Posted December 9, 2013 by advocateguru in Learning Centre
 
 

DEFINATION OF 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.

Property

The Legislature has not even tried to define the word ‘property’, but it is used in this Act in its boulevard 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 reconveyance 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 reconveyance of the property was transferred by the sale-deed.

Interests in Property

As ownership consists of a ample 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.

Transfer

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 vivous. 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. The Privy Council in Girja Bai v. Sadashiv Dhundiraj, 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. In V. N. Sarin v. Ajit Kr. Poplai court observed that ‘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 coparcaener, 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 coportation. 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.

SPES SUCCESSIONIS

Sec. 6 What may be transferred.– Property of any kind may be transferred, except as otherwise provided by this Act, or by any other law for the time being in force :

(a) The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred.

Clause (a) : Spes Successionis

The things referred to in this clauses as non-transferable are :

(1) The chance of an heir succeeding to an estate,

(2) The chance of a relation obtaining a legacy (a gift by will) on the death of a kinsman, and

(3) any other mere possibility of a like nature.

The possibilities referred to in this clause are bare or naked possibilities and not possibilities coupled with an interest such as contingent remainders and future interest.

Illustration

A has a wife B and a daughter C. C in consideration of Rs. 1,000 paid to her by A, executes a release of her right to share in the inheritance to A’s property. A dies and C claims her one-third share in the inheritance. B resists the claim and sets up the release signed by C. The release is no defence, for it is a transfer of a spes successions, and C is entitled to her one-third share but is bound to bring into account the Rs. 1,000 received from her father.

Chance of an heir apparent.

A mere possibility of an heir succeeding to an estate is excluded from the category of transferable property. The prohibition enacted in this clause is based on public policy, namely, that if these transfers were allowed speculators would purchase the chance of succession from possible heirs and there would be increase in speculative litigations.

Sec. 6(a), however, prohibits the transfer of a bare chance of a person to get a property. After the death of the husband, for example, if two widows inherit their husband’s properties together, the transfer of bare chance of the surviving widow taking the entire estate as the next heir of her husband on the death of the co-widow of her present interest in the properties inherited by her together with the incidental right of survivorship. Such widows could validly partition the properties and allot separate partitions to each and, incidental to such an allotment, could agree to relinquish her right of survivorship in the protion allotted to the other.

Spes Successionis and contingent interest.

While Spes Successionis cannot be transferred, contingent interest is transferable. “A contingent interest is something quite different from mere possibility of a like nature of an heir apparent succeeding to the estate, or the chance of a relation obtaining a legacy, and also something quite different from mere right to sue. It is well ascertained form of property. It certainly has been transferred in this country for generations in respect of which it is quite possible to raise money and to dispose of it in any way the beneficiary choose.”

Contingent ownership is based not upon the mere possibility of future acquisition but upon the present existence of an incomplete title. The distinction between contingent interest and spes successionis may be understood by the following illustrations :

(i) A, a Hindu owing separate property, died leaving a widow B and a brother C. C has simply a chance of becoming the owner of A’s estate.

(ii) A, a Hindu, owing separate property makes settlement of his property to his wife B for life and then to his son, if he should have one, and in default of a son of C. C’s interest is contingent and is transferable. His contingent interest is something more than a simple chance of becoming the owner of it. He has an interest contingent on A having no son.

By the Hindu law the right of a reversionary heir expectant expectant on the death of a Hindu widow is a spes successionis and its transfer is a nullity and has no effect in law. The Privy Council said in a decision :

A Hindu reversioner has no right or interest in prosenti in the property which the female owner holds for her life. Until it vests in him on her death, should he survive her, he has nothing to assign or relinquish or even to transmit to his heirs. His right becomes concrete only on her demise; until then it is mere spes successionis.

The reversioner ‘can relinquish his right to say that the properties in dispute form part of the estate to which he is the reversioner.

It was held by the Supreme Court in Jumma Masjid v. Kadimaniandra Deviah, that the principle of feeding th estoppel recognised in S. 43 of the Act would apply to a case where a reversioner purports to transfer properties to which he has only a chance of succeeding if he has represented to the transferee that he was absolutely entitled to the properties and if he subsequently acquires title to the properties. The Court held though S. 43 would not apply when the transferee knew the facts, there was no reason why a transferee who was not aware of the true facts and who acted on the fraudulent representation should not have the benefit of the equitable doctrine embodied in S.


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