What is the Transfer of Property Act
The Transfer of property Act was introduced in 1882, before this the transfer of properties were governed by the English Laws in India. This Act is an extension of the Indian Contract Act, 1872 and has 6 chapters with 137 sections. This Act also runs parallel to the Succession Laws in India.
The Transfer of Property Act governs all transfers of immovable property and some movable property except those which are mentioned under this act or prohibited by any under act prevalent in the territory of India. This act is applicable on both individuals and companies and is applicable for all transfers made in the form of sale, lease, mortgage, exchange, gift or actionable claims, while it is not applicable on transfer of property in the form of inheritance, wills, forfeiture, insolvency or sale through execution of decree.
This act also clears that anyone who is competent of making a contract under Section 10 of the Indian Contract Act and owns a property can make the transfer of said property, keeping in mind the restrictions stated below.
Section 6 of the Transfer of Property Act
This section defines all those properties which cannot be transferred.
(a) If one is expecting the ownership of a property. Ex: If X is expecting that his/her uncle will transfer their property to X in the absence of heir on his part, X cannot transfer that property to his/her sibling.
Official Assignee, Madras v. Sampath Naidu
In this case, the property belonged to 3 sisters, one of them died in 1926. On her death, Mr. B. Venkatakrishnama Chetti who was the son of another sister executed the mortgage suit even when he had only been expecting succession. The judge had held that this was in violation of Section 6(a) of the Transfer of Property Act, 1882 and thus the appeal, where the defendants seek to exercise their rights over the suit property, was dismissed.
(b) If a person has a right to re-enter into a property, he cannot transfer that right to someone else. Ex: If a lessor has the rights to re-enter the leased land if the lessee does not pay rent for 3 months, then the lessor cannot transfer this right to someone else.
Re Davis & Company
In this case, A promised to pay instalments for a land that he bought from B. It was agreed that if A fails to pay the instalments on time, B would enter his premises. In this case, if B transfers his right to enter to someone else, it would be considered void.
(c) If a person uses someone else’s property just for beneficial enjoyment of that land, he/she cannot transfer it to someone else. Ex: If X uses a property for passage, he cannot transfer those rights to someone else.
Sital v. Delanney
In this case, the landlord, Mr. Ujjir Babus had granted his easement to the plaintiff which was not his in the first place. It belonged to the grantee and cannot be transferred, as was held by the court.
(d) If a person possesses any property which is only restricted to his enjoyment, he cannot transfer this right to someone else. Ex: A tenant cannot transfer his rights to the property to someone else.
Shoilojanund v. Peary Charon
In this case, the court held that a right to receive voluntary and uncertain offerings at place of worship are interests which are restricted to personal enjoyment and hence, they cannot be transferred.
(e) A right to sue cannot be transferred. Ex: If X has wronged Y, Z cannot sue X.
Sethupathi v. Chidambaram
In this case, the appellant was the grandson of the original mortgagor and he contended that there was no reason as to why he should not be included in the hypothecation bond. These hypothecation bonds are signed when a person pledge their property as a collateral for a loan. The Court said that in express agreement, the hypothecation bonds were to be cumulative and independent securities, which means that the person who has signed it, only has the right to execute it.And thus, the appeal was dismissed.
(f) A public office or salary cannot be transferred. Ex: If X holds a public office, he cannot transfer his post to Y.
Ananthayya v. Subba Rao
In this case, a person agreed to pay a certain proportion of his income to his brother who took care of the concerned person’s education. The Court held that this clause was not applicable in this case because the concerned person had to pay the amount after when the salary was in his handsand thus the person had to pay the money.
(g) Stipends given to military, navalor air force personnel or pensioner cannot be transferred. Ex: If X is a pensioner of the government, he cannot transfer his right to pension someone else.
Saundariya Bai v. union of India
It was held that pension given to a person is not transferrable up until it is unpaid and in the hands of the Government.
(h) A transfer cannot be made if it is illegal or with unlawful consideration or is made by a person who is disqualified by law.
(i) A tenant cannot transfer his rights to occupy any land to someone else.
Shanti Prasad v. Bachchi Devi
In this case the lessee had overstayed his term of lease and it was held that the tenant cannot transfer his interest of occupying a property and thus the appeal which was filed by the lessee was rejected.
This Section of the Transfer of Property Act deals with all the properties which cannot be transferred. This section also explains that the interests in general rule are transferable and the transferability of the property is based on the Latin maxim “alienation rei prefertur Juriaccrescendi”, which means that law favours the alienation of property rather than its accumulation. This explains that any act made in order to interfere with the alienation of the property will be in opposition to what the law says. Moreover, Section 17 of the Transfer of Property Act, 1882, provides for a rule which says that accumulation of a property beyond a stipulated time period is prohibited by the law. This ensures the free flow of property, since accumulation of property and restricting its enjoyment is against public policy.