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Transfer of Property: Prohibited Properties

As you may be aware, land in India is a state topic. As a result, states have the right to establish laws and regulations governing property ownership and title transfer procedures.

States also inform particular land areas that remain state property despite being given to the general public on a leasehold basis. Section 22A of the Indian Registration Act, 1908 governs properties on the forbidden property list in India.

In Telangana, for example, barren government lands, waqf, and endowment are frequently listed on the restricted property list.

Following an increase in cases of private parties encroaching on government land due to large-scale urbanisation, states throughout India have begun to identify forbidden assets whose transactions are restricted since state governments control these properties.

Properties and Rights which may be transferable under the Transfer of Property Act 1882

The Act allows for the following types of transfers:

(1) sale, (2) mortgage, (3) lease, (4) Exchange, and (5) Gift.

  • A sale is a complete transfer of property
  • A mortgage is a transfer of a restricted interest in real estate
  • A lease transfers the right to use the immovable property for a certain period or perpetuity
  • Exchange is similar to a sale but varies in that the consideration is different. The reference in a deal is money, but the concern in trade is something else.
  • There is no thought in a gift.

Analysis of Section 5 of Transfer of property, 1882:

  • ‘inter vivos’ transfer is considered a transfer from a live person to another living person.
  • Transfers can be done in the present or the future, but the transferor must be alive. Abdul Hussain vs Shamsuddin (Section 13 Transfer to an Unborn Person is an exception.)
  • Living persons include juristic persons such as corporations and other similar organisations of individuals, whether registered or unregistered.
  • TPA does not affect other laws regarding the transfer.
  • An ‘act of conveyance’ is required, and the property must get transferred to the other party. It might get stated explicitly or impliedly.
  • The Act does not cover all types of transactions. It covers sale, gift, mortgage, lease, and exchange transactions.

Property and Rights which cannot get transferred under the Transfer of Property Act, 1882

Section 6 of the Transfer of Property Act, 1882 discusses the property that cannot get transferred. According to the clause, any property may get transferred. Section 6 Clauses (a) to (i) enumerate the properties that cannot get transferred.

  • Clause (a) states that succession is not transferable. It indicates that the transfer of a person’s mere possibility of obtaining property gets banned under this section.

    For example, Arun expects Chandini, his aunt, who has no troubles, to gift her property worth Rs. 50,000 to Bhushan. The transfer is null and void since Arun received the property by luck, and as a result, it is invalid.

  • The right of re-entry is not transferable, according to clause (b). The right to re-entry entails the right to reclaim control of land surrendered to someone else for some time.

    According to the provision, the right of re-entry cannot be transferred apart from the land. For example, A provides B with a lease on a block of land with the proviso that if he builds on it, he will re-enter — this transfers the right to re-enter to C once the covenant gets breached. The transfer is ineligible.

  • Easement rights are not transferable, according to clause (c). Easements are permissions to use or restrict another’s land. The right of way, for example, or the right of light, cannot be transferred.
  • Clause (d) states that an interest limited to the enjoyment of oneself cannot get transferred. For example, if a guy borrows a house for personal use, he cannot transfer his right of pleasure to another.

    The transfer of the right to maintenance gets limited by clause (d). Because such a right is for the benefit of the individual involved, it cannot get transferred.

  • Clause (e) states that just having the right to suit cannot be transferred. The restriction got imposed because of the right to sue in personal and exclusive ownership.

    A person can’t transfer his right to sue for damages incurred by another party due to contract violation.

  • The transfer of public posts gets prohibited under clause (f). The restriction is based on the belief that such a transfer may be contrary to public interests in general.

    A person’s traits determine whether or not he is qualified to occupy public office, and these attributes cannot be transmitted. As a result, the transfer of public posts is forbidden under this clause.

  • Section 6 Clause (g) states that pensions cannot get transferred. In layman’s words, an annuity is any regular stipend paid about any right of office but solely based on the pensioner’s previous services. Government and political pensions, as well as military and civil pensions, are not transferable.
  • Nature is the title of clause (h) in this section. This clause forbids transfers that would be detrimental to the affected interest. If the transfer’s object or consideration is illegal, the transfer is likewise prohibited. Furthermore, a transfer by a legally ineligible person to be a transferee is not permitted.

The Amendment Act of 1885 added clause (I) to section 6. Particular interests are declared to be untransferable and inalienable under this clause.

For example, A farmer who owes revenue payments on an estate cannot assign his interest in the property.

As a result, clauses (a) to (I) of section 6 clearly state that some items cannot get transferred. If carried out, such a transfer would be illegal in India.

Condition Restraining Alienation

The Condition Restraining Alienation is void if a property is transferred according to a condition prohibiting the Transferee from selling his interest in the property, according to section 10 of the Transfer of Property Act.

For example, suppose A passes his property to B with the stipulation that B never sells it. The imposed condition is null and invalid, and B is free to sell or not sell as he pleases. The theory behind this section is that a right of transfer cannot get isolated from property ownership. The rule that a condition of absolute constraint is null and void is founded on the notion of a public policy that allows free circulation and disposal of property.

Conclusion

In summary, it can be determined that under the Transfer of Property Act, the benefits, gains, maintenance, etc., are not transferrable since they are personal benefits that the person is entitled to. If he transfers them to another person, the transfer reverts to the original owner.

FAQs

The Transfer of Property Act allows for the transfer of what?

The Transfer of Property Act allows the transfer of any immovable property.

How many sections are there in the Transfer of Property Act?

The Transfer of Property Act gets divided into 137 parts.

How are properties transferred?

The Transfer of Property Act defines transfers as sales, exchanges, gifts, mortgages, leases, or actions to create a property claim.

Who is competent to contract?

The Indian Contract Act of 1872 defines contracting competence in Section 11.

Section 11 states that everyone has the legal capacity to contract:

  • Who, according to the legislation to which he is subject, has reached the age of majority,
  • They are of sound mind, and
  • He is not prohibited from entering into a contract by any legislation he is subject to.

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Real Estate Law