SALIENT FEATURES OF TRANSFER OF PROPERTY ACT 1882

Salient features of Transfer of Property Act 1882

INTRODUCTION

According to the Transfer of Property Act 1882, “Transfer of Property“ means an act by which a person conveys property to one or more persons. The act of transfer may be done in the present or for the future. The person may include an individual, company or association or body of individuals, and any kind of property may be transferred, including the transfer of immovable property.

Transfer of property

 Sale is the first step in the “ TRANSFER OF PROPERTY IN GOODS “ by the seller to the buyer.

 The Phrase “ TRANSFER OF PROPERTY IN GOODS “ means Transfer of ownership of the Goods from one person to another.

 Property in Goods is different from Possession of Goods.

 Possession of Goods refers to the custody over the Goods whereas Property in Goods means ownership over the Goods.

Importance of transfer of property

 Risk follows ownership

 if property has passed to the buyer, he becomes the owner of the goods and then the risk of destruction, damage or loss.

 Action against third parties

 if goods are damaged by action of third parties, only owner of goods can take the action.

 Suit for price

Seller become entitled to recover price of goods only when property in goods has passed to buyer.

 Insolvency

If the ownership has passed to buyer and buyer became insolvent, buyer’s official receiver can take possession of goods or vice versa…

Before 1882 the transfers of immovable properties in India were governed by the principles of English law and equity. And by the Regulations and Acts passed by the Governor- General-in-Council.
This Act may be called the Transfer of Property Act, 1882. It shall come into force on the first day of July1882.

Objective of the Act

PREAMBLE: an Act to amend the law relating to the Transfer of Property by act of parties.
Objective 1- to bring the rules which regulate the transmission of property between living person into harmony with the rules affecting its devolution upon death and thus to the complement the work that commenced with framing of the law of intestate and testamentary succession and
Objective 2- to complete the code of law of contract, so far as relates to immovable property.

Transfer of Property By act of parties By operation of law (succession, insolvency, execution) Testamentary (after death of parties Inter vivos (between two living person) Transfer of immovable or movable property Transfer of immovable property Sale Mortgage ExchangeLease Gift Transfer of Property By act of parties By operation of law (succession, insolvency, execution) Testamentary (after death of parties) Inter vivos (between two living person)

Property

The term ‘property’ is derived from the Latin term ‘Properietat’ and the French equivalent term is ‘Proprius’ which means a thing owned/possessed.
Immovable property.does not include standing timber, growing crops or grass (sec. 3)
Salmond- it means proprietary rights in rem.
John Austin- Property is a right availing against the world i.e. jus in rem.
It is right to possess, use, enjoy, dispose, commercial exploitation, apply for different purposes, inherit.
Property can be tangible or intangible.
Property is no men genralisssimeem and extend to every species of valuable and interest including real and personal property, easement, franchises, incorporeal heridaments.
It is unrestricted and exclusive right to a thing. It include right to exclude.
Property is a legal concept which includes a bundle of rights.
Police Act, 1861 sec. 1: property includes any movable property, money or valuable security.
Sale of Goods Act 1930: property means the general property in goods and not merely a special property.
Provincial Insolvency Act 1920: property includes any property over which or the profits of which any person has disposing power which he may exercise for his own benefit.

NATURE OF PROPERTY

In the TP Act, property is used as

Tangible material things. (land, house, furniture, jewellery, etc)
Rights which are exercised over material things. (to enjoy, possess, to sell, to gift etc)
Rights which are not exercised over any material things (to repayment of a debt)
Property means a proprietary right in rem or in personam.
Property includes all a person’s legal rights of whatever description.

KINDS OF PROPERTY

Real property: this property admitted of specific recovery and as this was originally allowed only where claimant had freehold interest. e.g.. land, building or anything attached to it.
Personal property: it comprise of goods or things movable. In such property in respect of which only a personal action lay was classed as personal property.
Tangible property: such property can be felt or touched.
Intangible property: such property cannot be felt or touched.
Tangible or intangible property may be movable or immovable.
Corporeal property (dominium corporis): it its the right of ownership in material things. It can be seen or felt.
Incorporeal property (dominium juris): It cannot be seen or felt. It may be jura in realiena i.e which one has in the property owned by another OR jura in repropria over immaterial things i.e. the subject matter of a right of property is either a material or immaterial things recognised by law as property.
Movable property: it is goods or things which are movable.

IMMOVABLE PROPERTY

“Immovable property” does not include standing timber, growing crops or grass. sec. 3
This definition is not clear and incomplete. • General Clauses Act 1897: ‘immovable property shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth.
Immovable property: it is permanent, fixed, cannot be moved and must be attached to property permanently.
The Registration Act 1908: immovable property includes land, buildings, hereditary allowances, right to ways, lights, ferries, fisheries or any other benefit to arise out of land and things attached to the earth, or permanently fastened to anything which is attached to the earth but not standing timber, growing crops or grass.
Therefore ‘immovable property’ includes

Land
Benefits to arise out of land, and
Things attached to earth i.e.
things embedded in earth,
things attached to what is so embedded in the earth, things rooted in earth; except

Standing timber,
Growing crops, or
Growing grass.

1-Land

Land means surface of the earth. it includes everything upon the surface of land, under the surface of land and also above the surface of land. Anything upon the land, so long it is not removed from there shall be part of the land.
Land includes:

a determinate portion of land,
possibly the column of space above the surface,
the ground beneath the surface,
all objects which are on or under the surface in its natural stage

For Eg: soil, mud, underground water, water collected in a pit, pond, lake, river, sub-soil, mineral, coal, gold mines, space above land.

2-Benefits to arise out of land

Benefits which a person gets from land, is also an immovable property.
It is intangible immovable property.
A right by the exercise of which a person gets certain benefits is called beneficial right or beneficial interest of that person.
It is any profit or gain from land.
For Eg: right of way, right to use, lease, tenancy, right of fishery, right of ferry, heredity office, fruits, lac etc.

3-Things attached to earth

things embedded in earth,
things attached to what is so embedded in the earth,

things rooted in earth

Embedded means, a thing whose foundation is laid well below the normal surface of the earth OR fixed firmly in a surrounding mass.
Eg: wall, pole, houses, building.
A machinery attached to a concrete base by nuts and bolts firmly, cannot be treated as embedded in the earth.
A thing (like a rock) placed on earth without intention to move is not immovable property.
A machinery or other installations of business are fixed to the land for commercial purpose only. They are regarded as accessory to the business and not an annexation to the premise.
Things attached to what is so embedded in the earth: it would become part of property. Eg: door, window, shutter etc.
For this, thing must be attached permanently and for the beneficial enjoyment of the house or building.
Electric bulb, window screens, other ornamental things are not immovable property.
Thins rooted in the earth: trees, plants, shrubs which grow on land are rooted in the earth.
Standing Timber, Growing Crops and Growing Grass,etc
‘Timber’ means, a tree that is chiefly meant to be used either for house building or for the burning purposes or for the furniture or the boat or other construction. Eg: seasham, neem, babool, teak.
Fruit bearing trees are not timber and hence not immovable.
Crops means, a plant grown for food or other purpose and include all vegetables in the form of fruits, leaves, bank or roots. • Grass is mainly grown for fodder purpose. It is movable property

Examples of immovable property

Right of way or easement.
Right under lease or tenancy.
Right to extract gold, silver, coal or other minerals from mines. • Right of fishery, • Fight of ferry, • Right to collect dues from fair or haat (bazar).
Right to hold exhibition or fair on one’s land,
Right to collect forest produce.(lac, tendu leave,gum)
Mortgage debt,
Office of the hereditary priest of a temple and its emoluments.

MOVABLE PROPERTY

A property which is not immovable is movable property.
Eg: standing timber, growing crops, growing grass, thins placed on earth, royalty, copy right, decree for arrears of rent, right to get maintenance allowance, furniture,

Difference of movable property & immovable property

All interest which are interests in object other than land are called movable.
It can be easily shifted or moved without any loss/damage.
It is liable for Sales Tax.
Registration is optional.
Mere delivery with intention to transfer complete the transfer.
All interest which are interests in land are called movable.
It cannot be shifted or transported without any loss or damage and if transported, it will lose its original shape, capacity, quality or quantity.
It is liable for Stamp duty.
Registration is mandatory.
Mere delivery is not enough. Transfer must be registered.

INSTRUMENT

“Instrument” means a non-testamentary instrument. sec.

• Instrument means a legal document.

Where a property is transferred through without any written document, that document is called as instrument.

ATTESTED

“attested”, in relation to an instrument, means and shall be deemed always to have meant attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument, or has seen some other person sign the instrument in the presence and by the direction of the executant, or has received from the executant a personal acknowledgement of his signature or mark, or of the signature of such other person, and each of whom has signed the instrument in the presence of the executant; but it shall not be necessary that more than one of such witnesses shall have been present at the same time, and no particular form of attestation shall be necessary; sec. 3
Attestation is an act of certifying the signature of the executant.
Object: Attestation of a document ensures the authenticity or truthfulness of the execution of a document.
It confirms that executant and none else has executed the document
It confirms that executant has executed document with free consent and there was no force, fraud, or under influence.
Who can attest: Any two person; Age of majority; Sound mind;
A person called to identify execution is not attesting witness.
Registrar, sub-registrar, any officer, typist or party to contract cannot be presumed to be attesting witness.
A person who is not party to transaction but person interested may be attesting witness. (relatives of party)

Essential for valid attestation:

The attestation must be done by two or more person.
Each attesting witness must a) see the executant signing the instrument (document) or fixing his mark on it. OR b) see some other person signing the instrument in presence of and under the direction of executant OR c) has received from the executant a personal acknowledgement of his signature or mark or of the signature of such other person
Each attesting witness has signed the instrument in presence of the executant.

Legal effects of attestation:
The documents which require attestation is valid only when it is properly attested and valid and proper attestation is proved.
Where attestation is mandatory, non attestation make it ineffective.
Attestation is not to show knowledge of content of document.

Registered

“Registered” means registered in any part of the territories to which this Act extends under the law for the time being in force regulating the registration of documents. sec. 3
It is a document which is officially recorded.
It is under the provisions of Indian Registration Act 1908.
Registration is valuable evidence regarding the statements made in the document.
Where ever required document must be duly attested and registered.

Actionable claim

“Actionable claim” means a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothication or pledge of movable property, or to any beneficial interest in movable property not in the possession, either actual or constructive, of the claimant, which the civil courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing,conditional or contingent.
Intangible movable property.
It is a claim affording ground for action in-law.
It is an act or claim for which an action can be instituted in civil court for realisation of the benefit.
In England it is called as ‘chose in action’ or ‘a thing in action’
To ascertain whether it is actionable claim, there should be ‘debt’. A debt is a sum of money which is payable in future or will become payable in future by reason of present obligation.
A debt is a property. It is obligation to pay liquidate/certain sum of money.

Section 5 of the Transfer of Property Act, 1882 defines that, the property will be delivered by a living person to one or more other people in the present date or in future times or to himself only. The expression mentioned above “in present or in future” is deriving the meaning of the word ‘deliver’. There will be no transfer of future property. The transferee needn’t be a competent person like a transferor. A transferee can also be a minor, insane or child in a mother’s womb.

In this section “living person” includes “companies, private associations, which are registered or not, but nothing in this section affects the law while doing the transfer of property to any company or association or individual body”.

Kinds of transfer

Subsequent forms of transfer under the Act are:

Sale– It’s an out-and-out transfer of property And also the consideration is money.

Mortgage– It’s a transfer of a limited interest during a property.

Lease– A lease may be a transfer of a right to enjoy the immovable property for a particular time.

Exchange– It’s the same as sale, but differ in consideration. Here the consideration is another thing not money.

Gift– Here, there’s no consideration.

Which is not amounting to the transfer of property?

Another meaning of transfer of property is “Conveying the property”. A fresh interest within the mind of the transferee, if new interest has not been created in mind of the transferee, the property can not be said to be conveyed, thus no transfer of property is finished.

Partition- When two blood relatives like brother and brother dividing their property between themselves is called partition. And it can’t be transfer of property because that property was already in their own possession and no new property is created.new is formed by co-sharer on the partition, it’s not a transfer of property. His specific share, which settled in him earlier, is just separated.

Relinquishment (sacrifice)- Here, there is nothing to transfer, because in this, the successor who was the owner of that property, he sacrificed that property to his/her closet person, the transferee may be one or more then one. Therefore, those who got the profitable property they can enjoy over that.

Surrender- A transferor has a contract to transfer some property with a minor. But, if the guardian of the minor has a condition with another person then it will not be a transfer of property.

Easement- The creation of an easement doesn’t amount to a transfer.

Will- Because it comes from the death of the person making it, while the definition of transfer is for the future by a living person, it doesn’t come under the definition of transfer.

Compromise- It depends on the facts and circumstances of every case. It may or might not amount to transfer.

Family arrangement/settlement- Any family problem arises about their property, then if a third person came and solved that problem and put an end to the disputes is not amounting to transfer of property.

What is also transferred?

Section 6– “ Any types of property which can be additionally transferred, except provided by this act or by any other law for nowadays in effect”.

This section specifies different types of property which can not be transferred (Exception to Section 6)-

Spes Successionis [Section 6(a)]- “The possibility that an heir apparent is clearly unsuccessful in a certain situation, that the possibility in a relationship, receiving an ancestral property by the death of an ancestor or in another natural event, then the transfer can not be performed.”

Any opportunity for the heir apparent to succeed under certain conditions is not included in the category of assets that can be transferred.

For e.g, ‘A’ a Hindu, dies and leaves his wife with ‘B’. ‘B’ has only a spes succession, his succession depends upon two factors, that the surviving of the A’s wife and the property which was left by ‘A’.

Right of Re-entry [Section 6(b)]

“A simple right of re-entry for breach of a condition following can not be transferred to anyone except the owner of the property.”

Easement [Section 6(c)]-

“An easement can not be transferred except from the dominant heritage.”

An easement right to use, or restrict the utilization of land of another in their way, for example- the right of way, right of water or light, etc. (Section 3 Easement Act).

Restricted Interest [Section 6(d)]

“A right of the owner is strictly prohibited in its enjoyment to him or her personally can not be transferred to any other.”

E.g- A man can not transfer the right of enjoyment of the home to any different person. If the home is lent to the man for his personal use.

Maintenance [Section 6(d)]

“A right of a person to his future maintenance, in whatever manner it would arise, that should be secured or determined, and can not be transferred to anyone.”

Mere right to sue [Section 6(e)]- “A mere right to sue can not be transferred to anyone.”

A right to sue is a personal possibility for the injured..

Public office [Section 6 (f)]-

“A public office cannot be transferred to anyone because, it’s a public property and the person who has the qualities, they should only enjoy the rights of the office not all. And always changes and pays for work not for the office.”

Pensions [Section 6(g)]

“Stipends are allowed only for the military, air force, naval and civil pensioners of the govt. and political pensions that can not be transferred to anyone, pension means a periodical allowance or stipend which they will get after their job is over.

Nature of Interests [Section 6(h)]

“There is no transfer on this point because it against the nature of the interest affected thereby, or as far as unlawful object or consideration within the meaning of Section 23 of the Indian Contract Act, 1872, or to someone who is legally disqualified to be a transferee.”

This clause restricts the transfer with anyone which is in nature and isn’t transferable, e.g- res communes (things are also utilized by all men, which nobody specifically is the owner), res nullius (things belonging to nobody).

Untransferable interests [Section 6(i)]

“In this section it is not mentioned that, to authorize a tenant it is compulsory to have an non-transferable right of occupancy, like the farmer has a condition to pay the revenue, in which there are some conditions are also on the lessee, under the supervision of a Court’s department”.

Time when property passes

 1)Specific or ascertained goods.

 2)Unascertained goods.

Specific or ascertained goods

Goods that are existing at the time of contract of sale and it is identified and agreed upon time of sale.

Section 19 of Sale of Goods Act provides “Where there s a contract for sale of specific or ascertained goods,the property in them is transferred to buyer at such time as the parties to contract intend to be transferred”.

Rules as regards ascertaining goods (sec.20-24)

 1)Passing of property at time of contract

When there is a unconditional contract for the sale of goods in a deliverable state, The property in goods passes to buyer when contract is made. The payment of price of delivery does not prevent property in goods passing at once.

Passing of property delayed beyond date of contract

 Goods not in deliverable state

 Something has to be done by the seller to put them in a deliverable state, property passes only when such thing is done, and the buyer has notice thereof.

Passing of property delayed beyond date of contract

 When price of goods to be ascertained by weighing or measurement

Where there is a contractor for the sale of specific goods in a deliverable state but seller is bound to weigh, test or do some other thing with reference to them, for ascertaining the price, the property does not pass till such act or thing is done and the buyer has notice of it.(sec.22).

Unascertained or future goods (sec.23)

 There is a contract for the sale of unascertained goods, property in the goods in not transferred to the buyer unless and until the goods are ascertained.(sec18).

 Process of ascertainment involves separating, weighing, measuring, counting.

Unascertained or future goods

 Sale “On Approval” or Sale or Return” basis

Where goods are delivered to the buyer ‘on approval’ or on ‘Sale or return’ or similar terms, the property passes to the buyer:

 Essentials of valid appropriation

1.The appropriation must be of goods answering contract description.

2.The appropriation must be intentional.

3.The appropriation must be made either by seller with the assent of buyer or by the buyer with the assent of seller.

4.The appropriation must be unconditional.

 Delivery to carrier[sec.23(2)].

Delivery to a carrier without reserving the right of disposal is a delivery to the buyer and the property passes at once at a time of delivery to the carrier.

 Reservation of right of disposal(sec.25) Reserving a right to dispose of the goods until certain conditions(like payment of price) are fulfilled.

When a person is competent to transfer?

As Section 7 of the Act provides that, “the person who is allowed to sign a contract is also allowed to transfer a property and then he will be allowed to enjoy the property wholly after it takes place. Legally permitted and determined for the time being in force.”

These are some persons can be competent to transfer:

Competent to contract, sound mind, the transferor must be entitled to transferable property.

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