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Partition under Transfer of Property Act

Partition in TPA


Transactions Not Amounting to Transfer of Property

The term "transfer of property," as defined in Sec. 5, encompasses transactions that result in the conveyance of property from one living person to another, creating a new title or interest for the transferee.

Hence, if no new title or interest is created, there is no transfer of property. Conveyance includes various transactions such as mortgage, charge, lease, release, assent, disclaimer, and other assurances of property.

Partition, although it involves dividing property among co-sharers, does not constitute a transfer because it merely separates the specific share that each co-sharer already possesses.

A will is not considered a transfer as it operates upon the death of the person making it, contrary to the requirement of a transfer by a living person.

Relinquishment refers to the extinguishment of a right, leaving nothing to transfer.

Surrender, involving the merger of a lesser estate into a greater one, does not constitute a transfer. 

Charge is not considered a transfer because it only creates a right to payment out of the charged property, as established in Gobind Chandra v Dwarka Nath (1908) 35 Cal 837.

In a family arrangement or settlement, there is an acknowledgment and definition of existing rights among family members, with each party relinquishing claims to certain property in favour of others. As such, a family arrangement is not regarded as a transfer, as established in Sadhu Madho Das v Pandit Muhand Ram (1955) 2 SCR 22).

Whether a compromise amounts to a transfer depends on the circumstances. A compromise of a doubtful claim typically does not constitute a transfer, but if one party relinquishes a claim in exchange for property rights, it may be considered a transfer, as seen in Hussain Banu v Shivnarayan AIR 1968 MP 307.

Partition - whether a transfer of property

A ‘transfer of property’ under Sec. 5, T.P. Act involves the creation of new right or interests in favour of the transferee. Partition is not a transfer of property because nothing new is obtained by a co-sharer on partition. His specific share, which vested in him earlier, is simply separated. 

Leading Case Laws

The Supreme Court laid down the law in the following case:- 

  • In the landmark case of V.N. Sarin v Ajit Kumar Poplai (AIR 1966 SC 432), the Supreme Court addressed the issue of whether a partition constitutes a transfer of property within the meaning of the law. The case involved a tenant who was inducted by respondent no. 1 before a partition occurred, after which respondent no. 2 became the owner of the property and sought eviction of the tenant.

The central question was whether the change in ownership due to partition constituted a transfer under Sec. 14(6) of the Delhi Rent Control Act.

This provision states that a person who acquires premises through transfer becomes a landlord, affecting the tenant's rights. The tenant argued that respondent no. 2 acquired the premises through a transfer, subjecting him to the Act's provisions.

The Court, however, reasoned that in a Hindu joint family, partition results in a division of joint property among coparceners, granting them exclusive ownership over specific properties. This division does not create new ownership but merely allocates existing ownership rights.

As such, the Court concluded that the transfer of property under partition does not fit the definition of "transfer" under Sec. 5 of the Transfer of Property Act.

This decision reaffirmed the principle that partition does not involve the creation of new ownership but the allocation of existing rights.

A similar stance was taken in the case of Commr. of Income Tax v Keshavlal Tallubhai (AIR 1965 SC 866), where the Court held that an oral partition among family members did not constitute a transfer for the purpose of income tax laws. These cases establish that partition, in its essence, does not amount to a transfer of property as defined in legal statutes.

  • In the significant case of Mohar Singh v Devi Charan (AIR 1988 SC 1365), the Supreme Court addressed the issue of whether partition, while not constituting a transfer of property under Sec. 5 of the Transfer of Property Act, could still be subject to the provisions of Sec. 109 of the same Act based on principles of justice, equity, and good conscience.

The case involved a property jointly owned by two co-owners, which was later partitioned between them. Subsequently, one of the owners, who obtained the tenanted portion through partition, filed for eviction of the tenant based on his own bona fide need.

The tenant argued, and the High Court accepted, that the severance of the reversion and assignment to the appellant-owner did not authorise him to seek eviction without the consent of the other co-owner, as it would split the unity of the tenancy.

However, the Supreme Court ruled in favour of the lessor (owner), highlighting that while a landlord cannot normally divide the tenancy, Sec. 109 of the T.P. Act provides an exception.

This section enables an assignee of a part of the reversion to exercise all rights of the landlord over that portion, without the need for the tenant's consent. The Court emphasised that this statutory provision overrides the contractual inhibitions of the landlord and operates independently of tenant consent.

The Court further acknowledged that while a partition is not a transfer of property per se, some High Court decisions have applied the principles of Sec. 109 to partition cases.

Even if the section does not explicitly apply, the Court noted that the underlying principle of Sec. 109 embodies fairness and equity, which could be extended to partition scenarios.

This case elucidates the interplay between partition, transfer of property, and the rights of landlords and tenants, emphasising the application of legal principles to ensure fairness and equity in property disputes.

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