Third party rights over prof­its from prop­erty

Claimants can get main­te­nance under Section 39 of theTrans­fer of Prop­erty Act

HT Estates - - HTESTATES - Su­nil Tyagi

Most of the times we hear of cases where the wife, chil­dren or de­pen­dent fam­ily mem­bers of a per­son make claims of main­te­nance out of the prop­erty owned by an in­di­vid­ual. The dis­pute be­tween the mem­bers of a fam­ily ag­gra­vates when the owner of such prop­erty trans­fers his prop­erty in favour of a third party.

The an­swer to this is em­bod­ied under Section 39 of Trans­fer of Prop­erty Act, 1882 ( TPA). This section is ap­pli­ca­ble only in cases where a third party has the right to re­ceive amounts for main­te­nance or ad­vance­ment or mar­riage pur­poses. It may be noted that the right of a per­son to re­ceive main­te­nance, ad­vance­ment amounts or mar­riage ex­penses out of prof­its of im­mov­able prop­erty is cre­ated when a sum is fixed and charge upon prop­erty is cre­ated ei­ther by a de­cree of court or by an agree­ment or by law.

Let us take an il­lus­tra­tion of this sit­u­a­tion.

A is mar­ried to B. After few years of mar­riage A and B sep­a­rate. The terms of sep­a­ra­tion as agreed be­tween them men­tion that A, out of his spe­cific im­mov­able prop­erty, will pay for main­te­nance of B. How­ever, in or­der to avoid pay­ing main­te­nance to B, A trans­fers his prop­erty to his friend C by way of gift. C is not aware of the claims of B. Here, the ques­tion is: what rights and claims does B have against A and C? And what are the li­a­bil­i­ties of C in re­spect of claims of B?

As per Section 39 of TPA where the trans­fer of prop­erty in favour of a trans­feree (ie C) is made out of grat­i­tude, ie no con­sid­er­a­tion is paid by trans­feree to the trans­feror (ie A), then third party (ie B) rights can be en­forced against trans­feree (ie C) even though the trans­feree ( ie C) may not have prior notice of the same.

There­fore, in the above il­lus­tra­tion, B can en­force her rights to re­ceive main­te­nance out of the prof­its of a prop­erty even when the prop­erty has been trans­ferred by A to C. Also, ab­sence of notice of B’s rights in the prop­erty can­not be taken as ground by C to deny B’s rights/en­ti­tle­ments.

How­ever, this Section pro­tects a bona- fide buyer who has pur­chased the prop­erty for con­sid­er­a­tion. This means that if the prop­erty is trans­ferred to a per­son for con­sid­er­a­tion and that per­son does not have notice of any third party rights then such rights can­not be en­forced against the buyer.

For ex­am­ple, if in the above il­lus­tra­tion A trans­fers the prop­erty to C by way of sale for which con­sid­er­a­tion is paid by C to A, then in that case B may not be able to en­force her claim/right against C, if C has no notice of B’s claim/right.

The t er m notice used i n this section is gen­er­ally in­ter­preted in broad con­no­ta­tion. It in­cludes within its mean­ing knowl­edge and aware­ness of third party rights. A per­son hav­ing knowl­edge of ex­ist­ing rights of third party can be con­sid­ered to be aware of the deal. Notice could be ei­ther ex­pressed or im­plied, but where the rights are con­ferred by law, then same is pre­sumed to be known by all.

How­ever, this Section does not stop or pre­vent a per­son from trans­fer­ring his prop­erty. A per­son with im­mov­able prop­erty is free to trans­fer his prop­erty to any­one. A per­son may also trans­fer his im­mov­able prop­erty where a third party is en­ti­tled to re­ceive main­te­nance from the prof­its aris­ing out of such prop­erty. How­ever, such trans­fer will not ex­tin­guish the rights of the third party in the prop­erty and th­ese rights can be en­forced in ac­cor­dance with Section 39 of TPA.

THINKSTOCK

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