The transfer of property is a cornerstone of economic activity and individual rights. In India, the legal framework governing such transfers is primarily laid down in the Transfer of Property Act, 1882 (TPA). A fundamental principle ensuring the validity and enforceability of any transfer is the "competency to transfer." If the person transferring the property lacks this legal capacity, the entire transaction can be rendered void or voidable, leading to complex disputes.

The Cornerstone: Section 7 of the TPA

Section 7 of the TPA is the pivotal provision that defines who is competent to transfer property. It states:

"Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed."

This section essentially lays down two primary requirements for a person to be competent to transfer property:

1. Competency to Contract: This is the most crucial aspect and directly links the TPA to the Indian Contract Act, 1872. As per Section 11 of the Indian Contract Act, a person is competent to contract if they:

• • Are of the age of majority: In India, the age of majority is generally 18 years, as per the Indian Majority Act, 1875. A contract entered into by a minor is generally void ab initio (void from the very beginning), not merely voidable.
• • Are of sound mind: A person is considered to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests.
• • Are not disqualified from contracting by any law to which they are subject: This includes individuals like insolvents, alien enemies, or those whose property is under the management of the Court of Wards.

2. Entitlement to Transfer or Authority to Dispose: Even if a person is competent to contract, they must also either:

• • Be entitled to the transferable property, meaning they must have a legal title or ownership of the property.
• • Be authorised to dispose of transferable property not his own. This covers situations where a person, though not the owner, has the legal authority to transfer the property (e.g., a power of attorney holder, a guardian acting on behalf of a minor with court permission, an executor or administrator of an estate, or a Karta of a Hindu Joint Family).

Key Cases and Illustrations

The principles of competency under Section 7 have been extensively interpreted by Indian courts.

• • Minors: The most prominent illustration of incompetency to transfer relates to minors. The landmark Privy Council case of Mohori Bibee v. Dhurmodas Ghose (1903) firmly established that a contract entered into by a minor is void, and not merely voidable. Consequently, a transfer of property by a minor is also void. This ruling emphasizes the protective nature of the law towards minors, preventing them from entering into agreements that could be detrimental to their interests. While a minor cannot be a transferor, they can be a transferee (i.e., a recipient of property), as the transfer to them is for their benefit and does not impose any liability.
• • Persons of Unsound Mind: A transfer by a person of unsound mind is also void. However, if a person who is ordinarily of unsound mind makes a transfer during a "lucid interval" (a period when they are of sound mind), such a transfer may be valid. The onus to prove the soundness of mind at the time of transfer lies on the party asserting its validity.
• • Unauthorized Persons: The principle of nemo dat quod non habet (no one can give what they do not have) is fundamental here. If a person does not own the property and is not legally authorized to transfer it, any purported transfer by them would be invalid. For instance, a tenant generally cannot transfer the ownership of the tenanted property, as they only possess a leasehold interest, not ownership.

Conclusion

The concept of "competency to transfer" under Section 7 of the Transfer of Property Act is a critical safeguard in property transactions. It ensures that only those with the legal capacity and entitlement or authority can effectively convey property rights. By linking competency to the principles of contract law and emphasizing ownership or proper authorization, the TPA aims to prevent fraudulent transfers, protect vulnerable parties, and maintain the sanctity of property titles in India. Understanding these foundational principles is essential for anyone involved in property dealings, as it underpins the very legality and enforceability of the transfer.