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:
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
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
What is included:
What is not 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.
Meaning of "things attached to earth":
Concept of "Doctrine of fixtures":
- A right to worship;
- A copyright;
- The interest of a partner in a partnership firm;
- A right to get maintenance;
- A right to obtain the specific performance of an agreement to sell;
- Government promissory notes;
- A machinery that is not permanently attached to the earth and can be shifted from one place to another.
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.
Registration as Notice
- 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.
- 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.
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
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:
Fraudulent concealment of fact by agent.
- As an agent
- During the agency
- In the course of the agency business
- In a matter material to the agency business
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
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 &
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
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
- 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 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
Legal person can live more than 100 years.
Status of partition of JF property; -
- The post of "American President" is a corporation, which was created some
three hundred years ago, and still it is continuing.
- "East India Company" was established in sixteenth century in
London, and now still is in existence.
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
Written By: A.Jonah Elisa Shiny
- 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)