Transfer of Property by Act of Parties

TRANSFER OF PROPERTY BY ACT OF PARTIES
SECTION 5:- “Transfer of Property” defined.- In the following sections

“transfer of property” means an act by which a living person conveys
property, in present or in future, to one or more other living persons, or to
himself and one or more other living persons; and “to transfer property” is to
perform such act.
[ In this section, “living person” includes a company or association or body
of individuals, whether incorporated or not, but nothing herein contained
shall affect any law for the time being in force relating to transfer of property
to or by companies, associations or bodies of individuals.
Definition of Transfer of Property –
“Transfer of Property” means an act by which a living person conveys property, in
present or future –
 To one or more other living persons; or

 To himself ; or
 To himself and one or more other living persons.
An analyses of this definition can be attempted under the following points:
 The transfer of property is an act of conveyance.

 Conveyance is affected through living persons.
 Property may be conveyed either to one or more other living persons, or to
himself, or to himself with one or more other living persons.
 Property may be transferred either in future or in present.
The Supreme Court stated the factors to be taken into account for determining the
nature of a transaction. The true nature of a document must be determined by
having regard to the intention of the parties as well as the circumstances
surrounding the making of the transaction and the wording of the document1.
1
Umabai v. Nilkanta Dhondiba Chavan, (2007) 6 SCC 243: (2005) 3 Supreme 508.
6. What may be transferred —
Property of any kind may be transferred, except as otherwise provided by this Act
or by any other law for the time being in force, —
(a) The chance of an heir-apparent succeeding to an estate, the chance of a

relation obtaining a legacy on the death of a kinsman, or any other mere
possibility of a like nature, cannot be transferred.
(b) A mere right of re-entry for breach of a condition subsequent cannot be

transferred to any one except the owner of the property affected thereby.
(c) An easement cannot be transferred apart from the dominant heritage.
(d) All interest in property restricted in its enjoyment to the owner personally
cannot be transferred by him.
(dd) A right to future maintenance, in whatsoever manner arising, secured or

determined, cannot be transferred.
(e) A mere right to sue cannot be transferred.
(f) A public office cannot be transferred, nor can the salary of a public officer,
whether before or after it has become payable.
(g) Stipends allowed to military naval, air-force and civil pensioners of the
Government and political pensions cannot be transferred.
(h) No transfer can be made (1) in so far as it is opposed to the nature of the
interest affected thereby, or (2) for an unlawful object or consideration within
the meaning of section 23 of the Indian Contract Act, 1872 (9 of 1872), or (3)
to a person legally disqualified to be transferee.
(i) Nothing in this section shall be deemed to authorise a tenant having an

untransferable right of occupancy, the farmer of an estate in respect of which
default has been made in paying revenue, or the lessee of an estate, under
the management of a Court of Wards, to assign his interest as such tenant,
farmer or lessee.
7. Persons competent to transfer —
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.
Section7, which deals with competency to transfer provides that the transferor-
i. Must be competent to contract, and

ii. Must have title to the property or authority to dispose of tranferable
property, if it is not his own.
 Persons Competent to Transfer (Section 7)

Competency to contract has been defined section 11 of Contract Act,1872.
Section 11 says that every person is competent to contract-

A. Who is of the age of majority according to the law to which he is subject,
B. Who is of sound mind, and
C. Is not disqualified from contracting by any law to which he is subject.
 Age of Majority
Generally the age of majority is 18, except when a guardian of minor’s
person or property has been appointed by the court, in which case it is 21.
The age of majority is to be determined according to the law to which a
person is subject.
 Sound Mind
According to section 12 of the Contract Act,1872, a person is said to be of
sound mind for the purpose of making a contract, if at the time when he
makes it, he is capable of understanding it and of forming a rational
judgement as to its effect upon his interst.
 Disqualified to Contract
It is necessary that the person must be qualified to contract according to law
to which he is subject. If a person is disqualified to contract he will not be
qualified or capable to transfer the property.
 Transfer in Favour of Minor

A minor being incompetent to contract cannot transfer a property. A minor
can accept transfer of property in his favour. He can be a mortgagee2
provided there is no covenant for him to perform, he can be a purchaser 3
provided the sale does not impose any obligation upon him and a donee of a
gift is not onerous.
 Persons Authorised to Dispose of Property

Any person who is authorized to dispose of the property is competent to
transfer it too.
2
Raghavachariar v. Srinivasa Raghavachariar, 40 Mad 308 (FB).
3
Subba Reddy v. Curuva Reddy, 1930 Mad 425.
8. Operation of transfer —
Unless a different intention is expressed or necessarily implied, a transfer of

property passes forthwith to the transferee all the interest which the transferor is
then capable of passing in the property and in the legal incidents thereof.
Such incidents include, when the property is land, the easements annexed thereto,
the rents and profits thereof accruing after the transfer, and all things attached to
the earth; and, where the property is machinery attached to the earth, the moveable
parts thereof; and, where the property is a house, the easements annexed thereto,
the rent thereof accruing after the transfer, and the locks, keys, bars, doors,
windows, and all other things provided for permanent use therewith; and, where
the property is a debt or other actionable claim, the securities therefor (except
where they are also for other debts or claims not transferred to the transferee), but
not arrears of interest accrued before the transfer; and, where the property is money
or other property yielding income, the interest or income thereof accruing after the
transfer takes effect.

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TRANSFER OF PROPERTY BY ACT OF PARTIES

SECTION 5:- “Transfer of Property” defined.- In the following sections

 To one or more other living persons; or

An analyses of this definition can be attempted under the following points:

 The transfer of property is an act of conveyance.

(a) The chance of an heir-apparent succeeding to an estate, the chance of a

(b) A mere right of re-entry for breach of a condition subsequent cannot be

(c) An easement cannot be transferred apart from the dominant heritage.

(dd) A right to future maintenance, in whatsoever manner arising, secured or

(e) A mere right to sue cannot be transferred.

(i) Nothing in this section shall be deemed to authorise a tenant having an

7. Persons competent to transfer —

Every person competent to contract and entitled to transferable property, or

i. Must be competent to contract, and

 Persons Competent to Transfer (Section 7)

Section 11 says that every person is competent to contract-

 Transfer in Favour of Minor

 Persons Authorised to Dispose of Property

Unless a different intention is expressed or necessarily implied, a transfer of

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