transfer of property act assignment topics

Transfer of Property Act Research Paper Topics

Transfer of Property Act research paper Topics – We are providing some research paper topics related to the Transfer of Property Act:

“Analyzing the Historical Evolution of the Transfer of Property Act in India”
“Impact of the 97th Amendment Act on Property Transactions in India”
“Legal Implications of the Doctrine of Part Performance in Property Transactions”
“A Comparative Study of Property Transfer Laws in India and Common Law Jurisdictions”
“Exploring the Role of Registration of Property in Ensuring Legal Validity”
“Challenges and Remedies in Disputed Property Transactions under the Transfer of Property Act”
“The Role of Easements in Property Transactions: A Legal Perspective”
“Property Rights of Women in India: A Critical Analysis of the Transfer of Property Act”
“Succession and Inheritance Laws under the Transfer of Property Act: A Socio-Legal Study”
“Real Estate Transactions and Tax Implications: A Study of Stamp Duty and Registration Charges”

These topics can provide a starting point for your research paper on the Transfer of Property Act, and you can narrow them down based on your specific area of interest within property law or real estate transactions.

12 more research paper topics related to the Transfer of Property Act:

11. “The Role of Trusts and Gifts in Property Transfers: A Comparative Analysis” 12. “Impact of Digitalization on Property Transactions and Registration under the Transfer of Property Act” 13. “Environmental Considerations in Property Transactions: Legal Aspects and Compliance” 14. “Adverse Possession and Its Implications in Property Law: A Case Study under the Transfer of Property Act” 15. “Mortgages and Liens: Examining Security Interests in Property Transactions” 16. “Co-Ownership of Property: Rights, Responsibilities, and Dispute Resolution” 17. “Legal Aspects of Leasehold and Freehold Property Transactions in India” 18. “Transferring Intellectual Property Rights: Challenges and Solutions under the Transfer of Property Act” 19. “Property Transactions in Special Economic Zones (SEZs): Regulatory Framework and Implications” 20. “Property Frauds and Legal Safeguards: A Study of Prevention and Remedies” 21. “Evolving Land Acquisition Laws in India: Impact on Property Ownership” 22. “Foreign Investment and Property Transactions: A Legal Analysis under the Transfer of Property Act” These topics cover various aspects of property law and can serve as the basis for in-depth research papers in this field. Choose the one that aligns best with your interests and objectives.

7 more research paper topics related to the Transfer of Property Act:

23. “Legal Implications of Property Partition among Co-owners: A Comprehensive Study” 24. “Property Transactions and the Rights of Minor Co-owners: A Legal Perspective” 25. “Unregistered vs. Registered Property Transactions: A Comparative Analysis” 26. “Property Transactions in the Digital Age: Blockchain Technology and Smart Contracts” 27. “Corporate Real Estate Transactions: Compliance with the Transfer of Property Act” 28. “Eminent Domain and Property Expropriation: Examining Government Powers and Compensation” 29. “Land Reforms and Property Redistribution: A Study of Social Justice Underlying the Act” These topics delve into various aspects of property law and can provide a solid foundation for your research paper. Choose one that resonates with your interests and research goals.

Transfer of Property Act Notes And Study Material [PDF Download]

Author : Yogricha

Updated On : March 3, 2024

Overview: The Transfer of Property Act is part of the syllabus for roughly all states' Prelims and Mains Judiciary Examination 2024. As a judiciary aspirant in 2024 or a student in your Law School, you should study the Transfer of Property Act in depth. Refer to this article to understand all the essential topics of the Transfer of Property Act for Judiciary Preparation. Read this entire blog and make notes accordingly. It would help if you also made notes for yourself after referring to this article.

In this Blog we will cover:

Notes of Transfer of Property Act for Judiciary
Important topics of Transfer of Property Act
Previous Year Questions for practice
Tips to memorize Transfer of Property Act for Prelims and Mains of Judiciary

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What is Transfer?

The term "transfer" refers to a procedure or action through which ownership of certain assets is transferred to another party. In the first paragraph of Section 5, the definition of a property transfer is explained as follows: A property transfer entails an action carried out by a living individual, whether in the present or the future, to transfer ownership of assets to one or more other living individuals or to oneself and one or more other living individuals. To execute a property transfer is to carry out this action.

A property transfer involves a living individual transferring ownership, whether in the present or the future, to one or more living individuals or even to oneself. In India, the Transfer of Property Act of 1882 governs property transfers. The Act defines the term "transfer of property" in Section 5.

As per this section, the transfer of property refers to an action through which a living person conveys ownership, whether currently or at a later time, to one or more other living individuals or to oneself along with other living individuals. It's worth noting that the term "living person" encompasses entities such as companies or associations, whether incorporated or not. However, this section doesn't impact any existing laws related to companies, associations, or groups of individuals that are currently in force.

What is the Purpose of the Transfer of Property Act?

The Transfer of Property Act serves the purpose of defining and amending laws related to the transfer of property through the actions of parties involved rather than through legal operations. Such transfers of property are essentially contracts, and therefore, they must meet all the requirements to constitute a valid contract.

Key Definitions:

Living Person: This term includes not only individual living persons but also extends to encompass "a company or association or body of individuals," whether they are incorporated or not. However, this provision does not affect any existing laws pertaining to companies.

Property: While the Act does not provide a specific definition for "property," it has a broad and inclusive meaning. Property can encompass various forms, including both movable (such as books or water bottles) and immovable (such as ownership or copyrights).

Transfer: The term "transfer" also holds a broad meaning, as it can involve the transfer of all rights and interests in a property or just one or more specific rights in that property.

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Essentials of Transfer of Property:

Transfer Involves Living Persons: Property transfers, referred to as "inter vivos," can only occur between living individuals. Transfers to persons who do not exist are not valid. The category of "living person" includes companies, associations, or bodies of individuals, whether incorporated or not.

Property Must Be Transferable: Generally, property of any kind can be transferred. However, there are exceptions outlined in Section 6 of the Act, which lists properties that cannot be transferred. For instance, public offices, pensions, and certain rights are among the items that cannot be transferred.

Transfer Must Not Violate the Law: Transfers that oppose the nature of interest affected, are for unlawful purposes or considerations, involve persons legally disqualified from being transferees, or go against the principles of public policy are prohibited.

Persons Competent to Transfer: Individuals who are competent to enter into contracts, as defined in Section 11 of the Indian Contract Act, may transfer property. This typically includes those who have attained the age of majority, are of sound mind, and are not disqualified from entering into contracts by any other applicable law.

Types of Transfers Under the Transfer of Property Act:

Sale: A sale represents an absolute transfer of property ownership.
Mortgage: A mortgage involves a transfer of a limited interest in the property, often as security for a debt.
Lease: In a lease, the transfer involves the right to enjoy immovable property for a specified period or perpetuity.
Exchange: Exchange is similar to a sale, but the consideration may be something other than money.
Gift: A gift involves the voluntary transfer of property without any consideration.

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Case Law Example:

In the case of Harish Chandra vs. Chandra Sekhar (AIR 1977, All 44), the court held that if a transfer deed explicitly states that the transferor was the owner of the property and expresses the intention to transfer their title, it would constitute a valid transfer of property.

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Defining Movable and Immovable Property:

Movable and immovable properties are differentiated based on several common factors:

Movable Property: Movable property refers to assets that can be easily transported from one location to another without undergoing a change in their shape, capacity, quantity, or quality. Personal property typically falls under the category of movable property.
Immovable Property: Immovable property, on the other hand, is commonly associated with real estate, such as residential homes, factories, manufacturing plants, and similar structures. Movable property, in contrast, encompasses assets that are transportable, like computers, jewelry, vehicles, and the like.
Civil Law System: In a civil law system, personal property is synonymous with movable property. This category includes assets that have the capability to be relocated from one place to another.

Understanding Movable and Immovable Property:

Movable Property: Movable property is characterized by its ability to be easily relocated from one place to another without undergoing any changes in its size, shape, quantity, or quality. Essentially, movable property is transferable through human effort. Examples of movable property include items like books, utensils, and vehicles. However, there are exceptions, such as when a banyan tree is cut or sold for wood, it becomes classified as movable property. Similarly, contracts related to activities like cutting bamboo or collecting leaves fall under the category of movable property.

Movable property does not require mandatory registration under the Indian Registration Act, 1908, and its transfer is voluntary. This type of property is subject to sales tax, central sales tax, and specific restrictions and conditions outlined in tax acts and the Central Sales Tax Act, 1956. The transfer of movable property is completed by a simple delivery, and it does not alter the nature of an ancestral impartible estate.

Movable property encompasses a wide range of assets, including rights of worship, royalties, decrees for the sale of immovable property, decrees for rent arrears, maintenance allowances, standing timber, growing crops, grass, government promissory notes, and more.

Immovable Property: Immovable property, as defined by the General Clauses Act, 1897, includes land, benefits arising from land, and objects attached to or permanently fixed to the earth. This encompasses a broad spectrum of elements, from land and buildings to hereditary allowances, rights of way, light, ferries, fisheries, and other land-related benefits. The definition of immovable property under the Transfer of Property Act, 1882, excludes standing timber, growing crops, or grass.

However, this exclusion is not exhaustive, and a comprehensive interpretation combines definitions from the General Clauses Act and the Transfer of Property Act, concluding that immovable property includes land, benefits arising from land, and objects attached to the earth, except for standing timber, growing crops, or grass.

Immovable property is characterized by various elements, as outlined by legal scholar Salmond, including a determinate portion of the earth's surface, the ground beneath the surface down to the earth's center, the infinite column of space above the surface, natural objects on or beneath the surface, and objects placed on or under the surface through human agency for permanent annexation.

Immovable property includes a wide range of elements, such as rights to ferries, fisheries, rent collection, hereditary offices, equity of redemption, mortgage interests in immovable property, factories, and more. It's important to note that the degree, manner, extent, and strength of attachment, as well as the object of annexation, play crucial roles in determining whether a property is considered movable or immovable. Transfer of immovable property typically requires registration, whereas movable property transfers do not have this requirement.

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Landmark Legal Cases:

Baijnath vs. Ramadhan and Anr, AIR 1963: This significant case was adjudicated by the Allahabad High Court and subsequently referred to a larger bench due to conflicting decisions regarding the key issue at hand.

Issue at Hand: The primary question raised in this case was whether standing shisham or neem trees could be categorized as standing timber as defined under section 2(6) of the Act.

Judgment: The court, in its ruling, emphasized the paramount importance of determining the intention behind the trees in question. It considered whether the parties involved intended to deal with these trees specifically for the purpose of cutting them down or using them as standing timber, rather than merely as ordinary trees.

Shantabai vs. State of Bombay, AIR 1958 SC 532: In this notable case, the Supreme Court held that the real intention behind planting a tree would be the decisive factor. The purpose for which the tree was originally planted and its subsequent use were taken into account. The court established that entering a piece of land and cutting trees would fall under the category of benefits arising from the land.

Kapoor Construction vs. Leela Nagaraj & Ors., AIR 2005: In this case, the court provided valuable insights into the factors that play a crucial role in determining whether a property should be classified as movable or immovable. These factors include:

Intention: The intention behind the property's use and handling is a fundamental factor in its classification.
Mode of Annexation: The manner in which the property is attached or affixed to the land is considered.
Degree of Annexation: The extent or degree of attachment to the land is assessed to determine its classification.

These cases have contributed significantly to the legal understanding of property classification, particularly in distinguishing between movable and immovable assets based on factors such as intention and mode of annexation.

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Property Transferability: An Overview

Definition of Transferable Property: Transferable property refers to assets that can be conveyed or moved from one entity or individual to another for their use. Section 6 of the Transfer of Property Act, 1882, establishes that property of various kinds can be transferred, except when prohibited by this act or other prevailing laws. In the absence of any legal restrictions preventing the transfer, the property owner may proceed with the transfer.

Those contesting non-transferability must demonstrate the existence of specific laws or customs that restrict the right to transfer. In some cases, unauthorized individuals may transfer property and subsequently acquire an interest in that property.

When property is transferred subject to a condition that entirely restrains the transferee from disposing of their interest in the property, this condition is considered void. An exception exists in the case of a lease where such a condition benefits the lessor or those claiming under the lessor. Typically, only individuals with an interest in the property have the authority to transfer their interest and confer proper title to another party.

Transferable Property vs. Non-transferable Property:

Non-Transferable Property under Section 6 of the Act:

Spes Succession (Section 6(a)): This clause pertains to the non-transferability of a mere chance of a person to inherit property. If the transfer is based solely on the chance of receiving property, it is considered invalid.
Right of Re-entry (Section 6(b)): The right to re-enter land, which has been leased or granted to another person, cannot be transferred separately from the land. It can only be exercised by the owner of the property.
Easements (Section 6(c)): Easements, such as rights of way or light, cannot be transferred independently but may be transferred along with the dominant heritage (the property benefiting from the easement).
Restricted Interest (Section 6(d)): Interests restricted in their enjoyment, such as property lent for personal use, cannot be transferred.
Right to Future Maintenance (Section 6(dd)): The right to future maintenance, granted for personal benefit, cannot be transferred.
Mere Right to Sue (Section 6(e)): Mere rights to sue for damages or other claims cannot be transferred, as they are personal to the aggrieved party.
Public Office (Section 6(f)): Transfer of public offices is prohibited, as it may conflict with public policy.
Pensions (Section 6(g)): Military, civil, and political pensions are non-transferable.
Nature of Interests (Section 6(h)): This clause prohibits transfers that are opposed to the interest affected, unlawful in object or consideration, fraudulent, against public policy, or prohibited by law.
Statutory Prohibitions (Section 6(i)): Certain interests, such as those related to default in paying revenue or untransferable rights of occupancy, are declared untransferable by law.

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Who Can Transfer Property Under the Transfer of Property Act, 1882:

Section 7 of the Transfer of Property Act specifies that any person competent to contract is competent to transfer property, either wholly or in part. Additionally, the person willing to transfer property must hold title to the property or have the authority to transfer it, even if they are not the actual owner.

It is crucial to be entitled to the transferable property or have the authority to dispose of transferable property, even if it is not personally owned. Competency to contract is determined by the age of majority, which is typically attained at 18 years, although it may be 21 years in certain circumstances, as stipulated by the Indian Majority Act, 1875.

Persons Disqualified to Transfer: Certain individuals are disqualified from transferring property, including convicts, insolvent individuals, aliens, and enemies. A transfer by a defective guardian of a minor's property is also considered invalid under Section 11 of the Hindu Minority and Guardianship Act.

Official Assignee, Madras vs. Sampath Naidu, AIR 1933 Mad. 795: In this case, the court ruled that a mortgage executed by an heir is void, even if the heir subsequently acquires the property as an heir. Therefore, the transfer of spes successionis (bare chance of inheritance) is void ab initio.
Shoilojanund vs. Peary Charon, (1902) ILR 29 Cal 470: The court held that the right to receive voluntary and uncertain offerings in worship is restricted for personal enjoyment and, therefore, cannot be transferred.
Ananthayya vs. Subba Rao, AIR 1960 Mad 188: In this case, the court clarified that agreements where one person agrees to give a certain proportion of their income to another person, in consideration of being maintained by the latter, are not subject to the non-transferability provisions.
Saundariya Bai vs. Union of India, AIR 2008 MP 227: The case affirmed that pensions are non-transferable property, especially when they are unpaid and in the possession of the government. It is essential to differentiate pensions from bonuses and rewards, which may be transferable.

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Transfer to an Unborn Person: An Explanation

Definition of Transfer to an Unborn Person: Transfer to an unborn person refers to a legal scenario in which an interest in property is created for the benefit of an individual who is not yet in existence but may come into existence in the future. Section 13 of the Transfer of Property Act, 1882, outlines the conditions under which such transfers can occur. These conditions ensure that any interest created for an unborn person does not take effect unless it covers the entirety of the remaining interest of the property's transferor.

While an unborn child does not have current legal existence, both Indian and English law treat a child in the womb as already born for many legal purposes, following the legal maxim "nasciturus pro jam nato habetur."

To transfer property for the benefit of an unborn person, a trust mechanism must be employed. In simpler terms, the immovable property must vest in a living person between the date of the transfer and the birth of the unborn person, as property cannot be directly transferred in favor of an unborn person.

Key Elements of Section 13 of the Transfer of Property Act:

No Direct Transfer: Directly transferring property to an unborn person is prohibited. Instead, such transfers must be accomplished through a trust mechanism.
Prior Life Interest: A prior life interest must be created, which means that the property must be in possession of a living person between the date of the transfer and the birth of the unborn person. The interest in favor of the unborn person should always follow a prior interest created in favor of a living person.
Absolute Interest: The entire property should be transferred in the name of the unborn person. Partial interests or interests lasting only for life cannot be given to an unborn person.

Procedure for a Valid Transfer of Property to an Unborn Person:

Section 13 outlines a specific procedure for transferring property for the benefit of an unborn person:

The individual intending to transfer property for the benefit of an unborn person must first create a life interest in favor of a living person.
Afterward, an absolute interest in favor of the unborn person can be established.
If the unborn person comes into existence during the period when the life interest is in place, the property's title will immediately transfer to the newly born individual. However, possession of the property will only be granted upon the death of the person holding the life interest.

Case Laws Relevant to Transfer of Property to an Unborn Person:

Girjesh Dutt vs. Datadin: In this case, a gift was made for the life of 'B' and then to 'B's daughter without the power of alienation. If 'B' had no heir, the property would go to 'A's nephew. The court held that the gift in favor of unborn daughters was invalid under Section 13 because it was a limited interest and subject to the prior interest in favor of 'B.'
Raja Bajrang Bahadur Singh v. Thakurdin Bhakhtrey Kuer: The Supreme Court observed that no interest can be created directly in favor of an unborn person. However, when a gift is made to a class or series of persons, some of whom exist and some are nonexistent, it remains valid for the persons who exist at the time of the testator's death but is invalid for the rest.

The transfer of property to unborn persons is possible through indirect means using trusts. Section 13 of the Transfer of Property Act ensures that such transfers adhere to specific conditions to prevent obstacles in the free disposition of property for future generations. To make a valid transfer in favor of an unborn person, it is crucial to convey the entire remaining interest of the property to the unborn individual. This ensures that the transfer takes effect in accordance with the law, and any other approach may render the transfer void.

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Rule Against Perpetuity Explained

Definition of Rule Against Perpetuity: The rule against perpetuity, as defined under the Transfer of Property Act, places a limit on the maximum time period during which property can be transferred. In this context, "perpetuity" means an indefinite or limitless duration. This rule prevents the creation of transfers that render a property inalienable for an indefinite period, known as the perpetuity period. Section 14 of the Transfer of Property Act addresses the rule against perpetuity.

Conditions for Compliance:

Transfer During Lifetime: To prevent violations of Section 5 of the Transfer of Property Act, property transfers must occur during the lifetime or before the death of the person with prior interest and the conception of the beneficiary. Failing to do so will render the transfer void.

Attainment of Full Age: The transfer of property to an unborn person or the creation of an interest in favor of the beneficiary can happen in three stages:

Interest is established upon conception.
It becomes a vested interest at birth, according to Section 20 of the Transfer of Property Act.
It fully vests upon the beneficiary attaining the age of majority. Absolute interest encompasses the enjoyment of property, possession, and alienation.

Object of the Rule Against Perpetuity: The primary objective of the rule against perpetuity is to ensure that property remains transferable and does not become inalienable for extended periods. This promotes the free circulation of property, benefiting trade, commerce, society, and property ownership. It aims to prevent the creation of perpetuities, which could hinder the active use and transfer of property.

Conditions for Rule Against Perpetuity under the Transfer of Property Act:

Transfer of Property: There must be a transfer of property.
Beneficiary: The transfer must aim to benefit an unborn person, meaning the ultimate beneficiary.
Timing of Interest: The interest created must take effect during the lifetime of a living person and during the minority of the unborn person.
Birth of Unborn Person: The birth of the unborn person must occur before the death of the person holding the property interest at the end of the living person's interest.
Vested Interest: The vested interest in favor of the ultimate beneficiary can only be postponed until the end of the living person's lifetime.

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Differences in the Rule Against Perpetuity between Indian Law and English Law:

In India, the minority period is 18 years, while it is 21 years in English law.
Under Indian law, the period of gestation must be an actual period, whereas under English law, it is a gross period.
Indian law requires the property to be given absolutely to the unborn person, while English law does not require absolute transfer.
In Indian law, the unborn person must come into existence before the death of the last life estate holder, whereas in English law, they must exist within 21 years of the last life estate holder's death.

Exceptions to the Rule Against Perpetuity:

Transfer for Public Benefit: Property transferred for the benefit of the general public, such as for knowledge, religion, health, commerce, or any other beneficial purpose to mankind, is not void under this rule.
Covenants of Redemption: This rule does not affect covenants of redemption in mortgages.
Personal Agreements: Agreements that do not create any interest in the property are not affected by this rule. It applies only to transfers where an interest is created.
Pre-emption: The rule does not apply to contracts of perpetual lease renewal.
Perpetual Lease: It is not applicable to contracts for perpetual lease renewal.

Vested Interest for the Ultimate Beneficiary:

A vested interest in favor of the ultimate beneficiary is achieved either:

Upon the death of the person with a life interest in the property, or
After a period of 18 years, or a longer period if applicable, from the creation of the interest. Any condition extending beyond this period is void.

Conclusion: Section 14 of the Transfer of Property Act establishes the rule against perpetuity to prevent the stagnation of properties and ensure their free circulation for the benefit of society. This rule encourages property's active use and transfer, which is essential for trade, commerce, and the overall betterment of society.

Case Laws under Rule Against Perpetuity under Transfer of Property Act:

Girish Dutt vs. Data Din: In this case, the court held that transfers intended to be effective upon failure of earlier transfers are void under Section 13 of the Act.
T. Subramania vs. T. Varadharayas: The court held that an interest created in favor of the eldest son was limited to his lifetime, making it invalid under the rule against perpetuity.

Vested Interest and Contingent Interest

Understanding Vested Interest

Definition of Vested Interest: Vested interest refers to an interest in a property that is created in favor of a person without specifying a specific time or connection. In a vested interest, the interest in the property belongs to the transferee, even though the right to enjoy the property may be delayed. The person with the vested interest does not have immediate possession of the property but has the expectation of receiving it upon the occurrence of a specified event.

Section 19 of the Transfer of Property Act defines Vested Interest: "Where, on a transfer of property, an interest therein is created in favor of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen, such interest is vested, unless a contrary intention appears from the terms of the transfer."

Example of Vested Interest: Suppose 'X' promises to transfer his property to 'Y' when 'Y' reaches the age of 22. 'Y' will have a vested interest in 'X's' property until he gains possession of it. If 'Y' were to pass away at the age of 21, the vested interest would transfer to 'Y's' legal heirs, who would be entitled to the property within the specified time frame.

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Characteristics of Vested Interest:

Certainty: Vested interest does not depend on an uncertain event; it creates an immediate or present right, even though the right to enjoy the property may be postponed.
Survivability: Vested interest does not cease to exist upon the death of the transferee. Instead, the property is transferred to the transferee, and upon the transferee's death, it passes to their heirs.
Transferability and Heritability: Vested interest is both transferable and heritable, depending on the nature of the transfer and any associated conditions.

When Does Vested Interest Occur? Vested interest can occur in two stages:

Immediate Possession: When the transferee is in immediate possession of the property.
Delayed Enjoyment: When the transferee has acquired an interest in the property but does not have current possession, and the right to enjoyment is deferred to a future date.

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Understanding Contingent Interest

Definition of Contingent Interest: Contingent interest refers to an interest created in favor of a person that depends on the occurrence of a specified uncertain event. In a contingent interest, the right to the property is not granted until the uncertain event happens, and if the event does not occur, the person does not receive the property. The contingent interest is entirely contingent on the condition imposed on the transfer.

Conditions for Contingent Interest:

Dependence on Uncertain Event: Contingent interest occurs when the interest depends on a specified uncertain event.

Examples of Contingent Interest:

If 'A' agrees to transfer property to 'B' on the condition that 'B' scores 90% on an exam, 'B' acquires a contingent interest in the property. 'B' will only receive the property if the condition of scoring 90% is fulfilled.
When a person has the chance to own a particular property, but the event that would trigger ownership has not occurred, their interest in the property is contingent.

Exceptions to Contingent Interest under Section 120 of the Indian Succession Act, 1925:

When a person becomes entitled to an interest upon reaching a particular age, and the transferor also gives them the income arising from such interest before they reach that age, or directs that the income, or a portion thereof, be applied for their benefit, such interest is not contingent.

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Characteristics of Contingent Interest:

Conditionality: Contingent interest depends entirely on the fulfillment of a specified condition. If the condition is not met, the interest is not realized.
Survivability: Contingent interest ceases to exist if the uncertain event does not occur. It is not transferable or heritable unless the contingent event takes place.

Vested interest is an immediate or present interest in a property, while contingent interest depends on the occurrence of a specified uncertain event. Both types of interests have distinct characteristics and implications, and they play a crucial role in property transfers and ownership rights.

Case Law: Lachman vs. Baldeo (1919) 21 OC 312

In this legal case, a deed of gift was transferred by one individual in favor of another person. However, the transferor included an instruction that the transferee should not take possession of the property until the transferor's own demise. Despite the postponement of the right to enjoy the property, the transferee was deemed to have a vested interest in the property.

Case Law: Leake vs. Robinson (1817) 2 Mer 363

In the case of Leake vs. Robinson, the court established a significant legal principle. It was ruled that whenever a condition is attached to a legacy, specifying that it is to be given 'at a particular age,' 'upon attaining a particular age,' or 'a specific age,' it can be inferred that the transfer involves a contingent interest.

Doctrine of Election in Property Law

The doctrine of election in property law pertains to the choice made by an individual between two alternative or incompatible rights when presented with such a situation. Under this doctrine, if a person is granted two rights through a single instrument, with one right being contingent on the other, they are obligated to select one of these rights. This means that the beneficiary cannot simultaneously enjoy both rights; they must choose between the conflicting options. Essentially, the person who receives a benefit under an instrument must also bear any associated burdens.

The doctrine of election is codified in the Transfer of Property Act, 1882, under Section 35, and is also found in sections 180-190 of the Indian Succession Act. It requires individuals to make a choice regarding whether they wish to assume ownership of someone else's property and whether they intend to uphold the conditions set forth.

Understanding the Doctrine of Election

The doctrine of election is founded on the principle that one cannot accept a benefit under an instrument or transaction and simultaneously reject or disapprove of its unfavorable aspects. In simpler terms, if an individual accepts a benefit from a deed or instrument, they must also accept any corresponding obligations or conditions.

For instance, consider a scenario in which 'A' promises to give 'B' 50 lakh rupees but with the condition that 'B' must sell his house to 'C.' In this case, 'B' must make a choice between accepting 'A's offer and complying with the condition to give up his house or refusing 'A's offer and retaining his house.

Essential Conditions for Application of the Doctrine of Election

For the doctrine of election to apply, several essential conditions must be met:

The transferor must not be the owner of the property being transferred.
The transferor must transfer another person's property to a third party.
The transferor must simultaneously grant some property from their own to the owner of the property.
Both transfers, i.e., the transfer of the owner's property to the third party and the benefit conferred on the owner, must be part of the same transaction. If they are separate transactions, the doctrine of election does not come into play.
The owner must possess a proprietary interest in the property in question.
If a person directly accepts a benefit under a transaction but diverts another benefit indirectly, the doctrine of election may not apply.

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Exceptions to the Doctrine of Election

There are exceptions to the doctrine of election:

When the owner, while choosing to retain the property, gains an unrelated benefit through the same transaction, they are not required to relinquish this additional benefit.
If the original owner is aware of the obligation to make an election and accepts a benefit, his acceptance is deemed as an election to validate the transfer.
If the owner does not make a choice within a year of the property transfer, the transferor may require the owner to elect. After a reasonable time, if the owner still does not make a choice, it is assumed that they have elected to validate the property transfer.
In the case of a minor, the period for election is postponed until the individual reaches the age of majority, unless represented by a guardian.

Modes of Doctrine of Election

There are two modes of making an election:

Direct Election: This can be done through various means, including a written letter, a telegram, oral communication from the transferor, or any indication by the person that expresses the transferor's intention.

Indirect Election: Indirect election includes three types:

Acceptance of benefits without knowledge of the duty for election: If the owner accepts the benefit without being aware of the duty to make an election, it constitutes an election.
Enjoyment for two years: If the owner holds the property for two years without expressing dissent after knowing the obligation to make an election, it is presumed that they have elected to validate the transfer.
Status quo cannot be restored: In cases involving property that is consumed or used, once consumption begins, the election is presumed to have taken place. No specific time period for consumption is required in this scenario.

Mohd. Kader Ali Fakir vs. Lukman Hakim: This case emphasizes that a person who accepts a benefit under an instrument must also accept any burden imposed by the same instrument. The doctrine of election ensures that one cannot accept favorable aspects while rejecting unfavorable ones under the same instrument.

Dhanpati vs. Devi Prasad and Others (1970) (3) SCC 776: In this case, the court outlined the essential conditions for the application of the doctrine of election. It stressed that the owner must not have a right to transfer the property, must transfer some benefit to the owner of the property, and both transfers must be part of the same transaction. The owner must choose to confirm or dissent from the transfer.

Transfer by an Ostensible Owner in Property Law

An ostensible owner refers to a person who appears to be the legitimate owner of a particular property but, in reality, is not the true owner. This individual is not a trespasser or someone in unlawful possession of the property. Instead, they act as if they are the property owner, often with the consent or acquiescence of the actual property owner.

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Transfer by Ostensible Owner

Section 41 of the Transfer of Property Act deals with the concept of a transfer by an ostensible owner.

Essentials of Ostensible Owner

Several key elements must be met for a transfer by an ostensible owner to be valid:

Transfer of Immovable Property by an Ostensible Owner: This section is applicable to the transfer of immovable property, including partial transfers, such as mortgages. It encompasses various types of transfers beyond just sales or exchanges.
Transfer for Consideration: The transfer must involve a consideration, meaning that it is not applicable to transfers made without any exchange of value, such as gifts.
Consent of the Person Interested in the Property: The transfer must occur with the consent of the person interested in the property, which usually refers to the real owner. This consent can be expressed or implied, but it must be independent and not obtained through fraud or misrepresentation.
Transferee's Good Faith and Reasonable Care: The transferee, the person receiving the property, must have acted in good faith and taken reasonable care before entering into the transaction. This implies that they believed the transferor had the right to transfer the property.

Benami Transaction

Benami transactions are a common example of ostensible ownership. In a benami transaction, one person holds the property while another provides the consideration for it. The person providing the consideration is the actual owner, while the person in whose name the property is held is the ostensible owner.

Benami transactions are now regulated by the Benami Transactions Act, 1988, which prohibits such transactions and imposes penalties. However, there are exceptions to this prohibition, including when someone buys property in their spouse's name or in the name of an unmarried daughter.

Validity of the Transfer

If all the requirements of Section 41 are met, the transfer by an ostensible owner is considered valid and not null or void.

Burden of Proof: Ostensible Owner

The burden of proof under Section 41 falls upon the transferee, who must demonstrate:

That the transferor is an ostensible owner.
That they took reasonable precautions, as a reasonably prudent person would, to protect their interests in the transaction.

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Rule of Estoppel over the Real Owner

Section 41 operates on the principle of estoppel. If the real owner of the property assures the transferee that the ostensible owner has the right to deal with and alienate the property, and the transferee reasonably believes this to be true even after taking due care, the real owner is prevented from later questioning the transfer. This is based on the idea that the real owner's conduct led to the transfer, and the innocent party should not suffer as a result.

Padam Chand vs. Lakshmi Devi: In this case, a gift deed was executed by the ostensible owner (father) in favor of his daughter. The transfer was based on love and affection. The court held that Section 41 did not apply because there was no monetary consideration involved.
Ramcoomar Koondoo vs. Macqueen: This case involved property purchased by Alexander Macdonald in the name of his mistress, Boono Baby. After Alexander's death, the property was sold to Ramdoni Kundu. The court held that the sale was bona fide and conducted with proper investigation, meeting the requirements of Section 41.

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The Doctrine of Lis Pendens in Property Law

The Doctrine of Lis Pendens, derived from the Latin phrase "Pendente lite nihil innovetur," translates to "during the pendency of litigation, nothing new should be introduced." It signifies that when there is ongoing litigation concerning a property, no fresh transactions or interests should be created in relation to that property. The doctrine aims to maintain the status quo of the property in question during the course of legal proceedings.

Key Aspects of the Doctrine of Lis Pendens:

Nature of the Doctrine: The Doctrine of Lis Pendens is rooted in the concept of necessity rather than the principle of notice, as found in common law, which includes principles of justice, equity, and good conscience. It ensures that justice is dispensed without prejudicing the rights of either party.
Legal Basis: Section 52 of The Transfer of Property Act, 1882, embodies the doctrine of lis pendens. It is encapsulated in the maxim "Pendente lite nihil innovetur," which means "nothing new should be introduced in property whose litigation is pending."
Effect of Lis Pendens: When a lawsuit directly involving the title or rights related to immovable property is pending in a competent court, any transaction affecting that property may not be carried out by any party involved in the lawsuit unless it is done under the jurisdiction of the court and according to its conditions.

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Illustrations:

Scenario 1: 'A' files a lawsuit against 'B' regarding a house in 'B's possession. During the litigation, 'B' sells the house to 'C.' If 'A's lawsuit is dismissed, the transfer to 'C' remains valid, and 'C' is not affected by the litigation outcome.
Scenario 2: 'A' files a lawsuit against 'B' regarding a house in 'B's possession. During the litigation, 'B' sells the house to 'C.' If 'A' wins the lawsuit, the transfer to 'C' is voidable, and 'A' has the right to claim the house.

Essentials of the Doctrine of Lis Pendens:

Several elements must be met for the doctrine of lis pendens to apply:

Pendency of Proceedings: There must be a pending case or legal proceeding.
Competent Court: The case or proceeding should be within the jurisdiction of a competent court.
Specific Involvement of Immovable Property: The right to the title of immovable property must be directly and clearly in question in the lawsuit.
Non-Collusive Suit: The lawsuit should not be collusive, meaning it should be a genuine dispute.
Direct Affectation of Rights: The suit should directly impact the rights of other parties involved.
Transfer's Impact on Litigation Rights: Any transfer of the property should affect the litigation rights of the parties involved.

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Non-Applicability of the Doctrine of Lis Pendens:

The doctrine of lis pendens does not apply in certain circumstances:

Sale by mortgage exercised under the power conferred by the mortgage deed.
Cases involving reviews.
Cases where the transferor is the sole party affected.
Cases where the proceedings are collusive.
Cases where the property is inadequately described in the plaint.
Cases where the subject matter of the rights under dispute is different from the property transferred.

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Purpose of the Doctrine of Lis Pendens:

The doctrine of lis pendens is essential to prevent the transfer of the title of a disputed property without the court's consent. Without this doctrine, litigation could continue indefinitely, making it impossible to bring lawsuits to a successful conclusion. The doctrine ensures that the rights of parties are protected and prevents unfair transactions during ongoing litigation.

Applicability of Section 52 of Transfer of Property Act: Conditions to Be Satisfied:

The Supreme Court, in the case "Dev Raj Dogra vs. Gyan Chand Jain and others," established the following conditions for the application of Section 52 of the Transfer of Property Act:

A pending suit or proceeding involving the right to immovable property.
The suit or proceeding must be in a court of competent jurisdiction.
The suit or proceeding should not be collusive.
The right to immovable property should be directly and clearly in question.

Case Laws Illustrating the Doctrine of Lis Pendens:

Ramjidas vs. Laxmi Kumar and Ors. (AIR 1987 MP 78): This case emphasized that Section 52 serves to subject claims related to immovable property to the authority of the court handling the property, ensuring justice is provided without undermining the rights of either party.
Lov Raj Kumar vs. Dr. Major Daya Shanker and Ors.: In this case, the Delhi High Court asserted that the principles of Section 52 of the Transfer of Property Act are aligned with equity, good conscience, and justice. Allowing transactions during pending litigation would defeat the ends of justice and undermine principles of equity.
Har Narain vs. Mam Chand: The Supreme Court clarified that Section 47(2) of The Registration Act, 1908, does not override the doctrine of lis pendens. Land sales are still subject to the doctrine even if the civil action commences before registration.

Understanding Fraudulent Transfers under the Transfer of Property Act

Definition of Fraudulent Transfer: A fraudulent transfer, as per the Transfer of Property Act, refers to the unlawful transfer of property with the intent to deceive or defraud creditors. Such transfers involve the intention to hinder creditors from exercising their legitimate and equitable rights. When a transfer is made with fraudulent intent, it is considered unjust and contrary to principles of equity and justice, even if it is legally valid.

Relevant Section: Section 53 of the Transfer of Property Act, 1882, deals with fraudulent transfers.

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Key Elements of Fraudulent Transfer:

Transfer with Intent to Defeat Creditors: To qualify as a fraudulent transfer, it must involve the intent to defeat or delay the rights of the transferor's creditors. This intention is crucial in establishing a fraudulent transfer.
Delaying Creditor Satisfaction: The primary objective of a fraudulent transfer is to place the property beyond the reach of creditors, causing a delay in satisfying their debts.

Example: If 'A' transfers ownership of his property to 'B' with the intention of shielding his assets from creditors, this transfer is deemed fraudulent.

Legal Consequences of Fraudulent Transfer: A fraudulent transfer of property creates a civil cause of action. The affected creditor can approach the court to set aside such a transfer. The court has the authority to declare a fraudulent transfer void at the request of the defrauded creditor.

Objective of the Doctrine of Fraudulent Transfers: The primary objective of Section 53 is to protect the rights of creditors who may be owed financial liabilities by the transferor. It aims to provide security to those creditors who might suffer delays or defeats in their claims due to the transferor's ill intentions. Creditors, who have done nothing more than lend money to the deceitful transferor, deserve legal protection, which can only be provided by legislative policy.

Essentials of Fraudulent Transfer under the Transfer of Property Act:

Transfer by the Transferor: The property must be transferred by the transferor.
Involvement of Immovable Property: The property being transferred should be immovable.
Transfer without Consideration: The transfer should be made without proper consideration.
Intent to Defraud Creditors: The transfer must be executed with the intent to defraud subsequent transferees and to defeat or delay the rights of creditors.
Voidable at the Option of Subsequent Transferee: Such transfers are voidable at the option of subsequent transferees.

Exceptions to Fraudulent Transfer:

A fraudulent transfer may not be void if the following conditions are met:

The transfer was made in good faith.
The transfer was made for consideration.

Filing a Suit for Fraudulent Transfer:

Suits related to fraudulent transfers are typically filed by the affected creditor. The suit is framed based on the grounds that the transfer was made with the intent to defraud or delay the transferor's creditors. These suits are instituted on behalf of all creditors to avoid multiple lawsuits against the same parties on the same matter.

Burden of Proof in Fraudulent Transfer Cases:

There is no presumption in law that a transfer was made with the intent to defraud creditors. The burden of proof initially lies with the creditors to demonstrate the transferor's intent to defeat or delay them. Once the creditors establish a prima facie case of fraudulent intent, the burden shifts to the transferor to provide a defense and explain the circumstances.

Proviso: The law protects bona fide transferees who have paid consideration for the transfer and were unaware of the fraudulent intentions of the transferor. However, if the transferee had constructive notice of the fraud, it is assumed that they knew about it.

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Case Laws Illustrating Fraudulent Transfers:

Kanchanbai vs. Moti Chand (AIR 1967 MP 145): In this case, the court clarified that the term "creditors" includes even a single creditor. The fraudulent transfer provision applies even if the intent was to defraud a single creditor.
Dr. Vimla vs. Delhi Administration (AIR 1963 SC 1572): The Supreme Court held that fraud involves two elements: deceit and injury to the defrauded party. Injury is not limited to economic loss but also encompasses harm to one's body, mind, reputation, or deprivation of property or money.

The doctrine of fraudulent transfers aims to protect the rights of creditors and ensure that fraudulent transactions do not hinder their legitimate claims.

Understanding the Rule of Part Performance

Definition of Rule of Part Performance: The rule of part performance is a legal principle based on equity. It was developed in England and later incorporated into the Transfer of Property Act, 1882, through the Amendment Act of 1929.

Key Elements of the Rule of Part Performance:

Contractual Agreements: In contractual agreements, such as a contract for sale of property, no rights are transferred until the contract is fully executed. However, if a party to the contract performs their part or takes any actions in furtherance of the contract, they are entitled to reimbursement or compensation if the other party backs out.
Section 53A: Section 53A of the Transfer of Property Act deals with this rule. It stipulates that when both parties in a contract have their respective roles to play, the transferor must get the necessary documents prepared and complete the registration process, while the transferee must pay the agreed-upon amount and take possession of the property.
Failure to Complete the Contract: If the transferor fails to complete the registration or fulfill other contractual obligations, they do not have the right to file a case against the transferee or other parties. However, the rights and ownership of the transferee remain unaffected.

Illustration: Suppose 'A' enters into a contract with 'B' to sell a plot of land for a specified amount. 'A' accepts an advance payment from 'B' and hands over possession of the plot. Later, when 'B' is ready to make the full payment, 'A' refuses to accept it and asks for the plot back.

In this scenario, 'B' is prepared to fulfill their part of the contract, but 'A' is not. In such a case, 'B' can file a case for specific performance against 'A,' even if the sale was not registered.

Essentials of the Rule of Part Performance:

Written Contract: The rule of part performance applies when there is a written contract for the transfer of immovable property by or on behalf of the transferor. It does not apply to oral agreements or agreements that are entirely absent in writing.
Consideration: There should be consideration involved in the contract.
Clear Terms: The contract should outline the terms of the transfer with reasonable certainty.
Transferee's Possession: The transferee must have taken possession of the property as a result of the contract or continued possession if they were already in possession. Possession must be linked to the contract and not for any other purpose.
Act Done in Furtherance: If the transferee was already in possession before the contract, they must have done something in furtherance of the contract. Mere continuation of possession by someone already in possession is not sufficient.

Objectives Behind the Rule of Part Performance: The rule of part performance is based on the principle of equity and is intended to protect the rights of parties in a contract. Its objectives include:

Ensuring that the transferee's right to retain possession is not affected if they have acted in good faith and have not committed any fault in the contract.
Preventing the transferee from suffering due to the transferor's failure to complete the transfer as agreed upon.

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Transfer of Property: The rule of part performance applies to the transfer of immovable property, including sales, leases, and mortgages.

Proviso: The law protects bona fide transferees who have paid consideration for the transfer and were unaware of the transferor's breach of contract. However, if the transferee had constructive notice of the breach, it is assumed that they knew about it.

Case Law Illustration: In the case of Kanchanbai vs. Moti Chand (AIR 1967 MP 145) , the court clarified that the term "creditors" includes even a single creditor. The rule of part performance can be applied even if the intent was to defraud a single creditor.

The rule of part performance aims to protect the rights of parties in a contract and ensure that they are not unfairly affected by the actions or omissions of the other party.

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Case Law Examples of the Rule of Part Performance

Case 1: Kukaji vs. Basantilal (AIR 1955 MB 93)

Facts of the Case:

'A' mortgaged his house to 'B' and handed over possession of the property.
Later, 'A' sold the same house to 'B' without registering the sale deed. The sale consideration was a mortgage loan.
Subsequently, the property was sold to 'C,' and a transfer deed was registered.
'C' filed a lawsuit against 'B' to release the mortgage, while 'B' claimed retention of possession under the rule of part performance, invoking Section 53(A) of the Transfer of Property Act.
The court held that 'B' was already in possession of the property as a mortgagee. Mere continuity of possession does not constitute part performance.
To benefit from the principle of part performance, 'B' needed to demonstrate that they had taken additional actions to advance the contract.

Case 2: Sardar Govindrao Mahadik vs. Devi Sahai

'A' mortgaged his property to 'B' and handed over possession.
Subsequently, 'A' and 'B' entered into an agreement to sell the mortgaged property. 'B' advanced Rs. 1000 to purchase a stamp for the deed, which was never registered.
Later, 'A' sold the property to 'C,' and both 'A' and 'C' filed a lawsuit against 'B' for the redemption of the property.
'B' claimed the benefit of the rule of part performance, arguing that a sale deed was executed in his favor, he retained possession, and he had advanced Rs. 1000 for the stamp, which should be considered as part performance of the contract.
The court held that the money provided for the purchase of the stamp was related to the contract, but no further actions were taken to advance the contract.
'B' was not entitled to the benefit of the rule of part performance in this case.

These case law examples illustrate the application of the rule of part performance in situations where possession alone is not sufficient to claim part performance, and additional actions or advancements of the contract are required to establish the right to retain possession.

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Definition of Actionable Claim:

An actionable claim refers to a claim or debt for which legal action can be taken. It signifies a right to enforce a claim through legal means. This term often pertains to unsecured debts or beneficial interests in movable property that are recognized by civil courts as grounds for seeking relief. Actionable claims can be transferred, and their transfer is regulated by the Transfer of Property Act, 1882.

Actionable Claim under the Transfer of Property Act:

Under the Transfer of Property Act, an actionable claim encompasses claims to unsecured debts or beneficial interests in movable property that are not in the possession of the claimant. These claims can be transferred from one party to another, and the Act provides guidelines for their transfer in Chapter VIII, which includes sections 130 to 137.

Examples of Actionable Claims:

Claim for Arrears of Rent: A tenant's claim for unpaid rent is considered an actionable claim. The tenant can take legal action to recover the overdue rent.
Claim for Money Due under an Insurance Policy: If an insurer owes a policyholder a sum of money as per the terms of an insurance policy, this claim can be an actionable claim. The policyholder can seek legal remedies to enforce the claim.
Claim for Return of Earnest Money: When earnest money is given as part of a contract and the contract falls through, the party who deposited the earnest money can pursue it as an actionable claim.
Right to Get Back the Purchase Money in Case of Set Aside Sale: If a sale is set aside for any reason, the buyer has the right to recover the purchase money. This right is considered an actionable claim.
Right of a Partner to Sue for an Account of a Dissolved Partnership Firm: When a partnership firm dissolves, a partner may have the right to sue for an account of the firm's financial transactions. This right is an actionable claim.
Right to Claim Benefits under a Contract for the Purchase of Goods: If one party has paid for goods or services and the other party fails to deliver them as per the contract, the party who made the payment can claim benefits as an actionable claim.

Exceptions to Actionable Claim:

Some claims and rights are not categorized as actionable claims under the Transfer of Property Act. These exceptions include:

Debts Secured by Mortgage of Immovable Property: Claims secured by a mortgage of immovable property are not considered actionable claims.
Damages for Breach of Contract: Claims for damages resulting from a breach of contract, whether in tort or contract, are not actionable claims.
Claims to Mesne Profits: Claims for mesne profits, which are payments for possession of immovable property made by a person who does not have the right to allow such possession, are not actionable claims.
Shares in a Company: Claims related to shares in a company are not considered actionable claims.
Claim to Copyright: Copyright claims are not classified as actionable claims under the Transfer of Property Act.

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Transfer of Actionable Claims:

The transfer of actionable claims is regulated by Section 130 of the Transfer of Property Act. To transfer an actionable claim, the following conditions must be met:

The transfer must be executed through a written instrument signed by the transferor or their authorized agent.
The transfer can be with or without consideration.
Once the instrument of transfer is executed, the transfer becomes complete and effective.
All rights and remedies related to the actionable claim then vest in the transferee, regardless of whether notice of the transfer is given to the debtor.

Notice of Transfer to Debtors:

While notice of transfer to debtors is not mandatory for the validity of the transfer, providing notice is advisable to bind the debtor with the transfer. Section 131 of the Transfer of Property Act specifies that the notice must be in writing, signed by the transferor or their authorized agent, and should include the name and address of the transferee.

H. Anraj vs. Govt. of Tamil Nadu, A.I.R. 1986 S.C. 63: In this case, the Supreme Court ruled that the right to participate in a draw is a beneficial interest in movable property, and the objective of participation is to win the award. Therefore, the transfer of such rights qualifies as an actionable claim.

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What is a Mortgage?

A mortgage is a financial arrangement wherein a borrower secures a loan to purchase or maintain real estate, typically a home, and commits to repay the borrowed amount over time through a series of regular payments. In this arrangement, the property itself serves as collateral to guarantee the repayment of the loan. Mortgage transactions involve the transfer of an interest in a specific immovable property, either to secure funds provided through a loan, existing or future debt, or to fulfill an engagement that might lead to a financial obligation.

As per Section 58(a) of The Transfer of Property Act, 1882, a mortgage is defined as the transfer of an interest in a particular immovable property, with the aim of securing the payment of money advanced or to be advanced as a loan, an existing or potential debt, or the performance of an engagement that could result in a pecuniary liability. In this context, the transferor is referred to as the mortgagor, the recipient of the transfer as the mortgagee, the total sum involving principal and interest currently secured is known as the mortgage-money, and the associated document, if any, formalizing the transfer is termed a mortgage-deed.

Characteristics of a Mortgage:

Involves Immovable Property: Mortgages are applicable exclusively to immovable property, which includes land and structures, along with profits derived from land-related assets such as trees, buildings, and machinery. However, it is important to note that machinery not permanently affixed to the earth and capable of relocation is not considered immovable property.

Partial Transfer of Ownership: Unlike a sale, where full ownership rights are transferred, a mortgage involves the transfer of specific ownership rights while retaining other ownership rights with the original owner.

Purpose for Securing a Loan: The primary purpose of a mortgage is to secure a loan, leading to a monetary obligation. Property transfer for any other purpose does not constitute a mortgage. For instance, transferring property to settle prior debts would not qualify as a mortgage.

Specific Identification of Property: The mortgaged property must be distinctly identifiable based on attributes such as size, location, and boundaries.

Possession May Remain with Mortgagor: The actual possession of the mortgaged property is not always transferred to the mortgagee. The mortgagor can retain possession while securing the loan.

Right to Property Returns to Mortgagor: After repaying the debt, the mortgagor regains full ownership rights over the mortgaged property.

Mortgagee's Right to Recover Debt: If the mortgagor fails to repay the loan, the mortgagee has the right to recover the debt by selling the mortgaged property.

Who is a Mortgagor?

A mortgagor is an individual or entity that borrows money from a lender, typically for the purpose of acquiring real estate, such as a home or other property. The mortgagor is the party that transfers an interest in a specific immovable property as collateral to secure a mortgage loan. The term is often used in the context of real estate transactions, where the mortgagor pledges the property as security to obtain financing for the purchase.

Mortgagors can secure different mortgage loan terms depending on various factors assessed during the loan approval process. Mortgage loans are considered secured loans, meaning they are backed by the collateral of real estate, and this collateral serves as a guarantee for the repayment of the loan. If the mortgagor fails to make timely payments, they may face foreclosure, which could result in the lender taking possession of the property.

For example, if an individual, 'A,' wishes to purchase a home and needs a loan to do so, 'A' becomes the mortgagor when they transfer an interest in the specific immovable property (the purchased home) to secure the loan. 'A' is responsible for repaying the loan according to the agreed-upon terms.

Who is a Mortgagee?

A mortgagee is a lender or financial institution that provides a mortgage loan to a borrower, commonly known as the mortgagor. In a mortgage transaction, the mortgagee is the recipient of the mortgage and holds the interest in the specific immovable property pledged as collateral. The term "mortgagee" is typically used in real estate and lending contexts, referring to the party that lends money for the purchase or refinancing of property and receives a security interest in return.

The mortgagee plays a crucial role in the mortgage process, as they have a legal claim on the mortgaged property until the borrower repays the loan in full. This legal interest ensures that the mortgagee has a right to take possession of the property and sell it if the mortgagor defaults on their loan payments. The mortgagee is also responsible for determining the terms and conditions of the mortgage loan, overseeing the servicing of the loan, and managing the title rights related to the property.

What is a Charge under the Transfer of Property Act?

The concept of a "Charge" under the Transfer of Property Act refers to an interest established over an immovable property to secure the repayment of a debt or obligation owed to another party. In essence, it is a financial encumbrance placed on a property without transferring ownership. Notably, not all charges are classified as mortgages, as the two terms are distinct. A charge serves as a legal mechanism to ensure the payment of a specified amount without necessitating a property transfer.

Key Elements of a Charge under the Transfer of Property Act:

Immovable Property: A charge must be linked to an immovable property, which can be either existing or future property belonging to the debtor. The intention is to create security that can be legally enforced.

Clear Specification: The property must be clearly identified and specified as collateral for the debt. Precise details about the property are vital for establishing a valid charge.

No Transfer of Ownership: Unlike a mortgage, a charge does not involve the transfer of property ownership or rights. It creates a personal obligation or the right to pay from the specified property.

Creation by Agreement: A charge can be created through a mutual agreement between the parties involved. It does not require specific technical language or formalities, but the intention to use the property as security must be evident from the agreement.

Operation of Law: Charges can also arise by operation of law, without the parties' explicit consent. This occurs when legal requirements compel certain obligations, even without the parties' intent.

Exceptions to Charges:

Two exceptions to charges are defined in Section 100 of the Transfer of Property Act:

Charges on Trust Property: A charge cannot be created on immovable property that serves as trust property for incurring expenses related to trust execution or maintenance.

Notice Requirement: If a property is transferred to a new owner without their knowledge of an existing charge on the property, the charge cannot be enforced against them.

Differences Between Charge and Lien:

A charge and a lien are distinct legal concepts:

Origin: A charge can be created by agreement or operation of law, while a lien arises solely by operation of law.
Applicability: A charge applies to immovable property, while a lien can pertain to both movable and immovable assets.
Possessory Nature: A charge is non-possessory, whereas a lien is possessory in nature.
Satisfaction of Claims: A charge holder can satisfy their claim by selling the property subject to the charge, while a lien holder can satisfy their claim through private sale or by retaining possession of the property.

Types of Charges under the Transfer of Property Act:

Two common types of charges are:

Fixed Charge: Created on specific, unchanging assets such as land, buildings, or machinery. The identity of the assets remains constant during the loan period, and the lender typically has significant control over them.

Floating Charge: Established on assets that can change or fluctuate, such as stock or debtors. These assets can be used in the ordinary course of business until the charge crystallizes, usually upon default or insolvency.

Registration of Charges:

Registration of charges is mandatory for corporations under the Companies Act, 2013. Companies must register charge particulars with the Registrar of Companies within 30 days of creating the charge. Failure to do so can render the charge void against the liquidator and other creditors. However, the charge remains valid until the company goes into liquidation.

If there is a valid reason for delay, the Registrar may condone it, allowing for late registration within 300 days of the charge's creation. The company can request an extension by submitting Form CHG-10 and providing a statement ensuring that the rights of intervening creditors are not adversely affected. In cases of continued non-compliance, the company can seek an extension from the Central Government under Section 87 of the Companies Act.

Case Law Examples on Charges under the Transfer of Property Act:

JK (Bombay) Private Ltd vs. New Kaiser-I-Hind Spinning and Weaving Co Ltd (1970 AIR 1041, 1970 SCR (3) 866): In this case, the court ruled that while a charge does not involve the transfer of interest or property, but rather the creation of a right for payment from a specific property, a mortgage, in contrast, entails the actual transfer of property or interest. The court emphasized that no specific wording is necessary to establish a charge; however, there must be a clear intention to create a property security for immediate payment.

Raychand Jivaji vs. Basappa Virappa Bellary (1940) 42 BOMLR 1113: The court in this case determined that it is sufficient to establish a charge if the document clearly indicates the intention to use the property as security for the payment of money, without transferring any rights or interests in the property.

Debi Singh and Ors. vs. Jagdish Saran Singh (AIR 1952 All 716): This case clarified that a mortgage is a legal arrangement in which a person borrows money, secures repayment, and pays interest by creating a right or charge in favor of the lender on their movable and/or immovable property.

Hasan vs. Mt Kalawati (147 IC 302, AIR 1933 All 934): The Calcutta High Court's decision in this case held that if an instrument is explicitly labeled as a mortgage and grants the mortgagee the power to recover the mortgaged money from the sale of the property, it should be treated as a mortgage. However, if the instrument does not overtly appear as a mortgage but instead establishes a lien or directs the recovery of money from a specific property without mentioning a sale, it creates a charge.

Understanding Sale under the Transfer of Property Act:

Definition of Sale under Transfer of Property Act: Sale, as defined under the Transfer of Property Act, refers to the transfer of ownership of a property in exchange for a price, whether paid, promised, partly paid, or partly promised. While the term "sale" is commonly associated with the purchase and sale of goods and services, under the Act, it specifically pertains to the sale of immovable property and is governed by Section 54 of the Transfer of Property Act, 1882.

Key Definitions from Section 3 of the Act: To fully grasp the concept of sale, it's essential to understand certain key definitions provided in Section 3 of the Transfer of Property Act:

Immovable Property: Immovable property includes all benefits arising from the land and objects attached to the earth but excludes standing timber, growing crops, or grass.
Instrument: Instrument signifies a non-testamentary, written document that formalizes a legal transaction, such as a contract, deed, bond, or lease.
Registered: Registered denotes that the document has been properly recorded in accordance with the provisions of the Registration Act, ensuring its legal validity.
Attached: Attached describes the physical union of two independent structures or objects, establishing a relationship between them.

Section 54 of the Transfer of Property Act: Section 54 of the Act offers a comprehensive definition of the term "sale" and outlines the manner in which the sale of immovable property can take place. In this context, sale implies the complete transfer of all rights in the property being sold, leaving no rights with the transferor.

Key Points from Section 54:

Sale involves the transfer of ownership in exchange for money consideration, whether paid, promised, part-paid, or part-promised.
It encompasses the sale of tangible and intangible immovable property, such as easement rights.

Contract for Sale: A contract for the sale of immovable property is a formal agreement that establishes specific terms between the parties involved. In this contract, the seller commits to selling or delivering the property to the buyer at a predetermined price agreed upon by the buyer. A contract of sale for goods is distinct from the sale of immovable property and is governed by separate laws.

Essentials of a Sale under Transfer of Property Act:

The essentials that must be met for a transaction to be considered a sale under the Transfer of Property Act include:

Parties: A sale involves at least two parties—the seller (transferor) and the buyer (transferee).
Competency: Both the seller and the buyer must be legally competent to enter into the transaction.
Money Consideration: Sale specifically entails the transfer of property in exchange for money, whether paid, partly paid, promised, or partly promised.
Conveyance: The transfer of immovable property can be accomplished through either a registered instrument or delivery of property, depending on the value of the property.
Registration: Sale deeds for tangible immovable property valued at Rs. 100 or more require registration under the Indian Registration Act, 1908.

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Rights and Liabilities of Buyer and Seller: Both the buyer and seller involved in a property sale have specific rights and liabilities:

The seller is obligated to disclose any material defects in the property or title, produce relevant documents of title, answer buyer's questions, and take care of the property until delivery. The seller must also pay any public charges, rents, or existing encumbrances.
The buyer must disclose any facts related to the property's value and pay the purchase money. The buyer bears the loss due to property damage, pays public charges and rents after ownership transfer, and retains encumbrance amounts if applicable.
The buyer is entitled to the benefits of property improvements, rents, and profits after ownership transfer, and may claim charges against the property for unpaid purchase money.

Understanding these elements and legal provisions is crucial for individuals involved in property transactions governed by the Transfer of Property Act.

Case Law Examples Related to Sale under the Transfer of Property Act:

Nahar Lal vs. Brijnath (1928 AC 385): In this case, the court ruled that if the registration of a document is carried out in violation of the provisions of the Registration Act, that document cannot be considered as duly registered. This judgment emphasizes the importance of adhering to the registration requirements outlined in the Registration Act for the validity of property documents.
Umakanta Das vs. Pradip Kumar Ray (AIR 1983 Ori 196): The court's judgment in this case pertains to the content of a sale deed. It states that if a sale deed includes a condition stipulating that the price will be paid within one year, contingent upon the buyer obtaining possession within that timeframe, and if possession is not acquired, the payment of the price will be deferred. Similarly, if the vendee does not gain possession of the property, the payment of the price may be withheld. This judgment clarifies the implications of such conditions within the context of a sale deed.
Raheja Universal Ltd. vs. NAC Ltd. (2012 4 SCC 148): In this case, the court elucidated that a contract for the sale of immovable property or an agreement to sell constitutes an agreement specifying the terms on which the sale of the property will occur. Such an agreement, in itself, does not create any interest or charge on the property. This judgment highlights the distinction between a contract for sale and the actual transfer of property, emphasizing that the former does not confer ownership rights.
Misabul Enterprises vs. Vijaya Srivastava (AIR 2003 Del. 15) : The judgment in this case underscores the necessity of a mutual agreement between the seller and the buyer in a contract of sale. It emphasizes that a valid contract of sale should be based on the consensus and understanding of both parties involved. This principle reinforces the fundamental requirement of mutual consent in property transactions governed by the Transfer of Property Act.

Gift Under the Transfer of Property Act:

Definition of Gift under the Transfer of Property Act: A gift under the Transfer of Property Act is the transfer of certain existing movable or immovable property made voluntarily and without consideration by one person, referred to as the 'donor,' to another person, known as the 'donee,' and accepted by or on behalf of the donee. The donor is the person transferring the property, while the donee is the recipient of the gift.

Essentials of a Gift under the Transfer of Property Act:

Involvement of Two Persons: A gift must involve two parties—the donor and the donee. The donor must be of sound mind, competent to make a gift, of the age of majority, and not disqualified by law.
Voluntary Transfer: The gift should be made voluntarily, without any undue influence, coercion, or force. It must be a result of the donor's free will.
Transfer of Ownership: A gift entails the transfer of both the property and its ownership, along with all associated rights and liabilities.
Existing and Transferable Property: The property subject to the gift must exist at the time of the gift, and it must be transferable. Gifts of uncertain or future assets are not valid.
Living Donor and Donee: Both the donor and the donee must be living at the time of the gift. If the donee dies before accepting the gift, the gift becomes void.
Gift Deed: A gift should be documented through a gift deed, which declares that the gift is voluntary and without consideration. It also affirms the donor's solvency.
Acceptance by Donee: The donee must accept the gift, and this acceptance should be recorded in the gift deed. Acceptance must occur during the donor's lifetime; otherwise, the gift may become invalid.

Void Gifts under the Transfer of Property Act: Gifts can be rendered void under various circumstances, including:

The donee dies before accepting the gift.
The gift is made for an illegal purpose.
A condition imposed on the gift is forbidden by law or is unlawful.
The donor or donee is incapable of making or receiving a gift, such as being a minor or of unsound mind.

Universal Donee: A universal donee, as defined in Section 128 of the Transfer of Property Act, means that when a transfer is made, the entire property of the donor, along with all debts and liabilities at the time of the transfer, is transferred to the donee. The donee becomes personally liable for these debts and liabilities.

Onerous Gift: Onerous gift, as defined in Section 127 of the Transfer of Property Act, pertains to a situation where a gift is made in one transfer to the same person with several items. In such cases, the donee has the option to accept one item and reject the others. This concept is based on the principle that one who receives a benefit must also bear the burden.

Creation of an Effective Gift: According to Section 123 of the Transfer of Property Act, the transfer of immovable property by way of gift must be executed through a registered instrument or on behalf of the donor, and it must be attested by at least two witnesses. For movable property, either a registered instrument or delivery of possession is sufficient.

Grounds for Revocation or Suspension of a Gift: Section 126 of the Transfer of Property Act provides grounds on which a gift can be revoked or suspended, including:

Coercion or undue influence in obtaining the donor's consent.
Dependency of the gift's validity on a specified event not subject to the donor's will.

Case Laws related to Gift under Transfer of Property Act:

Padma Chand vs. Laxmi Devi, 2010 (173) DLT 604: The court held that a gift is a voluntary transfer of property without any consideration, carried out by the owner of the property, resulting in a transfer of ownership without pecuniary benefits.
Vimala vs. Narayanaswamy, 1996 ALHC 4170 KAR : The court ruled that when a document is intended to take immediate effect, transferring the property during the executor's lifetime, it constitutes a gift deed rather than a will.
D.N. Dawar vs. Ganga Ram Saran Dhama, AIR 1993 Del.P 19: In this case, the court emphasized that for the gift of immovable property, mere delivery of possession is insufficient to transfer title if the document is not registered.
Shahdev vs. Sheikh Papa (1905) 29 Bom: The court held that gifts of immovable property are compulsorily registerable and serve as notice to subsequent transfers, although they may not apply to transactions preceding registration.

Lease in Transfer of Property Act:

Definition of Lease under Transfer of Property Act: A lease of immovable property, as defined under the Transfer of Property Act, is the transfer of the right to enjoy such property for a certain period, either express or implied, or in perpetuity, in consideration of a price or promise, or money, a share of crops, services, or any other valuable consideration, to be periodically rendered or on specified occasions, to the transferee (donee) by the transferor (donor). Lease-related provisions in the Transfer of Property Act, 1882 are covered from Section 105 to Section 117, and a lease can only pertain to immovable property.

Lease under the Transfer of Property Act: Section 105 of the Transfer of Property Act provides the definition of a lease, stating that it involves the transfer of immovable property for a specific duration, in consideration of which the transferee accepts the terms and conditions specified in the agreement. The Transfer of Property Act, 1882, governs leases, encompassing Sections 105 to 117.

Key Parties in a Lease:

Lessor: The transferor, or person granting the lease, is referred to as the lessor. The lessor retains ownership of the property but transfers the right to possession and enjoyment to the lessee.
Lessee: The transferee, or person receiving the lease, is known as the lessee. The lessee gains the right to possess and enjoy the property for the agreed-upon duration.

Essentials of a Lease under Transfer of Property Act: To constitute a valid lease under the Transfer of Property Act, certain essential elements must be met:

Competent Parties: Both lessor and lessee must have the legal capacity to enter into a contract. The lessor should be the rightful owner of the property and mentally competent, not disqualified by any legal provisions.
Right of Possession: A lease involves the transfer of the right to possess and enjoy the property while retaining ownership with the lessor. It differs from a sale where ownership is also transferred.
Consideration: A lease must involve consideration, which can be in the form of rent or premium. It represents the price paid or promised for the transfer of possession and enjoyment.
Acceptance: The lessee must accept the terms and conditions of the lease agreement, acknowledging the transfer of rights and responsibilities.
Specified Time Period: A lease always has a defined duration, which should be mentioned in the lease agreement. While the time period can be relaxed at the option of the lessor, it is generally specified.
Right to Enjoy: The lessee gains the right to enjoy the property for the agreed-upon duration but does not acquire ownership rights. The property may not be further transferred without the lessor's consent.

Termination of a Lease: A lease can be terminated through various means as stipulated in the Transfer of Property Act:

Lapse of Time: The lease terminates upon the expiry of the specified duration mentioned in the lease agreement.
Specified Event: If the lease is based on the occurrence of a particular event, it terminates when that event takes place.
Interest Termination: When the lessor's interest in the property is terminated or disposed of, the lease also comes to an end.
Same Owner: If the interests of both the lessor and the lessee merge into one, the lease is terminated.
Express Surrender: When both parties mutually agree to terminate the lease before its stipulated duration, it can be surrendered.
Implied Surrender: If the lessee enters into a new lease agreement with another party, it implies the surrender of the existing lease.
Forfeiture: A lease can be forfeited if the lessee breaches a condition, conveys the title to a third party, or becomes bankrupt, depending on the terms of the lease.

Notice to Quit and Its Implications: A notice to quit is a formal written statement issued to the lessee by the lessor when the lessee intends to terminate the lease agreement, either on the grounds specified in Section 111 or upon the expiry of the duration mentioned in Section 106. The notice to quit can be waived, either expressly or implicitly, as described in Section 112. The waiver indicates the intention to continue the existing lease.

Effect of Holding Over: Section 116 explains the effect of holding over, where the lessee retains possession after the termination of the lease. If the lessor accepts this, it is not considered a new lease but rather a continuation of the existing one. The lease becomes renewable, typically as a monthly or yearly lease, based on the terms outlined in Section 106.

Case Laws related to Lease under Transfer of Property Act:

State Bank of Hyderabad vs. Nehru Palace Hotels, AIR 1991 SC 2130: In this case, the court upheld that a lease involves the transfer of the right to enjoy property for a specified duration, in consideration of a price paid or promised, be it in cash or any other valuable consideration.
Bengal A & I Corporation vs. Corporation of Calcutta, AIR 1960 Cal 123 (133): The court held that the subject matter of a lease must be clearly defined and ascertainable. A lease cannot be valid when the land is yet to be identified and carved out of a larger parcel of land.
Jaswant Singh Mathura Singh vs. Ahmedabad Municipal Corporation, AIR 1991 SC 2130: In this case, the court determined that a lease grants a right or interest in enjoying the demised property, and the tenant has the right to retain possession until legally terminated and evicted in accordance with the law.

Important PYQs of Transfer of Property Act for Judiciary

1. An unequivocal and irrevocable settlement conferring enjoyment rights over the property in present and each getting a specific share in it upon the death of the settlor would create:

A. A contingent interest in favour of each of the beneficiary

B. A vested interest in favour of each of the beneficiary

C. Either A or B depending on the facts of the case

D. Neither A nor B, as it would be void

2. B gifts a share of business to A on the condition that in case B does not like the future daughter-in-law of B, the property will revert back to B. Which of the following statements will apply?

A. The gift and condition and valid

B. The gift is absolute, condition is invalid and discarded

C. The gift is void in totality

D. The gift is valid in case B’s son choose not to marry

3. B makes a gift deed in favour of A. The gift deed contains transfer of three houses unburdened by obligations, two houses which are mortgaged with C, two cars under the hire purchase agreement and three horses, one of which is lame. Which of the following statements will apply?

A. A can accept the whole gift, he has an option to accepting or not accepting the lame horse

B. A must accept the whole gift or refuse the same

C. A can choose to take gift of three houses and avoid all the rest

D. A has a choice to take over movable property and avoid immovable property

4. B makes a gift of residential house comprising of three distinct units, one each to D, E and F. E refuses the gift. Which of the following statements will apply?

A. One unit will default back to B

B. The house will be divided equally between D and F

C. E will continue to own one unit

D. None of these

5. B transfers some property to C with a condition that in case A marries during B’s lifetime the property will go to B. A marries during B’s life. Which of the following statements will apply?

A. The transfer to C is void and property reverts back to B

B. The transfer and condition are valid, and the property will transfer to A

C. The transfer is valid, but condition is invalid property remains with C

D. The transfer is voidable at C’s option

Tips to prepare Transfer of Property Act for Judiciary

Transfer of Property Act for Judiciary exams is important. However, you must understand the concepts thoroughly to score better in the examination. Here are quick tips for preparing for Transfer of Property Act for all state Judiciary Exams:

Go through the previous year's papers and make a comprehensive list of all the topics that were asked in the previous years.
Once you have done that, make sure that you read this article and download the notes for your preparation.
Read from reliable sources, and start making your own notes.
Include examples, explanations and essential case laws.
This will help you in developing a better understanding of all the subjects.
Make sure that your notes are brief; make short notes while covering all the essential topics and details.
After making notes, make sure you revise everything 2-3 times at least.
Practice PYQs and sample questions to test your knowledge on a regular basis.

Conclusion:

To prepare Transfer of Property Act for Judiciary you should make sure that all the important topics of Transfer of Property Act are covered by you and you make notes for yoursef\lf.
For revision you should prefer reading your notes majorly.
Reach out to your mentors and faculties in case you find difficulty in making a strategy to study for Transfer of Property Act.

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Transfer of Property Act: Notes, Case Laws and Reading Materials

Subject-wise Law Notes Transfer of Property Act
December 9, 2023

Section 5 of the Transfer of Property Act, 1882 defines the term transfer of property. According to this section, 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 and other living persons.

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This article provides Transfer of Property Act notes with case laws . The Act provides provisions for transfer of movable or immovable property. As a learner, you can consider it as a free, online, and self-placed course. As a competitive exams aspirant, you will find it perfect for Judicial Service Exams, UPSC CSE Law Optional, etc. And as a reader, this article on Transfer of Property Act notes is sufficient for you to learn or research on Transfer of Property Act!

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Meaning and Definition of Property

General rules and doctrines regarding transfer of property, sale under transfer of property act, mortgage under transfer of property act, lease under transfer of property act, gifts under transfer of property act.

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Transfer of Property

January 17, 2023 | Real Estate Property Transfer is how the title of the property can be transferred under Section 5 of the Transfer of Property Act 1882, and change of ownership from one person to another person can be done.

Property Transfer is how the title of the property can be transferred under Section 5 of the Transfer of Property Act 1882, and change of ownership from one person to another person can be done.

Meaning of Transfer of Property:

The transfer of property in India is subject to the provisions of the Transfer of Property Act 1882 and it is this law that regulates the assignment of property within India. This Act has specific conditions attached for the transfer of property and came into force on 1 July 1882.

As we all know property is classified into 2 kinds:

Immovable property : - This concept includes the Land, houses and all the structures that are constructed on the land.
Movable p roperty : - This includes the properties like jewellery, FDs, Bank accounts and cash.

Under the 1882 Act, 'transfer of property' means an act by which a person conveys the property to one or more persons, or himself, either in the present or in the future.

Transfer of Property with the Available Modes of Transfer:

Property transfer is how the title of the property can be transferred under Section 5 of the Transfer of Property Act 1882, and change of ownership from one person to another person can be done. However, to be able to contract and sign a transfer document the ability to contract is important and to understand the ability to contract, we have to refer to section 11 of the Indian Contract Act, 1872. Section 11 says that every person is competent to contract

Who is of the age of majority according to the law to which he is subject,
Who is of sound mind, and
Is not disqualified from contracting by any law to which he is subject.

Process amounting to the transfer of property:-

We can transfer properties using certain instruments as listed below: -

(1) Gift Deed : - As we are all familiar, transferring property ownership by ‘gifting’ the property using a gift deed is used quite commonly in India. Under, Section 122 of the Transfer of Property Act, 1882, gifting a property must be done voluntarily and without consideration of any kind. An acceptance is made by the recipient during the lifetime of the donor. If the acceptance is not made in the lifetime of the donor, the gift becomes void.

(2) Sale Deed : - The most commonly used method of property transfer is through a Sale Deed. A sale deed is executed between the two parties i.e. the seller and buyer, for monetary consideration. The sale is completed once the ownership gets transferred to the new owner, after registration at the office of the Sub-Registrar of Assurances.

Acts Not Amounting to Transfer

(3) Relinquishment Deed : - Under this mode of conveyance, an owner or relinquisher can release all his rights in favour of the other member without consideration. Stamp duty in these cases will be applicable only on the relinquished property and not the property, as a whole. The basic principle here is that no other person apart from the co-owners can create this Deed, hence there is no actual conveyance of title to any third party but among the co-owners themselves.

(4) Will : - Will is also an effective medium through which the family property can be secured. However, this happens only after the death of the testator and does not qualify the condition of a living or a juristic person to be present. After the death of the testator, the legal heirs need to apply to the concerned civil authorities with a copy of the will, death certificate and Succession Certificate for completing the allocation process.

(5) Partition Deed : - This method helps transfer property ownership from one person to another by a Partition Deed when there are jointly-owned properties. This helps to divide the property so that each person’s share is determined and partitioned. However, again this is between the co-owners and only the shares get bifurcated, hence, it’s not a transfer.

(6) Lease or Leave licence: Although it transfers possession for some time to the lessee or licensee, it’s not transferring the title of the property and the same devolves back on the owner after the expiry of the lease/licence period.

Principles Guiding the Transfer of Property:

The conditions and principles guiding the transfer of property are as under:

Transfer to be effected to a living or juristic person : The main criterion for an effective transfer is that there must be a transfer of the property between living or juristic persons. It could be an individual, firm, corporate or association but not partnerships.
Transfer through Conveyance : A property can be conveyed in the present or the future.
The property must be transferable : Section 6 of Transfer of Property Act, 1882 lists properties that cannot be transferred and if any of the properties fall in that category they cannot be transferred.
Transfer of property must be done by a competent person : The property transferred must be effected by a person of sound mind, the person must be a major or he is not a person disqualified by contract law.
The transfer should be made in a prescribed form : The sale of intangible property should be in a written format with requisite government fees paid.
The rule against perpetuity : Property must be transferred during the lifetime of an individual, as the perpetuity rule cannot be followed. A property cannot be transferred to an unborn child and it is necessary to consider that while transferring the interest of the property, the person should be above the age of 18 years.
Conditional transfer of property : As we know under Section 25 of the transfer of property Act, 1882, the property may be transferred complying with the condition elaborated. However, if the condition becomes impossible, forbidden by law, opposed to public policy, or is immoral the transfer would be held void.

Conclusion:

The Transfer of Property Act was enacted to create an all-inclusive Act that can provide information about the transfer in a very simple language. Hence, as envisaged above, we can effect the transfer of property through various sections of the Transfer of Property Act

Definition of Resolution plan will now include provisions for corporate restructuring: The amendment act has inserted an explanation in the definition of resolution plan to clarify that a resolution plan that proposes the insolvency resolution of a corporate debtor may include the provisions for corporate restructuring, including by way of merger, amalgamation and demerger.
NCLT will have to record reasons for delay in discarding an application for initiation of CIRP: As per the Code, the NCLT must dispose of an application for initiation of CIRP within a period of 14 days from the receipt of application. However, there have been cases when the NCLT has taken more than 14 days to make a decision on the application. Therefore, to ensure speedy disposal and value maximization of the corporate debtor's assets, a proviso has been added which requires that NCLT to record its reasons in writing in case an application is not disposed within 14 days.
Corporate Insolvency Resolution Process to be concluded within 330 days: Earlier, the IBC demanded completion of CIRP within 180 days including a one-time extension of 90 days. However, many a times the Courts have allowed removal of certain periods, for instance, time consumed in litigation, from the compulsory completion period resulting in a lot of unresolved CIRPs well beyond the time duration allowed in the IBC. The Amendment act makes it compulsory for a CIRP to be completed within 330 days including any extension of time granted and time taken under legal proceedings. It further states that any pending CIRPs that have been going on for over 330 days should be completed within 90 days from the date of commencement of the Amendment Act.
Voting by authorised representative representing a class of financial creditors: To avoid any confusion and facilitate decision making in the Committee of Creditors, especially in cases where financial creditors are a large group, the Amendment Act provides that an authorized representative representing a class of financial creditors shall vote on behalf of all the financial creditors he/she represents in accordance with the decision approved by more than 50% of such financial creditors. This principle however would not be applicable in case of voting for withdrawal of CIRP.
Amount payable to functional creditors and disagreeing financial creditors: The Amendment Act provides that payment of debts of operational creditors shall be the higher of
the amount to be paid to these creditors at the time of liquidation of the corporate debtor u/s 53 or
the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance of priority as mentioned u/s 53 (1)
NCLT has not approved or rejected a resolution plan
an appeal is pending at the Supreme Court or at the NCLAT (National Company Law Appellate Tribunal)
a lawsuit has been launched in a court challenging the decision of NCLT in relation to a resolution plan
Committee of Creditors (COC) to contemplate way of distribution submitted in the resolution plan: Besides the current need of approval of resolution plan after keeping in mind the practicality and acceptability of the resolution plan, the amendment act requires that the CoC consider the manner of distribution proposed in the resolution plan by taking into account the order of priority amongst creditors, as prescribed u/s 53 (1) relating to liquidation waterfall, including the priority and value of security interest of a secured creditor.
NCLT approved resolution plan will be binding on the Central Government, State Government or any local authority to whom corporate debtor owes a statutory debt: As per the Code, the approved resolution plan was only binding on the corporate debtor and its employees, creditors, members, guarantors and other stakeholders included in the resolution plan resulting in instances where the Government used to follow up for the balance dues after the said approval of resolution plan. The Amendment Act has now modified Section 31(1) to illuminate that any NCLT approved resolution plan will be binding on the Central Government, State Government and any local authority to whom a corporate debtor owes a debt in respect of payment of dues arising under any law.
Liquidation after setting up the Committee of Creditors (COC): The Amendment Act simplifies by way of an explanation, u/s 33(2) which covers liquidation, that the COC may decide to liquidate the corporate debtor any time after the setting-up of the COC until the confirmation of the resolution plan, including at any time before the development of the information memorandum. This change is pertinent as there have been cases where NCLTs have demanded that a liquidation order may be passed only after failure of the CIRP even though an early liquidation would have resulted in value maximization.

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Home » Must Knows » Legal » Transfer of Property Act, 1882

Transfer of Property Act, 1882

In this article, we discuss the Transfer of Property Act (ToPA), which primarily sets the path for property transfer from one owner to another in India.

Table of Contents

What is Transfer of Property Act?

Under the Indian legal system, properties are divided into two categories – movable and immovable. The Transfer of Property Act (ToPA), 1882, which came into force on July 1, 1882, deals with the aspects of transfer of properties between living beings. One of the oldest laws in the Indian legal system, the Transfer of Property Act is an extension of the law of contracts and runs parallel to the succession laws. For those planning to transfer their immovable property, knowing the key aspects of the Transfer of Property Act is quite important.

What is transfer of property?

The law defines transfer of property as “an act by which a living person conveys property in present or in future to one or more other living persons or to himself or to himself and one or more other living persons”. Living person also includes a company or association or body of individuals.

What are movable and immovable properties?

The difference between movable property and immovable properties lies in the stats of their physical movability. While movable properties can be carried from one place to another, the same is not true of immovable property. This state of immovability makes land and homes immovable property while cash, gold, share, etc. quality as movable property.

See also: Role of Karta in Hindu Undivided Family

Scope of Transfer of Property Act

Ways in which property transfer can take place.

Parties: Under the Transfer of Property Act, a transfer of property can be effectuated by an act of two or more parties or an act by the operation of the law.

Type of property: The Transfer of Property Act is applicable primarily on transfer of immovable property from one living being (inter vivos) to another. Also, the Act is applicable on property transfer by individuals, as well as by companies. However, the Transfer of Property Act is applicable to acts of parties and not on transfers applicable by the law.

Key facts about the Transfer of Property Act, 1882

What does ‘transfer’ mean under Transfer of Property Act ?

The term transfer includes transfer through sale, mortgage , lease, actionable claim, gift or exchange. The Act does not cover transfers by the operation of law, in the form of inheritance, forfeiture, insolvency, or sale through the execution of a decree. The Act is also not applicable on the disposal of properties through wills and does not deal with cases of succession of property.

Types of property transfer under Transfer of Property Act

The Transfer of Property Act talks about six types of property transfers:

Actionable claim

See also: Everything you need to know about gift deed

Who is eligible to t ransfer property ?

Section 7 of the Transfer of Property Act lays down the rules, vis-à-vis people who are legally eligible to transfer their property.

‘Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property, either wholly or in part and either absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed by any law for the time being in force,’ the section reads.

Under the Indian Contract Act, 1872, a person must be at least 18 years of age and have a sound mind, to be eligible to enter into a contract.

Properties that cannot be transferred under Transfer of Property Act

In terms of immovable property, one cannot transfer a property that one expects to inherit in future, states the Transfer of Property Act.

Example: Ram expects that his maternal uncle, who had no children of his own, would bequeath his property to him and he transfers his right in the property to his son, the transaction would be held invalid.

A lessor can also not transfer his right to re-entry into a leased property, under the Transfer of Property Act.

Example: Ram leases his plot to Mohan and puts in a clause in the lease agreement that he would have the right to re-enter, if the rent is not paid for over three months, then, he alone will have the right to do so. He cannot pass on his right to re-enter to, say, Ganesh, his associate.

A real estate developer who has entered into a joint development agreement (JDA) with a land owner, to build a project on the latter’s land, is also not allowed to transfer the ownership of the project thus created under the provisions of the ToP Act. The implications of the JDA are restricted only to the development part of the project. The builder will have to get a general power of attorney to sell the project on behalf of the owner. Even in this scenario, the land owner will be the one providing the conveyance deed to the prospective buyers of the project.

The Act also prohibits the transfer of easement rights – a right to use someone else’s land or property in some way. These include the rights of way (passage), the rights of light, the right of water, etc. Example: Ram has a right of passage over the land belonging to Mohan. Ram decides to transfer this right of way to Ganesh. As this is a transfer of an easement right, it is invalid.

One can also not transfer one’s interest in a property, restricted in its enjoyment.

Example: If a house is lent to Ram for his personal use, he cannot transfer his right of enjoyment to Mohan.

A right to future maintenance is only for the personal benefit of the person to whom it is granted. Hence, this right cannot be transferred. A tenant having a non-transferable right of occupancy, cannot alienate or assign his interests in the occupancy. Similarly, a farmer of an estate that has defaulted in paying revenue, cannot assign his interest in the holding. The same is true of a lessee of an estate under the management of a court of wards.

Transfer of property through verbal/oral agreement under Transfer of Property Act

Section 9 of the Transfer of Property Act says that property transfers could be affected though an oral agreement, unless the law explicitly states that a written agreement must be prepared to conclude the transaction.

In the case of immovable property of value less than Rs 100, such transfers may be made either through a registered instrument or by delivery of possession the property. In a recent ruling, the Karnataka High Court has clarified that the first provision of property transfer overlaps the second– this means property transfer can be made by a registered instrument in all cases. The high court has also stated that possession is enough to prove the ownership of a property that does not require registration under the rules prescribed under the Transfer of property Act.

This means that practically no immovable property can be transferred in the name of another individual without executing a written document.

However, oral arrangements do not typically work, except for partition of property among family members , where the family members can enter into a verbal agreement and divide the property for practical purposes. Exchange of property often requires written agreements for the transaction to be legally valid. This is true for sale, gifts, leases, etc.

Transfer of property to an unborn child under Transfer of Property Act

A person who is planning to bequeath his property to more generations than one, will have to keep the provisions of the Transfer of Property Act in mind, while doing so. This becomes imperative to avoid legal complications at a later stage.

Under the provisions made in Section 13 and Section 14 of the Transfer of Property Act, the transfer of a property directly in favour of an unborn child is prohibited. For this to happen, the person intending to make the transfer will first have to transfer it in favour of a person who is alive on the date of transfer. The property will have to vest in the name of this person, till the time that the unborn child comes into existence. Basically, the interest of the unborn child in a property must be preceded by a prior interest.

Example: Suppose Ram transfers his property to his son Mohan and thereafter, to his unborn grandchild. In case he was not born before the death of Ram, the transfer would not be valid. The transfer would be valid, if the child is born before Ram passes away and the interest of the property vests in Mohan, till the child is born.

Responsibilities of seller during transfer of property under

Section 54 of the Act talks about the responsibilities of the seller of a property:

To disclose to the buyer any material defect in the property. To provide to the buyer on his request for examination, all documents of title relating to the property. To answer to the best of his information, all relevant questions put to him by the buyer with respect to the property or the title. To execute a proper conveyance of the property , when the buyer tenders it to him for execution at a proper time and place, on payment or tender of the amount due in respect of the price. To take as much care of the property and all documents, which are in his possession, as an owner of ordinary prudence would take of such property, between the date of the contract of sale and the delivery of the property. To give the buyer possession of the property. To pay all public charges and rent accrued with respect to the property, up to the date of the sale. To discharge all encumbrances on the property then existing.

Duties of the buyer during transfer of property under Transfer of Property Act

To disclose to the seller any fact about the property, of which the buyer is aware of but has reason to believe that the seller is not aware of and which materially increases the value of such interest.
To pay the purchase money to the seller at the time and place of completing the sale.
To bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller, where the ownership of the property has passed on to the buyer.
To pay all public charges and rent, which may become payable on the property, the principal monies due on any encumbrances subject to which the property is sold and the interest thereon afterwards accruing due, where the ownership of the property has passed on to the buyer.

Tenancy agreements governed under Transfer of Property Act arbitrable: SC

The Supreme Court, on December 14, 2020, ruled that landlord-tenant disputes can be resolved through arbitration, except when they are covered by specific forum created by the rent control laws. In a landmark verdict in the Vidya Drolia and others versus Durga Trading Corporation case, the SC has ruled that arbitral tribunals have the power to decide such cases under the Transfer of Property Act.

However, for these disputes to be resolved through arbitration, the rent agreement must have an arbitration clause – this means the decision to include a clause to this effect in a landlord-tenant agreement lies with the parties concerned.

See also: Landlord-tenant disputes arbitrable when not covered by rent control: SC

Latest update

Sale agreement, lawful possession of property protect buyers’ right: sc.

Read full coverage here .

Encroacher cannot claim benefit under Section 51 of Tranfer of Property Act: SC

An encroacher cannot be termed a transferee to seek benefit of Section 51 of the Transfer of Property Act, the Supreme Court has said. For Section 51 to apply, “the occupant of the land must have held possession under colour of title, his possession must not have been by mere of another but adverse to the title of the true owner, and he must be under the bone fide belief that he has secured good title to the property in question. Section 51 gives only statutory recognition to the above three things”, the apex court ruled.

What can be transferred under the Transfer of Property Act?

Any immovable property can be transferred under the Transfer of Property Act.

What are the modes of transfer of property?

According to the Transfer of Property Act, a property can be transferred through sale, exchange, gift, mortgage, lease and by creating an actionable claim.

How many sections are there in the Transfer of Property Act?

There are 137 sections in the Transfer of Property Act.

😃 ( 37 )
😐 ( 11 )
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An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.

In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel. [email protected]

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Transfer by Co-owner under the Transfer of Property Act: An Analysis

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LLM Student at Chanakya National Law University, India

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Transfer by co-owners means when two or more persons hold title to the same property and the transfer a portion of share, the transferee takes the place of transferor who has transferred his share. However, in case of co-owner of dwelling house does not give the right to joint possession to transferee. This paper deals with transfer by co-owners under Transfer of Property Act, 1882. Section 44 to 47 of transfer of property act lay down rules applicable to transfers effected by co-owners. Further it discusses about legal competency to make transfer and about its applicability. It covers the rights and liabilities of transferee and discusses about the kinds of co-ownership. It also deals with the exception part in the context of transfer by co-owner which is under section 44. Further it also covers the concept of joint transfer and transfer by co-owners in common property.

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Transfer of Property Act

Research Paper

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International Journal of Law Management and Humanities, Volume 4, Issue 3, Page 237 - 251

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This is an Open Access article, distributed under the terms of the Creative Commons Attribution -NonCommercial 4.0 International (CC BY-NC 4.0) (https://creativecommons.org/licenses/by-nc/4.0/), which permits remixing, adapting, and building upon the work for non-commercial use, provided the original work is properly cited.

I. Introduction

Here the term property in general way indicates the economic status of a person. Such property is held by any person to take out benefit from it. There are various ways in order to transfer property from one person to another like it can be inherited, can be bought by giving the full payment of it. And in India law governing transfer of property under the rules of Transfer of Property Act, 1882. This act is an Indian legislation which governs all rules and procedures regarding transfer of property. Various types of property are as movable, immovable, corporeal and incorporeal etc. Transfer of movable property mainly governed by the sales of Good Act, 1930 whereas in case of immovable which is in between living persons is governed by the Transfer of Property Act, 1882.

In general way transfers are made by owners themselves, ostensible owners and the co-owners or Joint owners. For example, in case of Coparcenary where two or more persons enjoy common ownership and enjoyment of property like all Coparcener including all male members and now even daughters have a common and an equal interest in the ancestral property, so any co-owner can transfer his interest in the share of property to any stranger or may be another co-owner. And after this that transferee steps in the shoes of the co-owner (transferor) and gets clothes with all his liabilities. Hence that transferee becomes new co-owner. Section 44 to 47 of transfer of property act, 1882 deals with aspect of transfer by co-owners, section 44 which specifies about transfer by one co-owner and the rights of a transferee in case of this type of property. The second part of this section lays down an exception to this rule. The object of this exception is to prevent a stranger from claiming a joint possession of a family of dwelling house. The terms Co-owner states where co-owner may be either joint tenant or tenant in common under English law.

Section 45 deals with the question as to what quantum of interest each one of the several transfers under a transfer gets in the property transferred. When a Transfer for consideration is made to two or more persons jointly, they will become co-owners transferred their interest. It lays down a presumption as to the quantity of interest taken by co-owners who have paid consideration for acquisition. Section 46 deals with the question as to what interest each of the several joint transferors gets in the consideration for the transfer.

Section 47 which lay down principle regarding transfer of property by co-owners of share in common property, in which effect of transfer is to reduce their shares proportionately. It refers to tenancy-in common and this section helps while ascertaining the shares of co-owners.

Through this paper, the researcher has specifically dealt with the concept of transfer by co-owners and subsequently in the light of rights and liabilities of transferee and also the exception rule which embodied under section 44 of this act. This paper also dealt the intricacies related to the same in the light of different judicial interpretations given time to time by different courts.

Brief Background

Earlier transfer of goods was regulated to an extent by Indian contract act, 1872 whereas in case transfer of Immovable property which governed by the principles of justice, equity and Good Conscience. But after growing the extent of trade and commerce rapidly increase the infrastructure in the late 19 th century led to more conflict in business sector. There were various problems regarding pragmatic law of property and also some peculiar problems related to exchange of goods and transfer of property. Hence an immediate need was felt for clear cut law related to transfer of property and to take care of the potential economic problems. So, the enactment of this Indian legislation fell upon the First and second law commission.

Defining Co-Owners

In general way Co-Owner of a property in most cases is a member of the same family. In other way Co- Owner can be appointed by a will written in his favour. Every Co- Owner may either own equal rights to use the property like others or may have a portion of the property in his name. There is situation where more than two Co-Owners of the same property and one of the Co-Owners dies, his share automatically passes to his dependents or to other Co-Owners. [2] E.g., an ancestral property is inherited by three brothers, and these three will be Co-Owners of the property. In case one of them dies, then his share of the property passes on to two surviving brothers or may be his dependents along with rights. Co-Owner is entitled to three basic elements of Ownership under the Law:

Right to possession
Right to use, and
Right to dispose of the Property.

II. Kinds of ownership under co-owners

The word ‘Ownership’ consists of innumerable number of rights, liberties and powers with regard to thing owned. It has different kinds of Ownership as absolute, limited, sole ownership, co ownership, vested ownership, contingent ownership, Corporeal and incorporeal. When in case where a person owns a property in one time it is called sole ownership, whereas such property is owned by more than one person then in that case it is called as Joint ownership. But here Co ownership can turn into sole ownership by means of partition.

As the word ‘Co-Owner’ is wide enough to cover all kinds of ownership such as Joint tenancy, Tenancy in common, Coparcenaries, undivided Hindu family members, etc. Here the fact that regarding property that the parties have certain shares, indicates that they are Co-Owners. A Co-Owner is entitled to three essentials of ownership under Indian Law- Right to possession, enjoy and to dispose. Hence, in case a Co-Owner is deprived of his property, he has a right to put back in possession. In this aspect such co-owner has an interest in every part of property and has a right irrespective of his quantity of share, to be in possession jointly with others. This is also called joint-ownership.

Here these are the following types of co-ownership:

Tenants in Common : In this aspect co-ownership is not specifically stated and each tenant in common has a separate fractional interest on whole property. Though each tenant in common has a separate interest in that property and possess and use the entire property. It may hold unequal interest in the property but the interest possessed by each tenant in common is a fractional interest in the entire property. So, each tenant in common may freely transfer their interest in the property. [3] Here Tenants in common don’t have right of survivorship. Hence after death of any tenant in common their interest passes via will or through intestate laws to another person who will become new tenants in common with the surviving co-owners.

Joint Tenants : In this aspect it has right of survivorship. That means after death of one joint tenant his share/interest immediately passes to the surviving joint tenants and not to the decedents. It basically holds a unitary interest on whole property. Here each Joint tenant must have equal share in the property. There are certain features of Joint tenancy that is also the requirements of joint tenancy are as follows:

Unity of possession- each tenant is entitled to the possession and enjoyment of whole land.
Unity of Interest- Each joint tenant has same type estates and same duration.
Unity of time- joint tenancy interest must vest at the same time.
Unity of title- Interest of joint tenancy must derive by the same instrument like will or deed.

In case if any one fails to perform their part, then joint tenants automatically convert into tenants in common.

Joint tenancy implies unity in titles as well as unity of possession whereas Tenants in common signifies only the unity of possession. In case of Joint tenancy co-owners hold property upon the death of any of them his interest goes to the survivors but in tenants in common after death shares goes to his heir or representatives. Both concepts are of English Law. Except in case of Coparcenary between members of a Hindu Undivided Family, the concepts of Joint tenancy are unknown in India. [4]

Tenancy by the Entirely : This concept of co-ownership is for Husband and wife. It provides right of survivorship. It requires all four unites like unity of time, possession, title and Interest and also fifth unity of marriage. Tenancy by entirely does not allow spouse to convey his interest to third party whereas one spouse can convey his interest to another spouse. It may be terminated by divorce, death or mutual agreement by both spouses.

III. Transfer by one co-owner

In such a case where a property is jointly owned by two or more persons and each co-owner may have equal or unequal shares, but until partition is affected and their respective shares are separately possessed, every co-owner is entitled to common enjoyment of property. Section 44 of the Transfer of Property Act, 1882 deals with aspect of transfer by one co-owner, further it also provides the rights of transferee such type of transaction.

The principle of this section is that where a co-owner transfers his shares, the transferee is substituted in place of transferor. It substitutes in the property to the extent of share transferred to him. Here transferee too is entitled to common enjoyment of the joint property together with other Co-owners. Such transferee steps into the shoes of the transferor. It means transferee will acquire all the rights and liabilities which the co-owner [transferor] has in that Joint property at the date of transfer.

The object of this section as well as Section 4 of partition act 1893 is to keep off strangers who may purchase the undivided share of a co-sharer of an immovable property, so far as dwelling houses are concerned to make it possible for a co-sharer who has not sold his share to buy off the stranger purchaser. [5]

This section assures the transferee the right to joint possession or common enjoyment of the property, but does not confer on him any right to exclusive possession without enforcing partition. [6]

Law as to Co-Owners

Several Co-Owners hold any immovable property, each co-owner has interest in every portion/inch of the common property whereas his interest is qualified and limited by similar interest of the other co-owner. A co-owner by an express or implied arrangement, possess and enjoy any property exclusively and protect his possession against other co-owners. [7]

IV. Legal competency to make transfer by co-owner

The word “legally competent” is in paragraph 2 of section 44 of transfer of property act can be study with respect to Section 7 of the transfer of property Act, 1882 states that every person competent to contract that means a major and of sound mind or is not disqualified by law for contracting. Hence even the interest of a co-owner can be transferred, mortgaged, leased to another co-sharer or to a stranger. Here the fact that partition has not taken place by metes and bounds does not stand in the way of the interest of a co-owner.

As per law prevails in some areas, a coparcener of a Hindu Joint family can alienate his share in the Joint family property for consideration [Section 45]. In that case such Coparcener is a legally competent person whereas in case of Mitakshara coparcenary, the consent of other coparcener is required before any such transfer. In other cases where one co-owner is in exclusive possession of a joint land plot lets it out to a tenant without the consent of co-sharer landlords, such a tenancy will not bind the latter. In such a case the Lease will only be confined to the interest and share of the lesssor.

In case Baldev Singh v. Darshan Devi [8] where a co-owner who is not in actual physical possession over parcel of land cannot transfer a valid title of that portion of the property. Here the remedy available to the transferee would be to get a share out from the property allotted after the partition or to get a decree for joint possession or can claim compensation from the co-owner.

In case Rukmani and others v. H.N.T. Chettiar [9] where a co-sharer cannot be allowed to cause prejudice to the other co-shares by putting up a substantial construction during the pendency of a suit for partition filed by the other co-shares.

A case of Punjab and Haryana high Court Hazara Singh v. Faqiria [10] where a co-owner contention that he had, by adverse possession, a peaceful undisturbed possession by the other co-owners had become the sole owner of a land, held that the possession of a co-owner is possession of all the co-owners. It cannot be averse to them unless there is a denial of their right to knowledge by the person in possession. If a co-sharer is in possession of the entire property, his possession cannot be deemed to be adverse he possesses the property on behalf of all others.

V. Rights and liabilities of transferee

As per section 44 of transfer of property act which also deals with the rights of a transferee and also safeguards their rights. Here the transferee steps into the shoes of his transferor that means the Co-Owner and further is clothed with all the rights and become subject to all the liabilities of his transferor. It basically becomes as much a co-owner as his transferor was before the transfer.

Here the Transferee from a co-owner acquires rights like i.) a right to Joint possession of the property [11] ii.) a right to enforce partition as against other co-owners [12] . Other rights include right to make improvements and right to peaceful possession.

Right to Joint Possession : Each Co-owner has proprietary right in whole estate. Here transferee becomes the co-owner and getting all rights like joint possession in property except a dwelling house. In case where a co-owner or his transferee is ousted from joint possession, then he is entitled to get joint possession by a suit, and not necessary forced to sue for partition.

Right to peaceful possession : Here co-owner transfers his separate plot and transferee gets possession on that remaining part of co-owner, his transferee cannot be disturbed by the other co-owners until and unless a final partition takes place. So, a tenant of a land who derives his title from all co-owners cannot be disturbed by one co-owner without consent of all.

Right to make Improvements : In order to make construction on any part of land, co-owners can make out and he is allowed to do so. Whereas he is not entitled to do construct on any other portion of joint property or to the detriment of others co-owners.

Right to enforce Partition : As in every case of Joint partnership, each party has a right to demand partition that means a right to be placed in a position to enjoy his own right separately without any interference and interruption. As this section 44 applies all transfer including sales and mortgages or lease. Here a lessee of an undivided share can maintain a suit for partition [13] , a mortgagee [14] and even a life tenant is entitled to seek partition subject to condition that it gives effect to the transfer. Now a monthly tenant was also allowed to enforce a partition there was no probability of the lease being determined. [15] In a suit for partition there must be unity of possession and unity of title [16] . A claim for partition can be refused on the ground of inconvenience [17] after fulfilling conditions.

In case of Partial partition that prevents the working out of equities between the co-owners is not maintainable. The purchaser of a co-owner’s share in one particular item of property can file a suit for recovery of that share in the item without filing a suit for general partition. [18]

Muslim co-heirs and partial partition : In such a case where property has devolved on several co-heirs under the Mohamedan Law, definite fraction of every part of estate entitles to all co-hires. Then one of co-heirs can ask for recovery of his share of the common property by another co-sharer. [19]

Rights of purchaser of a Hindu coparcener’s interest : Here this concept says the purchaser of the interest of a coparcener in a Hindu Joint Family acquires as against the other coparceners the right to institute a suit for general partition. [20] The Madras High Court holds that such a purchaser has no right to joint possession. [21] His right to partition may be worked out in suitable case for recovery of possession by the non-alienating coparceners [22] as well as alienating coparceners. [23]

Co-sharer’s suit against trespasser : Here a co-owner has right to sue a trespasser in ejectment without impleading the other co-sharers. A tenant on sufferance is on the same footing as a trespasser. [24]

Claim to mesne profits against a co-sharer : where the possession of entirely joint property by a co-sharer is not wrongful. Thus, the co-sharers who haven’t taken any action to take possession cannot claim mesne profits.

Condition and Liabilities

As per section 44, the words ‘subject to the conditions and liabilities’ affecting at the date of transfer, the interest transferred which save principles established by Mitakshara law, that the right of an alien is only to institute a suit for partition, to work out his equities subject to the charges and encumbrances affecting the coparcenary property at the time of transfer.

As the transferee takes subject to all the liabilities by acquiring rights and bound by any condition and liabilities affecting the interest of transferor at the date of transfer. So, a purchaser of a share is of course not liable for the damage caused to the rest of the property by the transferor after the date of transferor. [25] Thus the vendor’s pious obligation to discharge his father’s debts will attach to his interest even in the hands of the alien. [26]

Alienation of Property by Co-owner : In that case the parties mutually divide their properties to reach an compromise decree and coparcenary came to an end after preliminary decree, alienation of his share by one co-owner has not alienated property in excess of his share. [27]

VI. Role of dwelling house and undivided family

This concept basically is an exception to the rule provided in the first part of section 44 of transfer of property act, 1882. Any co-owned property in which family members of the co-owners are living together where co-owner has right to transfer his share but transferee is not entitled to have common enjoyment or joint possession of the property. [28] Section 44 says that the co-owners right to joint possession, other common or part enjoyment of the property transferred will not be available to the transferee where such property is a dwelling house belonging to an undivided family and such transferee is not the member of that family. He only gets the share in a residential house belonging to a family member of a joint family not entitled to joint possession.

Object of this exception : This exception has been created in order to avoid inconvenience which may be caused by substitution of a stranger in joint family who may be of different caste, religion etc.

In the words of Westropp C.J., in Bombay case [29] , “We deem it a far safer practice, and less likely to cause serious breaches of peace, to leave a purchaser to a suit for partition, than to place him by force in joint possession with the members of a Hindu family, who may be not be of different caste for his own, but also different in race and religion.’’

Here restriction contained in this section for stranger is applicable even in that case also where there is only one male member of family in occupation of family dwelling house.

For granting relief under section 44 of transfer of property act, 1882 there must be two things satisfied:

The property should be a Dwelling house
The transferee should not be member of the family

Here transferee’s (stranger) right to have the house partitioned is, subject to Section 4 of the Partition Act, 1893. Where this section provides stranger to claim partition by metes and bounds may be compelled, at the option of the other members of the family to forego his legal right to partition and accept pecuniary compensation. The Partition act 1893, gives the coo-sharer the option of buying out the transferee at a valuation to be made by the court. [30]

Dwelling house : Taking the reference to the partition act, 1893 the term ‘Dwelling house’ means not only residential structure or building but it includes all the adjacent buildings, gardens, cartilage, Court yard, orchard and all which are necessary for the convenient use of the house. [31]

In case the dwelling house does not belong to an undivided family, section 44 of the transfer of property act, 1882 is not applicable. [32] Here the word ‘undivided family’ in Section 44 is not limited to Hindus, but includes such group of people related in Blood who live in one house under one head, and that it applies if they are undivided qua the dwelling house which they own. [33] In this a co-owner transfers his shares by way of sale, lease, gift or mortgage, section 44 will be applicable. But partition is necessary to give effect to the mortgage if the transfer is in nature of mortgage and in case of lease where lessee of an undivided share too has right of partition.

In a case where, a share of a house is transferred by way of lease which is used by all members of family then the lessee must get his part partitioned. Further if transferee is unable to get his part partitioned then in that case other co-owner may have right to restraint the lessee from getting possession of the house with others. In case Ashim Ranjan Das v. Bimal Ghosh [34] a house was in common enjoyment for Hindu undivided family members where a co-sharer leased out his share without effecting partition then after this the stranger lessee (tenant) attempted to enter into possession jointly with members of family. In which court held that interim injunction restraining the stranger lessee can be granted.

However, in case of Delhi High Court where ‘A’ entered into premises followed by his mother and brother who joined him later on and the government first granted licence and subsequently executed lease in his favour. Court held that A’s (lessee) mother and brother were not co-tenants and A was entitled to the possession of the whole premises including the portion of his mother and brother. It was observed by the court further that filing of suit by A for possession of portion which is in his mother and brother’s possession did not means that ‘A’ was not the lessee of the whole promises. [35]

Such house characterized as a dwelling-house belonging to undivided family is not altered by the mere fact that an undivided share is transferred to a stranger who comes into possession and collects rents from the portion of the tenants. [36]

This section affords defence to the members of a joint family but it does not create a positive right in them.

Effect of Partition Act, 1983 : Section 4 of this act plays a vital role in transfer by co-owner and to give rights and liabilities. Object of this section 4 of this act is to keep off strangers who may purchase the undivided share of a co-sharer of an immovable property, so far as dwelling houses are concerned to make it possible for a co- sharer who has not sold his share to buy off the stranger purchaser. [37]

Here co-sharer has right of pre-emption under section 4 of partition act not under section 44 of transfer of property act, 1882. There is a case where such question was raised like “where co-sharer has right of pre-emption? In the case P.C. Mallik v. Renuka Jain [38] there is no law which stipulates that a co-sharer must sell his property to another co-sharer. Hence Strangers and outsiders can purchase share of a co-sharer even in a dwelling house but he gets no right to joint possession or common enjoyment of the portion of the house so purchased. He has to file a suit for demarcation of his share and also delivery of possession.

Thus section 4 of partition act also would defend Joint so-sharers, that means it gives liberty to repurchase the share sold to stranger or outsiders. Here right of pre-emption is there but with subject to conditions of this act. A co-owner who has transferred his interest to outsider does not have right of pre-emption. He can’t re-purchase the share sold, then in that case where court shall evaluate the share in money value and shall ask the person claiming pre-emption to pay it to the outsider.

VII. Concept of joint transfers

Concept of Joint transfer aspect deal in section 45-46 of transfer of property act, 1882. Such transfer for consideration to two or more persons jointly makes them co-owners of the property. In case the consideration is paid out of a common fund their shares would be same as their interest in common fund.

Section 45 which deals with quantum of interest of each transferee and its determination, where there are several joint purchasers of immovable property. This section is not applicable to gifts and bequests but applicable to involuntary transfers and revenue sales. As per this section 45 which is made applicable to the involuntary transfer on the ground of justice, equity and good conscience. [39] Presumption of equality is there in that case where absence of any evidence to be contrary, then shall be presumed to be equally interested in the property. this section does not specify about property shares like whether they take as joint tenants or tenants in common, should be determined by reference to their personal law.

Section 46 which lays down that the transferors of property entitled to share in the consideration as per their respective interests in the property transferred. Hence, this section is the converse of section 45, due to the concept of transfer by persons with distinct interests. Thus, it basically deals with the question as to what interests each of the several joint transferors gets in the consideration for the transfer.

Transfer by co-owners

Section 47 incorporates with such concept where several co-owners transfer without specifying then the share of each co-owner is reduced proportionately. This section is thus helpful in ascertaining the shares of the co-owners in the property retained after the transfer. This section is an application of the principle of equity that equality is equity.

As this section helps by predicting a possible difference in quantum of the interests of the co-owners, it is clear that it deals with tenants in common.

In Mir Ali Nawaj v. Mir Ali Asghar [40] , two zamindars had equal shares in a property, one holding absolute interests and the other, life interest only. Half of the entire property was transferred by them. On the death of life interest holder his heir sued for partition. Court held that the vendee had taken 1/4 th from each Zamindar so that the heirs were entitled to 1/4 th only.

VIII. Judicial approach

Dorab Cawasji Warden v. Coomi Sorab Warden [41]

Facts: a property was purchased by father and mother of Plaintiff. Later on mother became died then appellant and his father became joint owner of the entire property. Further they converted joint tenancy into a tenancy in common. Later on father transfer his undivided share into the property to his another son. Hence the appellant and his brother became tenant in common in respect of the property but on the death of the brother, his widow and two minor sons sold their undivided share in the property. The appellant instituted a suit against his brother’s wife and children on the ground that the suit property was a dwelling-house belonging to an undivided family wherein they all lived in their respective portions. Here after sale, the buyer had no right to live as a tenant in common with the appellant.

Decision: the court held that this transfer would come under the other second paragraph of section 44; therefore, the buyer has no right to live in dwelling house. Here court also observed that irreparable injury is likely to be caused by the entry of transferee and balance of convenience was in favour of appellant, interim injunction against vendors and vendees regarding possession can be issued.

Here basically happens a particular part of share is transferred without partition and the transferee does not maintain suit for partition whereas attempts to take possession of his share, then in that case other co-owners may restraint that person from taking possession. Section 44 second paragraph which lays down exception rule for transfer of co-owners under this act, the object of this part is basically to avoid inconvenience for other co-owners which may be caused by substitution of a stranger. That stranger may be from different caste, religion and race, and then other co-owners of transferor’s family have a right to live in dwelling house.

Rukmani v. H.N.T Chettiar [42]

Facts: Here transferee had purchased only 2/3 rd share in the suit property from one of the co-owners then that transferee further proceeded to put up huge constructions on property without having partition by metes and bounds. The plaintiffs, means other co-owners wanted an injunction for restraining the transferee from doing so then Single judge of court refused to grant injunction. But when the matter came up before the Division bench overruled the above judgment it didn’t approve above view and grant injunction.

Issue: whether a co-sharer (the transferee) having 2/3 rd share in property could be allowed to put up constructions or not…?

Decision: Madras High Court held that transferee, being a co-sharer, cannot be allowed to cause prejudice to the other co-sharers by putting up constructions during the pendency of a suit for partition filed by the co-owners.

Court also observed here certain situation like if transferee claims to have acquired full title to the suit property, then in such case court can prima facie on that basis of his full title court can permit him to put up the constructions at his own risk whereas if transferee has not full title the court cannot permit him to put up construction on the suit property.

Here in case where if transferee has acquired title to the property only partly means not full owner and can’t exercise exclusive ownership to the detriment of other co-shares unless and until partition has happened, so here before partition he can’t put up constructions either on the entire or on portion of property.

Balaji v. Ganesh [43]

In this case the principle of second paragraph has been laid down in the following words:

“ It is a far safer practice and less likely to lead to serious breaches of peace, to leave a purchaser to a suit for transition than to place him by force in joint possession with the members of a Hindu family, who may be, not only of a different caste from his own, but also different in race and religion.’’

Rajeshwari v. Balchand Jain [44]

Facts: Members of Hindu Joint family residing in a house and carrying on business of the family. Here no partition had taken place. Plot of land was purchased and the source of money was appeared to ‘joint earnings.

Decision: Court held that presumption of equality is not there, so section 45 is not attracted. Here court observed there is no presumption about property that it is a joint family property. Then Burden of proof lies on the person who is asserting it to be joint property.

Section 45 deals merely with the quantum of interest and its determination where there are several joint purchasers of immovable property. In this context it doesn’t provide for the method of creating common ownership that means several so-owners can’t exist.

IX. Conclusion

After having research, researcher can conclude as transfer by co-owners means the transferee steps into the shoes of his transferor and is clothed with all the rights and liabilities of his transferor. So, transferee becomes as much a co-owner as his transferor was before the transfer. However, there is an exception to this rule which states that transferee happens to be stranger can’t claim for joint possession of a family dwelling house unless and until partition happens. Here the term ‘co-owner’ means either a joint tenant or tenant in common under English law. Joint transfer where property is transferred to two or more persons without specifying their respective shares and consideration is paid as common fund or may be advanced separately. Transfer by co-owners of share in common property which says transfer of shares without specifying from common property the transfer has made, and then the share of each co-owner is reduced proportionately. This is also an application of the principles of equity that equality is equity.

Apart from this researcher can conclude as the exception provide under section 44 in respect of dwelling house is to avoid inconvenience from stranger transferee who may not only of a different caste but also of different race and religion.

[2] G.P. Triphati, THE TRANSFER OF PROPERTY ACT, 18 th ed. 2016, p.222.

[3] H.N Tiwari, TRANSFER OF PROPERTY ACT, 5 th ed. 2008, p. 190.

[4] Jogeshwar Narain v. Ram chand Dutt, 1896 23 IA 37; Venkatakrishna v. Satyawathi, AIR 1986 SC 751.

[5] Daral Chandra Chatterji v. Gartha Behari Metra 1954 ILR 1 Cal 384; Bulu Sarkhel v. Kali Prasad Basu, AIR 2012 Cal 67.

[6] Lalita James v. Ajit Kumar AIR 1991 MP 15; Ramdayal v. Maneklal AIR 1973 MP 222.

[7] T. Lakshmipathi v. P. Nithyananda Reddy 2003 (5) ALT 44 (SC).

[8] AIR 1993 HP 141.

[9] AIR 1985 Mad 283.

[10] AIR 2004 P H 353.

[11] Amir Mahton v. Sheopujan AIR 1946 Pat. 231; Jamunan v. Jhalli AIR 1920 All.111.

[12] Venkayya v. Venkata Subbarao, AIR 1957 AP 619.

[13] Mohammad Jaffer v. Mazhar –ul-ashan 1906 3 All LJ 474.

[14] Hariharayyar v. Ahammadunni, AIR 1940 Mad. 491.

[15] RajniMohan v. Sambhunath 1930 ILR 57 Cal 715.

[16] Durga Charan v. khundkar, 1918 27 Cal LJ 441.

[17] Hemadri Nath Khan v. Ramani Kanta Roy 1897 ILR 24 Cal 575.

[18] G. C.V Subba Rao, LAW OF TRANSFER OF PROPERTY, 7 th ed. 2012, p.533.

[20] Muthukumara v. Sivanarayana AIR 1933 Mad. 158.

[21] Kandasamy v. Velayutha AIR 1926 Mad. 774.

[22] Subba Goudan v. Krishnamachari AIR 1922 Mad. 112.

[23] Bhau v. Bhudha AIR 1926 Bom. 399.

[24] Dr. Poonam Pradhan Saxena, PROPERTY LAW, 2 nd ed. 2011, p.208.

[25] Chandra Shekar v. Abidalli AIR 1925 Nag. 68.

[26] Venku Reddui v. Venku Reddi AIR 1927 Mad. 471.

[27] Parmanand Swain v. Rabindranath Swain, AIR 2004 NOC 109 (Ori).

[28] Ram v. Ram Kishan AIR 2010 All 125.

[29] Balaji v. Ganesh, 1881 5 Bom.499.

[30] D.F. Mulla, THE TRANSFER OF PROPERTY ACT, 11 th ed. 2013, p.257.

[31] Kshirode Chunder v. Saroda Prosad 1911 12 Cal LJ 525.

[32] Ram Bilas Tewari v. Shivrani AIR 1977 All 437.

[33] Kshirode Chunder v. Saroda Prosad 7 IC 436.

[34] AIR 1992 Cal. 45.

[35] Hari Singh v. Madan Lal, AIR 2001 Delhi 231.

[36] Nirupama Basak v. Baidyanath Paramanik, AIR 1985 Cal 406.

[37] Daral Chandra Chatterjee v. Gartha Behari Metra, 1954 1 Cal 384.

[38] AIR 2007 Ori. 65.

[39] Balai Chandra v. Raisuddin Naskar, AIR 1956 Cal. 58.

[40] AIR 1927 Sind. 62.

[41] AIR 1990 SC 867.

[42] AIR 1985 Mad. 283.

[43] 51 Bom. 499; AIR 1976 Bom. 342.

[44] AIR 2001 Mad. 179.

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Transfer of Property Act Notes And Study Material [PDF Download]

What is Transfer?

Landmark Legal Cases:

Property Transferability: An Overview

Vested Interest and Contingent Interest

Understanding the Doctrine of Election

Understanding Fraudulent Transfers under the Transfer of Property Act

Understanding the Rule of Part Performance

What is a Mortgage?

Who is a Mortgagor?

What is a Charge under the Transfer of Property Act?

Registration of Charges:

Understanding Sale under the Transfer of Property Act:

Gift Under the Transfer of Property Act:

Lease in Transfer of Property Act:

Important PYQs of Transfer of Property Act for Judiciary

Tips to prepare Transfer of Property Act for Judiciary

Conclusion:

Transfer of Property Act: Notes, Case Laws and Reading Materials

Meaning and Definition of Property

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Transfer by Co-owner under the Transfer of Property Act: An Analysis

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II. Kinds of ownership under co-owners

III. Transfer by one co-owner

IV. Legal competency to make transfer by co-owner

V. Rights and liabilities of transferee

VI. Role of dwelling house and undivided family

VII. Concept of joint transfers

VIII. Judicial approach

IX. Conclusion

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