Rule
Three sections answer three questions. S.7: who can transfer? S.8: what passes? S.9: how is the transfer made?
S.7 says every person competent to contract, and entitled to transferable property or authorised to dispose of property that is not his own, may transfer it. S.8 says that, unless a different intention appears, all the interest the transferor can pass goes to the transferee at once, with its legal incidents. S.9 says a transfer may be oral wherever the law does not expressly require writing.
The TPA does not create its own capacity test. It borrows the contract test (S.11, Indian Contract Act), so the same person who cannot make a valid contract cannot make a valid transfer.
| Provision | Subject |
|---|---|
| S.5, TPA | "Transfer of property" defined (act by a living person conveying property to another) |
| S.7, TPA | Competency to transfer: competent to contract + entitled to property or authorised |
| S.8, TPA | Operation: all the interest the transferor can pass, and its legal incidents (easements, later rents and profits, attached things) |
| S.9, TPA | Mode: oral transfer sufficient unless writing/registration required |
| S.11, ICA | Competency to contract: age of majority, sound mind, not disqualified |
| S.17, Registration Act | Compulsory registration of certain documents |
| S.54, TPA | Sale of immoveable property: registered instrument if value is Rs.100 or more (or if intangible) |
| S.59, TPA | Mortgage securing Rs.100 or more: registered instrument attested by 2 witnesses (except mortgage by deposit of title deeds) |
| S.123, TPA | Gift: registered instrument for immoveable property |
Requirements
S.7 has two requirements, and both must be met at the same time.
| Requirement | Source | Explanation |
|---|---|---|
| 1. Competent to contract | S.11, Indian Contract Act | (a) Age of majority (18 years, Indian Majority Act, 1875), (b) Sound mind, (c) Not disqualified by law |
| 2. Entitled to transferable property OR authorised to dispose of property not his own | S.7, TPA | Must have legal title, beneficial interest, or express/implied authority (agent, guardian, executor) |
A person competent to contract but without title transfers nothing. A person with title but without capacity (a minor) makes a void transfer.
Who can transfer
| Person | Capacity | Authority |
|---|---|---|
| Major of sound mind (owner) | Competent to contract | Entitled to property |
| Agent | Competent to contract | Authorised to dispose (S.182 ICA) |
| Guardian (of minor's property) | Own competence + court permission | Authorised under Guardians and Wards Act / HMGA |
| Executor / Administrator | Competent to contract | Authorised by will / succession certificate |
| Court-appointed receiver | Competent to contract | Authorised by court order |
| Karta (HUF) | Competent to contract | Authorised for legal necessity / benefit of estate |
| Ostensible owner | Competent to contract | Authority by implied consent (S.41 TPA) |
| Person | Why | Effect of Purported Transfer |
|---|---|---|
| Minor | Not competent to contract (S.11 ICA) | Void ab initio (Mohori Bibee v. Dharmodas Ghose, 1903) |
| Person of unsound mind | Not competent to contract | Void |
| Insolvent (undischarged) | His property vests in the Official Assignee or Receiver | Void (no title to transfer) |
| Person without title | Not entitled to property | Transfers nothing (nemo dat quod non habet) |
A minor's own transfer is void. A transfer of a Hindu minor's property by his natural guardian without the court's permission is only voidable at the minor's option (S.8(2) and (3), Hindu Minority and Guardianship Act, 1956). Keep the two apart.
What passes (S.8)
Unless a different intention is expressed or necessarily implied, a transfer passes:
| What Passes | Explanation | Example |
|---|---|---|
| All interests of transferor | Full extent of transferor's title | A sells a house: all his rights (possession, enjoyment, alienation) pass to B |
| Rent and profits accruing after transfer | Income follows ownership | Rent due from tenant after sale date goes to buyer |
| Easements annexed | Appurtenant easements travel with land | Right of way over neighbour's land passes with the dominant land |
| All things attached to or forming part of property | Fixtures, improvements | Built-in wardrobes, ceiling fans, embedded AC units pass with the house |
| Machinery and houses | Moveable parts of attached machinery; locks, keys, doors, windows and things provided for permanent use of a house | A sale of a house includes its doors and fitted locks |
The transferee steps into the shoes of the transferor. He takes the full benefit and also the burdens of the property as it stands. Existing encumbrances such as a mortgage stay on the property; between seller and buyer, the seller must discharge them unless the property is sold subject to them (S.55(1)(g)).
S.8 prevents disputes about what was included in the transfer. By default everything passes. A transferor who wants to keep something must reserve it expressly in the deed.
How a transfer is made (S.9)
A transfer may be made without writing in every case where writing is not expressly required by law.
When writing is required
| Type of Transfer | Mode Required | Provision |
|---|---|---|
| Sale of immoveable property worth Rs.100 or more, or of a reversion or other intangible thing | Registered instrument | S.54, TPA |
| Sale of tangible immoveable property worth less than Rs.100 | Registered instrument or delivery of the property | S.54, TPA |
| Mortgage securing Rs.100 or more (other than by deposit of title deeds) | Registered instrument signed by the mortgagor, attested by 2 witnesses | S.59, TPA |
| Mortgage by deposit of title deeds (equitable) | Deposit at notified towns; no writing required | S.58(f), TPA |
| Lease (year-to-year or exceeding 1 year or with annual rent) | Registered instrument | S.107, TPA |
| All other leases (for example month to month) | Registered instrument, or oral agreement with delivery of possession | S.107, TPA |
| Gift of immoveable property | Registered instrument + attestation by 2 witnesses | S.123, TPA |
| Gift of moveable property | Registered instrument signed by the donor and attested by 2 witnesses, or delivery | S.123, TPA |
| Exchange of immoveable property | Same as sale | S.118, TPA |
| Actionable claim | Instrument in writing signed by the transferor (notice binds the debtor, S.131) | S.130, TPA |
When oral transfer is enough
| Type | Mode |
|---|---|
| Sale of moveable property | Delivery of possession |
| Gift of moveable property | Delivery of possession |
| Lease not from year to year, not over 1 year and not reserving yearly rent | Oral agreement with delivery of possession |
| Mortgage by deposit of title deeds | Deposit in a notified town with intent to create security |
Writing and registration do two jobs: they prove the transaction, and they give public notice to third parties through the registration record. For low-value or short transactions these safeguards would cost more than they are worth.
Power of attorney sales
A General Power of Attorney with an agreement to sell, an affidavit and a will does not transfer immoveable property. Only a registered conveyance does (Suraj Lamp and Industries v State of Haryana).
Illustrations
1. Sale by a minor
- Facts: Raj, aged 16, inherits a house in Hyderabad and signs a sale deed for Rs.50 lakhs in favour of a buyer who acts in good faith.
- Result: The sale is void, not voidable. The buyer gets no title.
- Why: Raj is not competent to contract (S.11 ICA), so he cannot transfer (S.7). The buyer may claim restitution only as equity allows.
2. Sale by a natural guardian without court permission
- Facts: Raj's mother, his natural guardian, sells his house for his medical treatment without the court's permission.
- Result: The sale is voidable at Raj's option (S.8(3), HMGA). With the court's permission it would bind him.
- Why: S.8(2), HMGA bars a natural guardian from selling a minor's immoveable property without the court's previous permission.
3. Sale by an agent
- Facts: Meena gives her brother Suresh a registered power of attorney to sell her flat in Pune for not less than Rs.40 lakhs. Suresh sells it in her name.
- Result: Valid if within the authority. A sale for Rs.30 lakhs does not bind Meena unless she ratifies it.
- Why: Suresh is "authorised to dispose of property not his own" (S.7), but only within the limits of that authority.
4. Sale by a Karta
- Facts: Ramesh, Karta of an HUF, sells the family's commercial building to pay a tax demand of Rs.20 lakhs, without the other coparceners' consent.
- Result: Valid. A sale to fund his own luxury would be voidable at the instance of the other coparceners.
- Why: A Karta may alienate joint family property for legal necessity or the benefit of the estate.
5. Rent after the sale
- Facts: Prakash sells his let apartment to Devika by a deed registered on 15 June. The tenant pays the July rent on 1 July.
- Result: Devika gets the July rent. Rent for 1 to 15 June belongs to Prakash.
- Why: Rents and profits accruing after the transfer pass with the property (S.8).
6. Easement passes with the land
- Facts: Anand's plot has a right of way over Bharat's plot. Anand sells his plot to Chitra.
- Result: Chitra gets the right of way.
- Why: Easements annexed to land pass with it (S.8). Bharat cannot refuse because the owner changed.
7. Sale of a mortgaged house
- Facts: Kavitha's house is mortgaged to a bank for Rs.15 lakhs. She sells it to Lakshmi "as is", subject to the mortgage.
- Result: Lakshmi takes the house subject to the bank's mortgage. The bank can enforce it against the house.
- Why: Kavitha could pass only what she had: the house subject to the mortgage. The buyer of a mortgaged property takes it with the encumbrance.
8. GPA sale
- Facts: A buyer pays the full price, takes possession and gets a GPA, an agreement to sell and a will from the seller, but no registered sale deed. The seller later sells to a third party by a registered deed.
- Result: The third party gets title. The GPA buyer has only contractual rights.
- Why: A GPA transaction is not a conveyance (Suraj Lamp).
9. Oral gift of jewellery
- Facts: A father hands his son a gold chain worth Rs.2 lakhs and says "this is yours now". The son accepts it.
- Result: The gift is complete.
- Why: A gift of moveable property may be made by delivery (S.123).
10. Oral sale of land
- Facts: Suresh orally agrees to sell a plot worth Rs.10 lakhs to Ravi. Ravi pays in full and gets possession, but no deed is registered.
- Result: Title does not pass. Ravi may sue for specific performance of the oral agreement.
- Why: A sale of immoveable property worth Rs.100 or more needs a registered instrument (S.54). S.53A cannot protect Ravi because there is no written contract.
Key Cases
Mohori Bibee v Dharmodas Ghose (1903) ILR 30 Cal 539 (Privy Council)
- Facts: Dharmodas, a minor, mortgaged his house to a moneylender, whose agent knew he was a minor.
- Held: A minor's contract is void, not voidable, so the mortgage was void. The minor did not have to repay the advance.
- Principle: A minor cannot contract, so he cannot transfer property under S.7.
Suraj Lamp and Industries v State of Haryana (2012) 1 SCC 656 (decided 2011)
- Facts: The Court examined the practice of "selling" property by GPA, agreement to sell and will to avoid stamp duty and registration.
- Held: These transactions are not transfers and do not convey title. Immoveable property can be lawfully transferred only by a registered deed of conveyance.
- Principle: An agreement to sell or a power of attorney is not a conveyance (S.54).
Distinctions
| Aspect | Competent Transferor (S.7) | Authorised Transferor (S.7 second limb) |
|---|---|---|
| Title | Owns the property | Does not own; acts for owner |
| Authority source | Ownership itself | Power of attorney, guardianship, court order, statute |
| Examples | Owner selling own land | Agent, Karta, guardian, executor |
| Capacity required | Competent to contract + entitled | Competent to contract + authorised |
| Liability | Personal | May bind principal (within authority) |
| Excess of authority | Not applicable (owner has full power) | Does not bind the principal unless he ratifies |
| Aspect | Sale Deed (S.54) | Agreement to Sell |
|---|---|---|
| Nature | Conveyance (completed transfer) | Executory contract (promise to transfer) |
| Title passes? | Yes, upon registration | No; only creates personal obligation |
| Registration | Mandatory (immoveable, Rs.100 or more) | Needed for S.53A protection (S.17(1A), Registration Act) |
| Right created | Right in rem (against the whole world) | Right in personam (against the seller only) |
| Buyer's status | Owner | Prospective buyer |
| Remedy if breached | N/A (transfer complete) | Specific performance or damages |
| Stamp duty | Full conveyance duty | Varies by State; higher where possession is given |
Exam Scenario
A, aged 16, inherits a house from his late mother. His father, the natural guardian, sells it to B for Rs.40 lakhs by a registered deed without the court's permission. B pays in full and takes possession. Five years later A, now 21, challenges the sale. Advise A.
Approach
- Issue: The father is A's natural guardian (S.6, HMGA), and he, not A, executed the deed.
- Not met: A natural guardian needs the court's previous permission to sell a minor's immoveable property (S.8(2), HMGA). None was taken.
- Issue: The sale is therefore voidable at A's option (S.8(3)), not void as a minor's own sale would be.
- Met: A sues within 3 years of attaining majority (Art. 60, Limitation Act), so he is in time.
Conclusion: A can have the sale set aside and recover the house.
Remedy: B can recover the price from the father personally. He cannot keep the house against A.
Recall Check
- What two cumulative conditions must a person satisfy to be competent to transfer property under S.7?
- What is the effect of a transfer by a minor?
- Under S.9, when can a transfer of property be made without writing?
- What passes with a house under S.8 unless the deed says otherwise?
Flashcards
Who is competent to transfer property under S.7 TPA?
Every person who is (1) competent to contract (S.11 ICA: major, sound mind, not disqualified), AND (2) entitled to transferable property, or authorised to dispose of property not his own.
What is the effect of a transfer made by a minor?
Void ab initio. A minor is not competent to contract (S.11 ICA), so he is not competent to transfer (S.7 TPA) (Mohori Bibee v Dharmodas Ghose, 1903).
What passes with a transfer under S.8?
All the interest the transferor can then pass and its legal incidents: for land, the annexed easements, rents and profits accruing after the transfer, and things attached to the earth; for a house, also locks, keys, doors, windows and things for its permanent use (S.8). The buyer also takes the property subject to existing encumbrances unless the seller discharges them.
What is the general rule of mode under S.9?
Transfer may be made without writing unless writing is expressly required by law.
What did *Suraj Lamp v. State of Haryana (2012)* hold about GPA transfers?
Transfer of immoveable property by GPA (without registered sale deed) does not convey title. Only a registered sale deed transfers ownership.
What is the difference between a sale deed and an agreement to sell?
Sale deed = completed transfer (title passes; right in rem). Agreement to sell = executory contract (title does not pass; only personal right to seek specific performance).
Can a Karta of HUF transfer joint family property?
Yes, for legal necessity or benefit of the estate. Without legal necessity, the alienation is voidable at the instance of coparceners.
What does "nemo dat quod non habet" mean in property transfer?
No one can transfer a better title than they themselves have. A person without title or authority transfers nothing (S.7 TPA).
What is the minimum competence required for a transferor under S.7?
Must be competent to contract (major, sound mind, not disqualified by law) and authorized to dispose of the property.
Can immovable property worth Rs.50 be transferred orally?
Only if it is tangible property and the transfer is a sale completed by delivery of the property (S.54). An oral gift of immovable property is never valid (S.123), and a reversion or other intangible thing always needs a registered instrument.