Asst. Prof. M. A.

Limaye
 2.1 General rules of Transferability of Property (Sec. 6)
 2.2 Competency of Parties to transfer and Effect of
transfer (Sec. 7-8)
 2.3 Restrictive Conditions about the alienation of
Property (Sec. 10-12)
 2.4 Transfer for the benefit of Unborn Person and Rule
against Perpetuity
 (Sec. 13-14)
 2.5 Directions for Accumulation (Sec. 17)
 Section 6 of the Transfer of Property Act, 1882
outlines the general rules regarding the transferability
of property.
 This section states that property of any kind can be
transferred, but it also lists certain exceptions to this
rule.
 Section 6 lists specific categories of property that cannot be
transferred:
 Spes Successionis:
◦ This refers to the expectation of succession (a mere hope or chance of
inheriting property).
◦ Example: A person cannot transfer their hope of inheriting property
from a relative who is still alive. Such a transfer is void.
 Right of Re-entry:
◦ A landlord’s right to re-enter the property upon breach of the lease
agreement is not transferable.
◦ Example: If a tenant breaches the terms of the lease, the landlord
cannot transfer their right to reclaim the property to someone else.
 Easements:
◦ Easements are the rights to use someone else's land for a specific
purpose (like a right of way). These rights cannot be transferred
independently of the land.
 Public Office:
◦ Public offices and the salary or benefits attached to such offices
cannot be transferred.
◦ Example: A government official cannot transfer their office or the
income they receive from that position to someone else.
 Right to Future Maintenance:
◦ The right to receive maintenance (e.g., support for a dependent)
cannot be transferred. This is a personal right and cannot be sold or
assigned.
 Mere Right to Sue:
◦ A mere right to sue someone (for damages or compensation)
cannot be transferred. This is a personal right and cannot be
assigned or sold.
 Interest Restricted in Enjoyment:
◦ If the enjoyment of the property is restricted to a specific individual
(such as a life estate), that individual cannot transfer the property
beyond their interest.
◦ Example: A person who has the right to use the property for their
lifetime cannot transfer the property to someone else beyond their
lifetime interest.
 Right to Future Benefits under a Contract:
◦ Any right to a benefit that is contingent on the occurrence of a
future event, which may not happen, cannot be transferred.
 Pension Stipends:
◦ Pension and stipends provided by the government, such as military
or civil pensions, cannot be transferred or assigned.
 Section 7 deals with who is legally competent to transfer
property. It specifies the basic requirements for a valid
transfer of property.

 Competent to Contract:
◦ A person must be competent to contract under the Indian Contract
Act, 1872.
◦ This means that:
 The person must be of sound mind (capable of understanding the
transfer and its consequences).
 The person must be a major (above 18 years of age).
 The person must not be disqualified by law (such as due to insolvency or
other legal restrictions).
 Section 8 explains the effect of a property transfer and
what is included in the transfer unless specified
otherwise.
 Transfer Includes All Incidents:
◦ When property is transferred, unless explicitly stated
otherwise, all the rights and interests that are legally attached
to the property are also transferred.
◦ Example: If someone transfers a piece of land, the buildings,
trees, rents, rights of way (easements), and any profits
associated with that land are automatically included in the
transfer.
 Effect of Transfer on Conditions:
◦ A transfer may also come with conditions (such as restrictions
on use or ownership), but these must not be illegal or violate
the rules mentioned in the Act (like the rules against
perpetuity or restrictions on alienation).
 Specific Exclusions:
 If the transfer is subject to certain exceptions, these
must be expressly stated in the transfer deed.
 For example, if a transferor wants to keep the minerals
or trees on the land, they must mention it in the deed.
 Section 10: Condition Restraining Alienation
 Section 10 deals with conditions that restrict or prevent
the transfer of property by the transferee.

 General Rule: If a property is transferred with a condition

that absolutely prohibits the future transfer (alienation) of
the property, that condition is generally void.
 Absolute Restraint on Alienation:
◦ Any condition that completely restricts the transferee from
transferring the property in any way is invalid.
◦ Example: If a property owner sells a piece of land to someone and
includes a condition that the land can never be sold, the condition is
void, and the buyer is free to transfer the property.
 Partial Restraints May Be Valid:
◦ However, reasonable or partial restraints on alienation, such
as restrictions for a limited time or for a specific purpose, may
be valid.
◦ Example: If a property is transferred with a condition that the
transferee cannot sell the property for a specific number of
years, this may be legally acceptable if the restriction is
considered reasonable.
 Purpose:
 The purpose of Section 10 is to ensure that property
remains freely transferable and that an absolute
restraint on alienation does not burden future owners.
 Section 11: Restriction Repugnant to Interest Created
 Section 11 deals with restrictions that are contradictory (repugnant) to the
interest being transferred.

 General Rule: If a condition is imposed that is inconsistent or repugnant to

the nature of the interest being transferred, the condition is void.
 Example: If a person transfers ownership of a house to someone but adds a
condition that the new owner cannot live in the house, this condition would
be void because it contradicts the purpose of transferring the ownership
(which normally includes the right to use and enjoy the property).
 Effect of Void Conditions:
◦ Even if the condition is void, the transfer of property itself remains valid. Only the
condition attached to the transfer is unenforceable.
 Purpose:
 The purpose of Section 11 is to prevent the imposition of conditions that
would undermine the transferee's right to enjoy the property they are
receiving.
 Section 12: Condition Making Interest Determinable on
Insolvency or Attempted Alienation
 Section 12 addresses conditions that terminate the transferee's
interest in the property in the event of insolvency or attempted
transfer of the property.
 Key Points:
 General Rule: Any condition in a transfer of property that
provides for the termination of the transferee's interest upon
their insolvency or attempted alienation (transfer) of the
property is generally void.
 Insolvency:
◦ If a condition is added that the transferee will lose their interest in the
property if they become insolvent (unable to pay debts), such a
condition is unenforceable.
 Attempted Alienation:
◦ Similarly, if a condition is added that the transferee’s interest in the
property will end if they attempt to sell or transfer the property,
this condition is also void.
 Exceptions:
 There are certain exceptions to this rule, particularly in
cases of leases. In leases, it is possible for the interest of
the lessee to be terminated upon insolvency under specific
conditions laid down by law.
 Purpose:
 Section 12 aims to protect the transferee’s interest and
ensures that property interests are not unfairly lost due to
insolvency or attempts to transfer the property.
 Section 13 of the Transfer of Property Act, 1882
provides that
“when for the transfer of property, an interest therein
is created for the benefit of an unborn person at the
date of the transfer, a prior interest is to be created in
respect of the same transfer and the interest created
for the benefit of such person shall not take effect,
unless it extends to the whole of the remaining
interest of the person transferring the property in the
property to be transferred.”
The essential elements of section 13 have been discussed
below. They are as follows:
 1. No Direct Transfer
 A transfer cannot be directly made to an unborn person.
Such a transfer can only be brought into existence by the
way of trusts.
 It is an important principle of property law that every
property will have an owner. Accordingly, if a transfer of
property is made to an unborn person, it will lead to a
scenario wherein the property will remain without an
owner from the date of transfer of property till the date the
unborn person comes into existence.
 2. Prior Interest
 If the circumstances are such that there is no trust
created, then in that case the estate must transfer in
favor of some other person between the date of
transfer and the date when the unborn person comes
into existence.
 In simpler words we can say that the interest in favour
of an unborn person must always be preceded by a
prior interest created in favour of a living person.
 3. Absolute Interest
 The entire property must be transferred to the unborn
person. The transfer to an unborn person must be
absolute and there should be no further transfer from
him to any other person.
 Legal Consequences of Transfer for the Benefit of
Unborn Person under Section 13
 The intermediary person (who is alive at the date of
transfer) is only given a life interest. This means they
have the right to enjoy or possess the property but
must preserve it like a trustee.
 Upon the termination of the life interest, the entire
property or interest transfers to the unborn person
who has come into existence.
 If the unborn person comes into existence after the
termination of the life interest, the property reverts to
the transferor or their legal heirs. This is because the
property cannot remain in abeyance.
 Mr. A first transfers the land to his son, Mr. B (the unborn
child's father). This is called a life interest, meaning Mr. B
can use and enjoy the property during his lifetime but
doesn't own it permanently.
 Mr. A includes a condition in the transfer that after Mr. B's
death, the property will pass to Mr. B’s unborn child (Mr.
A's future grandchild).
 When the grandchild is born, they will automatically
receive full ownership of the land once Mr. B passes away.
No other person will have any rights to the land at that
point. The grandchild will own it fully and without any
conditions.
 “Perpetuity means
 “to hold something for an unlimited period of time.”
 Therefore, it can be inferred that perpetuity under
property law is holding a property for an unlimited
period of time, thereby, making it inalienable or
untransferable;
 The Rule Against Perpetuity is the law that prohibits
the transfer of property from generation to generation
and restrains the property from becoming inalienable.
 No perpetuity: The rule prohibits the creation of any
interest in property that takes effect beyond a certain
period.
 Life or lives in being: The rule allows property to be
tied up for the duration of a person’s life or multiple
lives (as long as those people are alive when the
interest is created).
 This rule aims to prevent the perpetual suspension of
ownership rights and promote free circulation of
property.
 The Rule Regarding Direction for Accumulation is
covered under Section 17 of the Transfer of Property
Act, 1882, and also in Section 114 of the Indian
Succession Act, 1925. These sections impose
limitations on the accumulation of income from
property, meaning a property owner cannot direct that
the income from a property be accumulated
indefinitely.
 Exceptions to the Rule:
 The law allows accumulation in certain cases like:
 Accumulation for the payment of debts of the
transferor.
 If the direction to accumulate exceeds these prescribed
periods, the excess portion becomes void, but the rest
of the direction remains valid. The rule ensures that
property income is not withheld from circulation for
unreasonable periods, promoting the free use of
property in society.