An introduction to Transfer of Property Act, 1882

Overview
The Transfer of Property Act is a law in India which regulates and provides framework or methods of transfer of property mainly immovable property such as land, houses etc. It lays down the basic rules and fundamentals of transfer of property and the modes of transfer including sale, mortgage, lease, gift, and exchange etc. Its main object is to simplify transfer of property i.e… “conveyance of property from one person to another.”

1. When act Enacted: The Act was enacted on 17th Feb, 1882 and came into force on 1st July, 1882. The Act consists of eight chapters and 137 sections.

2. Meaning of Act: Transfer of property is defined under Section 5 of the Transfer of Property Act, 1882. Section 5 defines the expression “transfer of property” 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, or to himself and one or more other living persons. It also defines the expression “to transfer property” as meaning to perform such act.

The section further clarifies that ‘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. This clarification was inserted in 1929.

3. Various modes of transfer of property:

A. By act of parties (TPA applies only on transfer by act of parties i.e., transfer between two living persons) this includes:
i. Sale
ii. Lease
iii. Mortgage
iv. Exchange
v. Gift
vi. Actionable claim

B. By operation of law, property here transferred automatically by the process of law (TPA does not apply in this kind of transfer except sec. 57 and chapter 4):

i. Transfers by orders of court
ii. Transfer in case of insolvency, forfeiture, sale in execution of court’s decree
iii. Inheritance, will

4. Preamble: Whereas it is expedient to define and amend certain parts of the law relating to the Transfer of Property by act of parties (transfer between living persons); it is hereby enacted as follows… Thus it is clear from the preamble that TPA applies only on transfer of property by act of parties and not by operation of law and it is not exhaustive. Note in preamble expression used ‘define and amend’ and not to consolidate. It means it does not contain complete law for all kinds of transfers in India.

5. Transfer of Property Act & Indian Contract Act: The Act has modified and make changes in some of the rules which existed before its enactment. It is not a complete code for all kind of transfers in India. It completes Indian Contract Act, 1872, as it is also evident from Section 4 of the TPA. Between 1872 and 1882 the transfer of property under contracts was regulated by English law and principles of justice, equity and good conscience.

6. Movable or immovable properties: It mainly deals in transfers of immovable properties. Transfer of movable properties are regulated by the Sales of Goods Act, 1930. However, secs. 5-37 applies to both movables and immovables. While 38-53A applies only on immovable properties. Further in some specific transfers are concerned, the definitions of gifts and exchange in the Act are not limited to immovable properties; they include the gift and exchange also of movables.

7. Muslim law: As per sec. 2 provisions of chapter 2nd of this act do not affect any inconsistent rule of Muslim personal law. And gifts made by Muslims are governed by the Muslim law of Hiba section 129 of the Transfer of Property Act specifically provides that the provisions of chapter 7th which is on gift would not be made applicable to gift made by Muslims.

8. Prospective or retrospective: The act is not retrospective therefore the rights or liabilities with respect to any property which existed before the commencement of this act shall remain unaffected there is a general rule that unless a contrary

intention is expressly indicated a new enactment is not retrospectively applicable glossy of section to lays down the general rule with regard to the provision of Transfer of Property Act. [Sec. 2(c)]
In a recent development Supreme Court has reiterated that the lease/tenancy matters which are not governed under the special statutes but under the Transfer of Property Act are arbitrable. (Suresh Shah vs. Hipad Technology India Private Limited, SC 2020)