Section 45 of the Transfer of Property Act, 1882, outlines the rules governing the joint transfer of immovable property when two or more persons are involved in the purchase, specifically concerning how ownership interests are divided based on the payment of the purchase consideration. The section applies in two key situations: when the consideration is paid from a common fund or from separate funds of the co-purchasers.

Text of Section 45:

"Where immovable property is transferred for consideration to two or more persons, and such consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and, where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interest in such property in proportion to the shares of the consideration which they respectively advanced."

"In the absence of evidence as to the interests in the fund to which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property."

Breakdown and Explanation:

1. "Where immovable property is transferred for consideration to two or more persons..."

• This phrase introduces the situation where a group of people jointly purchase immovable property (e.g., land or buildings) through a transfer of ownership. The transfer of the property involves more than one person as the buyer.

2. "...and such consideration is paid out of a fund belonging to them in common..."

• The consideration (the amount paid for the property) is paid from a common fund, meaning the funds used to purchase the property are collectively owned or pooled by the purchasers.
• Example: If two people, A and B, decide to buy a house together, they may pool their money into a joint account or a common fund to make the payment.

3. "...they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund..."

• If the payment is made from a common fund, the ownership of the property will be divided in proportion to the shares that each person contributed to the common fund.
• For example, if two people (A and B) contribute equally to the common fund to purchase the property, they will each own 50% of the property.
• If A contributes 60% of the common fund, and B contributes 40%, then their ownership interests in the property will be 60% and 40%, respectively.
• Key point: The shares of ownership in the property correspond to the shares in the common fund from which the payment was made.

4. "...and, where such consideration is paid out of separate funds belonging to them respectively..."

• The second scenario described in Section 45 arises when the consideration is paid from separate funds — meaning each co-purchaser uses their own individual funds to contribute towards the payment of the property.
• Example: A and B decide to buy the same property, but instead of pooling their funds, A uses their personal funds to pay a larger share of the price, while B uses theirs to pay a smaller share.

5. "...they are, in the absence of a contract to the contrary, respectively entitled to interest in such property in proportion to the shares of the consideration which they respectively advanced."

• In this case, ownership in the property will be divided according to the proportion of the purchase price that each person individually contributed. The more money a person contributed, the greater their share of the property.
• Example: If the total price of the property is 100,000 and A contributes 60,000, while B contributes ₹40,000, their ownership interests in the property will be 60% for A and 40% for B.

6. "In the absence of evidence as to the interests in the fund to which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property."

• If there is no clear evidence about how much each person contributed (whether from a common or separate fund), the law presumes that all parties involved have equal ownership of the property.

• Example: If two people buy property together but there is no written record of their individual contributions (whether from a common or separate fund), it is assumed that they each have 50% ownership in the property.

• This presumption prevents disputes when no clear evidence of contributions exists. In such cases, the law assumes equality by default to avoid unfair outcomes.

Key Points to Remember:

1. Common Fund (Shared Contribution):

   • If the consideration is paid from a common fund, the ownership interest in the property is proportional to how much each person contributed to the common fund.
   • If A and B contribute equally, they will have equal ownership in the property (50%-50%).

2. Separate Funds (Individual Contributions):

   • If the consideration is paid from separate funds, each person’s ownership interest in the property will correspond to the proportion of the total price that they personally contributed.
   • If A contributes 60% of the price and B contributes 40%, their ownership will be 60% and 40%, respectively.

3. Absence of Evidence:

   • If there is no evidence regarding how much each party contributed (in either the common or separate fund scenarios), equal ownership is assumed. This is a default rule to prevent unfairness or disputes over ownership.

Practical Example:

Let’s consider the following scenarios:

• Scenario 1: Common Fund

  • A and B decide to buy a property for Rs100,000. They pool Rs50,000 each into a joint fund.
  • Since both contributed equally, each person will have 50% ownership of the property.

• Scenario 2: Separate Funds

  • A and B decide to buy a property for Rs100,000. A contributes Rs 60,000, and B contributes Rs4 0,000 from their respective individual savings.
  • A will have 60% ownership, and B will have 40% ownership of the property.

• Scenario 3: No Evidence of Contributions

  • A and B jointly purchase a property, but there is no record of how much each person contributed.
  • The law will presume equal ownership for both, meaning each will own 50% of the property, unless proven otherwise.

Conclusion:

Section 45 of the Transfer of Property Act, 1882, helps define the distribution of ownership rights when immovable property is purchased jointly by multiple people. It clearly specifies how interests in the property are determined based on whether the purchase consideration was paid from a common fund or from separate funds. In cases where there is no evidence of the contributions, the law assumes equal ownership among the co-purchasers to avoid disputes.