Oral Transfer

The Transfer of Property Act comprises and states about the provisions related to the property as well as under which circumstances and terms transfer of the property can be done, forms of the property, etc. [1]The Transfer of Property Act, 1882 was enacted on 17th February 1882, and it was enforced on 1st July 1882.

There Are Two Methods For Transferring:

• By the act of the parties
• [2] By operation of the law

The act is generally applicable generally to living beings from one person to another. This act also applies both to moveable and immovable property specifically. Transfer must be in a prescribed manner.

[3]Section 9 of the Transfer of Property Act, 1882 provides that a transfer of property can be conducted without writing in every circumstance when a document is not expressly required by the law. This section refers to the oral transfer, which refers to the transfer of property from one person to another person with verbal communication and without any written document. This section allows the transfer of the property, stating that transfer of the property can be made without any written document expressly required by the law.

Modes of Transfer:

Delivery of possession:
Those properties may be transferred by the delivery of possession only where writing is not necessary for the transfer of the property. The movable properties may be transferred by the delivery of possession. Month-to-month tenancy, mortgage by deposit of title deeds, etc. can also be transferred orally.

For example, A sells his property (immovable property) to B, and the valuation of that said property is less than one hundred rupees. Therefore, if the property selling has a value less than Rs 100, the property will be transferred from the delivery of possession.

Registration:

These are the exceptions to Section 9 of the Transfer of Property Act, 1882. There are some conditions where the registration is required and necessary; therefore, in these conditions, the transfer made should be in written form. According to the transfer of property act, the following transactions should be in written document, which must be registered.

• Sale of the immovable property exceeding Rs 100 (section 54)
• Sale of reversion or other intangible property irrespective of its value (section 54)
• Simple mortgage (section 59)
• All the other types of mortgages (except the mortgage by the deposit of the title deeds)
• Leases from year to year or for a term exceeding one year (section 107)
• Gifts of immovable property (section 123)
• Transfer of actionable claims (section 130)

Circumstances Where Section 9 is Applicable:

• Movable Property: There is no need for writing agreements where there is a transfer of movable property (like goods or personal items); an oral transfer can be valid. For example, transferring ownership of jewellery can be done orally without the need for a written contract.
   
• Actionable Claims: Most actionable claims (such as debts or benefits under a contract) are transferred through written instruments; in some cases where the law does not mandate the writing of the agreement, it can be transferred orally.
   
• Customary Practices: In some areas or communities, customary practices may recognize and enforce oral transfers of property. If the law or local custom does not require written documentation, Section 9 can be applied in that scenario.
   
• Immovable Property Transfers: According to Section 54 of the Transfer of Property Act, sales of immovable property below Rs 100 can be done without registration and a written agreement.

Legal validity:
Oral transfers are legally valid under Section 9, but with that, it is oftentimes difficult to prove in the court of law due to a lack of documentary evidence. The absence of written documentation can lead to disputes, and therefore the lack of physical evidence can make it difficult to enforce such agreements if any disputes arise between the parties. The written documentation provides clear evidence of the terms and conditions of the transfer, which reduces the risk of fraud or misrepresentation.

Nathu Lal vs. Phool Chand 1969:

Facts of the case:
In this case, [4]Nathu Lal, who is the appellant, claimed that he had entered into an agreement to sell an immovable property to Phool Chand, who is the respondent. The agreement was not in written form but an oral agreement and therefore not registered as required by the law for the transfer of immovable property.

Nathu Lal argued that if the agreement was in written form, it is still valid and enforceable under the doctrine of part performance (section 53A) of the Transfer of Property Act, 1885. On the other hand, Phool Chand denied any sort of agreement and said, as there is a lack of written agreement and it is not registered, the agreement is unenforceable.

Issues:

• Whether an oral agreement is valid for the sale of immovable property?
• Whether Nathu Lal could claim possession under Section 53A of the Transfer of Property Act, 1885?

Judgement:

Section 53A Part Performance:

The [5]doctrine of part performance is an equitable doctrine. It is based on the maxim 'equity looks on that as done, which ought to have been done'. This basically means that equity treats the subject matter of a contract in the same manner as if the contemplated act (a future possible event) in the contract has been fully enforceable.

The Supreme Court stated in this case that there must be a written contract for the transfer of an immovable property for consideration. The contract must be registered. No legal transfer of ownership. The judgment deepens the importance of complying with the statutory requirements provided in the Transfer of Property Act, 1885. This case remains a very crucial and important role in Indian Property Law, particularly concerning the enforceability of oral agreements for the immovable property.

Conclusion:
Section 9 of the Transfer of Property Act, 1882, is applicable in circumstances where the law does not require a written agreement for the transfer of property. In these circumstances where oral transfer is applicable, where there is a transfer of movable property, there is no need or requirement for any written documents;[6] an oral transfer is valid. This primarily relates to movable property transactions or special cases when customs or other rules permit verbal agreements. However, written and registered documents are needed for the majority of transactions involving immovable property as well as other important transfers, so in those situations, Section 9 is less relevant.

End Notes:

1. The Transfer of Property Act, 1882 (4 of 1882)
2. The Transfer of Property Act
3. Dr Avtar Singh
4. Prof (Dr) Harpreet Kaur
5. The Transfer of Property Act, 1882 (4 of 1882)
6. Citation:
   • 1970 AIR 546
   • 1970 SCR (2) 854
   • 1969 SCC (3) 120
7. Mulla The Transfer of Property Act, 13th ed
8. MullaDr Poonam Pradhan Saxena
9. The Transfer of Property Act, 1882 (4 of 1882)
10. Links:
    • Oral Transfer of Property - Section 9 of the Transfer of Property Act, 1882:
      https://www.ezylegal.in/blogs/oral-transfer-of-property-section-9-of-the-transfer-of-property-act-1882
    • CaseMine - Oral Transfer of Property:
      https://www.casemine.com/search/in/oralBtransferBofBproperty