Principle of Apportionment under the Transfer of Property Act, 1882

The Transfer of Property Act, 1882 governs the transfer of property and the rights and obligations arising out of such transfers. One important principle under this Act is the principle of apportionment, which ensures a fair distribution of income and obligations when property is transferred or divided.

Apportionment, in simple terms, refers to the division of a common fund or benefit among several persons who are entitled to it. This principle becomes particularly relevant in cases where property generates income such as rent or is subject to certain obligations, and there is a change in ownership.

The law relating to apportionment is contained in Sections 36 and 37 of the Transfer of Property Act, 1882. These provisions deal with two different aspects of apportionment, namely apportionment by time and apportionment by estate. Together, they provide a structured framework for ensuring fairness between parties involved in property transactions.

Meaning of Apportionment

Apportionment means the division or allocation of a benefit, income, or liability among different persons in proportion to their respective rights or interests. It is based on the idea that when more than one person is entitled to a benefit or subject to a burden, such benefit or burden must be shared equitably.

In property law, apportionment commonly arises in the following situations:

• When ownership of property is transferred during a period for which income is payable
• When property is divided among multiple owners
• When obligations attached to property must be performed after division

The principle ensures that neither the transferor nor the transferee, nor any co-owner, receives an unfair advantage or suffers an unjust burden.

Statutory Framework under the Transfer of Property Act, 1882

The Transfer of Property Act deals with apportionment under two provisions:

• Section 36 – Apportionment by time
• Section 37 – Apportionment by estate

Each section addresses a different scenario and operates independently, although both are based on the principle of proportional distribution.

Kinds of Apportionment

Apportionment is broadly classified into two types:

1. Apportionment by Time

2. Apportionment by Estate

These are discussed in detail below.

Apportionment by Time (Section 36)

Section 36 deals with the apportionment of periodical payments such as rent, annuities, pensions, and dividends. It provides that, in the absence of any contract or local usage to the contrary, such income shall be deemed to accrue from day to day, even though it is payable at fixed intervals.

This means that when a property is transferred, the income arising from it must be divided between the transferor and the transferee based on the period for which each holds the property.

Key Elements of Section 36

• Accrual on a Daily Basis: Although payments like rent are usually made monthly or annually, the law treats them as accruing every day. This allows a fair calculation of the share of each party.
• Apportionment Between Transferor and Transferee:The section applies only between the transferor and the transferee. It does not impose liability on third parties such as tenants, unless otherwise agreed.
• Applicability to Periodical Income: The provision covers recurring income such as rent, annuities, pensions, and dividends. It does not apply to income that arises at a single point in time.
• Subject to Contract or Usage: The parties may agree to exclude this rule. Similarly, local customs may override the statutory provision.
• Limited to Transfers Between Living Persons: Section 36 applies to transfers made voluntarily between living persons and generally does not extend to transfers by operation of law.

Illustration of Apportionment by Time

A lets a house to C at a rent of ₹1000 per month, payable at the end of each month. A sells the house to B on 15th January.

At the end of January, the rent will be apportioned as follows:

• A is entitled to rent for the first 15 days
• B is entitled to rent for the remaining days

Thus, the rent is divided proportionately between A and B based on the duration of their ownership.

Similarly, where a property yielding ₹15,000 per month is sold on the 15th of a month, the seller is entitled to rent for the period prior to transfer, and the buyer is entitled to rent for the remaining period.

Relationship with General Rule of Transfer

Under the general rule, when property is transferred, all rights attached to it, including rents and profits, pass to the transferee. However, Section 36 modifies this rule in cases of periodical income by ensuring that such income is divided proportionately.

Role of Tenant

The principle of apportionment under Section 36 operates between the transferor and the transferee. The tenant is not directly concerned with such division unless specifically informed or required by agreement. The tenant continues to pay rent in accordance with the existing arrangement.

Apportionment by Estate (Section 37)

Section 37 deals with situations where property is transferred and divided among several persons. It governs the apportionment of benefits and obligations attached to such property.

When a property is divided into shares, and an obligation exists in respect of that property, the benefit of that obligation passes to all owners. Correspondingly, the duty must be performed in favour of each owner in proportion to their share, provided certain conditions are satisfied.

Essential Conditions

The application of Section 37 is subject to the following conditions:

• Notice of Severance: The person who is required to perform the obligation must have reasonable notice that the property has been divided among multiple owners.
• Severability of Obligation: The obligation must be capable of being divided. If it cannot be divided, the section does not apply in the usual manner.
• No Increase in Burden: The division of the obligation should not substantially increase the burden on the person responsible for performing it.

Working of the Principle

When property is owned by several persons, each owner is entitled to receive benefits in proportion to their share. At the same time, obligations must be performed accordingly.

However, if the obligation cannot be divided or if dividing it would increase the burden, the obligation must be performed in favour of a person jointly designated by the co-owners.

Illustrations

A sells a house to B, C, and D. The house is leased to E at an annual rent of ₹30 and delivery of one sheep. B contributes half of the purchase money, while C and D contribute one-fourth each.

E, having notice of this arrangement, must:

• Pay ₹15 to B
• Pay ₹7.50 each to C and D
• Deliver the sheep according to the joint direction of B, C, and D

This reflects proportional distribution of benefits based on ownership shares.

In another situation, each house in a village is required to provide ten days of labour annually to prevent flooding. E had agreed to perform this work for A.

After the property is divided among B, C, and D, each demands separate performance. E is not required to perform more than ten days of labour in total. The obligation cannot be multiplied merely because ownership is divided.

Applicability to Tenancy

In tenancy situations, the tenant must be informed about the division of ownership. If no such notice is given, the tenant remains liable to pay rent as a whole rather than in apportioned shares.

Exception

Section 37 does not apply to agricultural leases unless the State Government issues a notification extending its applicability.

Difference Between Apportionment by Time and Estate

The two types of apportionment differ in their nature and application:

• Apportionment by time deals with division of income based on duration of ownership
• Apportionment by estate deals with division based on ownership shares
• Section 36 applies between transferor and transferee, while Section 37 applies among co-owners
• Section 36 concerns periodical income, whereas Section 37 deals with obligations and benefits attached to property

Both provisions, however, aim to ensure fairness and proportional distribution.

Concept of Transfer and Co-ownership

The principle of apportionment must be understood in light of the broader concept of transfer under the Act. When property is transferred to multiple owners, each co-owner holds an undivided share in the property.

A co-owner cannot claim exclusive rights over the entire income or seek eviction independently unless authorised. The rights and obligations are shared, and apportionment ensures that each co-owner receives benefits in proportion to their interest.

Conclusion

The principle of apportionment under the Transfer of Property Act, 1882 provides a fair and equitable mechanism for distributing income and obligations arising from property. Section 36 ensures that periodical income is divided based on time, while Section 37 governs the distribution of benefits and burdens when property is divided among multiple owners.

These provisions reflect the underlying objective of property law to balance rights and responsibilities. By ensuring proportional distribution, the law prevents unjust enrichment and promotes fairness in property transactions.

Note: This article was originally written by Kajal Jain and published on 14 March 2020. It was subsequently updated by the LawBhoomi team on 01 April 2026.