Transferable Property and Non-Transferable Property

What is transferable property?

Meaning of Transferable Property: – Any property which is transferable, it can be passed or moved from one person or organization to another and used by them. Section 6 to the transfer of property act, 1882 states that property of any kind may be transferred, except those which are provided by this act or by any other law for the time being in force. Unless there is some legal restriction preventing the transfer, the owner of the property may transfer it.

The person insisting non-transferability must prove the existence of some law or custom which restricts the right of transfer. Unless there is some legal restriction preventing the transfer, the owner of the property may transfer it. However, in some cases, there may be a transfer of property by an unauthorized person who subsequently acquires an interest in such property.

In case the property is transferred subject to the condition which absolutely restrains the transferee from parting with or disposing of his interest in the property, the condition is void. The only exception is in the case of a lease where the condition is for the benefit of the lessor or those claiming under him. Generally, only the person having interest in the property is authorized to transfer his interest in the property and can pass on the proper title to any other person.

What cannot be transferred?

Exceptions to the transfer of property come under Section 6(a) – 6(i) of the act. So the following are Non-Transferable Property under the act: –

1.  Spes Succession [Section 6(a)]: –
   • Clause (a) describes spes successionis cannot be transferred. This clause states that the transfer of a bare chance of a person to get a property is prohibited under this section. For example, Arun expecting that Chandini, his aunt, who had no issues, would bequeath her house worth Rs. 50,000 transfers it to Bhushan. The transfer is invalid as it is a mere matter of chance of receiving the property on the part of Arun. Thus, it is invalid.
   • The chance of an heir-apparent in succeeding of getting the property, the chance of inherited relationship upon the death of any relative, or any other mere possibility of this nature cannot be transferred.
   • For example: – ‘A’ dies leaving his widow ‘B’, and his nephew ‘C’, here ‘C’ only have spes succession as his succession to the estate depends upon the factor, i.e., ‘B’ leaving the property intact.

2. Right of re-entry  [Section 6(b)]: –
   • Clause (b) mentions that the right of re-entry cannot be transferred. The right to re-entry implies a right to resume possession of the land which has been given to someone else for a certain time. The section mentions that the right of re-entry cannot be transferred by itself apart from the land.
   • A mere right to re-entry cannot be transferred to anyone except the owner of the property affected thereby.
   • For example: – ‘A’ grants his plot to ‘B’ on a lease, for 5 years; with a condition that ‘B’ cannot dig a tank on the land, if ‘B’ does any such act then ‘A’ has the right to re-enter. So, here ‘A’ cannot transfer his right to re-entry to ‘C’ for the breach of the condition. If ‘A’ does any such act of transfer of his right to ‘C’ then this transfer will be regarded as invalid.

3. Easement [Section 6(c)]: –
   • Clause (c) mentions that easement cannot be transferred. An easement is a right to use or restrict the use of land of another in some way. For example, the right of way or right of light cannot be transferred.
   • An Easement cannot be transferred except the dominant heritage.
   • For example: – Right to way, right to light, right to water, etc. These rights cannot be transferred without property which has its benefits.

4. Restricted Interest [Section 6(d)]: –
   • Clause (d) mentions that an interest restricted in its enjoyment of himself cannot be transferred. For instance, if a house is lent to a man for his personal use, he cannot transfer his right of enjoyment to another.
   • A person having right to a property can transfer the same either subject to a restriction or without restriction. Where property is transferred subject to a restriction the transferee is supposed not to act contrary to the restriction. Thus, if property is transferred to the transferee with a restriction that it is to be enjoyed him personally, he shall have no right to transfer such a property and if he transfers the property in violation of the restriction the transfer shall be void under this clause. Under this clause, a trustee cannot alienate his office because his office is based on personal confidence.

5. Right to Future Maintenance [Section 6(dd)]: –
   • Clause (dd) restricts the transfer of the right to maintenance. Such a right cannot be transferred as such right is for the personal benefit of the concerned person.
   • The right to future maintenance is only for the personal benefit of the person to whom it has been granted, thus it cannot be transferred.
   • “A right to future maintenance, in whatsoever manner arising secured or determined, cannot be transferred”. A right to receive maintenance is a personal right, although any particular property or the income thereof may be charged with it. The right of maintenance is a personal right and it is not transferable. But this right can be transfer in case of any arrears of maintenance but as to future maintenance it is not valid.

6. Mere Right to Sue [Section 6(e)]: –
   • Clause (e) provides that mere right to sue cannot be transferred. The prohibition has been imposed as the right to sue is a right which is personal and exclusive to the aggrieved party. For example, a person cannot transfer his right to sue for the damages suffered by him due to breach of contract by the other party.
   • A mere right to sue cannot be transferred. The right to sue is personal to the party aggrieved.
   • For example: – Damages for the breach of contract or tort, as it claims for past means profits for suing an agent for his accounts, for pre-emption, etc.
   • These rights cannot be transferred.

7.  Public Office [Section 6(f)]: –
   • Clause (f) forbids the transfer of public offices. The philosophy behind the prohibition is that such a transfer may be opposed to public policy in general. A person is eligible to hold a public office on the grounds of his personal qualities, and such qualities cannot be transferred. Thus, the transfer of public offices is prohibited under this section.
   • A public office is non-transferable property therefore cannot be transferred, nor can the salary of the public officer be transferred.
   • Thus, prohibition is based on public policy as a public office is held for personal qualities.
   • If the office is not public, it will be transferable, even if the discharge of its duties is indirectly beneficial to the public.

8. Pensions [Section 6(g)]: –
   • Clause (g) of section 6 provides that pensions cannot be transferred. Pensions allowed to military and civil pensioners of government and political pensions cannot be transferred. In simpler terms, a pension may be understood as any periodical allowance which may be granted in regard to any right of office but only on account of the past services offered by the pensioner.
   • The stipends which are paid to military, naval and air forces and civil pensions of government and political pensions cannot be transferred.
   • Pensions mean personal allowance or stipend not concerning any right of office but of special merit.

9. Nature of Interests [Section 6(h)]: – In this, no transfer can be made in three conditions: –
   • This clause prohibits transfer which will oppose the interest affected thereby. The transfer is also forbidden if the object or consideration of the transfer is unlawful. Moreover, a transfer by a person who is legally disqualified from being a transferee is also forbidden.
   • Opposed to the nature of business: – There are things which from their very nature are not transferable. It includes, res communes (i.e. things of which no one in particular is the owner) or also known as res nullius (i.e. thing without an owner such as air, water of rivers etc.). These things from their very nature are not transferable. Similarly, res extra commericum (i.e. things which cannot be the subject of commerce) e.g. property dedicated to a idol cannot be transferred.
   • Anything with an unlawful object or consideration within the meaning of Section 23 of the Indian contract act, 1872 cannot be transferred. A property otherwise transferable become non-transferable when the object or the consideration of the transfer is unlawful. Thus a house given on rent for the purpose of gambling or prostitution being immoral or opposed the public policy is invalid.
     • Is fraudulent
     • It is against public policy
     • It is prohibited by law.
     • Is of such a nature to defeat the provisions of any law.
   • A person legally disqualified to be a transferee: – A transfer cannot be made in favor of a person who is disqualified to be transferee. Under Section 36 of Transfer of property act, a judge, a legal practitioner or an officer connected with courts of justice are disqualified fro purchasing any actionable claims.

10. Statutory Prohibitions on the Transfer of Interest [Section 6(i)]: –
    • Clause (i) of section 6 was inserted by the Amendment Act of 1885. The clause declares that certain interests are untransferable and inalienable. For example, a farmer of an estate, in respect of which default has been made in paying the revenue, cannot assign his interest in the holding.
    • The general rule is that leasehold are transferable but this clause makes an exception to this rule and declares certain interest untransferable. A tenant having an untransferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate cannot assign or transfer their interest in the holding.
    • This section makes it clear that a tenant cannot have an occupancy of a non-transferable right in any way to transfer his interest.

Who is competent to transfer under Transfer of Property Act, 1882?

Following persons are competent to transfer of property: –

1. Section 7 of the transfer of property act states about the person who is competent to transfer. Every person who is competent to contract is competent to transfer property, which can be transferred in wholly or in part.
2. And another vital point is that the person who is willing to transfer property must have title to the property or authority to transfer it if he is not the real owner of the Property.
3. He should be entitled to the transferable property or to be disposed of transferable property which is not his own.
4. Competent to Contract: – According to Section 11 of the Indian Contract Act , 1872 every person is competent to contract who has attend the age of majority. Under section 3 of the Indian Majority Act, 1875 a person attains majority at the age of 18 years and if guardian is appointed, he would attend majority at the age of 21.
5. Transferor must be entitled to transferable property: – Authorised to dispose of transferable property not his own. One who is real owner of the property and property is free from hindrance is capable to transfer the same. An owner of the property may authorise his power of attorney holder to transfer the property for him and on his behalf.
6. Persons who are disqualified to transfer are: – The following are disqualified to transfer- Convicts , Insolvent Person, Alien, Enemy. A transfer by a defective guardian of minors property is invalid and will be hit by section 11 of Hindu minority .

Case laws for transferable property and non-transferable property

1. Official Assignee, Madras vs. Sampath Naidu, AIR 1933 Mad. 795

It was observed by the court that a mortgage executed by an heir is void even if he has subsequently acquired the property as heir. Therefore, it can be concluded from above that the transfer of spes- succession is void ab initio.

2. Shoilojanund vs. Peary Charon, (1902) ILR29 Cal 470

In this case, the court held that the right to receive voluntary and uncertain offerings in worship is restricted for personal enjoyment and, therefore, cannot be transferred.

3. Ananthayya vs. Subba Rao, AIR 1960 Mad 188

In this case, the court held that where there is an agreement between two people and according to which a person agrees to give a certain proportion of his income to his brother in consideration of having being maintained by the later. Now in such cases, this provision will not apply.

4. Saundariya Bai vs. Union of India, AIR 2008 MP 227

It was believed that the pension is non-transferable property, as long as it is unpaid and in the hands of the government. Another important aspect that needs to be noted is that pensions are separate from bonuses and rewards, and on the contrary, these are transferable.