Transfer of property act( Notes for Exam) PDF

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PROPERTY LAWS AND EASEMENTSUnit I- Jurisprudence and Preliminary rules1 Concept and ScopeIntroduction and History- TOPA doesn’t define property anywhere. It primarily deals only with the transfer of property and not property as such. Transfer of property (other than that of agricultural lands) finds...

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PROPERTY LAWS AND EASEMENTS Unit I- Jurisprudence and Preliminary rules 1.1 Concept and Scope Introduction and History1. TOPA doesn’t define property anywhere. It primarily deals only with the transfer of property and not property as such. 2. Transfer of property (other than that of agricultural lands) finds mention in Entry 6 of List III and thus both the centre and states may legislate with respect to the same. Entry 18 of List II talks of agricultural lands. 3. Easements, also called the ‘law of servitude’ form a part of these laws. 4. Feudalism is one of the reasons why transfer of property came into existence. Earlier all lands belonged to the king the people would either fight wars or till their lands. Later, it was distributed amongst landlords. Lord Birkenhead’s Act in 1922 was the first law pertaining to abolition of feudalism. 5. Till, 1882, there were no laws with respect to property in India and English laws were applied with little success. 6. Then, the 1st law commission was constituted which tried to codify several laws. This was followed by the Indian Civil Commission (check) which prepared drafts of TOPA as well and finally the Act came into force in 1882. 7. After this, 7 bills were passed to amend the Act. It was re-examined in 1921 and a bill was made in 1927. 8. It was again examined in 1929-30 by a select committee and important amendments were made. (30th April, 1930) The amendments apply to transfers after 30th April, 1930 or pending transfers. 9. Some of the changes introduced by the amendment include(a) Registration made compulsory and it was said that registration amounts to a constructive notice. (b) Notice to an agent amounts as notice to the principal. (c) Statutory recognition of the doctrine of part performance. (d) Doctrine of subrogation extended to persons other than the mortgagee like creditors, etc. (e) Remedy of fore closure abolished as regards certain mortgages. The remedy was made available to Indians as well. (f) Usufructuary rights or rights to benefits arising out of land incase of mortgage made available to the mortgagee even when only a promise of mortgage has been made without handing over possession. (g) It was laid down that a mortgagee must bring a single suit for all matters relating to a single mortgaged property. (h) Laid down that if transfer to a person in a particular class fails, transfer to the entire class doesn’t fail and stays valid for the others. (i) Recognition of right of mortgagor to lease out property. (j) Right of mortgagor to inspect title deeds.

(k) Right of mortgagee to compensation for necessary improvements on property. (l) A mortgagor having right to redeem may require mortgagee to transfer mortgaged debt to a 3rd party. (m) Incase of mortgage by conditional sale, such condition to be made part of the deed. (n) Mortgagor’s right to redeem several mortgages to the same mortgagee separately or simultaneously. (o) Mortgagee’s obligation to enforce several mortgages to the same mortgagor separately or simultaneously. (p) Provision for mortgagee to appoint receiver incase of sale without the intervention of the court. (q) Modification of law of merger. (r) Provision requiring registered leases to be executed by both parties. 10. Main features of TOPA(a) It deals with all kinds of transfers but excludes succession, auctions, etc. (b) It doesn’t define property as such and deals only with the transfer of property. (c) It excludes agricultural lands. (d) It is not applicable in Delhi, Punjab, etc. but may be made applicable by government notification. (e) It gives a restricted and negative definition of immovable property. 11. Property in common language means something over which ownership subsists. S.2 of the Benami Transactions Act, 1988 defines property as movable, immovable, tangible, intangible and all other rights and interests in relation to such property. 12. Ownership is where all rights with respect to a particular thing are concentrated in a particular person. As per Austin, it is a jus in rem or a right against the world. It is indefinite in point of use, unrestricted in point of dispossession and unlimited in point of duration. 1.1.1-Kinds of Properties 1. Property may be classified as physical/corporeal/tangible property and incorporeal/intangible property (like IPR s). Physical property may again be classified as movable and immovable property. 2. In English law, it is classified into realty or all immovable property and personally/personalty or all movables (personal property). 3. TOPA gives a negative definition of immovable property as it regards anything other than standing timber, grass and standing crops as immovable property. 4. S.3 of the General Clauses Act defines immovable property as land, benefits arising out of land and anything attached to the earth. 5. For all benefits arising out of land, the same must be registered so as to be able to claim them. (Anand Behera v. State of Orissa) This also includes profits derived from land. 6. Anything attached to the earth includes things rooted in the earth like trees, things embedded in the earth such as buildings and things attached to what is embedded in the earth like windows, doors, etc.

7. In English law, 2 maxims are followed namely- Quicquid plantatur solo solo cedit (with respect to plants) and Quicquid inaedificatur solo solo cedit (with respect to buildings), which means that anything attached to the earth belongs to the earth. This rule is not followed as strictly in India. To determine whether things embedded in the earth belong to the earth, 2 tests need to be applied. The first test is as regards the degree or mode of annexation and the second test is as regards the purpose or object of annexation. As per Holland v. Hodgson, the first test is more popular under English law while Indian law follows both. Generally, there is a relaxation of rules with respect to trade/commercial fixtures in which case the maxim is not followed. 8. As regards things attached to what is embedded, they must be of such nature that they exist for permanent use or enjoyment as in case of doors, windows, etc. 9. Other types of immovable property include mortgaged debt, reversioner of lessor, lease hold right of a tenant and mortgagee’s interest. 10. Movable property on the other hand has been defined under S.2(g) of the Registration Act as one that includes standing timber, growing crops, grass, fruit and property of every description other than immovable property. 11. Standing timber is that which is used for the purpose of building or repairing houses. This principle was laid down in Marshall v. Green wherein it was said that standing timber is an exception to the general rule of growing trees being immovable property as it is decided upon by the parties that it would be immediately removed from land and the purchaser wouldn’t derive any benefit from future vegetation of the thing or from the nutriment it derives. This was also held in Shantabai v. State of Bombay. 12. Growing crops have been held to include all vegetable growths which have no existence apart from their produce such as paan leaves, sugarcane, etc. Grass- (dbt pg 23, Mulla) 13. Transfer defined under S.5 as an act by which a living person conveys the property in present or in future to one or more living persons or to himself. 14. It has been held that abandonment or relinquishment or surrender may not be regarded as transfer as transfer refers to an ‘act’ by parties and in these cases there is no shifting of proprietary interest. 15. Transfers can always take place amongst living persons and are hence always inter vivos. An exception has been made under S.13 for transfer to an unborn person. A corporation has been regarded as a living person but not an idol. Wakf, dbt, pg 81, Mulla 16. Transfer to oneself is allowed as in case of a person creating a trust out of his own property becomes a trustee of such property. 17. Transfers may both be in the present or in the future. For future transfers to be valid, they must not be uncertain, illegal or immoral. 18. There are 2 concepts under English law as regards the same, reversion and remainder. Reversion is the residue of an original estate which is left with the grantor after he has granted a smaller estate. For e.g. the interest of a lessor is a reversion (right left with him after leasing out property) which is a future interest pending the termination of the lease. A remainder on the other hand is an interest granted out of the original estate at the same time as, but in succession to a precedent interest. For e.g. property granted to A for life and then to B, here the interest of B is a remainder and the estate of A is the particular estate which supports it.

19. A family arrangement is not a transfer. (SK Sattar v. Gundappa, Hansa Industries Pvt. Ltd. v. Kidarshan Industries) 20. A partition is not a transfer. 21. A compromise doesn’t amount to a transfer. (Mani Shankar Sharma v. Raj Kumari Sharma) 22. A charge is not a transfer as in that case only a personal obligation is created and there is no right in rem. Also, creation of an easement is not a transfer. 1.1.2-Transferable Property, Principle and Accessory Rights 1. Essentials of a valid transfer(a) Property must be transferable and mustn’t be an exception under S.6. (b) Transferor must be competent to transfer. (c) Transferee must be competent. (d) Consideration/object must be lawful. (e) Transfer not to be opposed to public policy. (f) Transfer should be done in a manner and form required by TOPA. 2. S.6 expressly mentions about property which is not transferable and provides the following exceptions(a) The first exception is ‘spes successionis’ or the mere chance of an heir apparent to succeed. This is primarily because it is only a bare possibility and not possibilities coupled with an interest such as a contingent or future interest created in property. An heir apparent is only a person who would be an heir if he survived the propositus and the propositus died intestate. Such a possibility even under English law is not an interest or even a contingent title. (Re Parsons, (1890)45 Ch D 51) Also, a Hindu reversioner has no right in present in the property. (b) A mere right to re-entry for breach of a condition-It is the right which the lessor reserves for himself when the lessee breaches any condition like non-payment of rent, bills, etc. and cannot be transferred without transferring the entire interest in property. Till the absolute interest is transferred, it remains a personal license and is not transferable. This was also held in Re Davis & Co., ex-pane Rawlings, (1889)22 QBD 193. (c) Easement detached from the dominant heritage cannot be transferred. A servient heritage refers to such property on which the easement primarily exists for e.g. a well on a property and a dominant heritage is the land which derives benefit of such easement. When the dominant heritage is transferred, the easement gets automatically transferred as a legal incident to it and not otherwise. The present law states that there cannot be any easement in gross or in its own right. (Sital Chandra v. Delanney (1916) 20 Cal WN 1158) (d) A restricted interest to enjoyment of property by the owner is not transferable, unless such restriction is void under S.10, for e.g. revenue collectors deriving authority from the government cannot transfer such right to collect revenue. A transfer of such a property would defeat the very object of restriction. An example may be given of the case of Zobair Ahmad v. Jainanandan where the right of a Mohammedan widow to retain possession of her husband’s property in lieu of her dower debt was considered personal to her and regarded as restricted interest under this section. A right to pre-emption is not transferable. Dbt, pg 101, Mulla

(e) Right to future maintenance arising or secured in whatsoever manner cannot be transferred. It is a personal right and is incapable of assignment (Narbadabai v. Mahadeo, (1880) 5 Bom 99) but arrears of maintenance may be attached and sold like any other debt. (Kasheeshure v. Greesh Chunder (1866) 6 WR Misc 64) However, it has also been decided that if land is assigned to a Hindu widow in lieu of maintenance, the transfer of such land is not transfer of a right of maintenance and is hence valid. (Dhup Nath v. Ram Charitra (1932) 54 All 366) (f) A mere right to sue is not transferable. A right to sue is personal to the party aggrieved and there can be no assignment of a right to sue for damages for tort or breach of contract. (Abu Mohammed v. SC Chunder, (1909) 36 Cal 345) Such a right to sue must be distinguished from an actionable claim as the latter is property and the assignee has a right to sue to enforce the claim. (Read pg 109, Mulla) (g) Transfer of a public office and salary of a public officer as such post is held for qualities personal to the incumbent. It is opposed to public policy that a public officer should transfer the salary of his office, for the salary is given for the purpose of upholding the dignity and the proper performance of its duties. (Liverpool Corporation v. Wright, (1859) 28 LJ (Ch) 868) (h) Transfer of stipends allowed to pensioners of the armed forces, the government and political pensions. A pension may be transferred to the wife or children of pensioners after their death as it is within the family. (i) The next exception makes property non-transferable in 2 cases- when the nature of interest is affected or when such transfer has an unlawful object or consideration. It thereby prevents illegal, immoral and invalid transfers. As regards the first case, an example may be given of property dedicated for religious or public purposes which are classified as res extra commercium which cannot be bought or sold. (Raja Varma Valia v. Kettayath, (1875) 7 Mad HC 210). The next case follows S.23 of the Contract Act which prohibits contracts without lawful object or consideration, for e.g. a contract to kill somebody. As regards transfer of property, transfer to a prostitute for future cohabitation is a transfer for unlawful consideration and is hence not allowed. (Deivanayaga v. Muthu Reddi, (1921) 44 Mad 329). To come within the ambit of this clause and S.23 of the ICA, the object or consideration must be forbidden by law or must be of such nature that it defeats the provisions of law or must be fraudulent or involve/imply injury to the person/property of another or be regarded as immoral by the courts or are opposed to public policy. However, the Act is silent about such transfers where the object or consideration is partly lawful and partly unlawful. (j) Transfer by a tenant who has an untransferable right of occupancy, transfer of land by a farmer in default in payment of revenue and a lessee appointed for management of property under the Court of Wards Act. 3. S.7 of TOPA deals with competency of a transferor. Under S. (6)(h)(3), any person is competent to be a transferee unless legally disqualified. The transferor under this section must be competent to contract and must have title to the property or authority to transfer such property if it is not his own. 4. A minor cannot be a transferor but he may be a transferee. However, a minor’s property may be used to provide for necessaries (Mohribibi v. Dharmodas Ghosh),

but he cannot dispose off such property. Also, disposition by his guardian is also regarded as void. His property may be disposed off only with the court’s permission. 5. A lunatic cannot transfer property except during lucid intervals of sanity. He can also not be a transferee. 6. Earlier even a married woman and pardanashin woman were regarded as incompetent. A pardanashin woman cannot transfer only if she has always stayed away from society. 7. The maxim ‘nemo dat quod habet’ means you cant pass a better title than what you have. This relates to the concept of limited ownership/rights as in the case of corporations, pardanashin women, etc. S.38 of TOPA gives powers to limited owners to dispose off property under certain conditions. 8. As per S.8, unless a different intention is expressed or implied, when a property is transferred, all interest with respect to such property gets transferred. 9. Where transferor is both part owner and executor, dbt, pg 131, Mulla. 10. Under Hindu law, there exist concepts like Nidhi and Niheshep which refer to treasure in the property which are also transferred alongwith the property. Other things which are transferred with property include Pashan(mountains, rocks, minerals, etc attached to land), Siddhay (things attached to land which yield a produce), Sadhay (any other produce from land), Jalnivitham (wells, reservoirs, etc), Arkshan (all privileges with respect to land), etc. There is also the concept of Agami Ashta Bhogam or whenever property gets transferred, it gets transferred in its entirety. 11. It was earlier presumed that when property was given to a woman, she would have only limited estate as regards the same except when it was conveyed in express words. 12. This section doesn’t apply to court sales as such sales effect a transfer by operation of law. What is sold at a court sale is a mixed question of law and fact to be decided upon the facts of each case. 13. The presumption of transfer of all interest can be rebutted by express words or necessary implication. The terms lease and mortgage themselves convey a limited interest in property. An intention to reserve a right may be implied not only from the terms of the deed but also from its object. A document must be read as a whole to construe the real intention of the parties. 14. Transfer of property leads to transfer of all legal incidents to it which includes easements, rents and profits, things attached to the earth, minerals, parts of machines, debts and securities, interest on debts, etc. 15. Easements to be transferred include those existing before and at the date of transfer. If the property to be transferred is a house, all easements attached to it will be transferred. As regards machines, movable parts of machines pass on with the land and the machine even though they are detachable. 16. Incase of debts and actionable claims, the securities pass on along with them. However, securities to a mortgage debt may not be transferred as the same is no longer an actionable claim. A mortgage being immovable property can only be transferred by a registered deed. A debt secured by charge however is different from a mortgage debt and may be transferred as an actionable claim by an unregistered instrument. A charge is different from a mortgage in the sense that it doesn’t transfer an interest in property but creates a right to payment out of the property specified. 17. A decree is not considered an actionable claim.

1.1.3 Written and oral transfers 1. S.9 talks about oral transfers where writing is not expressly required by law. However writing is required in cases like incase of exchange or sale of value more than Rs.100, incase of sale of intangible property, incase of simple mortgage where delivery of possession hasn’t been done, incase of mortgage above the value of Rs.100, in case of lease to be renewed after every year, gifts in relation to immovable property, all assignments with respect to actionable claims (registration not required), etc. 2. Actionable claims always arise from debts but these don’t include mortgage debts or debts arising from pledge or hypothecation. (Check TOPA for what all are actionable claims-objectives in exam) 3.The doctrine of part performance is an encroachment upon the general rule that when the manner of transfer is to be in a certain way as prescribed by the act, the same may not be done in another way. 1.1.4 Restrains on alienation, perpetuities1. Ownership may be categorised under the following heads(a) Absolute ownership (b) Co-ownership (c) Conditional ownership (d) Future ownership (e) Trust ownership 2. Incase of absolute ownership, the owner has full rights over his property which includes the right of alienation. No one can restrict such a right. A co-owner’s right is restricted as he has to ask the other co-owner for his consent in order to alienate property. Conditional owner cannot also alienate on his own as some condition needs to be fulfilled. Incase of future ownership, the person...