Transfer of property by persons having distinct interests

SECTION 46 OF TRANSFER OF PROPERTY ACT




Suppose more than one person have distinct shares in an immovable property and such property is transferred,
1)  if the transferors have interests of equal value in the property, then all of them are entitled to equal share in the consideration
2) if the transferors have interests of unequal value in the property, then the consideration is to be proportionately divided between them, based on the value of their  interests.

Subjected to the provision that there is no contract to the contrary.


Example: Suppose A owns certain immovable property X
               B and C owns 1/4th share each in certain property Y
               B and C together exchange 1/4th share of their total shares in property Y with 1/8th share of A in                  property X.
               Then,
                As share in Y= 1/4 * (Bs share in Y+Cs share in Y)
                                     = 1/16th value in Y + 1/16th value in Y
                         
                                     =1/8 th share in Y
                 B+C share in X = 1/8 * X
                  B and C are entitled to equal consideration since they have interests of equal value in property Y
                  Therefore each of them are entitled to half of 1/8th share of A in property X
                 i.e Bs share is 1/2 * 1/8 of X = 1/16th of X
                Similarly, Cs is entitled to 1/16th of X

   
Suppose in the above example if B and C have unequal interests in property Y, lets say that B have 1/4th share and C have 1/2 share in Y
         Then on exchange of 1/8th X by A with 1/4th  share Y by B+C,
         A is entitled to (1/16 + 1/8) of Y i.e 3/16th share of property Y

         B is entitled to 1/24th share in X and C is entitled to 1/12th share in X
         i.e they are proportionately entitled to share in the total consideration to their respective interests.