Transfer of Title of Ownership

Transfer of property refers to taking over the possession from one person to another person. The Transfer of Property Act 1882 contains specific provisions regarding what constitutes transfer and the conditions attached to it. According to the Act, ‘transfer of property’ means an act by which a person conveys property to one or more persons, or himself and one or more other persons. The act of transfer may be done in present or for future. The person may include an individual, company or association or body of individuals, and any kind of property may be transferred. Every person, who is competent to contract, is competent to transfer the property, which can be transferred in whole or in part. He should be entitled to the transferable property, or authorized to dispose off transferable property which is not his own. The right may be either absolute or conditional, and the property may be movable or immovable, present or future. Such a transfer can be made orally, unless a transfer in writing is specifically required under any law. A transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property, unless a different intention is expressed or implied. In case the property is transferred subject to the condition which absolutely restrains the transferee from parting with or disposing off 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 person. According to Section 6 of the Transfer of Property Act, property of any kind may transferred. 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 transfer of property by unauthorized person who subsequently acquires interest in such property. According to Section 43 of Transfer of Property Act 1882, in case a person either fraudulently or erroneously represents that he is au*thorized to transfer certain immovable property and does some acts of transfer such property for consideration, then such a transfer will continue to operate in future. It will operate on any interest which the transferor may acquire in such property. This will be at the option of the transferee and can be done during the time during which the contract of transfer exists. As per this rule, the rights of bona fide transferee, who has no notice of the earlier transfer or of the option, are protected. This rule embodies a rule of estoppel i.e. a person who makes a representation cannot later on go against it. The rights of the transferees will not be adversely affected, provided: they acted in good faith; the property was acquired for consideration; and the transferees had acted without notice of the defect in title of the transferor. The following conditions must be satisfied:
  • There must be as representation by the transferor that he has authority to transfer the immovable property.
  • The representation should be either fraudulent or erroneous.
  • The transferee must act on the representation in good faith.
  • The transferor should subsequently acquire some interest in the property he/she had agreed to transfer.
  • The transferee may have the option to acquire the interest which the transferor subsequently acquires. The exercise of option must be during the period of continuation of the contract and not afterwards.
  • When all these conditions exist, the transferee becomes entitled to the interest, which is subsequently acquired by the transferor. It is to be noted that the transferee, acting upon the representation, has no right against any subsequent bonafide transfer for consideration.