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Transfer in favour of God or Minor under TPA



Transfer in favour of God or Minor
Transfer in favour of God or Minor


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Transfer in favour of God 

According to Section 5 of the Transfer of Property Act, property must be conveyed from one living person to another living person, adhering to the principle of inter vivos.


This provision encompasses various entities, including corporations and associations of persons such as partnership firms, which can collectively effect property transfers in their business or firm names.


However, when it comes to the conveyance of property in favor of an idol or deity, a different legal principle applies. An idol, being a juristic person, possesses the capacity to own property. Yet, it does not qualify as a living person under the law.


Consequently, dedicating property to an idol or deity does not constitute a transfer as defined by the Transfer of Property Act. Therefore, such dedications need not adhere to the formalities of being made in writing or through a registered instrument as required by the Act.


Instead, dedications made to idols or deities fall under the purview of relevant religious or charitable endowment Acts. These Acts govern the legal framework surrounding such dedications and establish the guidelines for their administration and utilization in accordance with religious or charitable purposes.


Thus, while not considered transfers under the Transfer of Property Act, dedications to idols or deities are subject to specific legal provisions designed to regulate their management and ensure their intended purposes are upheld.



Transfer in favour of Minor

As per Section 7 of the Transfer of Property Act, a fundamental requirement for a valid transfer is that the transferor must be competent to contract. Consequently, since a minor lacks the legal capacity to enter into contracts, they cannot act as transferors in property transactions.


However, it's important to note that this restriction applies specifically to the role of transferor; a minor is not disqualified from being a transferee.


Despite being unable to enter into contracts as transferors, minors (as well as lunatics) are not prohibited from receiving property transfers. This means that a minor can legally assume the role of mortgagee, purchaser, or donee in various property transactions.


For instance, a minor can receive a mortgage over a property, purchase property, or receive property as a gift without contravening the law.


It's essential to recognize that while minors have the capacity to receive property transfers, their rights and interests in such transactions are safeguarded by legal provisions designed to protect their best interests.


These provisions ensure that any property received by a minor is managed and utilised in a manner that aligns with their welfare and legal rights.



Doctrine of Feeding Empty Grant by Estoppel 

Section 43 of the Transfer of Property Act deals with transfers made by unauthorized persons who subsequently acquire an interest in the property transferred.


It states that if a person fraudulently or erroneously represents that he is authorized to transfer certain immovable property and transfers it for consideration, the transfer shall, at the option of the transferee, operate on any interest the transferor may acquire in the property while the transfer contract subsists.


However, this section does not affect the rights of bona fide transferees for consideration without notice of this option.


The general principle, nemo dat quod non habet, dictates that one cannot give what they do not possess. However, there are exceptions to this rule, including Section 43 of the Transfer of Property Act. This section is grounded in the principle of estoppel, commonly referred to as "feeding the grant by estoppel."


This principle essentially means that if a person without any title to property grants it through a conveyance, and subsequently acquires an interest sufficient to fulfill that grant, the estate immediately passes to the transferee.


The person is estopped from denying the grant due to their conduct, and the law obliges them to fulfill the grant upon acquiring the necessary interest.


The doctrine of feeding the grant by estoppel compels a person to fulfill their promise to transfer property when they acquire the ability to do so. It is the option of the transferee to activate this validity by exercising their right under Section 43.


This doctrine applies not only to sales but also to mortgages, leases, charges, and exchanges. However, it does not apply if there is no grant or interest in immovable property involved, or if the transferor acquires an interest in a different property than the one subject to the transfer.



Essential Requirements of S. 43

Section 43 of the Transfer of Property Act outlines four main requisites:


  • Representation of Ownership: The transferor must make a fraudulent or erroneous representation of ownership, leading the transferee to believe they have the authority to transfer the property.



  • Transfer by the Wrong Owner: The transfer must occur by someone who does not actually have the title or ownership rights to the property.


  • Transfer for Consideration: The transfer must be made in exchange for consideration; it does not apply to gratuitous transfers.


  • Subsisting Contract of Transfer: There must be a valid and existing contract of transfer between the parties.


Additional Points:


  • Knowledge of Truth: The transferee cannot claim the benefits of Sec. 43 if they were aware of the transferor's lack of title.


  • Transfer Forbidden by Law: Sec. 43 does not apply if the transfer is invalid due to being prohibited by law or against public policy.


  • Option of the Transferee: The transferee has the option to exercise their rights under Sec. 43, but this must be done while the contract of transfer is still in effect.


  • Rights of Second Transferee: The rights of subsequent transferees in good faith and for consideration are protected under Sec. 43.


While Sec. 43 follows the English doctrine in some aspects, it differs in others, such as requiring the transferee to exercise their option for validation. The transfer becomes valid when the transferee exercises their option, and the transferor's title becomes perfected.


Various cases illustrate the application of Sec. 43, such as transfers involving inheritance, dissolution of partnerships, or mortgages by widows after a certain period. Overall, Sec. 43 provides a framework for dealing with transfers made by unauthorized persons who subsequently acquire an interest in the property transferred.



Difference between spes successionis and the rule of feeding the grant by estoppel under Sec. 43


The relationship between Sec. 43 and Sec. 6(a) is aptly demonstrated in the example provided under Sec. 43. The illustration depicts A, a Hindu who sells three fields to C, falsely claiming to have the authority to transfer all three.


However, one of the fields, Z, does not belong to A but is retained by his father B. Upon B's death, A inherits Z. Despite A's misrepresentation, C, who has not rescinded the contract, has the right to demand Z from A.


  • Sec. 6(a) deals with transfers involving spes successionis, where both the transferor and the transferee are aware of the speculative nature of the transfer. In contrast, Sec. 43 operates on the basis of an explicit misrepresentation by the transferor, leading the transferee to believe in the validity of the transfer. Unlike Sec. 6(a), Sec. 43 applies specifically to transfers made for consideration.


  • Furthermore, while the doctrine of spes successionis applies to both movable and immovable properties, the estoppel rule of Sec. 43 pertains only to immovable property transfers.


  • Under Sec. 6(a), the transfer is void from the outset, whereas under Sec. 43, the transfer is voidable at the option of the transferee, subject to certain conditions. The contract must remain in effect at the time the transferor becomes competent to transfer the property, and the property must still be available with the transferor, not in the hands of a bona fide transferee for value.


  • In the given case, since A made a false representation to C, Sec. 43 estoppel applies, allowing C to succeed in obtaining the property from A if the contract remains unrescinded. However, if C was aware of A's lack of authority to transfer, Sec. 43 would not apply, and the transfer would fail under Sec. 6(a).


  • If the sale deed was registered, it serves as constructive notice to subsequent transferees like D, preventing them from defeating C's rights. However, if the deed was not registered, D, as a subsequent transferee for consideration, can defeat C's rights. In such a case, C can still pursue civil or criminal action against A for recovery of money or charges of cheating.


The Supreme Court clarified the relationship between Sec. 6(a) and Sec. 43 in the case of Jumma Masjid v K. Deviah. The issue centred on whether a transfer made by individuals with only a spes successionis, representing it as a present interest, falls under the protection of Sec. 43.


The court held that even in cases of spes successionis, if the transferor later acquires interest in the property, the transfer remains valid.


The court emphasized that Sec. 6(a) establishes a substantive rule, prohibiting transfers of certain interests, while Sec. 43 operates as a rule of estoppel, addressing misrepresentations of title. The provisions apply in different contexts, without conflicting with each other.


Sec. 43 serves to protect transferees who rely on representations of present title made by the transferor. It applies regardless of whether the transferor lacks any interest or possesses only an expectancy.


The court stressed that Sec. 43 provides specific protection to transferees and does not conflict with Sec. 6(a).


Precedents like Ram Pyare v Ram Narain, Official Assignee, Madras v Sampat Naidu, Vithabai v M. Shankar, and Pismila v Manulal support this interpretation. In Official Assignee, Madras v Sampat Naidu, the court ruled that a transfer based on spes successions, known to the transferee, renders the initial transaction void under Sec. 6(a), but Sec. 43 does not apply.


It's suggested that a distinction be made between transfers involving mere rights or chances of succession, falling under Sec. 6(a), and transfers of specific property falsely represented by the transferor, falling under Sec. 43.

 






Leading Case Law


  1. KARTAR SINGH v HARBANS KAUR  (1994) 4 SCC 730

The case involved a Hindu woman who executed a sale deed for land belonging to her minor son. Upon the son reaching majority, he contested the sale, claiming it to be void. The trial court ruled the sale as void and directed the restoration of possession to the son.


However, before the son could take possession, he passed away, and the mother, as a Class I heir under the Hindu Succession Act, 1956, succeeded to the property. The transferee, to whom the property was transferred by the mother, claimed the benefit of Section 43.


The High Court set aside the trial court's decree, declaring the sale void and refusing to grant relief under Section 43. The case was brought before the Supreme Court.


The appellant argued that since the mother acquired the property by operation of law, they were entitled to the interest acquired by the mother under Section 43. The appellant contended that the High Court misapplied the precedent set in Jumma Masjid, Mercara v Kodimaniandra Deviah (AIR 1962 SC 847).


The Supreme Court clarified that for Section 43 to apply, two conditions must be met. First, there must be a fraudulent or erroneous representation by the transferor to the transferee regarding their authority to transfer certain immovable property.


Second, when it is discovered that the transferor acquired an interest in the property, the transferee is entitled to restitution of the interest, provided the transferor acquired such interest while the transfer contract was still in effect.


In this case, the sale deed indicated that the land was acquired by the mother and her minor son through the right of preemption, with the mother acting as guardian for the minor's share.


However, under the Guardian and Wards Act, the estate of a minor cannot be alienated without court permission.


The court emphasized that the transferee is obligated to conduct diligent inquiries regarding the transferor's capacity and the necessity to alienate the minor's estate. As the mother was a guardian and was also acting as one, the transferee should have further investigated her capacity to alienate the minor's share.


The court held that the material time for establishing knowledge is at the conclusion of the contract. Constructive notice on the part of the transferee would bring the case under Section 6(a).


If the transferee could have detected the transferor's incompetency through reasonable inquiries but failed to do so, constructive notice would be imputed. In such cases, the plea of misrepresentation, fraudulent or innocent, would not be accepted, and the transfer would be considered void under Section 6(a), rendering Section 43 inapplicable.





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