This article is written by Tamma Kusumanjali of 5th Semester of ICFAI Law School, Hyderabad
Abstract:
The research paper provides a comprehensive overview of of transfer of property, transferable property and nontransferable property. This article begins with transfer of property act and then tells what transfer of property and its modes. Subsequently the paper tries to state the requirements for valid transfer. And then the definition of transferable property is stated with the help of case law. Subsequently the definition of non-transferable property is explained.
Keywords:
transfer of property, sale, gift, lease, inheritance, consideration, intellectual property.
Introduction:
The word “transfer of property” is defined under Section 5 of the Transfer of Property Act of 1882. According to this provision, a transfer of property is an act in which a live person transmits property to one or more other living persons, or to himself and other living persons, in the present or in the future. The term “living person” includes a business, association, or body of persons, whether incorporated or not, although nothing in this section affects any current legislation pertaining to or by corporations, associations, or bodies of individuals. The transfer of property is critical in the field of legal transactions and ownership rights. This paper dives into the definitions and distinctions between property transfer, property transferable, and property non-transferable. Each idea is important in different legal circumstances, and understanding them is essential for both individuals and organisations.[1]
Transfer of property act in India:
An important piece of Indian law that regulates the transfer of property rights from one person to another is the Transfer of Property Act, 1882. For many sorts of property transfers, such as sales, leases, mortgages, gifts, and exchanges, it offers the legal framework. The rights and obligations of parties involved in real estate transactions are defined and governed by the Act. It lays out the guidelines and processes for the transfer of both mobile (such as growing crops and actionable claims) and immovable (land, buildings, etc.) property.
The Transfer of Property Act addresses a number of significant aspects of property transfers, such as:
1. Transferable Property: Both mobile and immovable properties are included as forms of property that can be transferred in the Act.
2. Modes of Transfer: It describes many ways to transfer property, including sales, leases, mortgages, gifts, and exchanges. For a transfer to be considered valid, specific conditions and requirements for each mode must be completed. 3. Conditions and Formalities: The Act outlines the crucial requirements and formalities, such as the transferor’s competency, the transferor’s purpose to transfer, and the transferee’s acceptance, that must be met for a transfer to be legitimate.
4. Parties’ Rights and Liabilities: It outlines the obligations and privileges that the transferor and the transferee have when transferring property. It also addresses matters pertaining to ownership transfer, enjoyment, and possession.
5. Transfer of Future Interests: The Act allows for the transfer of future property rights, including contingent, vested, and interests that emerge from the occurrence of specific events. 6. Registration: The Act provides that registration is necessary for certain forms of property transfers, such as the sale, lease, or mortgage of real estate. Registration gives the parties involved protection and aids in establishing legal legitimacy.
A thorough piece of law that creates the legal foundation for property transfers in India is the Transfer of Property Act, 1882. It makes ensuring that the rights of both the transferor and the transferee in property transactions are clear, consistent, and protected.
Transfer of Property:
The practise of transferring ownership rights or title from one person (transferor) to another person (transferee) is a key notion in property law. It is an essential component of a wide range of legal and business transactions, from the sale of real estate to the giving of personal possessions.
Modes of Transfer:
Property can be transferred in a variety of ways, depending on the persons involved and the unique legal requirements in a given area. Among the most popular modes of property transfer are:
a. Sale: A sale is one of the most common methods of property transfer, in which the transferor agrees to transfer ownership of the property to the transferee in exchange for monetary compensation. This consideration, often known as the purchase price, is a necessary component of a legitimate sale transaction.
b. Gift: Property can also be given as a gift, in which the transferor willingly relinquishes ownership rights in exchange for no monetary compensation. To be legally legitimate, the transfer must include an intention to gift, acceptance by the transferee, and delivery of the property.
c. Exchange: In some circumstances, property may be transferred through an exchange in which both parties agree to transfer their respective properties to one other. In barter transactions, this manner of transmission is prevalent.
d. Lease: While a lease does not transfer ownership, it does offer the lessee temporary possession and usage rights to the property. Throughout the lease term, the lessor maintains ownership.
e. Inheritance: Property can be transferred through inheritance when an individual passes away, and their assets are distributed among the heirs or beneficiaries according to their will or the intestate laws of the jurisdiction.
Requirements for Valid Transfer:
Certain standards must be completed for a property transfer to be legally effective. These criteria may differ depending on local regulations and the type of property being transferred. Some of the most typical factors necessary for a legal transfer are as follows:
a. Consent: The transferor must have the legal ability and purpose to freely transfer the property, and the transferee must accept the transfer.
b. Consideration: A legitimate transfer, in most situations, necessitates consideration, which is the value traded between the parties. Gifts and exchanges may include non-monetary motives, whereas sales do.
c. Legal Formalities: Certain property transfers may require certain legal formalities, such as written agreements, registration, or notarization, depending on the country.
d. Absence of Prohibited Transfers: Some properties may be subject to legal constraints, such as government rules, contractual commitments, or encumbrances, which may limit or prevent their transfer.
Transferable Property:
Examples of Transferable Property: Transferable property is any form of asset or thing that may be transferred from one person to another. It is also known as alienable or mobile property. These properties are not tied to any one location and can be legally moved or transferred. Transferable property includes a wide range of tangible and intangible assets, and their capacity to be transferred makes them desirable in a variety of economic and personal transactions.
Several examples illustrate the diversity of transferable property:
a. Money: Cash, banknotes, and digital money are highly transferrable and widely utilised in a variety of financial transactions.
b. Vehicles: Automobiles, motorbikes, boats, and other modes of transportation are frequent examples of transferable property that can change hands via a sale or gift.
c. Jewellery and Valuables: Transferable property includes precious metals, diamonds, and expensive personal possessions.
d. Securities: In the realm of investing, stocks, bonds, and other financial instruments represent transferable property.
e. Intellectual Property: Intangible types of transferrable property include trademarks, patents, copyrights, and trade secrets.
f. Chattels: Household products, furniture, and appliances are all examples of transferable property that may be purchased, sold, or donated.
Case:
Ram Gopal vs. Nand Lal[2]
According to Section 8 of the Transfer of Property Act, a transfer conveys the full estate of the transferor when no restriction is expressed by the deed, and there are passages in Hindi law requiring a gift to a female to be structured only as a limited gift.[3]
Nathu Lal vs. Durga Prasad
A woman inherited property through her father’s bequest. When she died, the plaintiff, her sister’s son, claimed the property as reversioner on the grounds that she possessed a little inheritance. The second claimant was the woman’s husband, who claimed the land as her stridhan’s heir. The Rajasthan High Court ruled that the woman possessed just a little land and granted the plaintiff a judgement. The Supreme Court overturned the judgement, ruling that the legatee had received an absolute estate. It was discovered that there is no difference between the cases of a female and a male, and that the fact that the done is a woman does not make the gift less absolute if words are adequate to express an absolute estate to a female.
Section 8 states that when a property is transferred, not only do all of the transferor’s rights in the property pass to the transferee, but also his interests in the legal circumstances of such property. An incident is anything that is inherently dependent on, related to, or follows another that is more valuable as rent to incident is a reversion.[4]
Legal Framework for Transferable Property:
Contract law governs the transfer of transferable property when parties enter into voluntary agreements to make the transfer. Contractual agreements outline the transfer’s terms and conditions, such as the consideration, timing, and mode of delivery.
Formalities for Transfer:
While transferable property is often easier to transfer than non-transferable property, depending on the nature of the asset and local legal restrictions, certain formalities may still be necessary. As an example:
a. Sale Agreement: A written sale agreement is frequently used to assure the clarity and enforceability of the transfer of significant assets, such as real estate and high-value products.
b. Stock Transfers: Transferring shares in a corporation may need compliance with applicable securities legislation and the completion of a stock transfer form.
c. Intellectual Property Assignment: Transfers of intellectual property rights often need the execution of a formal agreement outlining the scope and extent of the transfer.
d. Bill of Sale: A bill of sale is used to document the transfer of commodities, documenting the people involved, the things transferred, and the agreed-upon value.
Non-Transferable Property:
Non-transferable property, also known as inalienable or immovable property, refers to assets or objects that, owing to legal or practical constraints, cannot be transferred from one person to another. These assets’ ownership rights are fundamentally attached to a single area and cannot be readily relocated or distributed. Real estate, land, and buildings are common instances of non-transferable property. Non-transferable property transfers are often more complicated legal processes that need careful adherence to land registration and other related rules.
Features of Non-Transferable Property:
Several key features distinguish non-transferable property from transferable property:
a. Immobility: Non-transferable property is immobile by definition, which means it cannot be physically transported from one location to another. A piece of land or a structure, for example, cannot be transported like mobile assets.
b. Fixed Location: Non-transferable property is tied to a single area, and ownership rights are inextricably related to the property’s physical bounds.
c. Land Registration: Non-transferable property transfers may necessitate land registration formalities to officially record the change in ownership. This registration is required in order to provide a clear chain of title and avoid conflicts.
d. Complex Legal Formalities: Because of the importance of non-transferable property and its potential influence on communities and economies, transferring such property typically necessitates careful respect to legal formalities, assuring transparency and legal compliance.
e. Property Rights: Non-transferable property has a set of rights that include possession, use, exclusion, and disposition. The owner has the ability to lease or transfer particular rights to others, but the underlying ownership remains stable.
Land and Real Estate: Real estate, which includes both land and structures, is a prime example of non-transferable property. Real estate ownership
Conclusion:
Last but not least, India’s Transfer of Property Act, 1882 offers a thorough legal framework for the transfer of property rights. It defines the terms, procedures, rights, and obligations of parties involved in property transfers and makes a distinction between transferable and non-transferable property. Both moveable and immovable property that can be transferred from one person to another are referred to as transferable property. Examples of movable property include actionable claims and growing crops. The Act outlines the various transfer methods, each with their own specifications and conditions, including sale, lease, mortgage, gift, and exchange. The Act places emphasis on how crucial it is to meet prerequisite requirements and formalities for a legal transfer. These include the transferor’s competence, the transferee’s acceptance, and the transferor’s purpose to transfer. Certain types of property transfers, especially those involving immovable property, must also be registered in order to demonstrate their legal legitimacy and offer the parties concerned with protection.
[1] Transfer of Property: concept and nature available at < https://blog.ipleaders.in/transfer-of-property/ > last seen on 22nd July 2023
[2] Ram Gopal v. Nand Lal, 1950 SCC 702
[3] Transferable And Non-Transferable Property available at < https://www.legalserviceindia.com/legal/article-522-transferable-and-non-transferable-property.html#:~:text=It%20says%20that%20an%20interest,cannot%20be%20transferred%20by%20him.> last seen on 25th July 2023
[4] Transferable And Non-Transferable Property available at < https://www.legalserviceindia.com/legal/article-522-transferable-and-non-transferable-property.html#:~:text=It%20says%20that%20an%20interest,cannot%20be%20transferred%20by%20him.> last seen on 25th July 2023
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