Oral Transfer of Property Under The Transfer of Property Act

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MAHARASHTRA NATIONAL LAW UNIVERSITY,

AURANGABAD

SUBJECT: PROPERTY LAW

“Oral Transfer of Property under the


Transfer of Property Act”

Submitted By:
Rohan Kapoor
Roll No. 33
B.A.LL.B. (Hons.) Semester-IV

Under the guidance of


Prof. (Dr.) Kondaiah Jonnalagadda
(Professor of Law and Dean)

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CONTENTS

1. HISTORY AND DEVELOPMENT………………………………….(4)

2. ORAL TRANSFER OF PROPERTY…………………………………(7)

3. SECTION 9 OF TRANSFER OF PROPERTY ACT…………………(9)

4. CONCLUSION……………………………………………………….(13)

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ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my teacher (Prof. (Dr.)


Kondaiah Jonnalagadda) who gave me the golden opportunity to do this
wonderful project (Oral Transfer of Property under the Transfer Of Property
Act), which also helped me in doing a lot of Research and I came to know
about so many new things I am really thankful to them.

Secondly I would also like to thank my parents and friends who helped me a lot
in finalizing this project within the limited time frame.

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HISTORY AND DEVELOPMENT

Going back in time before passing of the Transfer of Property Act, writing was not an
essential ingredient for Transfer of Property from one entity to another.1 After the passing of
the Act, now certain specified transactions are required to be in writing.2 For example, if the
statute requires a deed for transfer of Title of the land, then the same cannot be passed by
mere admission. Transfer of Property Act contains specific provisions regarding what
constitutes a transfer and discusses different conditions attached to it. The Act, came into
force on 1st July, 1882.

Before coming to oral transfer of property, I would like to throw some light on what transfer
of property means. Section 5 of T.P. Act3 defines Transfer of Property and by bare reading of
the section it can be understood that the same means an act by which a living person conveys
property in present or in future to one or more living persons, (including/excluding) himself.
Here living person according to Section 5 includes any person or a company or an
association or a body of individuals, which may or may not be incorporated. Now, the
question that arises in that what kind of properties can or cannot be transferred. 4 The Act
does not specify or has no exhaustive list to answer the same but section 6 of T.P. Act5 states
that property of any kind may be transferred, except if states otherwise in the act which
essentially makes an exhaustive list of things which cannot be called property and which
cannot be transferred.

The Transfer of Property Act gives certain provision for the Oral transfer. In oral transfer,
writing is not necessary according to the law. The Act gives you rules for how a transfer of
property can be made without any writing. 
A simple deduction can be done for the oral transfer of property law that the transfer should
be done in writing. Now, movable property is not defined according to the Transfer of
Property Act but have some interpretations. The clause in section 3 of the Transfer of
Property Act, 1882, the immovable property does not contain the timber, growing crops or
grass. The General Clauses Act defines the term movable property as the property of every
des c r i p tion. It is defined to include land benefits that arise out of the land or things which
1
Mohamed Musa v Aghore Kumar Ganguli, (1915) 42 Cal 801: 42 IA 1. Justice was quoted saying “A transfer
can be made orally unless expressly required by the law to be in writing. Prior to passing of the Act, no writing
was necessary for such transfer.
2
Immudiapattam v. Periya Dorasami (1901) 24 Mad 377; Bishan Dial v Ghazi-ud-din. (1901) 23 All 175.
3
Section 5, The Transfer of Property Act, 1882
4
 Id.
5
Section 6, The Transfer of Property Act, 1882 (Bare Act)

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will be attached to permanently fastening anything which will be attached to the earth.
Anything can be easily be inferred because of the definition of immovable property in which
it is not covered according to the definition of the movable property that includes computer
programs and other intellectual property rights. 

The Section 9 of the Act tells about the oral transfer of property. It states as follows: 

Section 9 in The Transfer of Property Act, 1882 

Oral transfer.—A transfer of property may be made without writing in every case in which a
writing is not expressly required by law. 

The Section 9 of Transfer of Property act is\also related with some other sections such as: 

Section 54 in The Transfer of Property Act, 1882 

54. “Sale” defined.—‘‘Sale” is a transfer of ownership in exchange for a price paid or


promised or part-paid and part-promised. Sale how made.—3Such transfer, in the case of
tangible immoveable property of the value of one hundred rupees and upwards, or in the case
of a reversion or other intangible thing, can be made only by a registered instrument. 1In the
case of tangible immoveable property of a value less than one hundred rupees, such transfer
may be made either by a registered instrument or by delivery of the property. Delivery of
tangible immoveable property takes place when the seller places the buyer, or such person as
he directs, in possession of the property. Contract for sale.—A contract for the sale of
immoveable property is a contract that a sale of such property shall take place on terms
settled between the parties. It does not, of itself, create any interest in or charge on such
property. 

Section 130 in The Transfer of Property Act, 1882 

130. Transfer of actionable claim.— 

(1) The transfer of an actionable claim 1[whether with or without consideration] shall be

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effected only by the execution of an instrument in writing signed by the transferor or his duly
authorised agent, shall be complete and effectual upon the execution of such instruments, and
thereupon all the rights and remedies of the transferor, whether by way of damages or
otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter
provided be given or not: Provided that every dealing with the debt or other actionable claim
by the debtor or other person from or against whom the transferor would, but for such
instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or
other actionable claim, shall (save where the debtor or other person is a party to the transfer
or has received express notice thereof as hereinafter provided) be valid as against such
transfer. 

(2) The transferee of an actionable claim may, upon the execution of such instrument of
transfer as aforesaid, sue or institute proceedings for the same in his own name without
obtaining the transferor’s consent to such suit or proceeding and without making him a party
thereto. 

(Exception) —Nothing in this section applies to the transfer of a marine or fire policy of


insurance 3[or affects the provisions of section 38 of the Insurance Act, 1938 (4 of 1938)].
Illustrations 

(i) A owes money to B, who transfers the debt to C. B then demands the debt from A, who,
not having received notice of the transfer, as prescribed in section 131, pays B. The payment
is valid, and C cannot sue A for the debt. 

(ii) A effects a policy on his own life with an Insurance Company and assigns it to a Bank for
securing the payment of an existing or future debt. If A dies, the Bank is entitled to receive
the amount of the policy and to sue on it without the concurrence of A’s executor, subject to
the proviso in sub-section (1) of section 130 and to provisions of section 132. 

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ORAL TRANSFER OF PROPERTY UNDER THE TRANSFER OF PROPERTY
ACT

Definition
Section 9 of the Act6 talks about oral transfer of property. It states that,

“A transfer of property may be made without writing in every case in which a writing is not
expressly required by law.”7

Illustration of the definitions and case laws

This section essentially mandates that a transfer of property may be made without writing in
every case in which writing in not expressly mentioned/required by law but it is also
essential to note here that the act is not exhaustive of such kinds of transfers.8

In a very famous case of Sarandaya Pillay v Sankarlinga Pillai9, Ramaswami J., of Madras
High Court observed “the test, therefore in this country to determine whether a transaction
(be it a transfer or not) can be made without writing is to see if it is expressly required by law
to be in writing. If the transaction is a transfer of property and there is no express provisions
of law requiring it to be in writing, section 9 will enable it to be made without writing and
vice versa” through which an essential inference can be drawn and it can be said that if the
transaction is a transfer of property and there is no express provision of law requiring it to be
in writing then the general principle referred above will enable it to be validly made without
writing.

The reasoning of Section 9 underlines the general principles that everything is to be taken
permissible unless there is a prohibition against it and has been inserted in the statute ex
abdundanti cautela.10

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
6
Section 9, The Transfer of Property Act, 1882 (Bare Act)
7
Section 9, The Transfer of Property Act, 1882 (Bare Act)
8
Weavers Mills v Balkis Ammal, AIR 1969 Mad 462 (469,470): (1969) 2 Mad LJ 509
9
Sarandaya Pillay v Sankarlinga Pillai Sarandaya Pillay v Sankarlinga Pillai
10
ex abundanti cautela. out of an abundance of caution. In law, describes someone taking precautions against a
very remote contingency. “One might wear a belt in addition to braces ex abundanti cautela”.

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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. 

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. 

According to Section 43 of the Transfer of Property Act 1882, in case a person either
fraudulently or erroneously represents that he is authorised to transfer certain immovable
property and does some acts to 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. 

Every person, who is competent to contract, is competent to transfer property, which can be
transferred in whole or in part. He should be entitled to the transferable property, or
authorised to dispose of 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. 

According to Section 6 of the Transfer of Property Act, property of any kind may be
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. 

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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
authorised to transfer his interest in the property and can pass on the proper title to any other
person . 

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. 

It should be noted that these conditions must be satisfied : 

There must be a 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 transfer should be done for a
consideration. The transferor should subsequently acquire some interest in the property he
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 .

SECTION 9 OF THE TRANSFER OF PROPERTY ACT

Interpretation of Statutes

As already mentioned in the introduction, this section talks about oral transfer of property
and has mentioned that transfer of property can be made without writing in every case where
writing is not expressly required by the statute.  Now, the next question that arises is that
when does the statute mandate the transactions to be in writing. Transfer of Property

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under section 54, 58 (except mortgage by deposit of title-deeds), 105,118, 122 and 130 are
required to be in writing. Also under Section 5 of the Indian Trusts Act, II of 1882, transfers
which parties desire to register must be in writing. Gift of immovable property at the time of
marriage must also be registered and be in writing.

Provision of Oral Transfer of property at the time of the marriage.

It is also necessary to note here that Section 9 of T.P. Act would not apply to a case of
transfer of immovable property made at the time of marriage by a Hindu. 11 It is essential to
note here that Transfer of Property Act clearly recognizes oral transfers. Hence a simple
deduction can be done here that an oral transfer of property is a rule unless there is a law
which expressly requires that the transfer should be in writing. Now, movable property is not
defined under Transfer of Property Act but according to the interpretation clause that is
section 3 of the Transfer of Property Act, 1882, immovable property does not include
standing timber, growing crops or grass. Now the General Clauses Act, 1897 defines the
term movable property as property of every description, except immovable property.
Immovable property has been defined to include land, benefits arising out of land or things
attached to the earth or permanently fastened to anything attached to the earth. Hence
anything it can easily be inferred because the exhaustiveness of the definition of immovable
property that anything which is not covered under the definition of it is a movable property
including computer programs12 and other intellectual property.

Analyzing different sections with relation to section 9 of the Transfer of Property Act.

 Under section 54, a sale of tangible immovable property of value more than


hundred Rupees (Rs 100/-) is required to be made, only by a registered
instrument.
 In Section 59 of the T.P. Act, a writing is necessary in the case of simple mortgage
or in case of all other mortgages except a mortgage by title-deed deposit where the
principal amount or sum secured in more than hundred rupees (Rs 100/-).

11
Gangadhara Rao v G. Gangarao, AIR 1968 AP 291
12
Centre for Internet and Society, available at https://cis-india.org/internet-governance/bitcoin-legal-regulation-
india. (extracted on 11th July, 2017)

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 Also, in section 107, a lease of immovable property from year to year, or for any
term exceeding one year, or reserving a yearly rent, is required to be made in
writing.
 Section 130 mandates that all transfers of actionable claims have to be made by
writing and u/s 118, all exchanges are subject to the same rules as are applicable
to sales.

Hence it can be deducted that when the law requires that there should be an instrument in
writing and the said instrument should be registered then the ownership can only be
transferred by that method. But, where no writing is required by the Transfer of Property
Act or any other law, the transfer may be made orally.13

Illustration and few landmark judicial pronouncements

WRITING NECESSARY

The section provides for oral transfer. Transactions which are not required by law to be in
writing can be made orally under this section without any writing. Writing is necessary for
the following transactions:

1. Sale of immovable property of value of Rs. 100 or upwards.


2. Simple mortgage of specific immovable property of any value.
3. Lease from year to year or for any term exceeding one year or reserving a yearly
rental.
4. Exchange of the value of Rs. 100 or upwards.
5. Transfer of actionable claim.
6. Notice of transfer of actionable claim.

In the famous case of Narsinghdas v. Radhakisan14 it was held that a test to find out whether
a transaction can be made without writing is to see whether it is expressly required by law to
be in writing, which further substantiates our hypothesis and our illustration of Section 9 of
Transfer of Property Act, 1882.

13
Ramdas v. Pahlad, AIR 1965 Bom 74 (75,76): 66 Bom LR 499; Subramniyan v. Venkatachalam Pillai (2011)
6 MLJ 743 (752) (Mad)
14
Narsinghdas v. Radhakisan, 1952 Bom 425

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COMING TO ORAL GIFTS

In the case of Keshri Mull v Sukan Ram,15 it was held that oral gift though permissible under
the section is not valid without delivery of possession. Validity of oral partition was
challenged in the case of Peddu Reddiar v. Kothanda Reddi16 and the judgment finally
upheld the validity of oral partition of property. Subsequently, there have been various cases
which established the fact that when writing is not required by Act, transfer can be made
orally.17

ORAL FAMILY SETTLEMENTS

It has also been established by a three judge’s bench of the Supreme Court in a case of
allegations of fraud and undue influence, that family settlements can be oral and there is no
need to keep it in writing.18

ORAL FAMILY ARRANGEMENTS

The high court of Jammu & Kashmir has already substantiated that a family arrangement
need not be written and it can be oral too. 19 A relinquishment by the mother of her interest in
the joint family property, even when the property consists of immovable property and the
value of the share therein exceeds Rs. 100/-, can be made without writing, and registered
instrument is not required.20

A skimmed reading of the judgment in the case of Bhuta Singh v Mangu and Ram Sarupv.
Ram Dei21 also suggests that alienation needs no written instrument. It is sufficient if the
person entitled to the property does an act which necessarily results in its transfer.22 All that

15
Keshri Mull v. Sukan Ram, 1933 Pat. 264
16
Peddu Reddiar v. Kothanda Reddi, 1966 Mad 419
17
Weavers Mills Ltd. v. Balkis Ammal, 1969 Mad 463: (1969) 2 MLJ 509: (1969)  2 MLJ 509: (1969) 1 Mad
433
18
Kale v Director of Consolidation, 1976 SC 807: (1976) 3 SCC 119: (1976) 3 SCR 202.
19
1972 J&K 472
20
 Ramdas v. Pahlad, AIR 1965 Bom 74 (75,76) : 66 Bom LR 499
21
Bhuta Singh v Mangu, AIR 1930 Lah 9; Ram Sarup v. Ram dei, (1907) 29 ALL 239; Sheo Singh v. Jeoni,
(1897) 19 ALL 524
22
 Id.

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the act provides for is that certain specified transfers shall only be made in writing duly
registered. An award relating to immovable property need not be in writing.23

CONCLUSION

The Transfer of property Act, 1882 is an Indian legislation which regulates the transfer of
Property in India. Through numerous case laws and illustrations, the researcher has
consolidated the fact that Section 9 of the said Act deals with oral transfer of property and
has also discussed what can or cannot be transferred orally. It is further notified to the
readers that there is no law which says that the seller must sell the property at market rate. He
can always sell at any rate of his choice. The only constraint that is imposed on him would be
to pay the stamp duty required to be paid on the prices fixed by the Ready Reckon of the
Government so that there could be no loss of Government Revenue. The sale deed cannot
become void for inadequacy of prices after the parties have mutually accepted the prices as
the correct price.24

Property in itself can be classified into 2 components namely movable and immovable
property. Both the terms are not completely defined in the Act 25 hence the definition given
in Section 3 of General Clauses Act, 1897 has to be read along with the interpretation clause
in The Transfer of Property Act, 1882. It should also be taken note of that there are 18 other
statutes that are primarily concerned with Property Law, or significantly matter to Property
Law, as listed below:26

Trusts Act, 1882, Specific Relief Act, 1963, Easements Act, 1882, Registration Act, 1908,
Stamp Act, 1899, State Stamp Act, 2008, Limitation Act, 1963, General Clauses Act, 1897,
Evidence Act, 1872, Succession Act, 1925, Partition Act, 1893, Presidency-Towns Insolvency
23
Bhagwatibai v. Bhagwandas, AIR 1927 Sind 206
24
Dashrath Narayan Shinde v. Gangaram Ghag Laxman, 2010 (4) Mah LJ 392 (394) (Bom) : (2010) 3 Bom CR
641
25
Section 3 of The Tranfer of Property Act, 1882 has to be read along with the definition of immovable
property given in Section 3 of General clause Act, 1897. Available at http://alappuzha.nic.in/resources-file/acts-
rules/GeneralClausesAct.pdf.
26
Sumeet Malik, Property Law Manual (Hard Bound) (2014 edition). Eastern Book Company. p. 1-968. ISBN
number- 9789351451150.

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Act, 1909, Provincial Insolvency Act, 1920, Recovery of Debts Due to Banks and Financial
Institutions Act, 1993, Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002, Contract Act, 1872, Sale of Goods Act, 1930,
Negotiable Instruments Act, 1881.27

Also it is important to note here that every person, who is competent to contract 28, is
competent to transfer the property either in whole or in part. The right of the person can be
absolute or conditional29 or can be immovable or movable30 depending upon the nature of the
property. But, there are certain conditions that must be satisfied for a transfer of Property.
There must be a representation by the one who is transferring (the Transferor) that he has the
applied authority to transfer the immovable property. The representation should not either be
fraudulent or erroneous. The transferee must act in good faith and the property should be
transferred with some consideration which is valid in the eyes of law which essentially will
vest the transferee’s interest in the property and the transferor should have interest in the
property which he had agreed to transfer.31

27
Id. (Sumeet Malik)
28
 Not expressly barred by any national or international statute
29
Section 10, The Transfer of Property Act, 1882 ( Bare Act)
30
See Section 3, Interpretation Clause of Transfer of Property Act, 1882, (read along with) General Clause Act
1897 for definition of Immovable Property.
31
After bare reading of the The Transfer of Property Act, these points came out as an analysis.

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