viky tpa.docx

TRANSFER OF PROPERTY ACT PROJECT REPORT:

S ECTION 5 O F T HE T RANSFER O F P ROPERTY A CT, 1 882

Submitted to: Submitted by:

Prof. Rajinder Vikrant Attri

B.A.LL.B(Hons.)7th Sem

175/12

A CKNOWLEDGEMENT

I express my sincere gratitude to “Prof. Rajinder” for her inspiration, expert guidance, moral

boosting, continuous encouragement and appreciation which are the vital factors in successful

completion of my project work.

I humbly acknowledge deep gratitude towards my teacher.

Thanking You.

C ONTENTS

Section 5 of TPA,1882

Acknowledgement

Table of Cases

Transfer of Property whether movable or immovable

Introduction

Ingredients

Transfer of Property is an Act

Living Person

Conveys

In Present or in Future

To Himself

Whether the following amounts to transfer under section 5 of TPA, 1882

Bibliography

TABLE OF CASES

1. Ma Kyin Hone v. Ong Boon Hock AIR 1937 Rang.47

2. Sunil Sidharthbhai v. Commissioner of Income Tax AIR 1986 SC 368

Krishna Kumar Khemka v. Grindlays Bank PLC, AIR 1991 SC 899.

Bhupati Nath v. Ram Lal (1910) 37 Cal. 128.

Usha Rani Kundu v. Agradut Sangha and other, AIR 2006(NOC)911 Cal.

Ashrafi Devi v. Prem Chand, AIR 1971 ALL457

Har Narain v. Bank Upper India, AIR 1938 Oudh 84

Jugal Kishore v. Raw Cotton Co. Ltd(1922) 24 Bom. LR 861

Re Mahomed Hasham& Co(1907) 31. Bom. 165

Shumsuddin v. Abdul Husein AIR 1955 SC481

Sadhu Madho Das v. Pandit Mukund Ram, AIR 2006 SC 3304

RamdeoFoods Products Pvt. Ltd.v. Arvindbhai Rambhai Patel, AIR 2006

Tek Bahadur v. Devi Singh AIR 1966

Muniappa Pillai v. Periasami,(1975) 1 MLJ 236

M. KrishnaRAo v. M.L Narasikha Rao, AIR 2003 AP 498

Morati v. Krishna (1925) Nag.455

Kalka v. Jaswant, (1926) Oudh 69

The Transfer of Property Act, 1882

Bare Provision of the Act

Chapter II

Of Transfers of Property by Act of Parties

(A) Transfer of Property whether movable or immovable

“Transfer of Property”: Section 5 of Transfer of Property Act , 1882 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 himself1 and one or more living persons; and to “transfer of

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 contained herein shall affect any law for the time being in force

relating to transfer of property to or by companies, associations or body of individuals.2

The analysis of this definition makes it clear that transfer of property is:-

(i) an act by which,

(ii) a living person,

(iii) conveys,

(iv) in present or future,

(v) property,

(vi) to another living person or to himself.

1 Ins. by Act 20 of 1929, Sec 6

2 Ibid

Transfer of Property: An Introduction

The word “transfer” is defined with reference to the word “convey”. This word in English Law

in its narrower and more usual sense refers to the transfer of an estate in land; but it is sometimes

used in a much wider sense to include any form of assurance inter vivos. The word “conveys” in

Section 5 of the Indian Act is used in the wider sense referred to above. Transferor must have an

interest in the property. He cannot sever himself from it and yet convey it3. A lease comes within

the meaning of word ‘transfer’4.

The word ‘living person’ excludes transfer by Wills and the Will only operates after the death of

the testator.

In Ma Kyin Hone v. Ong Boon Hock5, a single judge of Rangoon High Court said that the word

‘transfer’ is a word of very wide meaning and includes every transaction whereby a party divests

himself or is divested of a portion of his interest, that portion subsequently vesting or being

vested in another party.

It may be noted that property is essentially a bundle of rights and interests. When a property is

transferred , there may be transfer of all the rights in that property or only some of it. All the

rights in the property signify the ownership or absolute interest. Only some rights or interests in a

property would mean partial or limited interests. In Sunil Sidharthbhai v. Commissioner of

Income Tax6, the Supreme Court rightly observed that in general, transfer of property means

passing of a right in the property from one person to another. In one case there may be passing of

entire bundle of rights from transferor to transferee, but in another case there may be transfer of

only some of such rights.

3 See Mulla, The transfer of Property Act, 9th Ed., LexisNexis Butterworths, 2004, p. 73.

4 Krishna Kumar Khemka v. Grindlays Bank PLC, AIR 1991 SC 899.

5 AIR 1937 Rang47.

6 AIR 1986 SC 368.

Thus, if A makes a gift of his house to B, there is transfer of absolute interest of the house.

It is a ‘transfer of property’. On the other hand, if A transfers the right of enjoyment of his

house to B for a certain period it is called a ‘lease’. It is transfer of not only partial interest

in the house but is also a transfer of property7.

Transfer of Property is an Act

It is an activity or process. Under this activity something is done by the person who wants to

transfer his property; it is not transferred automatically without transferors ‘act’ as is the case in

wills or inheritance. Transferring property would mean doing of this act or performing such act.

The legal effect of this act is passing of property from one person to another.

Living Person

The word ‘living person’ can only mean a human being who is alive and conveys his property to

another person. A person, who disposes of his property by will, does not convey it as a living

person because the transfer takes effect after his death. There is no present transfer.7

The person who makes the transfer is called the transferor. The transferor may be human person

or a juristic person. Juristic persons are companies, Firms, Corporations, University etc. which

although are not human being but law incorporates personality to them8.

The expression ‘inter vivos’ refers to transfer or conveyance of the property from one living

person to another.

Where property was acquired by or transferred in favor of Secretary of unregistered Society or

Club, Secretary of unregistered society or club has no legal status to hold or acquire the property

in question because secretary of the unregistered society or club cannot come within the

definition of “living person” within the meaning of Section 5 of the Act9.7 Sinha, DR. R.K., The Transfer of Property Act, 11th Ed., Central Law Agency , Allahabad, 2010,p.53

8 Ibid.9 Usha Rani Kundu v. Agradut Sangha and other, AIR 2006(NOC)911 Cal.

A deity is not included in the definition of person in section 5 of the Act. If deity is not a person ,

the provisions of the Act including Section 3 do not govern a transfer of property made in favor

of a deity10.

An idol is a juristic person capable of holding property but it is not a living person. An idol not

being a living person , a dedication of land to an idol does not fall within the terms of section

122 of this Act. Similarly a court is not a juristic person. It is not a living person either, therefore

a court order for sale is not a transfer of property within the meaning of this act11.

In Bhupati Nath v. Ram Lal12, a full bench of Calcutta High Court held that the principle of

Hindu Law which invalidates a gift other than to a sentiment being capable of accepting it does

not apply to a bequest to the trustees for the establishment of an image and the worship of Hindu

deity after the ancestor’s death nor does it make such a bequest void. The full bench after

examining the Hindu Texts and authorities observed that according to the strict Hindu Juridicial

notion there can be no gift in favor of the Gods for in case of deities there cannot be any

acceptance and therefore necessarily any gift.

Conveys

In a transfer of property the ‘living person’ i.e the transferor conveys the property. His

conveying is doing of the ‘act’ which is called transfer. There must be conveyance in every

transfer of property. Conveyance means any act of the transferor by which certain new titles

or interests are created in favor of the transferee. The word ‘conveys’ include any form of

assurance inter vivos in which some new title or interest is created in favor of the transferee 13.

For example A and B are owners of their houses. B has no title or interest in A’s house. A does

something (e.g. makes gift or sale) by virtue of which B becomes owner also of A’s house. Here

10 Ashrafi Devi v. Prem Chand, AIR 1971 ALL45711 Har Narain v. Bank Upper India, AIR 1938 Oudh 8412 (1910) 37 Cal. 12813Official Assignee, Madras v. Tehmina Dinshaw Tehrani, A.I.R 1972, Mad. 187.

A’s act is conveyance because this has the effect of creation of new title or interest in favor of B.

Shah states that:

“In fact the essence of the word ‘transfer’ is to ‘convey’, and therefore, a transfer of

property would include any transaction which has the effect of conveying any property or

any interest therein from one living person to another14.”

The test as to whether a transaction is a transfer of property or not is whether that transaction

passes on certain new rights or interests to the transferee or not ? If no new interest is created,

there cannot be transfer of property.

Division of Partnership assets among partners of a partnership firm is not a conveyance because

all of them were already owners of such assets. A firm is not capable of owing property because

it is not a legal person in the eye of law. Hence registration of such apportionment is not

necessary15.

In Jugal Kishore v. Raw Cotton Co. Ltd16, the word conveys is qualified by the term present or

future. So, the conveyance of the property may take place in present or future but property which

is to be transferred must be existing at the time of transfer.

In Present or in Future

The words ‘in present or in future’ means that the conveyance may be one which takes effect

immediately on execution or at some distant date, that is to say, the interest of the transferee

arises immediately on execution of the document of at the date fixed by the parties.

In Re Mahomed Hasham& Co.,16 Martin, J., in holding that Section 5 did not apply to the

Presidency Town Insolvency Act, observed: “ I am not absolutely sure what the words ‘in

present or in future’ refer to. I should have thought grammatically they refer to property.

14 Shah S.M., PRINCIPLES OF THE LAW OF TRANSFER, Ed. III, p. 7

15 AIR 1955 SC

16 (1922) 24 Bom. LR 861

In Shumsuddin v. Abdul Husein17,Jenkins, CJ., remarked., “there is no definition in the act of

‘convey’ or of ‘property’ but is to be noticed that a transfer means a conveyance of property not

only in present but also in future.

To sum up, a transfer of property may be made so as to take place with immediate effect or to

take place on a future date. The transferor can make arrangement that the property is vested to

the transferee immediately after the completion of transfer. He may also make such

arrangements in which the vesting of interest of property is postponed to a future date. Some

illustrations are:

A makes a gift of his property to B. He does not mention to when B shall get the

property and also does not lay down any condition. The transfer is present and B

gets the property with immediate effect.

A transfers his property to B for life and then to C. The transfer in favor of B is

present but the transfer in favor of C is future transfer.

A makes a gift of his watch to B provided that B gets first division in the next

examination. Here, although the gift has been declared today but it shall take

effect only if B gets first division. Such transfers are called conditional transfers.

The conveyance may therefore be present, future or conditional.

To Himself

A transfer of property under Section 5 of the Act requires two ‘living persons’, the transferor and

the transferee. One cannot transfer a property to himself. But, one can transfer a property to

himself in some other capacity. The words “to himself” were added to this section by the

Amending Act, 1929 to include in the transfer of property also a case where a person makes any

settlement of his property in a trust and appoints himself as the sole trustee18. Here the transferor

and the transferre are physically the same person but as transferor he has the legal status of the

settler whereas as transferre his legal status is that of a trustee.

17 (1907) 31. Bom. 165

18 Sinha, DR. R.K., The Transfer of Property Act, 11th Ed., Central Law Agency , Allahabad, 2010,p.54

Transfer of property as contemplated under this act carries the same meaning throughout

this enactment as it has been defined in Section 5. This definition has limited the scope of the

term ‘transfer of property.’ Unless the above mentioned elements are present in transaction, it

cannot be regarded as transfer of property.

WHETHER THE FOLLOWING AMOUNTS TO TRANSFER UNDER

SECTION 5 OF TPA, 1882

1) Family Settlement:

Family settlement or family arrangement is not a transfer of property. In a joint family property

all the members have their specific shares but they are not separated and are held conjointly by

all of them. When a family settlement takes place , the already existing specific shares of the

members of the family are defined and separated in order to avoid any possible disputes. Thus, in

family settlement there is mutual agreement between the members of the family to hold their

respective shares separately. It simply acknowledges and defines the title for each member19.

In Sadhu Madho Das v. Pandit Mukund Ram20, the Supreme Court observed that the family

arrangement is based on the assumption that there is antecedent title of some sort in the parties

and the arrangement acknowledges and defines what the title is.

In RamdeoFoods Products Pvt. Ltd.v. Arvindbhai Rambhai Patel21, a memorandum of

understanding was executed to resolve the dispute between the members of the family. The

Supreme Court held that such memorandum agreed between the family members can be treated

as ‘family settlement’ and the Court cannot interfere with this.

In a family settlement since there is no creation of new title or interest in favor of any member,

there is no conveyance, therefore it is not a transfer of property.

2) Partition:

A partition of property is not a transfer of property, but is analogous to an exchange22. In other

words partition means separating the parts of co-owned property.

19 Tek Bahadur v. Devi Singh AIR 196620 AIR 1955 SC 481.21AIR 2006 SCC 3304 22 Mulla, The Transfer Of Property Act, 9th Ed, LexisNexisButterworths.

If in a property there are several co-owners having , under the law, their respective interests but

the whole property is neither used nor enjoyed by them separately then, after the partition each

member gets merely the separate right of enjoyment. In Mohar Singh v. Devi Charan23, the

Supreme Court explained the legal nature of a partition in the following words:

“Partition is not actually a transfer of property, but would only signify the surrender of a

portion of a joint in exchange for a similar right from the co-sharer.”

The Karnataka High Court followed this line of decisions and held that a partition is not a

transfer, reason being no conveyance is involved because everyone had an antecedent title.

In Girijabai v. Sadashiv, Privy Council held that partition does not give a person new title but it

only enables him to obtain what is his own in a definite and specific form.

In Sarin v. Poplai24, C.J observed that “the true effect of partition is that each coparcener gets

specific property in lieu of his undivided interest in respect of the totality of the property of the

family.”

3) Surrender: Surrender is not a transfer of property as defined in Section. Surrender means

merging of a lesser interest with a greater interest in such a manner that the greater nest is not

enlarged. Surrender is therefore falling of lesser estate into greater. For example, A is a landlord

and B is his tenant. A as landlord has ownership of the house. Ownership or absolute interest is a

greater interest. B as a tenant has also an interest in A’s house but B’s interest is lesser because it

is limited only to the right of enjoyment. Now, if B vacates the house before expiry of the term

of tenancy it would amount to surrendering of his right of residence. Here, the lesser interest,

namely the right of residence, which was away from the absolute interest of the land during

tenancy, comes back to ownership. There is no creation of any new title or interest in favor of

23 AIR 1988 SC 1365.24 AIR 1966 SC 432.

landlord. Thus surrender by a tenant to the landlord25 or by a widow to the reversioners26 has not

been regarded as a transfer of property.

4) Release : Release is a transfer of property. When a larger interest falls into a smaller interest in

such a way that smaller interest is enlarged then, for the holder of smaller interest, there is

creation of new title or interest. Since some new title or interest are added it amounts to transfer

of property27. Where a person in whose favor a “release” is executed gets rights by virtue of the

release, the deed amounts to “transfer”.

In Muniappa Pillai v. Periasami28, after taking some money A executed a deed transferring his

right, title and interest in his half share of the property absolutely in favor of B. The document,

thus gave B absolute rights in the share which belonged to A and to which B was not entitled.

The Madras High Court held that this document clearly came under the definition of deed of

transfer within the meaning of section 5.

Since coparcenary property is a joint property of all the coparceners therefore, a release in

favor of only one or some of the coparcener would be deemed to be a transfer in favor of all the

coparceners. In M. KrishnaRAo v. M.L Narasikha Rao29 , a release deed was executed in favor

of some out of several coparceners. The Andhra Pradesh High Court held that the release made

in favor of some coparceners would operate to the benefit of all the coparceners and not only in

favor of those coparceners in whose favor release was executed. The release in all cases may be

with or without consideration.

5) Charge: Charge is not a transfer of property. It is created on a property of securing a payment

out of that property. When the property of a person is charged for securing certain payments e.g.

maintenance, it is simply securing “personal obligation” out of the property. A charge is not a

25 Morati v Krishna (1925) Nag 455.26 Kalka v Jaswant (1926) Oudh 29.27 Official Assignee, Madras v. Tehmina Dinshaw Tehrani, AIR 1972.28 (1975) 1 MLJ 236.29 AIR 2003 AP 498.

transfer of property because the only right created under it is a right to payment out of the property

subjected to the charge30.

6) Easement: Section 4 of the Easement Act, 1882, defines easement as “ a right which the owner

or occupier of certain land possesses as such for the beneficial enjoyment of that land, to do and

to continue to do something or to prevent and continue to prevent something being done in upon

or in respect of certain other land not his own.” No conveyance is done in an easement, therefore

easement is not a transfer of property31.

BIBLIOGRAPHY

Sinha, Dr. R.K., The Transfer of Property Act, 11th Ed., Central Law Agency, Allahabad,

2010.30 Gobinf v. Dwarkanath, (1908) 35 Cal. 837.31 Singh Avtar, Textbook on Transfer Of Property Act, Central Law Publications, 4th Ed. 2011.

Dr. Singh Avtar, Textbook on Transfer Of Property Act, Central Law Publications, 4th

Ed. 2011.

Vakil, Darashaw J., Commentaries on the Transfer of Property Act, 2nd Ed., Wadhwa and

Company Nagpur, New Delhi, 2004.

The Transfer of Property Act, 1882, Bare Act, Universal Law Publishing Co. Pvt. Ltd.,

New Delhi, 2013.

Dr. Tripathi G.P, The Transfer of Property Act, Central Law Publications, 2014.

Mulla, The Transfer of Property Act, 9th Ed., LexisNexis Butterworths, 2004.

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