What is 'transfer of property'? Is partition a transfer of property? Discuss with reference to decided cases.

Question: What is 'transfer of property'? Is partition a transfer of property? Discuss with reference to decided cases. [BJS 1975]

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Answer

Section 5 of the Transfer of Property Act, 1882, provides a comprehensive definition of "transfer of property" and outlines what constitutes a transfer of property. It defines the transfer of property as

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.

Partition, as commonly understood in property law, involves the division of property among co-owners, with each co-owner gaining sole ownership of their respective share or portion. However, Partition does not necessarily fall under the definition of a "transfer" as per Section 5 of the Transfer of Property Act for several reasons:

No Conveyance to Others: In a partition, the co-owners are not conveying their shares to others outside the co-ownership group. Instead, they are reorganizing their existing ownership interests within the property. Section 5 requires that property be conveyed to "one or more other living persons." In partition, the property remains within the group of co-owners.

Change in Mode of Ownership: Partition results in a change in the mode of ownership from joint ownership to individual ownership or separate ownership by co-owners. This change in ownership mode is different from a traditional transfer, where property is moved from one person to another outside of any preexisting co-ownership arrangement.

Recognition of Existing Rights: Partition recognizes the existing rights and entitlements of co-owners based on their respective shares or interests in the property. It doesn't create new rights or interests but rather redistributes the existing ones.

Consensual Nature: In many cases, partition is a consensual process, especially when it is voluntary partition. Section 5 often contemplates transfers that may not necessarily require mutual consent.

Because of these distinctions, partition is often viewed as a distinct legal concept from a typical transfer of property as defined under Section 5 of the Transfer of Property Act. It is more accurately seen as a reorganization of property rights among existing co-owners, rather than a transfer of property to new or external parties.

In the case of Amb Singh and Anr. v. Sub-Divisional Officer and Ors., 1996 (3) WLC 431, the Court has differentiated between partition and transfer. The Court in its judgment says that

'Partition’ is a division of the property between coparceners/co-tenants resulting in individual ownership/tenancy of interest of each co-parceners/co-tenants; while ‘transfer’ is an act of a party by which the title of the property is conveyed from one person to another. ‘Partition’ under the Hindu Law, puts an end to the unity of the title, ownership, and possession of the property between the co-parceners. In the partition, there is a severance of joint status and of the unity of possession between the co-owners/co-tenants.

Partition neither creates any new title in a co-owner/co-tenant in the property nor is there any fresh acquisition of the property. It only enables the parties to know which particular property or portion thereof is their individual exclusive share in the property. By partition, the subsisting joint title of the co-owner/co-tenant in the joint property transforms into their separate title in respect of the property which came to their share. In a transfer, the transferee acquires the right and title in the property which did not vest in him earlier. Thus, the ‘partition’ of the joint property cannot be treated as a ‘transfer of the property’ between individual co-parceners or co-tenants. Partition of co-parcenary property, therefore, cannot be regarded as a ‘transfer of the property’ because the co-parceners have an antecedent right in the entire co-parcenary property”.

In the case of Aralappa v. Jagannath, AIR 2007 Kar 91, the Court held that partition is not a transfer, the reason being that no conveyance is involved because everyone has the antecedent title.