Sections 38-39 of the Transfer of Property Act, 1882: Transfer by a Limited Owner and the Right to Maintenance

Sections 38-39 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Some people may sell property only when particular circumstances exist. Others sell property on which a third person has a right to maintenance. Sections 38 and 39 of the Transfer of Property Act, 1882 protect the buyer in the first case and set out when the third person's right binds the buyer in the second. This article reads them as per the text of the Act consulted.

Section 38: where a person authorised to sell immovable property only under circumstances that are in their nature variable transfers it for consideration, alleging that those circumstances exist, they are deemed to have existed as between the transferee and the transferor and others affected, if the transferee used reasonable care to ascertain them and acted in good faith. Section 39: a third person's right to maintenance, or a provision for advancement or marriage, from the profits of immovable property can be enforced against a transferee who has notice or to whom the transfer is gratuitous, but not against a transferee for consideration without notice, nor against the property in his hands.

Section 38: authority that depends on circumstances

Section 38 begins with a person who is "authorised only under circumstances in their nature variable to dispose of immovable property". The authority exists only if certain circumstances exist, and those circumstances can change from time to time. For example, an authority to sell only if the income of the property is insufficient, or only if a stated need arises.

Such a person transfers the property for consideration, alleging that the circumstances exist. The section then says that, as between the transferee on one side and the transferor and other persons affected by the transfer on the other side, the circumstances "shall be deemed to have existed" if:

• the transferee used reasonable care to ascertain the existence of the circumstances; and
• the transferee acted in good faith.

The Act's illustration, as printed

A, a Hindu widow, whose husband has left collateral heirs, alleging that the property held by her as such is insufficient for her maintenance, agrees, for purposes neither religious nor charitable, to sell a field, part of such property, to B. B satisfies himself by reasonable enquiry that the income of the property is insufficient for A's maintenance and that the sale of the field is necessary, and, acting in good faith, buys the field from A. As between B on the one part and A and the collateral heirs on the other part, a necessity for the sale shall be deemed to have existed. This illustration is stated as printed.

What the section does for a buyer

The point of the rule is protection for an honest, careful buyer, and legal due diligence is how the care is shown. He cannot always verify whether the seller's stated circumstances are true. If he asks sensible questions and acts honestly, the law treats the circumstances as having existed for the purposes of that transaction, against the seller and the others affected.

It does not protect a buyer who skips enquiry or acts in bad faith. Both conditions, reasonable care and good faith, must be met. For the wider idea of what a buyer ought to have found out, see our article on section 3, notice.

Present-day example. Rajiv Bhatia manages a family property and may sell a plot from it only if the family's other income falls below a stated amount. He tells buyer Seema Rao that the condition is met. Seema asks for the family's income papers, checks them, speaks with the other family members who are affected, and buys in good faith. As between Seema and the transferor and others affected, the circumstances are deemed to have existed. If Seema had not checked anything and simply accepted Rajiv's word, section 38 would not help her in the same way.

Before buying from someone whose authority depends on circumstances, a review of the authority document and the facts is a sensible step. The more general rule on sales by an apparent owner is in section 41; see our article on section 41, transfer by ostensible owner.

Section 39: a third person's right to maintenance

Section 39 covers this case: a third person has a right to receive maintenance, or a provision for advancement or marriage, from the profits of immovable property, and the property is transferred. (The copy consulted shows some words as omitted, marked "[ *]", after "transferred" and again after the section; the sense is clear from the rest.)

The section says the right may be enforced against the transferee in two situations:

1. if he has notice of the right; or
2. if the transfer is gratuitous (made without consideration).

But the right cannot be enforced:

• against a transferee for consideration and without notice of the right; nor
• against such property in his hands.

The last point is easy to miss. For a paying buyer without notice, the property he now holds is not subject to the right.

Section 6 of the Act, clause (dd), separately says a right to future maintenance cannot be transferred; see our article on section 6. Section 39 is about enforcing the right against a transferee of the property from which the maintenance is paid. Maintenance law and family law are separate subjects that this Act does not cover.

Present-day example. Mrs. Lata Desai has a right, under a family arrangement, to receive a yearly sum for her upkeep from the rent of a building. The owner, Mahesh Desai, sells the building.

• If the buyer, Naresh Kumar, knew of Lata's right, it can be enforced against him.
• If Mahesh had given the building to his cousin as a gift, Lata's right can be enforced against the cousin.
• If Naresh paid full price and had no notice of Lata's right, it cannot be enforced against him or against the building in his hands.

What counts as "notice" is defined in section 3: actual knowledge, or knowledge that a person would have had but for wilful abstention from an enquiry or search he ought to have made, or gross negligence, plus the three Explanations. A buyer who avoids asking about family arrangements should not expect to be treated as having no notice.

Practical checks for a buyer

1. Ask who the seller is and under what authority he sells. If the authority depends on circumstances, ask for proof of them.
2. Record your enquiries. Section 38 protects a buyer who used reasonable care and acted in good faith.
3. Ask whether anyone has a right to maintenance or a provision from the property's profits. Section 39 binds a buyer with notice and a gratuitous transferee.
4. Inspect the property and ask occupants. Notice includes the consequences of actual possession under section 3.
5. Pay for the property. A transferee for consideration without notice is treated differently from a donee.

Need help checking a seller's authority?

If the person selling to you can sell only in particular circumstances, or others may have a claim on the property's income, check before you pay. Our team can review the papers through legal due diligence.

Key takeaways

• Section 38 deems the stated circumstances to have existed for a transferee who, for consideration, used reasonable care to ascertain them and acted in good faith.
• Both reasonable care and good faith are needed.
• Section 39 allows a third person's maintenance or provision for advancement or marriage, payable from the profits of immovable property, to be enforced against a transferee with notice or a gratuitous transferee.
• It cannot be enforced against a transferee for consideration without notice, nor against the property in his hands.
• The illustration under section 38 is stated as printed.
• Later amendments and State changes should be checked.

Read next

• Section 35: doctrine of election
• Section 40: restrictive covenants and obligations running with land
• Section 41: transfer by ostensible owner
• Property Transfer Compliance Checklist

Disclaimer: Based on a publisher's print of the Transfer of Property Act, 1882 showing amendments up to the Transfer of Property (Amendment) Act, 2002 (3 of 2003), as consulted on 2 October 2026. State amendments, later amendments, stamp duty and registration charges are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.