Introduction

• The branch of transfer of property rests upon the Latin Maxim ‘alienation rei prefertur juri accrescendi’ which means law favours alienation to accumulation.
• Section 7 of the Transfer of Property Act, 1882 delineates the criteria that determine the eligibility of individuals to engage in transfer of property.

Competency to transfer

• Section 11 of Contract Act,1872 (ICA) says that every person is competent to contract:
  • Who is of the age of majority according to the law to which he is subject.
  • Who is of sound mind.
  • Is not disqualified from contracting by any law to which he is subject.

Age of Majority

• The Majority Act, 1875 under Section 3 mentions the age of majority as 18 years. The age of majority is to be determined according to the law to which a person is subject to.
• In the case of Mallikarjuna v. Mareppa (2008), a person purchased certain property in the name of his minor son and subsequently resold it while the son was still a minor.
  • Court permission was necessary under Section 8 of the Hindu Minority and Guardianship Act, 1956 but no such permission was taken.
    • Karnataka HC held that the provision of a person being minor is mandatory in nature, hence the sale cannot be held to be void.

Sound Mind

• Under Section 12 of ICA, a person is of sound mind for the purpose of making a contract, if he is capable of understanding the terms of contract and of forming a rational judgment as to its effect upon his interest.
  • A contract made by a person of unsound mind is void.
• A person who is usually of unsound mind but occasionally of sound mind may make contract when he is of sound mind.

Disqualified from Contracting

• It is necessary that the person must be qualified to contract according to the law to which he is subject to. If a person is disqualified to contract, he will not be qualified to transfer the property.
  • For Example: Alien enemies, convicts, insolvents etc.

Valid Transfer of Property

A transfer of property is considered valid if the following conditions are fulfilled:

• The property must be transferable property. The types of properties which cannot be transferred are mentioned under Section 6 of TPA described as follows:

• The transferor (One who transfers the Property) must be a living person at the time of transfer and competent to contract.
  • Transferor may be a human being or a juristic person like company or associations, etc.
• The transferee (the one to whom the property is transferred) must be a living person at the time of transfer. TPA does not lay down any criteria for the competency of the transferee.
  • A transferee can also be a juristic person or a human being.
• The transferor must have the right to transfer the property being transferred. He must be entitled to transfer the property or authorised to dispose of the property (to be transferred), if it is not his own.
• The transferor may transfer the property either wholly or in parts and either absolutely or conditionally.

Transfer in Favour of Minor

• A minor being incompetent to contract cannot transfer a property.
• Section 7 of the TPA, 1882 provides for only the competency of a transferor not that of a transferee therefore a minor can act as a transferee.

Persons Authorised to Dispose of Property

• Any person who is authorised to dispose of the property is competent to transfer it too.
  • For Example, Karta of a Hindu Joint family, a guardian, a trustee, an executor or administrator, etc.
• A tenant cannot transfer the tenanted property because he is not the owner of the property.
  • In case Balai Chandra Mondal v. Indurekha Devi (1973), Supreme Court held a person’s conduct in collecting rents and managing an estate of the landlord does not empower him to transfer the land as the landlord’s agent.