TRANSFER OF PROPERTY ACT, 1882

- Khyati Nayak
 CONTENT OUTLINE :
MODULE 3
Transfer of Property (Inter-vivos)
Understanding the concept of transfer of property under the Transfer of Property Act,1882

MODULE 4
Attestation and Notice
Understanding the concept of attestation and notice.
 Section 5 ; TRANSFER OF
PEOPERTY
TRANSFER OF PROPERTY (Inter vivos – between living
persons)
 PREAMBLE
PREAMBLE
Law to define and amend Law relating to Transfer of property by act of parties.

Transfer of Property: Any transaction which has the effect of conveying any property or any
interest therein from one person to another.

TRANSFER CAN BE INITIATED BY :

By effect of Law
For example : Land Acquisition, succession
By Act of Parties
1. Testamentary
For example : Will
2. Inter-vivos transfers (Non testamentary transfers b/w living persons)
For example : sale, exchange, gift, mortgage etc.
 SECTION 5. “TRANSFER OF PROPERTY”
Section 5. “Transfer of property” defined.—
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, or it himself and one or more other living persons;
and “to transfer 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 herein contained shall affect any law for the time being in force relating
to transfer of property to or by companies, associations or bodies of individuals.
 INGREDIENTS
I. Act of Parties
“transfer of property” means an act (Conscious action on part of the owner)
Operation of Law - excluded

II. Between Living Persons (Inter-vivos transfers)

I. by which a living person conveys property,
II. to one or more other living persons, or to himself, or it himself and one or more other living persons. (Transferee)
Can also be even a child en ventre sa mere (in mother’s womb)

Testamentary & Dedication to a deity (excluded)

Transfer in favour of unborn perdon (Section 13,14 & 15)
4. In present or in Future

5. Transferor conveys the property (Transfer is a conveyance)

Transfer is to convey and hence a transfer of property would include any transaction which has the effect of conveying any property or
interest in property from one living person to other living person.
Conveyance – Creation of right/interest who has none by a person who has right in immovable property.
Actual Conveyance – Registered sale deed
Sunil Sidharth bai v. Commissioner of Income Tax AIR 1986 SC
(Entire bundle of rights) means ownership/ title.
(Partial Rights/intrest) means possession etc.
Not Covered
Relinquishment/surrender – extinction not transfer
Family Arrangement – bonafide settlement of disputed claim (Recognition of pre-existing rights) – Kalyani v Narayan 1980
Partition – Khusmanben Bankulal v Babubhai Rangeela Das (1978)
Apportionment – Division of shares – Balbir Singh v state of UP (2012)
Certain compromised – Khunni Lal v. Govind Krishna Narayan (1911)
6. A living person can transfer property to himself.
Amendment Act 1929

For example : By creating trust

 TRANSACTION NOT AMOUNTING TO
TRANSFER UNDER THE ACT
Partition
VN Sarin v. Ajit kumar popali AIR 1966 SC 432
Sec. 14(6) of Delhi Rent control Act – Bona-fide necessity
Held – Division of collective rights into individual or specific rights

Will
N Ramaiah v. Nagaraj S AIR 2001 Kant 395
Widow __ Nephew
Will in question – claimed forged
Temporary injunction against transferring & alienating property
Transfer – Conveyance of existing property/ irrevocable
Will – Legal expression of intention & wishes in regards of property which a person desires to be carried out after his death/ Revocable until death
Kenneth Soloman v. Dan Singh Bawa
Bequeathing tenancy right
On death the beneficiary under will took possession of tenanted property during the sustenance of lease.
Delhi Rent Control Act – Violation of provisions – parted with the possession/transfer - without the permission of the owner
Delhi HC held – The property vests in the beneficiary when the testator dies – The process of “parting with possession” starts on execution of will – And hence
violation of agreement.
 TRANSACTION NOT AMOUNTING TO TRANSFER UNDER THE
ACT
(CONTINUES…)
Family settlement/Arrangement
Sadhu Madho Das v. Pandit Murkand Ram, 1955 2 SCR 27
Simply acknowledge and defines title and does not create any title
Zaheda Begum v. Lal Ahamd Khan AP, 2010
Non family members

Relinquishment
Bharti lal v. Salik Ram, 38 All 107
Extinction of title not creation of title

Compromise
Hussiaa Banu V. Shiv Narayan, AIR 1968 MP 307
Certain compromises are also not transfer under TPA
 KINDS OF TRANSFER COVERED
UNDER TPA
Transfer of property act includes the following types of conveyances only-
Sale,
Gift,
Exchange,

Mortgage and
Lease
 ESSENTIALS OF VALID TRANSFER:
Transferability of property (Section 6)
What may be transferred.—Property of any kind may be transferred, except

Competency of parties (Section 7)

Persons competent to transfer.—Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his
own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed
and prescribed by any law for the time being in force.

Lawful Consideration (Section 6(h)(2))

for an unlawful object or consideration within the meaning of section 23 of the Indian Contract Act, 1872
(h) No transfer can be made (1) in so far as it is opposed to the nature of the interest affected thereby, or (2) [for an unlawful object or consideration within the meaning of
section 23 of the Indian Contract Act, 1872 (9 of 1872)], or (3) to a person legally disqualified to be transferee;

Manner (Section 9)
Oral transfer.—A transfer of property may be made without writing in every case in which a writing is not expressly required by law.
 GENERAL REQUIREMENT FOR TRANSFER
OF IMMOVABLE PROPERTY :
Generally, three requirements are to be fulfilled in order to pass title in the immovable property.

1) Properly Executed
• Signed by the transferor

2) Attested
• By two or more witness
• Section 3. TPA : Interpretation Clause

3) Duly Registered
• As per Law of Registration
• (Section 17 : Documents of which registration is compulsory)
• Section 17(b) : Non-testamentary instruments which purport or operate to create, declare, assign,
limit or extinguish, whether in present or in future, any right, title or interest, whether vested or
contingent, of the value of one hundred rupees and upwards, to or in immovable property.
ATTESTATION Section 3. Interpretation

& NOTICE Clause

 ATTESTATION
Section 3. Interpretation Clause.

"Attested, in relation to an instrument,

means and shall be deemed always to have meant
attested by two or more witnesses

each of whom has seen the executant sign or affix his mark to the instrument,
or has seen some other person sign the instrument in the presence and by the direction of the executant,
or has received from the executant a personal acknowledgement of his signature or mark, or of the signature of such other
person, and each of whom has signed the instrument in the presence of the executant;

but it shall not be necessary that more than one of such witnesses shall have been present at the same time,

and no particular form of attestation shall be necessary.

BASICALLY…
 PURPOSE OF ATTESTATION
Kumar Harischand v. Bansidhar Mohanty air 1965 SC

Purpose – To protect the executant by ensuring that the execution is not done by use of any coercion, undue
influence or fraud. (To ensure free will)
 REQUISITES OF VALID ATTESTATION :
Supreme Court in the case of M.N Abdul Jabbar v. H. Venkata Shastri AIR 1965 SC 1147 laid down the essential conditions of a
valid attestation as follows:
1. For an attestation to be valid it must be done by two or more persons.
The witnesses must have seen the executant sign the document concerned or should have received the personal acknowledgement from the executant himself.
Each attesting witness must see the executant signing or fixing his mark (thumb impression), or see some other person signing in the presence and by under the direction
of the executant.
The witness must sign in the presence of executant.

2. With the view to witness or attest the document, each of them should sign the instrument in the presence of the executant,
confirming that he has seen the executant sign or has received the personal acknowledgement of the same.
But in case the attestation is done for some other purposes for example to certify that he is a scribe or a registering officer, he fails to be an attesting witness.
Thus, it is essential that the witness put his signature with the purpose of attesting.

3. The attestation can only take place after the execution of the legal instrument is ready for it to be a valid one.

4. Signature by an attesting witness at the legal document is acceptable in any form and formality may constitute valid attestation.
There is no particular form of attestation is prescribed that parties need to adhere to.
 WHO CAN BE A WITNESS
Any Person COMPETENT TO CONTRACT
who is major & of sound mind.

Except the parties involved in the transfer.

ANIMO ATESTANDI
'Animo' means intentionally or purposefully and 'testandi' means testamentary.
Signature of Scribe or a Registering officer.
The signature must be With the view to witness or attest the document.
In case the attestation is done for some other purposes for example to certify that he is a scribe or a registering officer,
he fails to be an attesting witness.
The signature must have been made separately with the view to attest the same. Then only the same will be valid.
 LEGISLATIVE & JUDICIAL DEVELOPMENT IN
RESPECT OF CONCEPT OF ATTESTATION
TPA, 1882 (no definition initially)
Succession Act, 1865 (Explanation)
For valid attestation either the witness could be present at the time of execution of deed if not present could receive a personal acknowledgement from the executor and
then sign it.

Under English Law acknowledge was not permissible

In absence of concrete definition, Conflict of Judicial Opinions emerged.
Calcutta & Madras – English Law
Bombay & Allahabad – Acknowledgement was permissible

Twin rule continued till Shamu Patter v. Abdul Khader, (1912), privy council followed the English law approach.

To avoid confusion – Transfer of Property (Validating) Act, 1917 (validating the documents)
In 1926 – definition was inserted
In 1927 – amended – and shall be deemed always to have meant
Hence, current definition is a departure from Shamu Patter case and English law.
 DISTINCTION BETWEEN ENGLISH &
INDIAN LAW
Under English Law :
•Witness must see executant sign the document. (Not necessary under Indian Law)
•Personal acknowledgement is not valid. (Personal acknowledgement is valid under Indian Law)
•Witness must be present together. (Need not to be present together under Indian Law)

•Though, Under both laws the attestation must be done in the presence of the executant.
 MODE OF ATTESTATION

TESTIFY THE VOLUNTARY EXECUTION

In Sant Ram v Kamala Prasad (1951) (can never be prior)

ATTESTATION OF DOCUMENT EXECUTED BY A PARDANASHIN WOMEN

Kundan Lal v. Musharraf begum, AIR 1936 (Execution by a pardanashin woman- behind curtain)
Padarth Halwani v. Ram Narain, AIR 1951 (well acquainted with voice)

ATTESTATION AS A PROOF OF CONSENT

Pandurang v. Markandeya, AIR 1922 (Does not itself comply consent though there might be circumstances which might show attesting
witness had knowledge of consent)

WITNESS NOT A PARTY TO EXECUTION

T.N. Krishnamurthy Pillai v. Manglam, 1998 (does not make a invalid transfer valid)
NOTICE SECTION 3
 NOTICE
“a person is said to have notice” of a fact

when he actually knows that fact, (Actual Notice)

or
when, but for willful abstention from an enquiry or search which he ought to have made, or
gross negligence, he would have known it. (Constructive Notice)

Notice is mentioned in section 39, 40, 41, 53 and 53(A) of Transfer of Property Act.

Used to determine the rights and claims of two or more persons vis-à-vis each other, who are involved in unreasonable
transaction.

For Example ;
Purchaser with notice (under responsibility to honour the right)
Bona fide purchaser without notice
 ACTUAL NOTICE
When a person receives the actual knowledge of a fact or a definite information regarding a
legal dispute, it is called actual or express notice.
Vague rumor and hearsay are not regarded as an actual notice. (Ashiq Husain v Chaturbhuj, AIR 1928)

The following are the essential conditions to constitute an actual or express notice:
There must be a definite and direct information or actual knowledge of a fact.
A person pertaining to the transaction can only have an actual knowledge.
The actual knowledge must be linked with the transaction.
Illustration: X sells his land to Y. X and Y have a contract. Y gives X 50% of the money and contracted to give the rest
after registration of the instrument. Now, X again sells the same land to Z.

If Z knows about the previous contract between X and Y, then Y can go against Z in the court.
 CONSTRUCTIVE NOTICE
Constructive notice is the knowledge of those particulars facts which a court ascribes on a party. (Presumption)
Which a prudent person ought to have known.
The legal presumption regarding constructive notice is that a person should have known a fact as if he actually
knows it.
If the situations or surrounding circumstances indicate that a man of ordinary prudence ought to have known a
precise fact pertaining to the transaction of transfer then that person will be deemed to know it.
This notice works like a provision of law.

In the famous case of Plumb V Fluitt [1791]

‘Constructive notice is itself an evidence of notice.’ The court will not allow any person to disprove it.

In the case of Jones V Smith [1841] Wigram V C determined the cases of constructive notice into 2 classes namely,
Cases in which the party alleged has had actual notice regarding the fact that the property is in dispute;
Cases in which the court has been persuaded from evidence on record before it that the party alleged has restrain himself from inquiring to avoid the
notice.
 RULE OF CAVEAT EMPTOR

CAVEAT EMPTOR – LET THE BUYER BE AWARE

In property transactions, a transferee ought to verify certain facts to safeguard his own interest.
To ensure whether the property is free from any charge or encumbrance, and whether the transferor is
entitled to transfer any title in the property or not.
Transferee can not afford to be negligent or careless as the law will assume a constructive notice.
In the following circumstances the legal presumption of constructive notice arises –

Willful abstention from an inquiry or search

Some starting point enquiry, hint or suspicious circumstances, something wrong demanding probe or investigation to reveal the truth
Kausalai Ammal v. Sankara Muthaiah, AIR 1941 Mad 707 (Willful abstention distinguish from mere omission (bona-fide).)
Ram Coomar Condoo v. MacQueen (1872) - (person has a means to know- inquiry would have led to discovery).

Gross negligence
For example – Failure to read a noting while document was in possession.
Mohammad Yunus Khan v. Courts of wards, AIR 1937 (Omission to inspect the title deed - Partition with condition- can not be allowed to plea ignorance of those
conditions.)
Ahmedabad Municipality Corp. v Haji Abdul (1971) – (Failure to enquire about arrears or tax or other dues- Constructive Notice of Municipal taxes)

Document compulsorily registrable

Actual possession

Notice to an agent
 REGISTRATION AS CONSTRUCTIVE NOTICE
“a person is said to have notice” of a fact when he actually knows that fact, or when, but for willful
abstention from an enquiry or search which he ought to have made, or gross negligence, he would
have known it.
Explanation I.—Where any transaction relating to immoveable property is required by law to be and has
been effected by a registered instrument,
any person acquiring such property or any part of, or share or interest in, such property shall be deemed
to have notice of such instrument as from the date of registration or,
where the property is not all situated in one sub-district, or where the registered instrument has been
registered under sub-section (2) of section 30 of the Indian Registration Act, 1908 (16 of 1908), from the
earliest date on which any memorandum of such registered instrument has been filed by any
Sub-Registrar within whose sub-district any part of the property which is being acquired, or of the
property wherein a share or interest is being acquired, is situated.
 WHEN,
REGISTRATION AS CONSTRUCTIVE NOTICE

In respect of registered transaction, the followings are the essential conditions for constructive notice:
The instrument has to be registered in consonance with the Registration Act, 1908.
The instrument has to be duly entered or filed in books kept under section 51 of the Registration Act, 1908.
The particulars pertaining to the transaction to which the instrument relates have to be correctly entered in the
indexes kept under section 55 of the Registration Act, 1908.
 KHYATI NAYAK
Assistant Professor (Law)
THANK YOU KPMSOL, NMIMS, MUMBAI

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