Transfer of Property Act, 1882

Types of Property: The Transfer of Property Act was enacted in the year 1882 with the objective of
codifying the laws relating to transfer of properties. This Act is not exhaustive in nature, as it does not cover
all kinds of transfers, or all types of properties. The Transfer of Property Act, 1882 does not incorporate all
the rules relating to the different modes of transfer, neither does it include the transfer of all properties. There
are other Acts which codify the laws regarding different types of property such as the Sale of Goods Act,
1930.
This Act also does not deal with transfers by operation of law, which includes transfers in execution of a
Court’s decree. [1] This Act only covers inter vivos transfers which are transfers between living persons by
act of parties through express or implied contracts. Also, the Act mainly deals with transfer of immovable
properties, but some of the provisions of the Act are also applicable to movable properties.
Movable: Act does not define the term ‘immovable property’ properly and gives a very vague definition that
movable property are those property which are not immovable property.
Immovable: Transfer of Property Act, does not define this term, but it gives exhaustive definition in regards
to immovable property. Section 3 of the act lays down that immovable property does not include standing
timber, growing crops or grass.
Definition of ‘immovable property
Section 3 Transfer of Property Act 1882: The definition given in The Transfer of Property Act says that it
does not include standing timber, growing crops or grass. All these three items come under the scope of
movable property. The basic meaning that can be understood as immovable property is a property which is
not a movable property.
A fruit-bearing tree will not come under the ambit of standing timber and therefore be stated as immovable
property. Any tree which can be cut in a short period of time either for the purpose of construction or
anything else will be a standing timber. In the case of Jagdish v. Mangal Pandey (1), the court held that to
check whether a tree is a standing timber or not, two things are to be ensured. First, the nature of the tree is to
be taken into account and then the intention, whether the owner has the intention to cut that property in a
short period of time or not.
Section 3(26) General Clauses Act 1908: There is another definition of immovable property that is given in
the General Clauses Act which can be used to understand the concept of immovable property.
Section 3 (26) of this act defines an immovable property, it says that this property consists of:
• Any land, building or etc.,
• Benefits arising out of land and
• Things attached to Earth.
One of the leading cases where the immovable property was defined in the case of Sukry Kurdepa v.
Goondakull (2), where Justice Holloway opined that if a thing is not changed or altered from its initial place
without causing any harm to the property, it is called an immovable property.
Transfer of Property - Meaning (Section 5); Section 5 of the Transfer of Property Act, 1882 , defines the
term “ Transfer of Property” as “act by which a living person conveys property, in present or in future, to
one or more living person or to himself and one or more other living persons”. ‘Transferor’ is the one who
transfers the property, while the one who receive such property is ‘Transferee’. Term “Living Person” not
only include living person but legal entity such as companies, private association or body individuals.
What may be transferred (Section 6);
Section 6 of the Transfer of Property Act, 1882 discusses the property which may be transferred. The section
states that property of any kind may be transferred. However, Clauses (a) to (i) of section 6 mention the
properties which cannot be transferred.
Clause (a) describes spes successionis cannot be transferred. This clause states that the transfer of a bare
chance of a person to get a property is prohibited under this section. For example, Arun expecting that
Chandini, his aunt, who had no issues, would bequeath her house worth Rs. 50,000 transfers it to Bhushan.
The transfer is invalid as it is a mere matter of chance of receiving the property on the part of Arun. Thus, it
is invalid.
Clause (b) mentions that the right of re-entry cannot be transferred. The right to re-entry implies a right to
resume possession of the land which has been given to someone else for a certain time. The section mentions
that the right of re-entry cannot be transferred by itself apart from the land. For example, ‘A’ grants a lease of
a plot of land to ‘B’ with the condition that if shall build upon it, he would re-enter — transfers to ‘C’ his
right of re-entering in case of breach of the covenant not to build. The transfer is invalid.
Clause (c) mentions that easement cannot be transferred. An easement is a right to use or restrict the use of
land of another in some way. For example, the right of way or right of light cannot be transferred.
Clause (d) mentions that an interest restricted in its enjoyment of himself cannot be transferred. For instance,
if a house is lent to a man for his personal use, he cannot transfer his right of enjoyment to another. Clause
(dd) restricts the transfer of the right to maintenance. Such a right cannot be transferred as such right is for
the personal benefit of the concerned person.
Clause (e) provides that mere right to sue cannot be transferred. The prohibition has been imposed as the
right to sue is a right which is personal and exclusive to the aggrieved party. For example, a person cannot
transfer his right to sue for the damages suffered by him due to breach of contract by the other party.
Clause (f) forbids the transfer of public offices. The philosophy behind the prohibition is that such a transfer
may be opposed to public policy in general. A person is eligible to hold a public office on the grounds of his
personal qualities, and such qualities cannot be transferred. Thus, the transfer of public offices is prohibited
under this section.
Clause (g) of section 6 provides that pensions cannot be transferred. Pensions allowed to military and civil
pensioners of government and political pensions cannot be transferred. In simpler terms, a pension may be
understood as any periodical allowance which may be granted in regard to any right of office but only on
account of the past services offered by the pensioner.
Clause (h) of this section is titled as nature of nature. This clause prohibits transfer which will oppose the
interest affected thereby. The transfer is also forbidden if the object or consideration of the transfer is
unlawful. Moreover, a transfer by a person who is legally disqualified from being a transferee is also
forbidden.
Clause (i) of section 6 was inserted by the Amendment Act of 1885. The clause declares that certain interests
are untransferable and inalienable. For example, a farmer of an estate, in respect of which default has been
made in paying the revenue, cannot assign his interest in the holding.
Thus, section 6 containing clauses (a) to (i) specifically mention that certain things cannot be transferred.
Such a transfer if undertaken would be invalid in the eyes of the law in India.
Persons competent to transfer (Section 7): Section 7 enumerates the concept of competency of persons
who may be allowed to transfer property. According to this section, a person is allowed to transfer property if
he satisfies two conditions. The first condition is that the person must be competent to enter into contracts
with other persons. The second condition is that the person who is willing to transfer property must have title
to the property or authority to transfer it if he is not the real owner of the property.
An important point to be noted in this regard is the conditions mentioned in section 11 of the Indian Contract
Act, which specifies the category of persons who may be competent to transfer. In the section, it is stated that
the person must have attained majority, he must be of sound mind, and he must not be disqualified to enter
into contracts by any other law applicable in India.
Modes of transfer of property
Sale: Section 54 of the Transfer of Property Act, 1882, defines “sale” as the transfer of ownership in
exchange for a price. The term “price” is to be interpreted as a price in terms of money and not otherwise. If
the transfer involves any other kind of consideration, it is not a sale. Further, the Section also provides that
the price need not be paid simultaneously with the transfer. The price may either be paid in full or partially,
or partly paid and partly promised. The transfer will be deemed complete in all three cases. Thus, what is
relevant is not the immediate payment but the reference as to when and how the payment is to be made.
The subject matter of the sale under the said Act is immoveable properties. Section 54 includes immoveable
properties, both tangible and intangible. The tangible properties are those that are visible, such as lands,
houses, etc. The intangible properties are those that do not have a physical existence, such as copyrights,
trade secrets, the right to ferries or fisheries, or a right to mortgage debt, etc. This Section provides two
specific methods for how a sale can be made and executed. According to this Section, a sale can be
completed by a “registered instrument” in cases of
• Transfer of tangible immoveable property of the value of Rs. 100 or upwards;
• Transfer due to reversion; or,
• Transfer of intangible immoveable property.
In other cases, such as the transfer of tangible immoveable property of a value less than Rs 100, a sale can be
made either by a “registered instrument” or by “delivery of property”. According to this Section, when the
seller hands over the possession to the buyer or the person he specifies, delivery of the property is deemed to
have occurred.
In common parlance, a “sale” is a transaction wherein one person purchases some article from another in
exchange for some consideration. However, when it comes to the law, a sale has several facets. The law
categorizes the subject matter of the sale into moveable and immoveable properties. In every sale, there are
always two parties. The person who transfers the property is known as the “seller,” and the person who
receives such property in exchange for monetary consideration paid by him is known as the “buyer.” They
both must be competent in the eyes of the law to effectuate a valid sale deed.
Two modes of transfer by sale
By Registered Instrument: Where the value of tangible immovable property is 100 or more than 100 rupees
than in that case, sale can only be made by Registered Instrument.
Delivery of Possession: Where the property is valued less than 100 rupees transfer of property can be made
either by a registered instrument or delivery of possession. Registered instrument is not mandatory.
Mortgage: When property, land or any other commodity is used as collateral to borrow money or to take a
loan from a lender, it is known as Mortgage. In simpler terms, when a person borrows money from a lender
(bank loans) and signs up an agreement where he/she gets cash in exchange for a real estate property as a
guarantee with the bank until the entire amount is repaid is called a mortgage.
• The borrower and lender both are uncertain about profit/loss in case of a mortgage.
• If the borrower is not able to pay back the loan amount, the lender has full authority over the mortgaged
product
• The one who takes the loan is called a “debtor” and the one who lends money is called the “creditor”
• Loan is a contract between the lender and borrower when one lends money and the other borrows it at a
certain rate of interest. Mortgage, on the other hand, is a type of loan in which the real estate or property
element is added as a guarantee if the amount is not returned to the lender.
Lease: A lease is defined under section 105 of Transfer of Property Act, 1882 as, “A lease of immovable
property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in
perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other
thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who
accepts the transfer on such terms.
From this definition, the important ingredients which can be crystallized are:
• Lease is always for an immovable property
• There is a transfer of rights only to enjoy such property. (only the right to enjoy such property, neither the
title nor the ownership is transferred)
• As far as the duration of the lease is concerned, it can be for a certain expressed or implied duration, or it
can be for perpetuity (99 years)
• Consideration is must for a lease; it can be money, a share of crops or any other thing of value.
• Consideration can be paid periodically or on specified occasions which are decided between lessor and
lessee.
Lease being a contractual agreement specifies the date and time of the contract and the duration in which the
contract is valid. But there are certain circumstances that do not describe the duration of the lease and are
neither mentioned in any of the local customs and usages. In such circumstances Section 106 of the Transfer
of Property Act, 1882 is applicable which explains certain situations and prescribes the duration of the lease
Exchange: Exchange is defined in section 118 of the Transfer of Property Act, 1882. The exchange of
property in this act relates to immovable property** only. The exchange of moveable property is governed
by the Sale of Goods Act. The literal meaning of exchange is giving and taking of something.
In the early decades, the concept of exchange was known as barter system. The people used to exchange their
things and commodities with others who are in need of them. And in return, they used to get something
which is useful for themselves.
Essentials of Exchange
• There must be two persons for the purpose of exchange.
• Their intention to transfer the things must be with mutual consent. If either of them has not
given consent, then it is not exchange.
• There must be a transfer of ownership of a thing from one person to another and vice-versa.
• Any of the thing which is getting exchanged can be any immoveable property but not money.
Money can’t be a property in exchange. (If money is involved, it becomes sale and not
exchange.) (But money can be exchanged if both parties exchange money. Like A gives 71
rupees to B, and receives 1 dollar from A. See next to next heading.)
• The exchange takes place between the parties like the process of sale. One person transfers his ownership
to the other person, and likewise, other person does.
Gift: Gift under transfer of property act is defined as the transfer of certain existing moveable and
immovable property made voluntarily and without consideration, by one person called the ‘donor’, to
another, called the ‘donee’, and accepted by or on behalf of the donee. The person who is transferring the
property refers to as “donor” and to whom the property is transferred referred to as “donee”.
The essentials of gift under transfer of property act are as follows: –
• There should be Two Persons: – To make a gift there must be two persons i.e. the donor and the donee. The
donor should be of sound mind, must be competent to make a gift, must attain the age of majority, and
should not be disqualified by law.
• The Gift must be made Voluntarily: – The gift should be made out of free wish and will and should not be
under any undue influence, coercion, etc.
• Without any consideration: There must be no payment made for the gift. The transfer of property by way
of gift should be made out of love and affection without expectations of any consideration or payment.
• Transfer of Ownership: – When a gift is to be given, the property is transferred along with the transfer of
ownership with all rights and liabilities.
• Gifts must be Existing and Transferable: – Gifts cannot be made from uncertain assets or future assets.
Assets must exist and be transferable.
• Donor and Donee must be living: – A gift is an inter vivos i.e. between two living persons. It is necessary
that the donor and donee should be living at the time of transfer and acceptance. If Donne dies before
acceptance, the gift is void.
Meaning of void gifts: – Void gifts are the gifts which are not enforceable by the law due to the
incompetence of a person or both the persons i.e. donor or donee. Void gifts can be:
• Donee died before acceptance of a gift.
• When a gift is made for an illegal purpose.
• When a condition that is imposed is forbidden by law or unlawful.
• When a person is unable to make a gift i.e. minor or lunatic.
Any person who is competent to contract is eligible to transfer property either in whole or in part. The
transfer may be made orally unless there is specific requirement under any law for the transfer to be in
writing. In circumstances where a person is physically unable to sign any contract but is mentally competent,
the lawyer under such person, can sign such contract with the help of power of attorney.
Section 126 of Transfer of Property Act states that grounds on which a gift can be revoked or suspended: –
• A gift can be revoked or canceled if the consent of the donor has been obtained forcefully by coercion or
undue influence.
• If the validity of the gift is dependent on a specified event, and such specified event is not dependent on the
will of the donor, the gift may be suspended or revoked
Illustrations of Gift:
• In the case of Krishna Prasad v. Gopal Prasad, property was gifted by the women of 60 years of age to his
grandson without giving it to his son. Due to this, the son filed the case that the property wasn’t gifted with
the free consent and there was a case of fraud. However, the court observed that even if the woman was old
still she retained her intelligence and the gift was valid as she was capable of understanding her actions.
• In the case of Tirath v. Manmohan Singh, it was observed that delivery of possession of the property cannot
be taken into consideration while determining whether the acceptance has been given by donee or not. There
can be cases where possession is shared jointly by both the parties and still there can be acceptance.
• In the case of Kalyanasundaram v. Karuppa, it was observed that the registration of gifts can even take
place after the death of the donor.
• A gifts B two properties in which in one of which he is presently the owner and for the other property it is
the property of joint family. So, in this case one of the property is of the joint family cannot be gifted and it
can only be gifted once the property is being partitioned in future. A gift is void.
• A gives a property to B, C, D in equal portion. D didn’t accept the gift of his one-third share. Now the gift
will be valid for B and C for their two-third share and gift would only be void for one-third share which D
rejected.
• A gifted a property to B with a condition that if a certain ship returns on a certain date then gift would be
valid whereas if the ship doesn’t return on that date then the gift can be revoked. Now in this case the
returning of the ship is not in the control of A and is not dependent upon his will. Thus, this condition is
valid.
Actionable Claim: Actionable claim is defined in Section 3 of the Transfer of Property Act, which was
included in the Act by the Amending Act II of 1990. Actionable claim is an intangible movable property.
According to Section 3 of the Act, actionable claim means:
• Claim to an unsecured debt
• Beneficial interest in a movable property
These are both claims that are recognized in the Courts of law as affording relief. There are other types of
claims also that afford relief and are actionable in the Courts of law, such as secured debts and tortuous suits
like defamation or nuisance. But those are not categorized under the meaning of actionable claim. The term
actionable claim only covers the above-mentioned two types of claims.
Unsecured debt: It refers to all monetary obligations of a certain amount, and that is not covered by any
security in the form of mortgage, pledge or hypothecation. This is not just limited to the concept of loans
forwarded by a creditor to a principal debtor. It extends to all kinds of monetary obligations, such as rent or
payment on sale of property etc.
The three requirements for a transaction to qualify as unsecured debt are:
• Monetary obligation
• No security
• Certainty of amount of money obligated
An actionable claim may be existent in praesenti, accruing, conditional or contingent. So, the three types of
unsecured debt are:
• Existent Debt
• Accruing Debt
• Conditional or Contingent Debt
Beneficial Interest in Movable Property: If a person has the right to possess a movable property, then it is
said that he has beneficial interest in that movable property. But if that property is not in his possession, then
he has an actionable claim. So, the requirements to constitute this type of actionable claim are:
Movable property:
• The movable property is not in the possession of the claimant;
• The claimant has the right to possess that movable property.
For example, if A sells his car to B and B has completed his obligation, that is, B has forwarded the
consideration from his side, then B has the right to possess the car; but if B is unable to acquire possession,
then B can approach the Court to claim this possession.
But if the movable property is already in the possession of the claimant, either actual or constructive, then he
cannot claim possession. So, if in the previous example, A had given the car keys to B, then it can be said
that B has constructive possession, and hence, B cannot approach the Court to claim possession.
Instances of Actionable Claims:
• Claim for arrears of rent.
• Claim for money due under insurance policy.
• Claim for return of earnest money.
• Right to get back the purchase money when the sale is set aside.
• Right of a partner to sue for an account of the dissolved partnership firm.
• Right to claim benefit under a contract for the purchase of goods.
• Right to get the proceeds of a business.
In all of these instances the amount for which the suits are filed are certain and definite. So, such claims are
transferable under actionable claims.
Differences between Sale, Mortgage & Lease
Sale Mortgage Lease
All the rights in property are The property kept as Only the right of
transferred to the buyer by the collateral with the mortgagee possession of property is
seller will be returned once the passed on to the lessee.
mortgagor pays back the loan
Sale of property is made in Money is given as a loan by The payment is made as
exchange of money either paid in the mortgagee to the agreed upon by both
full or is promised to be paid mortgagor parties in the lease
within a stipulated time agreement which is
signed for a period of 11
months
 Once the whole payment is made Money taken as a loan must The agreement may or
and property is be returned within stipulated may not be renewed at
delivered/registered, the transfer time after which property the end of 11 months.
is complete kept as a collateral can be
taken back
If either the payment by the seller If the loan is not paid back If the tenant fails to pay
or the delivery of property by the within the promised time, the the lease amount at the
seller is not made, they can sue mortgagee can sell the time agreed upon, the
for breach of contract mortgaged property to lessor can take actions
recover the loaned amount. against the lessee like
asking them to evict.

Doctrine of Election: Doctrine of election means choosing between two alternative rights or incompatible
rights. Under any instrument, if two rights are conferred on a person in such a way that one right is in
exchange for the other, he is bound to choose only one of them. The applicant cannot use both, the recipient
must choose between two inconsistencies or alternative rights. It means that the person taking the benefit
should also bear the burden.
The doctrine of election is predicated on the principle of equity that one cannot take what’s beneficial to him
and disapprove that which is against him under an equivalent instrument. One cannot approbate and
reprobate at an equivalent time. In simple words, where an individual takes some benefit under a deed or
instrument, he must also bear its burden.
The doctrine of election is stated in Transfer of Property Act 1882 in section 35. Election means a choice
between two alternative or conflicting rights. Granting two rights in such a way that one is higher than the
other, you can choose either of them. You cannot have both. The applicant cannot use both, the recipient
must choose between two inconsistencies or alternative rights. It means that the person taking the benefit
should also bear the burden.
This principle was derived from the equity principle where a person cannot retain all the benefits of a
transaction thus, he cannot keep the property and get benefits still. They have to elect for Or against the
instrument. The doctrine of election is a general legal rule that requires the recipient to choose whether the
heir wants to own someone else’s property and decide whether to preserve the property or accept his
intentions.
Example: A promises to give B, 50 lakh but only on one condition that he will sell his house to C, now B
here has to make the election on what to do? If he takes A’s offer he will have to give his house to C. On the
other hand if he doesn’t, he won’t get 50lakh also hence he has to make an election on what to choose.
Doctrine of Lis Pendens: Lis Pendens literally means ‘litigation pending’ or ‘pending suit’ and is drawn
from the concept based on the maxim “Pendente lite nihil innovature” which means that nothing new must be
introduced while a litigation or suit is pending.
This Doctrine states that the Transfer of property shall be restricted when there is a litigation pending on the
title or any rights that arise directly thereof involving an immovable property.
The suit commences the moment a complaint is presented or the day of commencement of proceedings in the
appropriate Court and shall be terminated by Order of the [Link] Court may, however, permit any party
to the suit to transfer the property on such terms which it may think fit and proper to impose.
The sale of immovable property can take place through private negotiations, but the said Transfer will be
subservient to the verdict of the competent Court.
Now that the doctrine is clear, an inevitable question that may arise is – what is the objective or purpose of
this doctrine? Let us read on to find out.
This Doctrine is essential as it prevents Transfer of the title of any disputed property without the Court’s
consent, there can be endless litigation, and it will become impossible to bring a lawsuit to a successful
termination if alienations are permitted to prevail, and covenants are not imposed.
The ‘Transferee pendente lite’ is bound by the verdict just as if he were a party to the suit and the transfer
shall be subservient to the result of the pending lawsuit.
Conditions for Applicability of the Doctrine as provided in Section 52
• A suit or proceeding is pending.
• The above suit is brought to a competent court within the jurisdiction.
• The right to the title of an immovable property is directly in question.
• There cannot be any collusion.
• The suit should directly affect the rights of the other party.
• The property in question is being transferred by either party.