elisa Shiny
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