Section 5 of Transfer of Property Act (TPA) – “Transfer of property” defined

Definition of Section 5 of Transfer of Property Act According to the Government of India

Section 5 of Transfer of Property Act : “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.

Section 5 of Transfer of Property Act Explained

Section 5 of the Transfer of Property Act, 1882, is the “engine” of the entire Act. Without understanding Section 5, you cannot understand Sales, Mortgages, Leases, or Gifts.

This section explains what “transfer of property” means. A transfer of property is when a living person gives or passes on property to:

• one or more other living persons, or
• to himself, or
• to himself along with one or more other persons.

This transfer can happen either now (present) or later (future). To “transfer property” simply means doing such an act.

The term “living person” is not limited to individuals. It also includes:

• companies,
• associations, and
• groups of people (whether they are officially registered or not).

However, this section does not change or affect any existing laws related to how companies, associations, or such groups can transfer property.

Section 5 tells us who can transfer, what can be transferred (existing property), and when it can take effect. The most important legal concept here is “Inter Vivos,” which means a transfer between living souls, rather than through a will after death.

Essential Elements of Section 5 of Transfer of Property Act

To qualify as a valid “Transfer of Property” under Section 5, the following four essential elements must be satisfied:

1. Living Person (Inter Vivos): Both the transferor (giver) and the transferee (receiver) must be living at the time of the transfer.
2. Conveyance: There must be a clear act of transferring the title or interest in the property.
3. Existing Property: The property must actually exist today. You cannot “transfer” a house that you hope to build or inherit next year under this section.
4. Present or Future: While the property must exist now, the transfer can take effect immediately or at a scheduled date in the future.

Does “Living Person” Include Companies and Corporations?

One of the most common questions is whether a company is considered a “living person.”

Under Section 5, the term “living person” is not restricted to human beings. It explicitly includes:

• Individuals
• Companies
• Associations
• Body of individuals (whether incorporated or not)

Section 5 TPA: Transfer Inter Vivos vs. Testamentary Succession

It is crucial to distinguish between a transfer under this Act and a transfer by a Will.

Key Illustrations for Section 5

To better understand the application of Section 5, consider these scenarios:

• Scenario A: A transfers his house to B for life, and after B’s death, to C. This is a valid transfer under Section 5 because A, B, and C are all living at the time of the act.
• Scenario B: A promises to transfer a property to B that he expects to get through a will from his uncle. This is not a valid transfer under Section 5 because the property is “future property” and not currently owned by A.

Frequently Asked Questions (FAQs) on Section 5 TPA

1. Can a person transfer property to himself? Yes. Following the 1929 amendment, a person can transfer property to himself and others (e.g., creating a trust where the owner is also a trustee).

2. Is a “Will” a transfer of property? No. A Will is a testamentary document and does not fall under Section 5, as it only takes effect after the death of the testator.

3. What happens if the property does not exist at the time of transfer? The transfer is void under Section 5. The property must be in existence (either moveable or immoveable) for a valid conveyance to occur.