Concept of conditional transfers under TPA

 

Conditional Transfers under Transfer of Property Act, 1882

INTRODUCTION

Section 25 of the Transfer of Property Act, 1882 provides for Conditional Transfer. It means that any transfer that happens on the fulfilment of a condition that is imposed on the other party for the transfer of property.

For any kind of a conditional transfer to be valid, the condition that is imposed should not be:

1. Prohibited by law,

2. Should not be an act that involves fraudulent acts,

3. Should not be any act that is impossible,

4. Should not be an act that is termed as violative of public policy,

5. Should not be immoral,

6. Any act that incurs any harm to any person or his property.

Types of Conditions on Transfer

There are three specific types of conditions that are imposed in a transfer of property and there are some more types provided. All these conditions should also satisfy all the requirements of a condition as mentioned in Section 25 of the Transfer of Property Act, 1882.

Condition Precedent

It is given in Section 26 of the Transfer of Property Act, 1882. Any condition that is required to be fulfilled before the transfer of any property is called a condition precedent. This condition is not to be strictly followed and the transfer can take place even when there has been substantial compliance of the condition. For example, A is ready to transfer his property to B on the condition that he needs to take the consent of X, Y and Z before marrying. Z dies and afterward, B takes the consent of X and Y so the transfer can take place as there has been substantial compliance.

Condition Subsequent

It is given in Section 29 of the Transfer of Property Act, 1882. Any condition that is required to be fulfilled after the transfer of any property is called condition subsequent. This condition is to be strictly complied with and the transfer will happen only after the completion of such condition. For example, A transfers any property ‘X’ to B on the condition that he has to score above 75 percent in his university exams. If B fails to achieve 75 percent marks then the transfer will break down and the property will revert back to A.

Although it is an essential requirement that the condition needs to lawful and if it is not then the condition will be held as void and the transfer will not break down and will be finalized. For example, A transfers the property to B on the condition that he shall murder C. This condition is void and hence transfer will go through and the property will be kept by B.

 

Condition Collateral

Any condition that is required to be fulfilled simultaneously after the transfer of any property is called condition collateral. It needs to be strictly followed otherwise the transfer will break down. For example, A transfers property ‘X’ to B on the condition that he shall maintain A’s wife C for a period of 10 years. If B complies with it and maintains C, the transfer will be valid and the property will be in the possession of B.