Transfer of Property Act, 1882 / Chapter II / Section 5

Section 5 of Transfer of Property Act, 1882 - Transfer of Property Defined

Section 5 explains what constitutes a transfer of property by an act of living persons. It covers conveyance of property in the present or in the future, identifies who may participate, and expressly includes companies and associations within the meaning of a living person.

Text of Section 5 - Transfer of property defined

5. "Transfer of property" defined. 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.

Meaning and scope of Section 5

The Transfer of Property Act, 1882 (Act 4 of 1882) primarily regulates transfers made by acts of parties. Section 5 provides the starting definition. A transfer is a legally effective act of conveyance by a living person, rather than a mere intention or promise to transfer. The subject of the conveyance may be movable or immovable property, subject to the provisions applicable to the particular kind of transaction and other laws in force.

1. Act of a living person

The transferor must be a living person within the extended statutory meaning. The term includes an individual, a company, an incorporated or unincorporated association, and a body of individuals. The section does not override company law, statutory restrictions or other rules governing transfers to or by such entities.

2. Conveyance of property

The act must convey a legally transferable interest. Section 5 defines a transfer, while Section 6 sets out what may be transferred and what cannot. For example, a mere chance of inheritance or a mere right to sue is not transferable under Section 6.

3. Transfer in present or in future

The definition contemplates a conveyance intended to operate presently or in the future. This does not mean that an unsupported promise to convey at a later date itself passes title. Whether an interest is effectively created or transferred depends on the instrument, the type of property, applicable formalities and other statutory conditions.

4. Transfer to another person or to oneself

The property may be conveyed to one or more other living persons, to the transferor himself, or to the transferor jointly with one or more others, provided the arrangement constitutes a legally effective transfer under the applicable law.

Requirements for a valid transfer

Competent transferor: Under Section 7, the transferor must generally be competent to contract and entitled to the transferable property, or authorised to dispose of it.
Transferable interest: The interest must not fall within a prohibition under Section 6 or another applicable law.
Lawful object and consideration: The transaction must satisfy the legal rules relevant to its nature, including the prohibitions under Section 6(h).
Required form: Some transactions require writing, execution, attestation or registration. Section 9 permits oral transfers where writing is not expressly required by law.

Examples of transfers of property

Sale: A sale transfers ownership in exchange for a price, subject to Section 54 and applicable registration requirements. Mortgage: Under Section 58, an interest in specified immovable property is transferred to secure a debt or specified obligation. Lease: Under Section 105, a right to enjoy immovable property is transferred for a specified or ascertainable duration in exchange for consideration. Gift: Under Section 122, existing movable or immovable property is voluntarily transferred without consideration and accepted as required by law.

These are different legal modes of transfer. Each is subject to its own statutory requirements, including the relevant provisions concerning registration, execution and attestation.

Transfer by act of parties and by operation of law

Section 5 concerns voluntary acts of conveyance by living persons. Devolution by inheritance, or transfer arising by operation of law or execution of a court decree, is not necessarily a transfer by act of parties within this definition. Section 2 also preserves specified transfers by operation of law and court orders, subject to the exceptions expressly stated there.

Section 3 - Interpretation clause: definitions including immovable property, attestation and notice.
Section 4 - Contract Act and Registration Act: connection with contractual and registration law.
Section 8 - Operation of transfer: interests and incidents ordinarily passing with a transfer.

Official statutory reference

For the statutory text, amendments and applicable notes, consult the Transfer of Property Act, 1882 on India Code (Government of India). State amendments and other special laws may affect a particular transaction.

Legal note: Section 5 is a definition, not a standalone rule validating every conveyance. The transfer must also comply with the substantive and procedural requirements governing the property and transaction.