Transfer of Property Act (TPA)
Joint Transfer for Consideration under Section 45: The Presumption as to the Shares of Joint Transferees
Two or more people buy a property together and the deed says nothing about their shares. Years later the question arises: who owns how much? Section 45 supplies the answer by looking at the money. Where the price came out of a fund held in common, the buyers take interests matching their interests in that fund; where each paid from his own pocket, they take in proportion to what each advanced; and where nothing can be proved about either, the law presumes them equally interested. All of it yields to a contract to the contrary.
Figure 1: Contributions of different sizes, and the interests they produce
1. The Section
Section 45, TPA Where immoveable property is transferred for consideration to two or more persons, and the consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in the property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and where the consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, entitled to interests in the property in proportion to the shares of the consideration which they respectively advanced. In the absence of evidence as to the interests in the fund to which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property. |
2. The Three Situations
The source of the price | How the interests are worked out |
|---|---|
A fund belonging to the transferees in common | Their interests in the property mirror their interests in that fund, as nearly as may be |
Separate funds of each transferee | Their interests are in proportion to the shares of the consideration each advanced |
Neither can be proved | They are presumed equally interested in the property |
A contract between them fixing the shares | The contract governs, whatever each in fact paid |
3. A Worked Example
Three buyers, three purses A, B and C buy a house for ₹1,000. A pays ₹600 from his own funds, B ₹300 and C ₹100, and the deed says nothing about their shares. Their interests are six-tenths, three-tenths and one-tenth respectively. If instead the whole price had come from a partnership fund in which they held equally, they would take equal interests, whatever the internal bookkeeping. And if nothing can be shown about either the fund or the contributions, the presumption of equality applies. |
4. The Character of the Section
- It is a rule of presumption, not of title. It tells a court how to read a deed that is silent, and it is displaced by evidence of what the parties actually agreed.
- It operates between the transferees. The seller is not concerned with how the buyers divide what they have bought.
- It applies only to a transfer for consideration. A gift to two persons is governed by its own terms and by the general law.
- It applies to immoveable property. The section says so expressly.
- And it is subject throughout to a contract to the contrary, which is the first thing to look for in any problem.
5. Points Worth Noting
Question | Answer |
|---|---|
Does the deed's silence make them joint tenants? | No. Indian law leans against joint tenancy with survivorship; the section produces interests in defined shares, held in common |
What if one buyer paid the whole price but both names appear? | Section 45 would give the payer the whole beneficial interest — but a claim of that kind must be tested against the Benami Transactions (Prohibition) Act, 1988 as amended, which bars most such assertions |
Must the shares be proved by documents? | No. Evidence of the source of the money and of the contributions is enough; the presumption of equality applies only where none is available |
Does the section decide possession? | No. It decides the extent of each transferee's interest; possession and enjoyment follow the law of co-ownership, and section 44 governs a later transfer by one of them |
6. Sections 45, 46 and 47 Together
The three sections deal with the same practical problem from different angles, and are best learned as a set. Section 45 divides the property among the buyers, according to what each put in. Section 46 divides the price among the sellers, according to the value of the interests each gave up. Section 47 decides, where several co-owners sell a share without saying whose share it comes from, whose holding is reduced and by how much. Each is a default rule that yields to a contract.
Retention aid Follow the money, then the fund, then presume equality. And remember the order of enquiry: is there a contract fixing the shares? If not, where did the price come from? If that cannot be shown, the buyers are equal. |
7. Related Topics and Provisions
- Transfer for Consideration by Persons Having Distinct Interests, Section 46 — the division of the price among sellers
- Transfer by Co-owners of a Share in Common Property, Section 47 — whose share bears the transfer
- Section 44, TPA — a transfer by one co-owner, and the rights of his transferee
- Transfers in Special Circumstances, Sections 38 to 53A — the chapter scheme
- Benami Transactions (Prohibition) Act, 1988, as amended in 2016 — where one buyer claims the whole beneficial interest
- Section 8, TPA — what passes by a transfer, read with the shares section 45 fixes