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PRELIMINARY TOPICS - Transfer of Property

Updated: Jul 9, 2021

PRELIMINARY TOPICS - Transfer of Property

Transfer of Property :

Sn.5 of Transfer of Property. Act defines Transfer of Property'. It means an act by which a living person conveys property in present or in future to one or more living persons, or to himself, or to himself and to one or more other living persons. Living person includes a Company, Association or body of individuals. The T.P. Act deals with sale, mortgage, gift, lease and exchange. Hence, abandonment is not a transfer. Partition is not a transfer. Transfer to himself and others: This is possible in case of trust. Future property can be transferred (subject to Sn.6.). The persons must be competent to make a contract. The transfer of property passes all the interests of the transferor and the legal incidents, to the transferee. Registration, under the Registration Act is compulsory if the value of. the immovable property is worth Rs.100/- and above.


The T.P. Act defines attestation in Sn.3. Attesting in respect of an instrument means that the documents must be attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the document. Further each of them must have signed the instrument in the presence of the executant. The attestors must have animus attestandi (intention of attesting). It is not necessary that more than one should be present at the same time. Law also does not prescribe any particular form of attestation. The usual procedure is that the attestors must sign with address and date.

The Privy Council in Shamu Vs. Abdul Khandir, resolved the controversy whether the attestors should have actually seen he execution or not, of the document. It held that the attestors who sign the document must have actually seen the document executed. This was accepted in Sn.3. but it is given retrospective effect.

In English law attestors should all be present at the same time and must have seen the execution. But it is not so, according to Indian Law. Attestors should be a sui juris (person legally capable) Even thumb impression is allowed. Attestation does not mean that attestors have notice of the contents of the document. But attestation estops from denying the factum of execution. They vouch to the execution, not to contents.

Immovable Property:

The Transfer of Property Act deals with various transfers relating to immovable property. S.3(2) says, Immovable Property does not include standing timber , growing corps or grass. The General Classes Act says, Immovable Property includes lands, benefits that arise out of land and things attached to the earth. 'Attached to the earth' means rooted to the earth i .e., trees, shrubs etc., imbedded in the earth i .e., walls or buildings, attached to what is so embedded. Further right to receive future rent is Immovable Property. Marshall V Green: Sale of trees to be cut and taken away. Held: sale was not for Immovable Property, if the intention of the parties is that the trees should have further nutriment from the land, then it is Immovable Property otherwise not. In English Law, there is the doctrine of fixtures. Whether a chattel is resetting merely, by is weight on the floor, it is not immovable. In Holland V. Hodgson : a mortgage of a mill was made. Held: Certain looms attached to the stone of the mill, was also covered by the mortgage.

Constructive Notice.

Section 3 defines notice. A notice may be actual or constructive. There is actual notice, when knowledge of a fact is brought directly to the person concerned. It is constructive when there is a presumption of the knowledge of the fact.

The following are its different kinds:

i) knowledge is presumed when the party wilfully abstains from making enquiry.

ii) Gross negligence of the party.

iii) Registration: The privy council had held that registration was not a constructive notice to subsequent transferees. (Thilak Devilal's Case). This is now superseded by T.P.Act. Hence, registration of a transfer amounts to notice, from the date of registration.

iv) Possession as notice: If a person is actually in possession of a property, then the acquirer of the property is deemed to have notice of the title, if any, of the person in possession of the property.

v) Notice to agent is treated as notice to the principal. The agent must have notice during the course of his business. If an agent fraudulently conceals the fact, then there is notice to the

principal. The principal should not be a privy to the fraud.

Spes Successionis:

Means 'Chance of Succession'.S.6. of the T.P.Act provides that the chance of an heir succeeding to an estate, or the chance of a relation obtaining a legacy of a Kinsman or such a mere possibility cannot be transferred.

E.g.: The interest of a reversionary on the death of a Hindu widow. In Amrit Narayana Vs. GayaSingh: 'A' hoping to succeed to the property of his material grandfather B, sold to C, his such interest, during the life time of B. Subsequently B died. A sued for recovery of property from C. Held: The sale was of a spes successions and therefore void. Future interests in properties such as contingent interest or executory interest are transferable, as, here, the possibility is coupled with an interest. Similar to spes successions, the possibilities of a like nature are:

i) Chance of a person deriving income from scavenging work, which he expects to get in future.

ii) Right of a priest to a share in the offerings at the temple. There is a mere chance and hence inalienable. The leading case is Allcard V. Walker.

Actionable Claim:

Actionable claims include claims recognised by the courts to grant relief either(a) as to unsecured debts or (b) as to beneficial interest in movable property not in possession (actual or constructive), whether present or future, conditional or contingent.This definition has solved many difficulties that had arisen earlier to 1900.

The leading cases are:Colonial Bank V, Whinney and Muchiram V.Ishan Chandar. sn.130 of the T.P.Act deals with the transfers of Actionable claims. It says that a transfer of an actionable claim (whether with or without consideration) should be made only by the execution of an instrument. Thereupon, all the rights and remedies of the transferor become vested in the transferee, whether notice is given or not. The transferee may sue or proceed in his own name without obtaining the consent of the transferor.

Eg.: (a) A is the debtor and B is the creditor. B transfers the debt to C. B then demand from A to pay; A pays without notice of the transfer. The payment is valid. C cannot sue A for the debt. The debt is an actionable claim and may be transferred by B to C. But, C as. transferee has those rights and remedies as B. Hence, C cannot sue 'A' for the debt.

b) A has a life insurance policy. He assigns it to a Bank B for securing a loan. A dies. B is entitled to receive the amount of the policy. B can sue without the consent of A's executors.

The following are actionable claims :

i) Share in a Company ii) Mortgage debt iii) Claim to copyright iv) Claim to mesne profits v) Mere right to sue.

Exchange: (T.P. Ac t Sn.111)

When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things money only, the transaction is called an 'Exchange'. Any such transfer can be made in the same manner as is done in respect of sale. A partition of H.U.F. is not an Exchange. The parties to Exchange are subject to the same rights & liabilities of the Vendor and the Vendee. Any defect in the title of the property exchanged, is to be set right by that party whose property had the defective title. A transfers his house to B and B transfers his wet land and pays cash of Rs.5,000/- to A as consideration. This is an Exchange. If B had given money only, then it is not an Exchange.

Charge : Sn.100

Where immovable property of a {person is by act of parties, (or by operation of law) made a security |or the payment of money to another, the latter person is said to hav£ a charge on the property.


i) The transaction should not amount to a mortgage.

ii) All matters relating to the rights and liabilities of the parties to the charge are governed by those applicable to a simple mortgage.(Sn.59 T.P.Act).

iii) This will not apply to a trustee^ who makes a charge on the trust-property.



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