Transfer of Property Act (TPA)
Inter Vivos Transfer under the Transfer of Property Act, 1882: Meaning, Essentials, Living Persons and the Unborn Transferee
The Transfer of Property Act is a statute of transfers inter vivos — between living persons. Section 5 says so in terms, and the whole architecture of the Act follows from it: the requirements of consent and competence, the prescribed forms, and the doctrines of Chapter II all presuppose a living owner who chooses to part with his property in favour of someone who is there to receive it. This topic takes the expression apart word by word: who counts as a living person, what the phrase 'in present or in future' actually qualifies, and why a transfer for the benefit of an unborn child is not the exception it appears to be.
Figure 1: The inter vivos field, its three requirements, and the two dispositions that look like exceptions but are not
1. The Statutory Text
Section 5, TPA — '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.' |
The expression inter vivos does not appear in the section. It is the compendious name the courts give to what the section describes: a conveyance operating between persons who are alive when it operates. Its opposite is a disposition mortis causa — one that takes effect from death — which belongs to the law of succession.
2. The Essentials of an Inter Vivos Transfer
- An act of conveyance. There must be something done by which property moves. A transaction that merely recognises, adjusts or extinguishes an existing right — a partition, a family settlement, a surrender — conveys nothing and is therefore not a transfer at all.
- A living transferor. The person conveying must be alive at the moment the instrument operates. This is what excludes the will: a testamentary instrument speaks from death, when its maker has ceased to be a living person.
- A living transferee. The person taking must also exist. A conveyance to a person already dead, or to a company not yet incorporated, is void for want of a transferee capable of receiving.
- The property must be transferable. Section 6 excludes, among others, the mere chance of an heir apparent succeeding (spes successionis), a mere right to sue, and a public office.
- The transferor must be competent. Section 7 requires majority, soundness of mind, and either title to the property or authority to dispose of property that is not his own.
3. 'Living Person': How Wide the Expression Runs
Section 5 expands the ordinary meaning of the words. A company, an association and a body of individuals are living persons for the purpose of a transfer, and it makes no difference whether the body is incorporated. The saving clause at the end of the definition preserves any other law regulating transfers to or by such bodies — company law, societies legislation and the like continue to apply on top of the Act.
Transferee | Can it take under section 5? | Reason |
|---|---|---|
A natural person | Yes | The paradigm case, provided he is alive at the date of the transfer |
A registered company | Yes | Expressly a 'living person'; capacity is further governed by company law |
An unincorporated association or firm | Yes | The definition covers a body of individuals whether incorporated or not |
A Hindu idol or a deity | Yes | A juristic person capable of holding property, though it acts through a shebait or manager |
A company not yet incorporated | No | There is no transferee in existence; the transfer is void, and a post-incorporation ratification will not cure it |
A person already dead | No | No living transferee; the instrument conveys nothing |
An unborn person, directly | No | See section 13 — the interest must be routed through a prior living transferee |
4. 'In Present or In Future': What the Words Qualify
This is the most commonly mistaken phrase in the section. The words do not permit the transfer of future property. They qualify the verb 'conveys', not the noun 'property'. In other words, a living person may make a conveyance that is to operate at once or at a future date — but the thing conveyed must be property presently in existence and presently transferable.
The authority, and the distinction it draws In Jugalkishore Saraf v. Raw Cotton Co. Ltd., AIR 1955 SC 376, the Supreme Court held that the words 'in present or in future' in section 5 govern the word 'conveys' and not the word 'property'. A transfer of property not in existence at the date of the transfer therefore operates, at most, as a contract to transfer which the law may enforce when the property comes into existence — it is not itself a transfer. Read this with section 6(a): the chance of an heir apparent succeeding, the chance of a relation obtaining a legacy, and any other mere possibility of a like nature cannot be transferred at all, whether for consideration or without it. |
5. Transfer to Oneself, and to Oneself and Others
Section 5 contemplates three configurations of transferee: to another, to oneself, and to oneself together with others. A transfer to oneself is not the contradiction it first appears. A person may convey property to himself in a different capacity — most obviously by declaring himself a trustee of it, so that he continues to hold the legal title while the beneficial interest passes to the beneficiary. Similarly, a sole owner may transfer to himself and another, creating a co-ownership that did not exist before. The requirement in both cases is a real change in the character in which the property is held.
6. The Unborn Person: An Apparent Exception
If both parties must be living, how can property be settled on a child not yet born? The Act answers by refusing a direct transfer and providing a route.
- No direct transfer. Property cannot be conveyed directly to an unborn person, because at the date of the transfer there is no transferee.
- Section 13 — the machinery. Where, on a transfer, an interest is created for the benefit of a person not in existence at the date of the transfer, the interest must be preceded by a prior interest created by the same transfer, and the interest given to the unborn person must extend to the whole of the remaining interest of the transferor. A life estate to a living person, remainder to the unborn child, is the standard form; a life estate to the unborn person is void.
- Section 20 — when the interest vests. The unborn person acquires, upon his birth, a vested interest, although he may not be entitled to enjoyment immediately.
- Section 14 — the outer limit. The rule against perpetuity caps the arrangement: the vesting cannot be postponed beyond the lifetime of one or more persons living at the date of the transfer and the minority of the unborn person who is to take.
So the transfer itself is still inter vivos: it is made to a living person, and the unborn person takes through the interest so created, not as an immediate transferee.
7. Inter Vivos and Mortis Causa Compared
Point | Inter vivos transfer | Mortis causa disposition |
|---|---|---|
When it operates | During the lifetime of the transferor, at once or at a stipulated future time | From the death of the maker, and not a moment before |
Governing law | Transfer of Property Act, 1882, with the Contract and Registration Acts | Indian Succession Act, 1925 and the personal laws |
Revocability | A completed gift is revocable only on section 126 grounds | A will is ambulatory and freely revocable until death |
Subject matter | Property owned at the date of the transfer | The estate as it stands at the date of death, including after-acquired property |
Formalities | Writing, attestation and registration where the Act requires | Attestation by two witnesses under section 63; registration optional |
One exception | — | A donatio mortis causa of moveables is taken out of Chapter VII by section 129 and is governed by section 191 of the Succession Act, 1925 |
8. Why the Classification Matters in Practice
- Stamp duty and registration. An inter vivos conveyance attracts duty and compulsory registration; a will attracts neither.
- Creditors. Property that has passed inter vivos is out of the transferor's estate, subject to section 53; property disposed of by will remains in the estate and answers to the debts.
- Construction of documents. Where a deed is ambiguous, the court asks whether an interest passed in praesenti. If it did, the document is a transfer whatever it is called — the label is not decisive.
- Capacity. The competence required by section 7 is tested at the date of the transfer; testamentary capacity is tested at the date of execution of the will and is governed by different rules.
Retention aid Both ends alive, something conveyed, nothing waiting on death. Companies and unincorporated bodies count as living; the dead, the unincorporated-yet and the unborn do not. And remember the Jugalkishore point: in present or in future attaches to conveys, never to property. |
9. Related Topics and Provisions
- Section 5, TPA — the definition from which the whole inter vivos requirement flows
- Transfer of Property vs Will — the instrument that fails the inter vivos test, examined in detail
- Transfer by Act of Parties vs Transfer by Operation of Law — the other boundary of section 5
- Sections 13, 14 and 20, TPA — transfers for the benefit of an unborn person, and the rule against perpetuity
- Section 6(a), TPA — spes successionis, and why a bare expectancy cannot be conveyed
- Section 129, TPA and section 191, Indian Succession Act, 1925 — the donatio mortis causa of moveables