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What may be transferred under TPA?



What may be transferred?
What may be transferred?


Content:-




Transfer of  Property

Sec. 5. “Transfer of property” defined - The word “property” has not been defined in the Act, but has been used in its widest and most generic sense. It signifies every possible right and interest which a person can acquire, hold and enjoy. Thus ownership, tenancy, copyright, etc. are property of their respective holders. 


The word “transfer” has also been used in a wide sense. It may mean either transfer of all rights and interests in the property or transfer of one or more of subordinate rights in the property.


For example, if the owner sells his house, he transfers all rights and interests in the property. If however he gives his house on rent, he only transfers a right to enjoyment for a specific period. Both are “transfer of property”, which entails the conveyance of rights or some of the rights in the property from one person to another. 


In the following sections “transfer of property” means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and one or more other living persons, and “to transfer property” is to perform such act.



Explanation of “Transfer of Property”

  1. Transfer of property involves conveying rights in the property from one person to another. According to Section 5, the person conveying the property doesn't necessarily have to be the owner. Even a deed of appointment constitutes a transfer.

  2. Transfers of property don't always require a formal instrument.  

  3. Section 5 allows transfers to take effect immediately or in the future. 

  4. Regarding future property, the property must exist at the time of transfer; future property cannot be transferred directly. However, a conveyance may be considered a contract to assign future property, becoming binding when the property comes into existence. Equity allows specific performance of such contracts if made for consideration but not for gratuitous transfers like gifts, making a gift of future property void.

  5. The transfer of property must occur between living individuals, which includes juristic persons such as companies or corporations, as well as other associations of persons, whether incorporated or not. 

  6. According to the section, a person can transfer property to themselves under certain circumstances. For example, if a person vests property in trust and becomes the sole trustee, or if someone makes a transfer in their capacity as an executor to themselves in their private capacity. However, a person cannot transfer property to themselves in the same capacity. If a person transfers property in one capacity to themselves and receives it in another capacity, such a transfer is permissible.



Kinds of transfer 


The Act encompasses various kinds of transfers, including sale, mortgage, lease, exchange, and gift. A sale constitutes a complete transfer of ownership in property, typically for money as consideration. In contrast, an exchange involves the transfer of property for another thing as consideration, while a gift involves no consideration.


A mortgage entails the transfer of a limited interest in property, often as security for a debt. A lease, on the other hand, involves the transfer of the right to enjoy immovable property for a specific time period or perpetuity.


Additionally, a release-deed is considered a conveyance and thus a transfer of property. If the deed indicates the intention to transfer ownership and effectively conveys the title, it constitutes a transfer.

However, if the property is transferred or released without consideration, such as in a gift, it is still considered a transfer. In a release, a person relinquishes their right or interest to another with a limited estate, as seen in cases like Kuppuswami v Arumugam (AIR 1967 SC 1395).




WHAT MAY BE TRANSFERRED (SEC. 6)


Sec. 6(a): Spes successionis

The things referred to in this clause as non-transferable are —


  1. the chance of an heir-apparent succeeding to an estate,

  2. the chance of a relation obtaining a legacy (a gift by will) on the death of a kinsman, and

  3. any other mere possibility of a like nature.


The principle outlined in Section 6 affirms that property of any nature can be transferred unless there is evidence of a law or custom that restricts transferability. This principle is rooted in the maxim "alienation rei prefertur juri accrescendi," which denotes that the law favours alienation over accumulation.


However, for a transfer to be valid, the transferor must have a present and existing title or interest in the property, along with the capacity to deliver it to another party. Section 6 of the Transfer of Property Act delineates nine exceptions where certain types of property cannot be transferred.



Chance of an heir-apparent

The term 'heir apparent' indicates that a living individual currently lacks any heir. Intestacy refers to a situation where a person dies leaving behind property without a valid will, resulting in their estate being governed by inheritance laws.


Consequently, the identity of the heir and the availability of the property can only be determined upon the individual's death, not beforehand.


Any mere possibility or expectancy of an heir inheriting an estate is excluded from the realm of transferable property. The term 'apparent' suggests a likelihood or possibility, and transfers based solely on speculative chances or possibilities are prohibited.


This prohibition stems from public policy concerns, as allowing such transfers could lead to speculation and increase in litigation. If an individual attempts to transfer such a speculative chance, known as spes successionis, the transfer is deemed void from the outset.


It does not confer any rights upon the transferee, even if the transferor ultimately becomes the owner of the property in question in the future.



Chance of legacy

The likelihood of a relative receiving a legacy is even more remote than the chance of inheriting as an heir and therefore, is not transferable.


A 'reversioner' is someone who anticipates acquiring property upon the death of another relative. They do not possess a vested interest in the property but rather a contingent or dependent interest.


For instance, let's consider two brothers, A and B, in a Hindu joint family. Upon A's death, his interest in the joint family property passes to his widow, W. B, in this scenario, would be deemed a reversioner.


However, B's chance of inheriting the property upon W's death is merely an expectancy and cannot be transferred. This is because B may pass away during W's lifetime. Only if B outlives W does he have the opportunity to become the property's owner upon her demise.



Other possibilities of a like nature

The term 'of a like nature' refers to possibilities based on hope or expectancy that cannot be transferred.


For example, the chance of winning a lottery or a prize in a competition cannot be transferred.


Similarly, the possibility of receiving a gratuitous payment at the discretion of an employer for services rendered or about to be rendered cannot be transferred.


There is a conflict in legal decisions regarding the transferability of the right to receive future offerings. The Calcutta High Court has ruled that it cannot be transferred because the chance that future worshippers will give offerings to a temple is a mere 'possibility.'


On the other hand, the Allahabad High Court has held that the right to receive offerings is not so uncertain as to be outside the scope of transferability. However, this view seems unsound because there is no certainty that offerings will be made.


A good example of a "mere possibility of a like nature" is the 'next cast in a fisherman's net.' There is no guarantee that any fish will be caught, and the fisherman has no interest in the fish until they are caught in his net.


Therefore, an interest in property arising in the future cannot be transferred. A transfer of future property amounts to a contract, which can be enforced when the property comes into existence.



Sec. 6(b): Right of re-entry

“A mere right of re-entry for breach of a condition subsequent cannot be transferred to any one except the owner of the property affected thereby”. By a mere right of re-entry is meant a right to resume possession of land which has been given to another person for a certain time.


It is usually inserted in leases empowering the lessor to re-enter upon the demised premises if the rent is in arrears or if there is a breach of covenants in the lease. 



Sec. 6 (c): Easement

“An easement cannot be transferred without the property which has the benefit of it”. An easement is a right to use, or restrict the use of land of another in some way, for example, right of way, right of light and rights of water.


For example. A, the owner of a house X, has a right of way over an adjoining plot of land belonging to B. A transfers this right of way to C. The transfer is a transfer of easement and therefore invalid. But if A transfers the house itself, the easement passes on to C on such transfer. 


Sec. 6(d): Restricted interests

“An interest in property restricted in its enjoyment to the owner personally cannot be transferred by him”. For instance, if a house is lent to a man for his personal use, he cannot transfer his right of enjoyment to another. 



Sec. 6(d): Maintenance

“A right to future maintenance, in whatsoever manner arising, secured or determined, cannot be transferred”. In some old cases it has been held that if the amount of maintenance is fixed by an agreement or by a decree, it can be assigned.


Although an agreement/decree would make such a right definite, it is nevertheless a right created for the personal benefit of the qualified owner (e.g. a Hindu female) and is now not transferable.


The above reasoning, however, does not apply to arrears of maintenance which have accrued. Thus the assignment of a decree for maintenance is valid if the maintenance has already become due but as to future maintenance it is not valid.



Sec. 6(e): Mere right to sue

According to Sec. 6(e), a mere right to sue cannot be transferred. This includes claims for past mesne profits, damages for breach of contract or tort, suing an agent for accounts, and pre-emption rights.


However, if the right to sue has merged into a decree, the right under the decree is assignable. Therefore, rights to mesne profits or damages under a decree can be transferred.


Additionally, if the right to sue involves an interest in property, it is also assignable.


The term 'mere' is crucial. For instance, if someone has given Rs. 100 as a loan to another person, they do not just have a mere right to sue. They have a definite right to recover the loaned sum, which is not uncertain like damages for breach of contract.


Thus, a right to recover a definite debt is not a mere right to sue and is transferable. For example, if A owes Rs. 1,000 to B, and B transfers the debt to C, the assignment is valid.



Sec. 6(f): Public office

“A public office cannot be transferred, nor can the salary of a public officer, whether before or after it has become payable”. A public office is held for qualities personal to the incumbent, and obviously it would be against public interest to permit alienations of public office.


Similarly, the salary is given to a public officer for upholding the dignity of the office and the proper performance of its duties; such salary cannot, therefore, be transferred.



Sec. 6(g): Pensions

Under this clause, stipends allowed to military and civil pensioners of Government and political pensions cannot be transferred. The term 'pension’ means a stipend granted not in respect of any right of office but on account of past services of particular merits. Accordingly, a reward is not a pension. 



Sec. 6(h): Nature of interest

This clause prohibits transfer under three conditions: 


(1) if the transfer opposes the nature of the interests involved, 


(2) if it involves an unlawful object or consideration, and 


(3) if the transferee is legally disqualified. Certain things are inherently non-transferable due to their nature. For instance, res communes (things owned by no one) and res nullius (things belonging to nobody), such as air and water, cannot be transferred as they are incapable of appropriation.


Similarly, res extra commercium (things removed from commerce), like property dedicated to a deity, cannot be transferred.


Property that is otherwise transferable can become non-transferable if the object or consideration of the transfer is unlawful, as per Sec. 23 of the Indian Contract Act. For example, leasing a house for use as a gambling den is invalid due to immorality or public policy concerns.


Lastly, a transfer cannot be made to a person disqualified to be a transferee. According to Sec. 136 of the T.P. Act, judges, legal practitioners, and court officers are prohibited from purchasing any actionable claim.


Sec.6 (i): Untransferable interests

The general rule is that leaseholds are transferable but this clause makes an exception to this rule and declares certain interests untransferable. Thus, a tenant having an untransferable right of occupancy cannot alienate or assign his interest in the occupancy.


Similarly, a farmer of an estate, in respect of which default has been made in paying revenue, cannot assign his interest in the holding. The same remarks apply to a lessee of an estate under the management of a Court of Wards. 

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