Essentials of a valid transfer – Transfer of Property Act, 1882

Essentials of a valid transfer under Transfer of Property Act, 1882

Introduction : 

The word ‘property includes all those things on which the right of ownership can be expanded and it also includes the properties of all kinds of description like movable, immovable, tangible, and intangible properties.

The transfer of property Act, 1882 provides for the transfers, relating to immovable property and it also lays down the principles relating to the transfer of property regarding what constitutes a transfer and the conditions attached to it.

Meaning of transfer of property : 

According to section 5 of the transfer of property Act, 1882 ‘transfer of property means an act by which a living person conveys property, in present or future,

1. to, One or more living persons
2. to, Himself, or
3. to, Himself and one or more other living persons.

It was also observed by the supreme court that in general, the transfer of property means passing of entire bundle of rights (ownership) from the transferor to transferee or there may be the transfer of only some of the rights I.e (partial interest).

Here the term living person includes a company or association or body of individual whether incorporated or not. And the term conveys involves the creation of new titles or interests in favor of the transferee.

Modes of transfer of property : 

The transfer of property act, 1882 provides certain modes under which an immovable property can be transferred, they are as follows

1. Sale :

Section 54, of the Transfer of Property Act, defines sale, according to this section, “sale is a transfer of ownership in exchange for a price paid or promised or part-paid and part -promised”.

So price here refers only to the consideration of money. The words ‘price paid or promised or part paid and part promised indicates the importance of price as an ingredient in the transaction of sale. It lays down that for the execution of the valid sale deed, the payment of the whole price is not necessary I.e part payment is also recognized for a sale to be complete.

2. Mortgage :

Section 58, of the Transfer of Property Act, defines Mortgage as “ The transfer of an interest in specific immovable property to secure the payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to a to a pecuniary liability.”

Securing the debt is the main purpose behind such a transaction, so if the mortgager forfeits his debt then the interest which has been transferred can be used by the mortgage to recover such debt.

3. Lease 

Section 105, of the Transfer of Property Act, defines lease, according to this section “ lease is the transfer of immovable property for a particular period for the consideration according to which the transferee has accepted the terms of the agreement.

So basically in the lease, the right of possession is transferred rather than the right of ownership.

4. Exchange :

Section 118, of the Transfer of Property Act, provides for exchange, which means “when two persons mutually transfer the ownership of one thing for the ownership of another, neither things or both the things being money only then the transaction is called the exchange”.

5. Gift :

According to section 122 of the TP Act, a Gift is a “transfer of certain existing movable or immovable property made voluntarily and without consideration by one person is the called the donor to another called the donee and is accepted by or on behalf of the donee”.

Essentials of a valid transfer of property :

To constitute a valid transfer it has to fulfill the following conditions;

1. Transfer must be between two living persons :

One of the main features of the TP Act is that it governs transfers only between living persons or the transfers have to take place intervivos, I.e both the transferor and the transferee must be living at the date of the transfer.

And the property has to be conveyed from one living person to another, so here conveying of the property involves the creation of new title or interests in favor of the transferee and if the new title or interest is not created in favor of the transferee then the property is not conveyed and is not regarded as a transfer of property.

2. The property must be transferable :

There are certain exceptions to the general rule, that the property of any kind may be transferred, these exceptions are mentioned in section 6 of the TP Act, according to this section the following are the exceptional types of property whose transfer is forbidden by the law.,

1. Spes succcessionis : i.e a chance of succession
2. Right to re-entry
3. Easement
4. Restricted interest
5. Maintenance
6. Mere right to sue
7. Public office
8. Pensions, etc

3. The transfer should not oppose to nature of interest :

There are certain things which are known as “res communes”, these things are in their natural form and they do not belong to anyone, like, air, water, sea, light, etc., it is not possible to hold and possess these things separately so if anyone tries to transfer such a thing it would be opposed to its nature.

4. The consideration or the object must be lawful : 

To be a valid transfer the consideration and the object must be lawful. Section 23 of the Indian Contract Act, provides that when the consideration or the object is unlawful .according to this section the consideration or the object is unlawful if ;

1. It is forbidden by law
2. It Defeats the provisions of any law
3. If the object or consideration of any agreement is made for fraudulent purposes.
4. If the agreement is made concerning harm to any person or his property.
5. If the agreement which has been entered into is immoral.
6. If the agreement is against public policy.

5. Persons competent to transfer :

Section 7 of the TP Act, provides that if the person is competent to contract then that person is competent to transfer the property either wholly or in part, and either absolutely or conditionally, in the manner which has been permitted by law.

And the Competency to contract has been defined in section 11 of the Indian contract act, according to this section “every person is competent to contract who has attained  the age of majority and  is of sound mind and that person is not disqualified from contracting by any law”

6. The transfer must be made in the manner and the form required by the Act :

Section 9 of the TP Act provides for oral transfer. It states that the transfer of property can be carried out without a written instrument where writing is not expressly necessary under the law. And the writing is necessary for the following transactions; they are

• Sale of immovable property where the  value is of Rs.100 or upwards
• Transfer of actionable claim
• Exchange of value of Rs. 100 or upwards.
• Simple mortgage irrespective of document secured. Etc

Conclusion :

The Transfer of Property Act lays down certain conditions which are necessary for a valid transfer of property, so all the essentials must be fulfilled to constitute a valid transfer. If those essential requirements are not fulfilled then the transfer will not be considered a valid one or it can be declared void.

References :

I . legislations :

1. The Transfer of Property Act, 1882
2. The Indian Contract Act,1872

II. Books :

1. Avtar Singh, Textbook on the transfer of property Act,( universal law publishing co. Pvt .ltd., New Delhi,2nd ed.,2011)
2. SN Shukla, transfer of property act (Allahabad law agency, Haryana, 13th ed.,2020)

Author: Naveen Talawar,
3rd year student at KSLU's law school