311341946 305992562 Transfer of Property Law Notes India PDF

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Summary

The condition of transfer is immoral or opposed to public policy andS ec ti o ns 1 , 3 , 5 , 6 , 7 , 8 , 1 0 , 1 3 , 14 , 15 , 18 , 1 9 , 2 0 , 2 1 , 2 3 , 2 5 , 26 , 2 7 , 2 8 , 2 9 , 3 1 , 3 5 , 36 , 37 , 38 , 3 9 , 4 1 , 4 2 , 43 , 48 , 5 3 , 53 A , 54 , 55 , 56 , 5 8 , 60 , 62 , 6 7 , 6 8 , 6 9 ...

Description

Sections 1, 3, 5, 6, 7, 8, 10, 13, 14, 15,18, 19, 20, 21, 23, 25, 26, 27, 28, 29, 31, 35, 36, 37, 38, 39, 41, 42, 43, 48, 53, 53A, 54, 55, 56, 58, 60,62, 67, 68, 69, 69A , 78, 81, 100, 105, 106, 107, 108, 109, 110, 122, 137 of The Transfer of Property Act, 1882. .

Transfer by act of parties, vested and contingent interest, election, clog on, right to foreclosure, mortgage, sale, charge, lease and gift.

PROPERTY LAW NOTES AND CASES

Chapter 1: What is immovable p roperty?

We know that property is the total wealth of a person. It may include land, buildings, mortgage rights, debts owed to him, insurance money due, cheques received, cash, etc. The Transfer of Property Act, 1882, defines immovable property as that which does not include standing timbe r, growing crops and grass. This is a very open-ended definition though, so we must look at the definition furnished by the General Clauses Act, 1897, wherein it is mentioned that immovable property includes – a) land, b) benefits arising out of land, c) things attached to the earth, or d) permanently fastened to anything attached to the earth. Also, the Registration Act defines immovable property as land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries, or any other benefits arising out of land and things attached to the earth, but not standing timber, growing crops or grass. The Sale of Goods Act, which deals with the sale of movable property, says that movable property, or goods, includes any property other than actionable claims and money. This is why transfer of any actionable claim is dealt with in the TOPA.

CASE: Ananda Behera v. State of Orissa The condition of transfer is immoral or opposed to public policy and voi

The dispute was about fishing rights in the Chilka Lake, which was part of an estate owned by the Rajah of Parikud. By the Orissa Estates Abolition Act, the estate became vested in the State of Orissa. The petitioner had obtained from the previous proprietor the right to fish in the lake, long before the property became vested in the state. The State refused to recognize these licenses. The petitioner claimed that the transaction was based on the sale of future goods, and as fish was movable property, it should not be covered under the act that abolished the estates. There can be no doubt that the lake is immovable property. Therefore, the state, in whom the right to the lake is vested, can bar access to the lake for anyone else. The right the petitioner had was to catch and carry away fish from the lake. Now, this amounts to a benefit arising out of land, and hence, should be covered under immovable property. Also, fish is not standing timber, growing crop, or grass! If it was a mere sale of goods, there should be an instrument to prove it, that is, a written and registered receipt. The sale in this case was oral. The case is different from Firm Chhotabhai Jethabai Patel & Co. v. The State of Madhya Pradesh, where it was held that the right to pluck Tendu leaves from trees was not under the purview of immovable property, as it is under the definition of a growing crop. Also, the state was not a part of the contract between the Rajah and the petitioner, so the state cannot be asked for the money, nor can the Rajah be asked to compensate, as he did not breach the contract either. The suit was dismissed.

(Question: What is profit a prendre? Answer: It is a privilege or right to enter another’s land and take away some valuable, natural thing. For example, fish, wood, honey, etc.)

CASE: Shantabai v. State of Bombay

The condition of transfer is immoral or opposed to public policy and voi

The petitioner’s husband was a zamindar, who had executed an unregistered document in favour of the petitioner giving her the right to enter upon certain areas in the zamindari to cut and extract bamboo, fuel wood and teak. Only the lease for forest woods was given to her. Then the Madhya Pradesh Abolition of Proprietary Rights Act was passed and it was held that the petitioner no longer had an enforceable right against the state as far as lumbering work was concerned, as all proprietary land became vested in the state. Justice Bose said in this case that a tree draws subsistence from the soil as long as it stands, and therefore, it is permanently attached to the land and should be treated as immovable property. Standing timber must be in such a state that if cut, it can be used straightaway for building houses, bridges, ships, etc. The rule is that if there is an intention to sever such things as timber from the immovable property for the purpose of selling separately, then such separate items would constitute movable property. A tree can be said to be standing timber if it can be looked at as timber in all practical purposes, even if it is still standing. The deed for the transfer was unregistered, and the price was Rs. 26000, so the petitioner could not execute any right against the state. Appeal dismissed. A debt secured by mortgage of immovable property is itself immovable property. DIFFEREN CE BETWEEN PROPERTY LA W IN INDIA AND ENGLAND

Indian law classifies property into movable and immovable. But English law divides property into realty and personalty. Realty was the kind of property which could be regained by a person if he lost possession of it, through a real action. If a person lost possession of land, he had the right to take the land back from the new possessor. In the case of goods, if a person lost possession, he could not recover the goods, but he had the right to recover damages. Such action taken was personal action, and hence, goods were termed as personalty. However, the Indian system is prevalent in the UK now, after the Real Property Amendment Act of 1925.

FREEHOLD AND LEASEHOLD

The condition of transfer is immoral or opposed to public policy and voi

An estate is said to be freehold when it is vested in a person for a definite period, which is of uncertain duration. For example, let us say Anubhab owns NUJS for life. Here, we know that as long as the period of Anubhab’s life is running, NUJS is vested in him. However, we do not know how long he will survive, so the duration is uncertain. On the contrary, a leasehold estate is held by a person for a definite period and certain duration. For example, a property may be leased to Anubhab for a period of 99 years. Thus, we know that it will be divested only after 99 years pass.

Chapter 2: What Property is Transferable?

The TOPA deals with transfer of property inter vivos (between living persons). Hence, it does not apply to wills or testaments, which operate only after the death of the testator. Dedication of property to a temple or a deity is also invalid, as these are not living persons. However, sections 13, 14 and 20 make an exception, by allowing transfers in favour of unborn persons, with certain restrictions. This is quoted in Section 5 of the act.

If a holder of property relinquishes his rights over it to the coparcener, or a widow gives up her right to the reversioner (person in whom the property is vested once the original possessor gives up his right to it) in order to accelerate his succession, they are not transfers, but merely extinction of rights in property. Partition of property is also not a transfer, but only a change in the mode of enjoyment of the property. Transfer of future property is invalid, that is, you cannot transfer property that is not in existence. In England, after the Law of Property Act, 1925 was passed, the creation and conveying of estate tail and life estate became banned. Only estate in fee simple and estate for a term of years were valid. In India, all 4 of these estates can be conveyed or created under the TOPA. Estate in fee simple – This implies absolute ownership. When a fee simple tenant dies, the estate passes to the nearest heir.

The condition of transfer is immoral or opposed to public policy and voi

Estate tail – It is created on the grantor’s request when on the grantee’s death, the estate goes to the grantee’s lineal descendants, or heirs of the body. If there are no such heirs, it reverts back to the grantor, or if the grantor is dead, the grantor’s representatives. Life Estate – It arises when an estate is granted to the grantee for the period of life of the grantee or of any other person. In the second case, it is known as per autre vie. Estate for term of years – The property is transferred for a definite period of time.

A family arrangement of a disputed claim is also not a transfer of property. It is recognition of pre -existent rights and does not convey any new or distinct title to the parties.

CASE: Kalyani v. Narayanan

Here, a man named Karappan had two wives, Nani and Ponni. Two of the defendants, the plaintiff’s husband, and the deceased father of three more defendants were born of his first wife, in addition to 4 daughters (a very fertile woman indeed!), and his second wife had a son and 2 daughters. The family was governed by Mitakshara law, and Karappan had executed a registered deed for the partition of the property. Karappan had property worth 8000. He gave 1300 to each of his male issues. 300 went to his first wife and 1000 to his second wife. 200 went to his stepmother. Karappan died, and soon after this, Raman, his third son and husband of the plaintiff, followed daddy upstairs. Widowed Kalyani sued for partition and separate possession of her 1/4th share in the property. The defendants held that the Karappan and his sons were coparceners of the property, and thus, Karappan had no authority to execute such a deed. They also contended that the 4 sons were coparceners to the property, and succession depended on survival. Since Kalyani’s husband was dead, therefore, she could not get the property. It was ancestral property, and all 4 sons had acquired interests to it by birth. Therefore, Karappan had no right to dispose of by will ancestral property in his hand. A Hindu father cannot impose such a family arrangement without his sons’ consent after his death. The second wife’s son had already taken his share The condition of transfer is immoral or opposed to public policy and voi

out and left the family. Therefore, the brothers were tenants-in-common, and the property was allowed to be divided. 1/4 th share was granted to the plaintiff.

Section 6 of the act talks about what kinds of property may be transferred and what may not be transferred. In section 6(a), we find that the chance of an heir-apparent succeeding to an estate, the chance of a relative obtaining a legacy on the death of his kinsman, or any other such mere possibility, cannot be transferred. These things mentioned in clause (a) are known as spes successionis. It means a mere chance, or bare possibility. It is different from future interest. In Indian law, the transfer of an expectancy or any agreement to transfer expectancy are both void.

CASE: Annada Mohan Roy v. Gour Mohan Mullick

In this case, the appellant purchased from the respondents their rights expectant, under the will of their uncle, upon the termination of his surviving widow’s rights. Later, there was a compromise between the widow and the respondents as a result of which the respondents got certain properties. The appellants filed a suit for the recovery of the properties from the respondents. The court held that the transfer was of a spes successionis, and was thus forbidden by the TOPA.

CASE: Karpagathachi v. Nagarathinathachi

2 co-widows divided their husband’s properties into 2 shares and took separate possessions, with each widow giving up her life interest under the partition deed. The respondent is the daughter of the widow who died. The surviving widow filed a suit against the daughter for recovery of the property in her mother’s possession, alleging that the arrangement by which her right of survivorship was relinquished was repugnant to section 6(a). The court said that the interest of each widow was property, and this, along with the incidental right of survivorship could be lawfully transferred. The section might prohibit the transfer of the bare chance of the The condition of transfer is immoral or opposed to public policy and voi

surviving widow taking the entire property as the next heir of the husband, but it does not prohibit the transfer by the widow of her present interest together with the incidental right of survivorship to the daughter. Suit dismissed. The ratio is that right of survivorship can be transferred.

Question: What is reversion? Answer: If I grant my land to Pritam for life, Pritam becomes entitled to it. On Pritam’s death, the land would be returned to my possession, and this is called reversion. Suppose now, that I grant a life estate to Pichu and then a fee simple [which would imply absolute ownership and reversion to Pichu’s nearest heir, say Bulba], then Bulba’s estate will be called ‘Remainder’. It may either be a vested remainder, as in this case, or a contingent remainder, say, with a condition of Bulba.

CASE: Amrit Narayan v. Gaya Singh

The guardian of a minor reversioner entered into a contract with the female holder of property that the properties would be relinquished in favour of other relatives. In a suit for the reversioner for possession of property after the female’s death, it was held that he had no right or interest at the time when the agreement was made, because the female owner was holding the property for life. Until it vested in him on her death, he had nothing to assign or relinquish or transfer. He, being the reversioner, has a right only after her death, and until then it is mere spes successionis.

EASEMENTS

An easement is a right which the owner or possessor of certain immovable property possesses for the proper enjoyment of the property (this must have a dominant heritage), like a right of way over adjoining property (which enjoys servient heritage). Since the right cannot subsist

The condition of transfer is immoral or opposed to public policy and voi

without the dominant heritage, the right of easement alone cannot be transferred. This is outlined in clause (c).

Clauses (f), (g) and (h) are prohibited based on public policy. An office is granted to a person on personal grounds, and he alone can discharge the duties, and hence, be entitled to the salary. Loss of such remuneration might mean a lack of inducement to perform duties and temptation to accept bribes.

Section 7 of the TOPA says that any person, who has the capacity to contract and is entitled to transferable property or authorized to dispose of such property, can transfer such property. In Mohari Bibi v. Dharmodas, it was held that a conveyance of land by a minor is void, as he is not competent to contract.

Section 8 says that a transfer of property to a transferee transfers all the interests which the transferor can pass in the property (e.g. rents, profits, benefits arising from it, things attached to earth, etc.), unless a different intention is expressly or impliedly present.

CASE: Nathoo Lal v. Durga Prasad One Ramchandra dies, and gifts his property to his elder daughter Laxmi. On Laxmi’s death, her husband takes possession, claiming right as her heir. He mortgages the property to the appellant, Nathoo Lal. Meanwhile, after 12 years, the son of the other daughter (Bhuri) returns and claims the property, saying his aunt Laxmi only had a limited stake in it. The court observed that unless there are express terms in the deed of gift to indicate the d onor who had the absolute interest, a gift in favour of an heir who inherits a limited interest cannot be understood as an absolute interest. Court held that to convey an absolute estate to Hindu female no express power of alienation need be given. The words used in the gift deed were of amplitude enough to convey full ownership to Laxmi. The appellant won the case. The condition of transfer is immoral or opposed to public policy and voi

ACTIONABLE CLAIM

Actionable claim means a claim to any debt, other than debt secured by mortgage/pledge of immovable property, or to any beneficial interest in movable property not in the possession of the claimant, which are recognized by law as affording grounds for relief. Chapter 3: General Rules regarding Transfer of Property

Sections 10-18 contain the first set of rules that must be observed when alienating property. There is a principle in economics that wealth should be in free circulation so that the greatest benefit can be derived from it, and hence these sections provide that ordinarily there should not be any restraint on alienation.

Section 10 provides that where property is transferred based on a condition or limitation which absolutely restrains the transferee or any person claiming under him from parting with or disposing of the interest in property, such condition or limitation is void. There are exceptions in the case of a lease where the condition is for the benefit of the lessor, and when the property is transferred to or for the benefit of a woman so that she shall not have power during her marriage to transfer or charge the same for her beneficial interest.

In almost all property law systems, the rule is alienatio rei praefertur juri accrescendi, that is, the law favours alienation of property rather than accumulation.

Section 10 must be read with Section 12 which says that where property is transferred subject to a condition or limitation making any interest therein, reserved or given to or for the benefit of any person, to cease on his becoming insolvent or trying to dispose of the same, such condition or limitation is void. Nothing in this clause applies to a condition in lease for the lessor’s benefit. The condition of transfer is immoral or opposed to public policy and voi

A condition which says that the transferee will not transfer his interest in a property for 3 years or that he will not transfer it to any member of a particular family is partial restraint and is therefore allowed. But if a condition exists saying that the transferee is prevented from transferring his property to anyone but the transferor or his heirs and that too only if they are willing to buy, it constitutes absolute restraint, and is void. Assume that a situation arises where Suman, Arghya and Dipayan partition a joint property and agree that if anyone of them does not have a baby, he should not sell his property to anyone else, but leave it for the other two. This is a case of absolute restraint. If I sell a property to Biju and Biju independently executes an agreement whereby he states that if he wants to sell the property he would only sell it to me, the agreement would be valid, because I did not impose any condition against alienation at the time of transfer. Biju himself added the condition.

As far as lessors are concerned, the condition is good only if it is for the benefit of the lessor, for example, if a conveyance gives the power to the lessor to re-enter (take control of the property once it is out of his possession) instead of merely entitling to damages.

Restraints on the power of alienation in favour of married women (who are not Hindus, Muslims or Buddhists) will be valid. Under old English law, a husband and wife were looked at as one legal entity. All the property of the woman would become her husband’s on marriage, and she could not dispose of it without his consent, and nor could she devise a will. The Married Women’s Property Act of 1882 changed this. Thenceforth, the transferor has the power to decide to what extent he wants to restrain the woman’s power of alienation. Such provision can be used to prevent a married woman from alienating her property as long as she is under her husband’s protection.

Section 13 of the act provides that when an interest (the interest must, of course, b...