TRANSFER OF PROPERTY WHETHER MOVABLE/IMMOVABLE (SECTIONS 7,8,9) Flashcards
Persons Competent to Transfer (Section 7)
Competency to contract has been defined section 11 of Contract Act, 1872. Section 11 says that every person is competent to contract—
(a) who is of the age of majority according to the law to which he is subject,
(b) who is of sound mind, and
(c) is not disqualified from contracting by any law to which he is subject.
Age of Majority
Generally the age of majority is 18, except when a guardian of minor’s person or property has been appointed by the court, in which case it is 21. The age of majority is to be determined according to the law to which a person is subject.
A person purchased certain property in the name of his minor son and subsequently resold it while the son was still minor. Court permission was necessary under section 8 of the Hindu Minority and Guardianship Act, 1956 but no such permission was taken.
The provision being mandatory the sale was held to be void. While the suit about that sale was still pending, he sold the property again. This sale was held to be hit by section 52
Sound Mind
According to section 12 of the Contract Act, 1872, a person is said to be of sound mind for the purpose of making a contract, if at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interest.
A person who is usually of unsound mind but occasionally of sound mind, may make contract when he is of sound mind.
A person who is usually of sound mind but occasionally of unsound mind, may not
make a contract when he is of unsound mind.
Disqualified from Contracting
1) The property must be a transferable property. Section 6 of the transfer of property contains certain exceptional cases where property is not transferable.
2) The transferor must be competent to contract. Transferor must be a living person at the time of transfer. He may be a human being or a juristic person like company or associations, etc. He must be an adult of sound mind and must not be disqualified to contract by any law to which he is subject.
3) Transferee must be a living person at the time of transfer. The Act has not laid down any criteria for the competency of the transferee. He must be a human
being or a juristic person. Section 6(h) (iii) provides an exception. Judges, legal practitioners or officers connected with any court of justice are incompetent
transferees in dealings of actionable claims.
4) The transferor must have the right to transfer the property being transferred. He must be entitled to transfer the property or authorised to dispose of the property (to be transferred), if it is not his own.
[s 8.1] Operation of Transfer
Section 8 dealing with effects of transfer provides that unless a different intention is present a transfer of property passes all the interests which the transferor is then capable of passing in the property and its legal incidents to the transferee. Operation of transfer under section 8 has given the detailed effects of transfers.
The object of this section is to clearly define what are the legal incidents of each particular class of
property which pass along with the property when it is transferred.
Land: where the property to be transferred is land, its incidents will include—
(i) easements attached to it,
(ii) its rents and profits accruing after the transfer
(iii) all things attached to the earth.
Machinery: Where the property to be transferred is machinery, its movable parts will be its incidents.
House: Where the property to be transferred is a house, its legal incidents will include:—
(i) easements annexed to it,
(ii) its rent accruing after the transfer,
(iii) locks, keys, bars, doors, windows and all other things provided with it for permanent use,
(iv) Debt: Where the property to be transferred is a debt or other actionable claims, those securities will be legal incidents which are only for the debt
transferred to the transferee.
(v) Money: Where the property to be transferred to the transferee is money or other property yielding money, its legal incidents will include its income or interest accruing after the transfer.
[s 8.2] Transfer Passes whole Interest of Transferor
The general rule regarding transfer is that the transferor conveyed all that he was possessed of in the property transferred. This presumption may be rebutted by use of express words or such words which limit the interest which the transferor intends to convey by necessary implication.
What was the intention of the transferor at the time of executing the deed should be clearly found by interpretation of the words of the deed.
“The cardinal rule of construction is that a document must be read as a whole, each clause being read in relation to the other parts of the documents and an attempt should be made to arrive at an interpretation which will harmonise and give effect to the other clauses thereof.
It is not legitimate to pick out an expression torn from its context and try to interpret the document as a whole in the light of that expression.
Such a forced construction on the document in question cannot but defeat the very object which its executants had in view.
[s 9] Oral transfer.
Section 9 says that a transfer of property may be made without writing in every case in which a writing is not expressly required by law. There are 2 modes in which a property can be transferred:—
(i) Delivery of possession
(ii) Registration
[s 9.1] Delivery of Possession
Those properties may be transferred by delivery of possession only where writing is not necessary for transfer. Generally the movable properties may be transferred by delivery of possession. Month to month tenancy, mortgage by deposit of title-deeds, exchange
of immovable property valuing less than rupees one hundred, etc. can also be transferred orally.
[s 9.2] Registration
Where registration is necessary, the transfer must be made in writing. According to the Transfer of Property Act, 1882, the following transactions must be made only through a written document which must be duly registered:
(a) Sale of an immovable property exceeding rupees one hundred (section 54).
(b) Sale of reversion or other intangible property (irrespective of its value) (section 54).
(c) Simple mortgage irrespective of the amount specified (section 59).
(d) All other mortgage (except the mortgage by deposit of title-deeds) securing sums exceeding rupees one hundred (section 59).
(e) Lease from year to year, or for a term exceeding one year or reserving a yearly rent (section 107).
(f) Exchange of immovable property exceeding one hundred rupees in value (section 118).
(g) Gift of an immovable property (section 123).
(h) Transfer of actionable claims (section 130) (where only writing is sufficient, registration is not necessary).
