Table of Contents

Introduction ................................................................................................................................ 2

Research Design......................................................................................................................... 3

➢ Research Methodology............................................................................................... 3

➢ Research question ....................................................................................................... 3

➢ Research objective...................................................................................................... 3

What does “Transfer of Property” means: ................................................................................. 4

Person Competent to Transfer ................................................................................................... 5

Conclusion ............................................................................................................................... 10

Bibliography ............................................................................................................................ 11

1
Introduction

In 1882, Indian Law commission headed by Lord Romilly and several other British jurists
prepared the draft of Laws regarding transfer of property. This act finally passed on 1st July
1882 as Transfer of Property Act, 1882. Since then, it went to several changes and various
amendments too. But, the basic ‘Rules and Doctrines’ remain unchanged.

Importance and relevance of property in today ‘s materialistic world is undeniable. Property

related disputes dominate the courts among strangers, former friends and relations who fight
tooth and nail with fret and flume wasting several precious years. It is also true that relevance
of property in the socio–economic life of an individual is relatable more with respect to its
disposition rather than its abstract content which indicates the inherent necessity of awareness
of the basic concepts with respect to transfer of property. 1Fighting immense battles and losing
precious lives and time can be avoided to a large extent with right guidance at the initial level
of its transfer.

According to the Act, ‘transfer of property’ means an act by which a person conveys the
property to one or more persons, or himself and one or more other persons. The act of transfer
may be done in the present or for the future. The person may include an individual, company
or association or body of individuals, and any kind of property may be transferred, including
the transfer of immovable property.

This, Property can be transferred in several ways, and conveyance of title in India is not subject
to one single piece of legislative enactment. Thus, different legislations exist that govern the
transfer of title from one person to another with respect to the property depending upon the
mode of conveyance. One of the basic features of the Transfer of Property Act, 1882 is that it
governs transfer of property inter vivo or between living persons only. It does not apply to
acquisition of title through inheritance and succession which are subject to distinct religious
specific personal.

Transfer of Property Act 1882 discuss about various aspects of the transfer including operation,
competency, guidelines, conditions, etc was discussed and explained in it.

Here, we are going to discuss about the person who is competent to transfer the property and
its judicial approaches.

1
Dr Poonam Pradhan Saxena, The Transfer of Property Act, 2nd Edition, 2011, Lexis Nexis Butter Worth, p. 13.

2
Research Design

Research Methodology

The research is done by using various data available on secondary sources which has been
collected from the relevant websites, judgements, books and articles. The method of research
is doctrinal.

Research question

• What are the various judicial interpretations of Section 7 of Transfer of Property Act?

Research objective

• To study the various aspects of Section 7 of Transfer of Property Act, 1882.

• To study the judicial interpretation of Section 7 of Transfer of Act, 1882.

3
What does “Transfer of Property” means:

The Transfer of Property Act primarily deals with transfer of immovable property and interests
in immovable property. However, some of its provisions also apply and govern transfer of
movable property. It provides a specific method of transfer of immovable property and one of
the very important features of the Act is that barring few exceptions, transfer of immovable
property is no longer a private affair as it requires compulsory registration of the transfer
document.2

Section 5 of Transfer of Property Act, 1882 defined ‘Transfer of Property’ as-

In the following sections “transfer of property” means 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, and “to transfer property” is to perform such act.

In this section “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.3

It means an act by which a living person conveys property, in presence or in future, to one or
more other living persons, or to himself. It is important to note that living person may be an
artificial person - like a Company incorporated under the Companies Act, 1994. It also includes
an association or body of individual even not incorporated.

It is important to note that it is an essential requisite of valid transfer that the property must be
in existence at the date of the transfer, though a transfer may be made so as to operate
immediately, or at some future date. If the property itself is non-existence on the date of the
transfer the said transactions cannot operate as a ‘conveyance’ but, nevertheless operate as ‘a
contract’ - which may be specifically enforced as soon as the property comes into existence.

Transfer by act of parties means those transfer only as takes place between living persons by
their own voluntary acts, as distinguished from transfer by operation of law, which occurs in

2
Mulla, The Transfer of Property Act, 10th Edition, Lexis Nexis Butter Worth, p. 11.
3
Transfer of Property Act 1882, Act No. 4 of 1882, Section 5.

4
case of succession, forfeiture, insolvency and court sale, such as sale in execution of a decree.
Transfer of Property Act in 1882 is limited to transfer by act of parties.

Further the Act also defines What may be transferred, who is competent to transfer, operation
of transfer, etc. in in various sections.

Person Competent to Transfer

Section 7 of Transfer of Property Act, 1882 talks about ‘Person Competent to Transfer, it
says that:
Every person competent to contract and entitled to transferable property, or authorized to
dispose of transferable property not his own, is competent to transfer such property either
wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and
in the manner allowed and prescribed by any law for the time being in force.4

In other words, anyone who is (1) competent to contract and (II) have title to the property, or
authority to transfer it if it is not his own, can transfer. So far, the competency is concerned a
minor, a lunatic, or disqualified proprietors whose estates are under the management of Court
of Wards cannot transfer.
In Mohari Bibi v. Dharmodas, it was held that a minor’s contract in Indian sub-continent is
void, that is, a minor is not competent to contract, and hence a conveyance of land by a minor
is not merely voidable, but void5. Where a minor, however, fraudulently represents himself to
a major and induces an innocent third party to purchase property from him and latter sues for
its recovery on the ground that the sale was void the court will, on equitable principles, restore
the property to him only if he returns the purchase money. The age of majority in English law
is 21 years, while in Indian sub- continent it is 18, except when the minor is under the protection
of the Court of Wards or a guardian has been appointed under the Guardian and Wards Act,
1890 in which case, the age of majority is 21 years.

4
Transfer of Property Act 1882, Act No. 4 of 1882, Section 7.
5
Mohori Bibi v. Dharmodas 30 Cal 539 (PC)

5
Minority, however, is no disqualification for being a transferee in the following cases:
- a gift or device in favor of a minor, when it is not onerous;
- a conveyance for consideration, where the consideration has proceeded or proceeds from a
third party and no obligation is imposed on the minor;
- even if the consideration proceeded from the minor, if the transaction was complete and there
is no outstanding obligation to be performed by the minor

Where the conveyance is for consideration which has yet to proceed from the minor or where
there is an outstanding obligation to be performed by the minor, the conveyance in favor of the
minor transferee cannot be upheld. For example, a Lease in favor of a minor when rent has to
be paid in future. In the cases of a Lease under Section 107, since a lease has to be executed
both by the lessor and the lessee, a minor can neither be a lessor nor a lessee. A transfer by a
lunatic is wholly void. If the conveyance was made during a lucid interval, it would be valid
provided no guardian has been appointed in respect of his property. The law is that where a
conveyance is made in favor of a lunatic the property will vest in him, but it will be managed
by a guardian. (AIR 1981 Pat 384)
Thus, an administrator, guardian, trustee or agent acting under a Power of Attorney, are persons
who are authorized to dispose of property not belonging to them.

Here in this section it is clearly stated that any person who is competent for a contract is
competent for a transfer. Person competent to contract was defined and describe in Section 11
of Indian Contract Act, 1872. It talks about person who are competent to contract —
Every person is competent to contract who is of the age of majority according to the law to
which he is subject, and who is of sound mind and is not disqualified from contracting by any
law to which he is subject.6
Thus, it sets certain terms which are (1) Age of Majority (2) Sound mind (3) Status
There are various landmark judgments were given regarding competency of transfer explaining
and amending various aspects of section 7 of Transfer of Property Act 1882.

6
The Indian Contract Act 1872, Act 9 of 1872, Section 11.

6
A Person is competent to transfer when he is competent to contract as stated in Transfer of
Property Act 1882 and has title to the property or has authority to transfer if it is not his own
as discussed in the famous case of Faujdar Kameshwar v. Ghanashyamdas 1987.7
Section 11 of the Contract Act, 1872 every person is competent to contract who is of the age
of majority according to the law to which he is subject, and who is of sound mind and is not
disqualified from contracting by any law to which he is subjected8. Similarly under section 3
of the Indian Majority Act, 1875, a person shall be deemed to have attained majority when he
shall have completed his age of 18 years, but in the case of a minor of a whose person or
property or both a guardian has been appointed by a court, or of whose property the
superintendence is assumed by a Court of Wards, the age of majority shall be deemed to have
been attained on the minor completing the age of 21 years.9

For the purpose of contracting and competent to transfer of property, a person is said to be of
a sound mind if at the time when he makes it, he is capable of understanding it and of forming
a rational judgment as to its affect upon his interest. A person who is usually of unsound mind,
but occasionally of sound mind, may make a contract when he is of sound mind, and a person
who is usually of sound mind, but occasionally of unsound mind, may not make a contract
when he is of unsound mind. As per Section 12 of Indian Contract Act10

A minor is incapable of a contract, and that his contract is not only voidable but void-
11
MohoriBibi v. Dharmodas 30 Cal 539 (PC). A minor is, therefore, incompetent to make a
transfer of his property by sale, mortgage or lease. In Mohori Bibi v. Dharmodas the plaintiff
Dharmodas Ghosh, when he was a minor, mortgaged his property to the defendant, a
moneylender. At that time, defendant’s attorney had the knowledge about plaintiff’s age. The
plaintiff later paid only Rs 8000 but refused to pay rest of the money. The plaintiff’s mother
was his next friend (legal guardian) at that time, so he commenced an action against the
defendant saying that at the time of making of a contract, he was a minor, so the contract being
a void one, he is not bound by the same.

7
Faujdar Kameshwar v. Ghanashyamdas 1987 Supp SC 689.
8
Supranote 6.
9
The Indian Majority Act 1875, Section 3.
10
The Indian Contract Act 1872, Act 9 of 1872, Section 12.
11
Supranote 5.

7
A sale deed by a minor is void and a subsequent ratification by the transferor after attaining
majority does not validate the transfer - Hari Satya v. Mahadev.12 A lease by a minor is cold.
That it was executed only by lessee in favour of the lessor by means of kabiyat) and not by the
lessor (by means of a patta) does not cure its invalidity. The fundamental concept of a lease
involves a transfer by the lessor. A lease is essentially a bilateral contract – Govinda v.
Chowakkaran13

Where the actual lease executed by a minor was only for five years, and the stipulation with
regard to the continuance of the lease in future, should the tenant require it, had not passed
from the domain of contract, the stipulation could not be ratified by the minor on his coming
of age, as the agreement with regard to the future lease was void as said in landmark judgement
of Indian Cotton Co. v. Raghunath.14

In Tranfer of Property where a deed is executed by a person who alleges himself to be a major
but the fact of his minority is established, such a deed executed by minors being a nullity is
incapable of founding a plea of estoppel as said in Sadiq Ali v. Jai Kishori.15 When a contract
has been induced by a false representation made by an infant as to his age, he is liable neither
in the contractnor in tort. No estoppel can be pleaded against a statute-Ajudhia Prasad v.
Chandan 1937. 16

But, if the manager of a minor's estate enters into an agreement for the purchase of certain
immovable property, the minor is not bound by the contract, nor can he sue for the specific
performance of the contract Mir Sarwar Jan v. Fakhruddin 39 Cal 232 (PC). A contract by the
minor's guardian to sell his immovable property cannot be enforced against the minor as
discussed in Raghunathan v. Ravuthakanni17 and in Venkatachalan v. Sethuram.18 But in K.
Subrahamanyam v. Kurra Subba Rao what has he actually decided in that case that, where a
guardian enters into a contract for the sale of immovable property for repaying the debts of the
minor's father, and the purchaser enters into possession on payment of the consideration and

12
Hari Satya v. Mahadev AIR 1983 Cal 76.
13
Govinda v. Chowakkaran AIR 1931 Mad 147(149)
14
Indian Cotton Co. v. Raghunath AIR 1931 Bom 179 (182).
15
Sadiq Ali v. Jai Kishori AIR 1928 PC 152 (156).
16
Ajudhia Prasad v. Chandan1937 AT 610 (FB).
17
Venkatachalan v. Sethuram AIR 1939 Mad 322.
18
Raghunathan v. Ravuthakanni AIR 1938 Mad 765.

8
the guardian files a suit for recovery of possession taking advantage of the non-execution of
the deed of sale, the purchaser is entitled to get the protection under section 53A of the Transfer
of Property Act, but a transfer to a minor is valid.1920 Section 53A of Transfer of Property talks
about part performance it says that-
Where any person contracts to transfer for consideration any immoveable property by writing
signed by him or on his behalf from which the terms necessary to constitute the transfer can be
ascertained with reasonable certainty, and the transferee has, in part performance of the
contract, taken possession of the property or any part thereof, or the transferee, being already
in possession, continues in possession in part performance of the contract and has done some
act in furtherance of the contract, and the transferee has performed or is willing to perform his
part of the contract, then, notwithstanding that 21[***] where there is an instrument of transfer,
that the transfer has not been completed in the manner prescribed therefor by the law for the
time being in force, the transferor or any person claiming under him shall be debarred from
enforcing against the transferee and persons claiming under him any right in respect of the
property of which the transferee has taken or continued in possession, other than a right
expressly provided by the terms of the contract: Provided that nothing in this section shall
affect the rights of a transferee for consideration who has no notice of the contract or of the
part performance thereof.22

As discussed in Amina Bibi’s case a transfer by a lunatic of his property is void. A lease of
property granted by the lessor at a time when he was mentally unfit and incapable of
understanding the effect of the transaction is void.23An insane person is not competent to
contract and as such, not competent to transfer any property by a deed of gift as per
24
Tarakeshwar v. Mahesh case. Similarly, in a disposition of property by a lunatic during a
lucid interval is considered as done by a person perfectly capable of contracting, managing and
disposing of his affairs at that period as discussed in a landmark judgement of Hall v. Warren.25

19
K. Subrahamanyam v. Kurra Subba Rao 52 CWN 706 (PC).
20
Transfer of Property Act 1882, Act No. 4 of 1882, Section 53A.
21
The words “The contract, through required to be registered, has not been registered, or” omitted by the
Registration and Other Related Laws (Amdt.) Act, 2001.
22
Supranote 20.
23
Amina Bibi. Saiyed Yusuf AIR 1922 Al 449.
24
Tarakeshwar v. Mahesh AIR 1981 Pat 348.
25
Hall vs Warren 9 Ves 505.

9
Conclusion

Section 7 of Transfer of Property Act 1882 talks about the person who is competent to transfer
property saying that any person competent to contract is competent to transfer. This section 7
must read along with section 11 of Indian Contract Act 1872 which deals with the person who
is competent for the contract. Accordingly, any person who attains the age of majority and has
a sound mind and who is not disqualified by any law for the same is competent contract and
transfer both.

Since 1882, various changes and amendments were brought in this act of Transfer of Property
drafted by Lord Romilly and others. Competency is also among one of the many disputed issues
of this acts. According to this act, any kind of transfer made by a minor person is void.26 Though
transfer made to a minor is valid.27 The transfer of property act forward says that a contract by
minor’s guardian to sell his immovable property cannot be enforced against minor in famous
case of Raghunathan v. Ravuthakanni28 whereas in another landmark judgement of Great
American Insurance v. Madan Lal it was stated that contract made by guardians of minor for
minor’s benefit or interest is eligible.29 Similarly there must be certain clause in Transfer of
Property against minor laws which allowed transfer by minor or by his/her guardians for
reasonable and justified reasons securing the interest of that minor person.

26
Supranote 5.
27
Supranote 19.
28
Supranote 18.
29
Great American Insurance v. Madan Lal (1935) 37 BOMLR 461.

10
Bibliography

Acts referred

• Indian Contract Act, 1872

• Transfer of Property Act, 1882
• Indian Majority Act, 1875.

Books referred

• Mulla, The Transfer of Property Act, 10th Edition, Lexis Nexis.

• Dr Poonam Pradhan Saxena, The Transfer of Property Act, 2nd Edition, 2011, Lexis
Nexis Butter Worth.

11