“Transferability of property is the general rule; its non-transferability is an exception under Transfer of property Act”
Abstract: This report discusses about the transferability of property but the main focus of this report is the non-transferability of property which is an exception under the “Transfer of property Act”. First, this report discusses about the “Transfer of property Act” which is an act by which some one convey a property to another. In general any kind of property is transferable, but this report discusses some exceptions under which situation property can be non-transferable. These exceptions are Spes successions, Right of re-entry, Sub-section (d): Restricted interests, Easement, Restricted interests, Maintenance, Mere right to sue, Public office, Pensions, Nature of interest, Nontransferable interests, Copyrights, Insurance
Introduction
Often, there is confusion between the terms sale, transfer, exchange,lease, mortgage and charge. Many times, these terms are used interchangeably. However, there are distinct differences between these terms.In common parlance, transfer of property refers to making over the possession from one person to another. The Transfer of Property Act contains specific provisions regarding what constitutes transfer and the conditions attached. As per the Act, ‘transfer of property’ means an act by which a living person conveys property to one or more other living persons or to himself and one or more other living persons (TNN, 2005).
Transfer of property act
The Transfer of Property Act, 1882 (hereinafter, the Act) is a civil legislation of immense importance owing to the vast number of property related transactions taking place throughout the country. A uniform legislation was the need of the hour considering this factor, and this act was drafted to serve the selfsame purpose. In the Transfer of Property is defined as 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. 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(Property of ‘any kind’ may be transferred).
The Act may be done in the present or for future. Further, a living person may include an individual, company, association, or body of individuals, whether incorporated or not. Under the Act, property of any kind may be transferred.
Eligibility of Transfer
Every person who is competent to contract is competent to transfer property either wholly or in part. He/her should be entitled to the transferable property, or authorized to dispose of transferable property which is not his/her own. The right may be either absolute or conditional. A transfer of property may be made without writing in cases where a written document is not expressly required by law. It can be transferred either absolutely or conditionally. Such transfer can be only to the extent, and in a manner allowed and prescribed by law. The property may be movable or immovable, present or future. Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is capable of passing in the property and in the legal incidents thereof.In case a property is transferred subject to a condition which absolutely restrains the transferee from parting with or disposing off his/her interest in the property, the condition is void.
Non-transferability of Property under the ‘Transferability of Property act’
In general “property of any kind may be transferred’. There is however, a series of exceptions to this, as enumerated under sub-sections (a) to (i), explained hereafter. It is interesting to note the distinct similarity between these sections and those made by Section 60 of the Civil Procedure Code as to the property which cannot be attached in the execution of a decree. Although there is this similarity yet there is a difference between the exceptions made in this section and exceptions made in Section 60. Certain things such as tools of artisans and necessary cooking vessels can be transferred, yet they, under Section 60 of the Code cannot be attached. Apart from the exceptions made by the present section there are certain restrictions imposed by other laws on the power of transfer. For example, restrictions in Hindu law against the transfer of coparcenary property.
Sub-section (a): Spes successions
The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred.
Examples:
· Interest of reversionary[i] (transfer is a nullity):A reversioner cannot bring trespass or ejectment against the tenant so long as the tenancy continues, and he is not debarred from his remedy at law or in equity for waste because the proceeding may involve the determination of a disputed title(Kime, 1877).
· Chance of legacy[ii] (the bequest of legacy is a mere chance)
· Mere possibility (no priest can assign his right to receive future offerings)
· Easement in gross (i.e. an easement apart from dominant heritage): An easement that attaches a particular right to an individual rather than to the property itself. The easement in gross is often considered irrevocable for the life of the individual, but can be revoked if the individual sells the property that grants him or her that easement. For example, a homeowner may have an easement in gross with a neighbor allowing the homeowner to use a path through the neighbor’s woods to reach the property. If the homeowner then sells the property, he or she cannot pass the easement in gross to the next property owner(Easement In Gross).
· Right of preemption (a personal privilege cannot be transferred except to owner of property)
· Widow’s right to maintenance against husband’s property:In the presence of a male descendant of the deceased his widow is ordinarily only entitled to suitable maintenance, whether such descendant is the issue of the surviving widow or of another wife(Disallowance of partition by Revenue Officer – Section 115 of the Punjab Land Revenue Act, 1887.).
· Right to future maintenance fixed by agreement or decree
· Mere right to sue
Under Sec. 6 (a), however, transfer of a bare chance to get the property is prohibited. After the death of the husband, for example, if two widows inherit their husband’s properties together, the transfer of bare chance of the surviving widow taking the entire estate as the next heir of her husband on the death of the co-widow is prohibited under Sec. 6 (a). It, however, does not prohibit the transfer by the widow of her present interest in the properties inherited by her together with the incidental right of survivorship. Such widows could validly partition the properties and allot separate partitions to each and, incidental to such an allocation, could agree to relinquish her right of survivorship in the portion allotted to the other.
Example: A expecting that C, his paternal aunt, who had no issues, would bequeath her house worth Rs.20000, transfers it to B. The transfer is invalid. The above rule regarding prohibition of the bare chance doctrine and spessuccessions apply in this case.
Sub-section (b): Right of re-entry
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. This right of reentry is’ usually inserted in leases empowering the lessor to re-enter upon the demised premises if the rent is in arrear for a certain period or if there is a breach of covenants in the lease. This Sub-section lies down that the right of reentry cannot be transferred by itself apart from the land.
Example: A grants a lease of a plot of land to B with a condition that if B shall build upon it, he would re-enter. A transfers to C his right of re-centering in case of breach of the covenant not to build. The transfer is invalid for two reasons, one, the right is a personal license and not transferable, second, the transferee could only use it for the purposes of a suit to enforce the right without acquiring any right in the property. But if A transfers the whole of his interest in the property, i.e., ownership along with the right of re-entry to C, the transfer shall be valid being a legal incident of the property.
An easement is a right to use, or restrict the use of land of another in some way. Examples of easements are rights of way, rights of light and rights of water. An easement involves the existence of a dominant heritage and a servient heritage. That is, there must be two parcels of land, one (the dominant heritage) to which the benefit of the easement attaches, and another (the servient heritage) which bears the burden of the easement. But technically an easement cannot exist in gross (independently of the ownership of land but only as appurtenant) attached to a dominant heritage. It follows therefore that an easement cannot be transferred without the property which has the benefit of it.
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.
Sub-section (d): Restricted interests
This clause states, a person cannot transfer an interest restricted in its enjoyment of him. A transfer of such interest would defeat the object of the restriction. As an example, if a house is lent to a man for his personal use, he cannot transfer his right of enjoyment to another. Under this clause, the following kinds of interest have been held not to be transferable:
(a) A religious office
(b) Emoluments attached to priestly office. Where, however, the right to receive offerings made at a temple is independent of an obligation to perform services involving qualifications of a personal nature, the right is transferable.6
(c) A right of pre-emption.
(d) Service tenures.
A right to future maintenance is solely for the personal benefit of the person to whom it is granted and, therefore, cannot be transferred. Before the insertion of this Sub-section in 1929, there was a conflict of opinion whether the right to future maintenance when it was fixed by a decree was transferable. It was held in Madras that it was, and in Calcutta that it was not. The amendment supersedes the Madras decision. The result is that 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. Arrears of maintenance, therefore, can be assigned.
Sub-section (e): Mere right to sue
A mere right to sue, as for instance, in respect of damages for breach of contract, or for tort, cannot be transferred. The object of the prohibition is to prevent gambling in litigation. Moreover, a right to sue is personal to the party aggrieved.
Example: A contracts to buy goods from B. On due date A fails to take delivery and B sells the goods in the market at a loss of Rs.10000. B transfers the right to recover the damages to C. The transfer is invalid.
Sub-section (f): Public office
According this section, a public office cannot be transferred. The prohibition is based on the grounds of public policy. A public office is held for qualities personal to the incumbent, and obviously it would be against public interest to permit alienations of public officer.
The salary of a public officer is not transferable, although, under Section 60, C.P.C, it is attachable with certain limits. As stated by Page Wood, V. C. in Corporation of Liverpool v. Wright:
“Where the law assigns fees to an office, it is for the purpose of upholding the dignity and performing properly the duties of that office, and the policy of the law will not allow the officer to bargain away those fees to the appointer or anyone else.”
If the office is not public, it would be transferable even though the discharge of its duties should be indirectly beneficial to the public.
Under this clause, stipends allowed to military and civil pensioners of Government and political pensions cannot be transferred. The term ‘pension’ means a periodical allowance or stipend granted not in respect of any right of office but on account of past services of particular merits or as compensation to dethroned princes, their families and dependents. Accordingly, a reward is not a pension. Section 60 of the Civil Procedure Code also exempts a pension from attachment in execution of a decree against the pension holder.
Sub-section (h): Nature of interest
This sub-section forbids transfer (1) in so far as such transfer would be opposed to the interests affected thereby, (2) for unlawful object or consideration, and (3) to a person legally disqualified to be a transferee.
Sub-section (i): Nontransferable interests
The last sub-section of Section 6 is identical with the proviso in Sub-section (i) of Section 108 of this Act and was inserted by the Amendment Act, 1885 to obviate any doubt which might arise owing to the fact that section does not primarily apply to leases for agricultural purposes.
In general leaseholds are transferable but this sub-section makes an exception of this rule and declares certain interest immutable. Thus, under this rule, a tenant having a nontransferable right of occupancy cannot alienate or assign his interests 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.
Copyright is non-transferable. The rights can only belong to the person who actually created it, and if they are sold in any way they are forfeit and the article in question is out of copyright. Thus, all profits from a creation must go to the author. Deals can obviously be done with third parties, but it will be in the form that they agree a fee the author will pay them if they create a certain number of sales for him.The rights come with the creation, and just as the author of the creation can’t be changed, the rights to it can’t be changed either. The rights and the creation are a form of property, but they are still different. For example, when you buy a copy of something, you are not buying the actual thing, i.e. you don’t own the music in the CD you bought. Thus, just like this non-transfer of property, make the actual rights non-transferable. It makes little sense that you can create something, sell the rights to it to someone else, who then becomes the de facto creator of that work.When creators are under pressure to produce something to warrant payment, budgets will be reduced, and films like Battle L.A. need never be made (at an estimated cost of $70,000,000). And with technology, it is becoming easier to produce even films at home, at a cheaper price. Special effects were never meant to be the focus of film, yet somehow they have become (Non-transferable Property?, 2011)[1].
Clauses found in professional liability policies indicating that an insured cannot transfer coverage to a noninsured without the insurer’s approval.
For example: attorney A who sells his practice to B cannot transfer coverage under his professional liability policy to B without the assent of his insurer. This is because professional liability insurance is a “personal” contract (nontransferability provisions).
The Civil Procedure Code and Transfer of Property Act embody what is referred to as the backbone of civil law in India, and the notions in question, those of Transferable Property and Attachment are key concepts with regards to the functioning of the civil litigations in the country. It is thus of crucial importance that these concepts are well understood by both lawyers and the parties concerned. This paper has attempted to bring out such distinctions as were found relevant for the present discussion, and the more important portions of such legislations have been incorporated for the purpose of a meaningful analysis of the issues at hand. The researcher is optimistic that the discussion ushered in this paper will go the distance in clarifying the murky areas of these pivotal provisions and help elucidate the position taken by the Hon’ble Court in this regard. The researcher has tried to incorporate the difference in position in this regard between the said provisions of the Code and the Act, illustrating how though the conceptual similarity is apparent on the face of the matter, there is a great difference in terms of the meaning and content of the two statutory provisions. Also, it has been concluded that though in general, ‘all property may be transferred’, this is subject to the exceptions mentioned in Section 6(a) to (i) of the Act. Thus, one may safely assume that, due regard being given to such exceptions, expressly mentioned in the Act, transfer of all other categories of property is possible and this Act is in furtherance of the selfsame objective of arriving at the desired level of uniformity in terms of regulating property issues throughout the length and breadth of this diverse nation.
[1] Cited from http://thenewsocialnetwork.wordpress.com/2011/07/13/47/
[i]Reversioner is a party entitled to receive an estate in reversion or one who possesses the reversion to an estate; an heir in reversion. Cited from http://definitions.uslegal.com/r/reversioner/
[ii]Legacy is a gift of personal property or money to a beneficiary (legatee) of a will. While technically, legacy does not include real property (which is a “devise”), legacy usually refers to any gift from the estate of one who has died. It is synonymous with the word “bequest.” (Will, beneficiary, bequest, legatee). cited from http://legal-dictionary.thefreedictionary.com/legacy
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