1. A property sold/ transferred with the intention to defeat or delay the creditors of the seller/ transferor is voidable by the creditor.
2. But the right of the transferee in good faith and for consideration shall not be affected.
3. If a prior transfer is made without consideration to defeat the right of subsequent transferee, then the subsequent transferee can challenge the prior transfer as voidable.
4. The remedy is under sec 53 of T. P. Act.
5. Fraudulent Transfer is punishable offence under section 421 of IPC.
GIFT (SECTION 122 O 129 OF THE T.P. ACT)
1. Gift is the transfer of certain existing movables or immovable property made voluntarily and without consideration by one person called the DONOR to another called the DONEE and accepted by and on behalf of the Donee.
2. Gift must be made without consideration.
3. If the Donee dies before acceptance, the Gift is void.
4. The transfer of immovable property must be affected by a Registered Gift Deed by or on behalf of the Donor and is attested by at least two witnesses.
5. Gift of future property is void. The property must be existing during the transfer.
6. Gift made by Mohammedan Donor not covered under Section 122 to 129 of the T.P. Act. Under Mohammedan law oral gift is valid.
7. Generally, gift cannot be revoked.
8. But if the Donor and Donee agree that on the happening of a specified event then the gift shall be suspended or revoked.
9. But if the gift is revocable at the will of the Donor, then such gift is void.
10. The stamp duty is Rs.1,000/- for a gift of property to husband, wife, son, daughter, daughter-in-law, brothers, sisters and grandchildren.
11. Stamp duty is payable on market value of the property where the Donee is not the family member of the Donor.
RIGHT OF PRE-EMPTION
Under a Will a testator can bequeath a property to two or more persons, with the condition that if either of them want to sell the property then they shall have to sell it to other sharer as per the prevailing market value and not to strangers.
Such restriction on alienation of property to strangers is valid and not violative of rule against perpetuity.
LIS PENDENS means pending litigation. The Rule/Doctrine says that during the pendency of the suit nothing new should be introduced/created with respect to the suit schedule property. If the property is transferred, the transferee is bound by the decision of the Court whether or not he had notice of the suit or proceeding. If the decision of the Court is in favor of the transferor, the transferee has rights in the property transferred to him. If the decision goes against the transferor, the transferee cannot get any interest in the property.
The following conditions are necessary for the application of the doctrine of lispendens:-
• There should be pendency of suit / proceeding
• Suit /proceeding `must be pending in a court of competent jurisdiction
• The property in dispute must be transferred
• Transfer must affect the right of the other party to litigation
• Suit / proceeding must not be collusive
The pendency of a suit begins from the date on which the plaint is prescribed and terminates on the date when final decree is passed.
If transfer is made with the permission of the court, the rule of lispendens is not applicable.
The Rule does not invalidate the transfer but renders if subservient or subject to the rights of the parties to litigation.
EXCHANGE OF PROPERTY
1. When two persons mutually transfer the ownership of one property for the ownership of another property, the transaction is called exchange.
2. Exchange of immovable property can be made only in the manner provided for the transfer of such property by sale.
3. It requires registered deed and the stamp duty involved is same as provided for sale.
TDS ON IMMOVABLE PROPERTY
The Finance Bill, 2013, makes TDS applicable on sale of immovable property (other than agricultural land) wherein the sale consideration of the property exceeds or is equal to Rs 50,00,000 (Rupees Fifty Lakhs). Sec 194 IA of the Income Tax Act, 1961 states that for all transactions with effect from June 1, 2013, Tax @ 1% should be deducted by the purchaser of the property at the time of making payment of sale consideration. For example, if X buys a property worth Rs.50 lakh from Y, then X will have to deduct tax at 1% or Rs.50,000 on sale value and deposit it. Besides making the payment, X will also have to obtain a challan for the payment and issue Form 16B to the seller. Contact us to know more on this Subject