Oral Transfers - Contract law topic PDF

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Q. Examine the validity of oral transfers Section 9 -Oral Transfers Section 9 of the Transfer of Property Act reads: A transfer of property may be made without writing in every case in which a writing is not expressly required by law. Transfer of Property Act clearly recognizes oral transfers unless there is a law which expressly requires that the transfer should be in writing. Section 54 says that immovable property worth more than Rs.100/- requires to be registered. Thus, if we read section 54 together with section 9 oral transfers are permitted if the property is movable or immovable if it were worth less than Rs. 100/-. In Marshall v. Green,1 the defendant purchased some growing trees by word of mouth on the terms that he would remove them as soon as possible. Later, the defendant has cut down some trees the plaintiff countermanded the sale and prohibited him from cutting the remaining. However, the defendant has cut them and carried them away. The issue was whether there has been a transfer of interest in land or whether it was a mere sale of timber as it was an oral transfer. It was held the sale was not of immovable property. The principle was based on a query do the parties intend that the tree should continue to have the benefit of further nutriment to be afforded by the land? If the answer is yes, the tree is to be treated as immovable property. If the parties intend to withdraw the tree from the land, the land is practically serving only as a warehouse for the thing sold and what is sold (the tree) is to be treated as movable property. It was contract of sale /Transfer of interest in land-of something which derives benefit from the land. Oral Family Settlements Valid The Privy Council upheld the family settlement in Ramgouda Annagouda & others v. Bhausaheb and others. In that case there were three parties to the settlement of a dispute concerning the property of the deceased person. These were the widow of the deceased, the brother of the widow and the son-in-law of the widow. It was obvious, therefore, that in presence of the widow neither her brother nor her son-in-law could be regarded as the legal heirs of the deceased. Yet having regard to the near relationship which the brother and the son-in-law bore to the widow the Privy Council held that the family settlement by which the properties were divided between the three parties was a valid one. In Kale v. Deputy Director of Consolidation,2 the Supreme court held that the family arrangement can be arrived at orally; It was also held that registration under section 17(1)(b) of the Indian Registration Act, 1908 would be necessary only if the terms of the family arrangement are reduced into writing. In Kale case, Lachman the last propitiator was the tenant and the tenure holder of the property in dispute. The property consisted of 19.73 acres of land. Lachman died leaving behind three daughters, namely, Musamat Tikia, Musamat Har Pyari and Musamat Ram Pyari. Musamat Tikia was married during the life time of Lachman 1 Marshall v. Green (1875-76) L. R. 1 C. P. D. 35 2 Kale v. Deputy Director of Consolidation AIR 1976 SC 807

and the appellant No. 1 Kale is the son of Musamat Tikia. After the death of Lachman the family consisted of his two unmarried daughters Har Pyari and Ram Pyari and his married daughter's son Kale. Under the U.P. Tenancy Act, 1939 which applied to the parties only unmarried daughters inherit the property. The dispute arose soon after the death of Lachman. The appellant filed a petition before the Naib Tahsildar, Hasanpur, for expunging the names of respondents 4 and 5 from the disputed Khatas because both of the daughters having been married ceased to have any interest in the property. lt was therefore prayed that the appellant was the sole heir to the estate of Lachman under s. 3 of the U.P. Tenancy Act, 1939, he alone should be mutated in respect of the`property of Lachman. The Naib Tahsildar, accepted the contention of the appellant and expunged the names of respondents 4 & 5 from the Khatas in dispute and substituted the name of the appellant Kale. Soon thereafter the respondents Musamat Har Pyari and Ram Pyari daughters of Lachman, filed an application before the Naib Tahsildar for setting aside his order. While this application of respondents was pending adjudication, a compromise or a family arrangement under which the appellant Kale was allotted, Khatas Nos. 5 & 90 whereas respondents were allotted Khatas No. 53 & 204 as between them. A petition was filed on before the Revenue Court to that effect which was signed by both the parties. The Assistant Commissioner, passed an order mutating the name of the appellant Kale in respect of Khatas Nos. 5 & 90 and the names of respondents in respect of Khatas Nos. 53 and 204. Ultimately, the Supreme Court held Family Arrangement is a settlement of disputes within the family in a spirit of give and take. Family arrangements are arrived at for a consideration namely, to resolve the disputes amongst the parties, to preserve the family peace and harmony and to avoid litigation. It was held the family settlement did not contravene any provision of the law but was a legally valid and binding settlement in accordance with the law. The Court made it clear that even if the family settlement was not registered it would operate as a complete estoppel against respondents. It was obvious that respondents 4 & 5 would be estopped from denying the existence of the family arrangement or from questioning its validity. It was opined that as the settlement was made to end the disputes and to benefit all the near relations of the family, it would be sustained as a valid and binding family settlement. Conclusion Thus, the law is clear that the Transfer of Property Act permits oral transfers and family arrangements. But, the requirement of written transfers only by registration if the property is worth more than Rs. 100/ - needs revisited. At the time of the enactment of the Transfer of Property Act, registration of the property worth more than Rs. 100/-. The legislative intent was to permit oral transfers of the property less than Rs.100/- the value of which should be Rs. 1 lakh now. Therefore, the Act requires amendment....