Transfer Tr ansfer of Property Act
BACKGROUND
In India, the personal laws governed the transfer of property assisted by orders of Courts under Civil Procedure Code before the Transfer of Property Act, 1882 came into eistence! Transfer of movable goods was regulated to an etent by the Indian Contract Act, 18"2! #or transfer of immovable property, the Anglo$Indian Anglo$Indian courts often turned to principles of %ustice, &'uity and (ood Conscience as it prevailed in &ngland at the time! This rarely did any good g ood due to the vast differences in customs and society of the two countries! )f course the rapidly growing commerce and infrastructure in the late nineteenth century lead to more conflicts even in business! Thus, an immediate need was felt for a clear and pragmatic law regarding property and transfers suited to India and its peculiar problems as well as to ta*e care of the potential economic problems! The tas* of drafting such legislation fell upon the #irst +aw Commission and was later referred to the econd +aw Commission! THE ACT
A -ill, -ill, finally presented to the +egislative Council, beca me a law on the 1"th of #ebruary 1882 and came into force from 1st %uly of the same year! The Transfer Transfer of Property Act, 1882 mainly deals with transfer of immovable property! It does not apply to transfers by the operation of law such as transfer of immovable property necessitated by )rder o f Court for insolvency or forfeiture among others! The 1." sections contained within have been divided into 8 ch apters! Interestingly, Interestingly, nowhere does the Act define /0hat is a transfer of property! -ut it does define /transfer as a standalone in ection ! OBJECTIVES
1
The Transfer of Property Act, 1882 3hereinafter referred to as the /T P Act, 18824 was intended to define and amend the eisting laws and not to introduce an y new principle! It applies only to voluntary transfers! The following may be enumerated as the ob5ec tives of the Act6 a4
As per the preamble of the Act, the T P Act, 1882 is to amend or regulate the law relating to to
transfer of property by the acts of the parties! b4
The Act provides provides a clear, systematic and uniform law law for the transfer of immovable
property! c4
The Act completes the Code of Contract since since it is an enacted law for for transfers transfers that ta*e ta*e
place in furtherance of a contract! d4
0ith provision for inter$vivo transfers, the T P Act, 1882 provides a law parallel to the
eisting laws of testamentary and intestate transfers! e4
The Act is not ehaustive and provides scope to to apply the the principles principles of %ustice, &'uity and
(ood Conscience if a particular case is not governed by any provision of law!
SCOPE
ince the T P Act, Act, 1882 is not a complete code of transfer of property7 we can say its scope is limited! The Act Act does not apply to all the transfers ta*ing place in India! a4
+imitation on Transfer6 Transfer6 The Act applies to transfer transfer by the the act of parties and not by
application of law! Thus, its operations are limited to transfers by act of parties only ecept in a few cases saved by ection 2 of the Act! b4
ot &haustive6 There are various *inds of property and various modes of transfer of
property! The Act does not incorporate incorporate rules for all modes of transfer in eistence! eistence! The Act does not even claim to be a complete code as apparent ap parent from omission of the term /consolidate from its Preamble!
2
The Transfer of Property Act, 1882 3hereinafter referred to as the /T P Act, 18824 was intended to define and amend the eisting laws and not to introduce an y new principle! It applies only to voluntary transfers! The following may be enumerated as the ob5ec tives of the Act6 a4
As per the preamble of the Act, the T P Act, 1882 is to amend or regulate the law relating to to
transfer of property by the acts of the parties! b4
The Act provides provides a clear, systematic and uniform law law for the transfer of immovable
property! c4
The Act completes the Code of Contract since since it is an enacted law for for transfers transfers that ta*e ta*e
place in furtherance of a contract! d4
0ith provision for inter$vivo transfers, the T P Act, 1882 provides a law parallel to the
eisting laws of testamentary and intestate transfers! e4
The Act is not ehaustive and provides scope to to apply the the principles principles of %ustice, &'uity and
(ood Conscience if a particular case is not governed by any provision of law!
SCOPE
ince the T P Act, Act, 1882 is not a complete code of transfer of property7 we can say its scope is limited! The Act Act does not apply to all the transfers ta*ing place in India! a4
+imitation on Transfer6 Transfer6 The Act applies to transfer transfer by the the act of parties and not by
application of law! Thus, its operations are limited to transfers by act of parties only ecept in a few cases saved by ection 2 of the Act! b4
ot &haustive6 There are various *inds of property and various modes of transfer of
property! The Act does not incorporate incorporate rules for all modes of transfer in eistence! eistence! The Act does not even claim to be a complete code as apparent ap parent from omission of the term /consolidate from its Preamble!
2
c4
The Act mainly deals with transfer of immovable properties only!
d4
&emption of 9uslim +aw6 In In case of a conflict between the T P Act, 1882 and rules of
9uslim +aw, the latter will prevail! ection 2 of the Act does not affect inconsistent rules of 9uslim +aw! e)
&emption of :ights and Incidents6 Certain incidents of a co ntract or the essential nature of
property are eemption from the operation of the Act Act by ection 2! The Act also saves saves certain property rights! #or eample, the right to partition of immovable property is an incident of property but this right is not affected affected by the provisions of the T P Act, 1882!
Defnton of I!!o"a#$e Propertes $
ection .$ 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, ecept standing timber, growing crops or grass, it also include creepers and betel leave!
%&at s t&e !eann' of (an n TP*
There are four meaning of +and in TP$ 1! Plot Plot of of lan land d or plai plain n land land!! 2! +and +and incl include udess space space as as well well!! .! Thin Things gs ben benea eath th lan land! d! ;! Things Things above above surfac surfacee or thing thing on surfa surface ce The definition definition of Immovable Immovable property given in the !. of Transfer Transfer of Property Property Act 1882, is not ehaustive, ehaustive, it is the negative negative definition definition which eclude the things and says immovable immovable property does not include standing timber, growing crops or grass! The definition in the (eneral clauses Act also not ehaustive ehaustive but it is some what positive positive definition definition which includes land, benefits to arise out of land , and things attached to the earth! $
(an* considers in its legal aspect, land includes the following elements6
1! A determinate determinate portion portion of the earth earthss surface surface!! 2! Possib Possibly ly the the column column of space space above above the surfa surface! ce! .! The ground ground beneat beneath h the the surfac surface! e! 3
;! All ob5ects ob5ects which which are on or under under the surface surface in its natural natural state$ state$ mineral minerals, s, la*es, la*es, ponds, rivers! ! All All ob5ect ob5ectss place placed d by human human agency agency on or under under the the surf surface ace,, with with the intent intentio ion n of permanent anneation! These become part of the land, and lose their identity as separate movable < building, walls, fences! Benefts to arse o+t of $an*
Apart from property being immovable from the physical point of view, every benefit arising out of it and every interest in such property is also regarded as immovable property!$ hereditary allowa allowances nces,, rights rights of way, way, light lights, s, ferrie ferriess and fisher fisheries ies!! A debt secure secured d by a mortga mortgage ge of immovable property is an interest inland! A right to collect lac from 5ungle, flash from pond, right to ta*e minerals, rent from hat or mar*et place! T&n's attac&e to eart&* S,- . defines the epression < attac&e attac&e to t&e eart&* as including$
1! 2! .! ;!
Thin Things gs roo roote ted d in the eart earth, h, Thin Things gs imb imbedd edded ed in in the the earth earth,, Things Things atta attached ched to what what is so imbedd imbedded, ed, Chatte Chattell attac attached hed to to earth earth or buildi building! ng!
T&n's roote n t&e eart&*
Includes li*e trees and shrubs, but when such trees constitute standing timber they are not immovable property!imilarly, property!imilarly, growing crops, and grass are regarded as movable property! T&n's !#ee n t&e eart&*
Includes Includes such things as houses and buildings, buildings, there are certain certain thing which are imbedded imbedded in the land but not a immovable property li*e anchor imbedded in the land to hold a ship! T&n's attac&e to /&at s so !#ee*
Includes li*e door, window of a house are attached to the house for the permanent en5oyment of the house, when the intention Is not permanent en5oyment then it becomes the movable property li*e fans, blinds! C&atte$ attac&e to eart& or #+$n'*
If a chattel, i!e!, movable property is attached to earth or building, it is immovable property!
4
Secton 0, 1Transfer of Property1 means an act by which a $"n' person con"eys property ,
in present or n f+t+re , to one or more other living persons, or to himself and one or more other living persons7 and =to transfer property= is to perform such act! •
0hen we analy>e the above definition$ there are few things which comes up regarding Transfer of property$ Transfer is an ACT* (iving and Ta*ing of :ights$ Active Act, ?isible Act!
•
-etween two or more (IVING PERSON* by which a living person Inter vivos$ +iving or atural person and Artificial Person 3 +aw eistence, company4!
•
Con"eys $ transfer!
•
Present or f+t+re $ #uture property not allowed!
•
Property $ Property to another person$ To himself 3 Trust, minor or guardianship$
:ahubar ingh v@s %ai %nder -hadur ingh!
2oe of Transfer
There are five modes of transfer of property 1! ale 3Immovable Property4! Transfer of Complete :ights! Consideration! 2! 9ortgage! 3 it is of si *ind$ 1! Possession,2! &n5oyment,.! ub5ect to Condition,;! &'uitable,! ymbolic, ! Constructive!4
5
.! (ift$ 3 o consideration4 ;! Actionable claim!$ Bnsecure debt! ! +ease 3Time force, :ent4
2o"a#$e Property3 P$e'e I!!o"a#$e Property3 2ort'a'e, 2ac&nery3 Hypotaton,
In this section =living person= includes a compan y or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals! %&at s transfer4 The term =transfer= means a process or an act by which something is made
over to another! It does not however, mean that the ma*ing over of the thing should always be absolute! I may transfer my boo* to you for a day! I may also transfer it to you absolutely either by sale, gift or in echange of your boo*! In either case, what is primarily essential is that I have to handover the boo* to you, and that act of handing over the boo* to you is the transfer of the boo*! 1! Transfer of Property has special technical meaning in Transfer of Property Act! )nly conveyances are considered as transfer according to this Act! T&ree !oes con"ey a#so$+te tt$e e,', sa$e5 'ft5 e6c&an'e, T/o con"ey $!te nterest e,', !ort'a'e an $ease,
2! Transfer inter via alone are included as Transfer in Transfer of Property Act, e!g! transfer from living person or persons to living person or persons! .! Transfer can be present or future but transferor and transferee must be living person! The only eception is ection 1. of Transfer of Property Act!
6
;! +iving person is wider term than natural hu man beings! It includes 5uristic persons li*e company and other li*e associations or body of individuals whether registered or not registered! ! )ther laws governing transfer to 5uristic persons etc! are not affected b y Transfer of Property Act! In simple words Transfer means
An act by which, A living person, Conveys, In present or future, Property, To another living person!
#ollowing transactions are not considered as Transfer -#amily settlement! -Compromise -Partition! -urrender! -:elin'uishment! -Charge •
An Act$ it means it is a process or an activity7 it is not a digital application or not the automatic process! 9eaning thereby, something should be done by the person who wants to transfer his or her property! 0ill or Inheritance is the eception of this rule as property transfer automatically by operation of law!
•
+iving Person$ The Act use the word Inter ?ivos i!e! transfer between living person AT T& DAT& )# T:A#&:! )peration of law come into picture in case of Inheritance or wills 3 means the death of the transferor4 this sort of transfer 3 -y operation of law4 called T&TA9&T:A:E T:A#&:!
•
Conveys < Doing an act of transfer denote conveys! It means any act the transferor by which certain new titles or interests are created in favor of the transferee! In simple language it would be called the AB:AC& which is being given by Transferor to the Transferee! Conveys means anything done or any assurance given by the Transferor to 7
the Transferee by virtue of which the transferee gets the new title or interest is called the conveys! •
In present or In future$ The transfer of property may be ta*e place immediately or in future date, the epression in present or in future governed by Conveys, it does not govern by the property! 9eans the title of property may vested in the transferee immediately with en5oyment or it en5oyment can be delayed or postpone for future, which can also comply with certain conditions! Property$ property may be tangible or intangible, property is essentially a bundle of rights or interest! 0hen a property is transferred it actually the transfer of rights! All rights in a property denote the ownership or absolute interest
To anot&er $"n' person, There should be another person to whom the property can be transfer,
a person can not transfer the property to himself, but in 1F2F some amendment has been made and a person can transfer a property to himself in case he ma*e any settlement in a trust and he become the sole trustee! )ther :ules$ ot a Transfer of Property 7a!$y Sett$e!ent*
#amily settlement or #amily agreement is not a transfer of property, why because when it ta*e place the already eisting shares of the members of the family are defined and separated in order to avoid any possible dispute! Secton 8* Ora$ Transfer* 2oe of Transfer
This section deal with mode of transfer, it says where writing is not necessary the property may be transferred orally! i!e! without writing any deed! It means there are two mode of transfer$ 1! Delivery of possession$ which generally happened in case of movable property! 2! Transfer by registration! In the following condition :egistration are compulsory u@s F of TPA$ 1! 2! .! ;! ! !
(ift of an immovable property! ale of an immovable property eceeding :s 1GG! ale of reversion or other intangible property irrespective out of its value! +eases form year to year or for a term eceeding one year or reserving a year rent! imple mortgage irrespective of its amount! )ther *ind of mortgage3 ecept mortgage by deposit of title deeds4 where the sum secured eceeds :s 1GG! 8
"! &change of immovable property &:s 1GG! 8! Transfer of actionable claim!
Secton 9* person co!petent to transfer Persons co!petent to transfer -
&very person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the etent and in the manner, allowed and prescribed by any law for the time being in force!
Competent to transfer! 1! 2! .! ;!
Attained the age of ma5ority! oundness of mind! There should be no other legal bar! &ntitle to transfer 3 must be ownership4
Ne!o ept :+at non &a#t* ;o+ can transfer on$y t&ose /&c& yo+ &a"e ! :ule is applicable
even for Transfer of Property Act
Secton <* Operaton of transfer
To understand the section 8 we have to understand what happen in transfer, we transfer the interest or rights actually! -y transferring property, we also transfer some incident, which may or may not be epress in writing! &le of legal incident are$ ! Property +and
+egal Incident &asement , rent,and profits and all things attached
ouse
to the earth! &asement the rent accruing after the transfer, loc*s,
9achinery attached to earth Debt
*eys,bars, doors and other things! 9ovable parts of machinery ecurities 3right to resort to some property for the
9oney or other property yielding income
satisfaction of the debt Interest or income accruing after the transfer ta*es effect!
9
Secton*=>* Conton restrann' a$enaton* Vo t&e Conton not t&e Transfer, %&ere property s transferre s+#?ect to a conton or $!taton A-)+BT&+E
:&T:AII( the transferee or any person claiming under him form parting with or disposing of his interest in the property, the condition or limitation is void, ecept in the case of le ase where the condition is for the benefit of the lessor or those claiming under him ! Provided that property may be transferred to or for the benefit of a women 3not being a indu, 9uhammadan or -uddhist4, so that she shall not h ave power during her marriage to transfer or charge the same or her beneficial interest therein!
Secton => Contona$ Transfer
Conditional transfer if allowed! There are two form of Conditions$ 1! Bse related conditions! 2! #urther transfer of property$ alienation! ection 1.$ transfer for benefit of unborn person Genera$ r+$e of TPA is transfer of property between living person at the date of transfer, but section 1. of this act provide the conditions where a interests can be created for unborn person or a person who is not eist at the date of transfer sub5ect to certain conditions which is also authenticated by Indian Trust Act !
Transfer to an +n#orn person* An unborn person means , a person who is not in eistence even in the mothers womb!
Property can be transfer to a child in mothers womb 3en ventre sa mere4! -ut property can not be transfer to a person who is not in eistence means who is not even his mother womb! Accordingly ! of this act provide that transfer of property between two living person! Transfer for t&e #eneft of an +n#orn person !1. provide property can be transfer for the benefit of un unborn person sub5ect to following conditions6 1! o direct transfer6 2! Prior interest .! Absolute interest
NO DIRECT TRANS7ER* 10
o transfer can be made directly to an unborn person! uch transfer can be made by the machinery of trust! :eason behind if a transfer were made directly to an unborn person, there would be an a#eyance of o/ners&p form the date of transfer till the coming into eistence of the unborn person which is void according to &nglish Common +aw! PRIOR INTEREST
In case the trust is not created , the estate must vest in some person between the date of the transfer and the coming into eistence of the unborn person! In other words, the interest in favour of an unborn person must always be preceded by a prior interest in favour of a living person! ABSO(UTE INTEREST The entire property must be transferred to the un born person! It is not permissible to confer a life$interest on an unborn person! in &nglish +aw it is possible to give an estate to an unborn person for life! -ut this aspect of &nlish +aw was sub5ect ot a restriction called the rule against double possibilities! Types of Transfer =, Operaton of transfer Bnless a different intention is epressed or necessarily implied, a transfer of property
passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof! uch incidents include, when the property is land, the easements anneed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth7and, where the property is machinery a ttached to the earth, the movable parts thereof7 and, where the property is a house, the easements anneed thereto, the rent thereof accruing after the transfer, and the loc*s, *eys, bars, doors, windows, and all other things provided for permanent use therewith7 and, where the property is a debtor other actionable claim, the securities therefor 3ecept where they are also for other debts or claims not transferred to the transferee4, but not arrears of interest accrued before the transfer7and, where the p roperty is money or other property yielding income, the interest or income thereof accruing after the transfer ta*es effect! 2! Ora$ transfer 11
-
A transfer of property may be made without writing in every case in which a writing is
not epressly re'uired by law! a, Conton restrann' a$enaton 0here property is transferred sub5ect to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, ecept in the case of a lease where the condition is for the benefit of the lessor or those claiming under him6 P:)?ID&D that property may be transferred to or for the benefit of a women 3not being a indu, 9uhammadan or -uddhist4, so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein! #, Restrcton rep+'nant to nterest create 0here, on a transfer of property, an interest therein is created absolutely in favour of an y person, but the terms of the transfer direct that such interest shall be applied or en5oyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction! 0here an y such direction has been made in respect of one piece of immovable property for the purpose of securing the beneficial en5oyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof! c, Conton !a@n' nterest eter!na#$e on nso$"ency or atte!pte a$enaton 0here property is transferred sub5ect to a condition or limitation ma*ing any interest therein, reserved or given to or for the benefit of any person, to cease on his becoming insolvent or endeavouring to transfer or dispose of the same, such condition or limitation is void! othing in this section applies to a condition in a lease for the benefit of the lessor or those claiming under him! , Transfer for #eneft of +n#orn person 0here, on a transfer of property, an interest therein is created for the benefit of a person not in eistence at the date of the transfer, sub5ect to a prior interest created by the same transfer, the interest created for the benefit of such person shall not ta*e effect, unless it etends to the whole of the remaining interest of the transferor in the property!
-, Contona$ transfer
12
An interest created on a transfer of property and dependent upon a condition fails if the fulfilment of the condition is impossible, or is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of an y law, or is fraudulent, or involves or implies in5ury to the person or property of another, or the court regards it as immoral or opposed to public policy! a, 7+$f$!ent of conton preceent
0here the terms of a transfer of property impose a condition to be fulfilled before a person can ta*e an interest in the property, the condition shall be deemed to have been fulfilled if it has been substantially complied with! #, Contona$ transfer to one person co+p$e /t& transfer to anot&er on fa$+re of pror sposton
0here, on a transfer of property, an interest therein is created in favour of one p erson, and by the same transaction an ulterior disposition of the same interest is made in favour of another, if the prior disposition under the transfer shall fail, the ulterior disposition shall ta*e effect upon the failure of the prior disposition, although the failure may not have occurred in the manner contemplated by the transferor! -ut, where the intention of the parties to the transaction is that the ulterior disposition shall ta*e effect only in the event of the prior disposition failing in a particular manner, the ulterior disposition shall not ta*e effect unless the prior disposition fails in that manner! c, Conton t&at transfer s&a$$ cease to &a"e effect n case specfe +ncertan e"ent &appens or oes not &appen
ub5ect to the provisions of section 12, on a transfer of property an interest therein may be created with the condition superadded that it shall cease to eist in case a specified uncertain event shall happen, or in case a specified uncertain event shall not happen! , Transfer #y person a+t&orse on$y +ner certan crc+!stances to transfer
0here any person, authorised only under circumstances in their nature variable to dispose of immovable property, transfers such property for con sideration, alleging the eistence of such circumstances, they shall, as between the transferee on the one part and the transferor and other persons 3if any4 affected by the transfer on the other part, be deemed to have eisted, if the transferee, after using reasonable care to ascertain the eistence of such circumstances, has acted in good faith! 13
e, Transfer /&ere t&r person s entt$e to !antenance
0here a third person has a right to receive maintenance, or a provision for advancement or marriage, from the profits of immovable property, and such property is transferred, the right may be enforced against the transferee, if he has notice thereof or if the transfer is gratuitous7 but not against a transferee for consideration and without notice of the right, nor against such property in his hands! f, Transfer #y ostens#$e o/ner
0here, with the consent, epress or implied, of the persons interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to ma*e it6 P:)?ID&D that the transferee, after ta*ing reasonable care to ascertain that the transferor had power to ma*e the transfer, has acted in good faith! ', Transfer #y person &a"n' a+t&orty to re"o@e for!er transfer
0here a person transfers any immovable property, reserving power to revo*e the transfer, and subse'uently transfers the property for consideration to another transferee, such transfer operates in favour of such transferee 3sub5ect to an y condition attached to the eercise of the power4 as a revocation of the former transfer to the etent of the power! &, Transfer #y +na+t&orse person /&o s+#se:+ent$y ac:+res nterest n property transferre
0here a person fraudulently or erroneously represents that he is authorised to transfer certain immovable property and professes to transfer such property for consideration, such transfer shall, at the option of the transferee, operate on any interest which the transferor may ac'uire in such property at any time during which the contract of transfer subsists! ;! ! Transfer #y one co*o/ner 0here one of two or more co$owners of immovable property legally competent in that behalf transfers his share of such property or any interest therein, the transferee ac'uires, as to such share or interest, and so far as is necessary to give, effect to the transfer, the transferorHs right to 5oint possession or other common or part en5oyment of the property, and to enforce a partition of the sameH but sub5ect to the conditions and liabilities affecting at the date of the transfer, the share or interest so transferred! 0here the 14
transferee of a share of a dwelling$house belonging to an undivided family is not a member of the family, nothing in this section shall be deemed to entitle him to 5oint possession or other common or part en5oyment of the house!
a, Jont transfer for conseraton
0here 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 fund7 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 interests 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 e'ually interested in the property!
#, Transfer for conseraton #y persons &a"n' stnct nterests
0here immovable property is transferred for consideration by persons having distinct interests therein, the transferors are, in the absence of a contract to the contrary, entitled to share in the consideration e'ually, where their interests in the property were of e'ual value, and, where such interests were of une'ual value, proportionately to the value of their respective interests c, Transfer #y co*o/ners of s&are n co!!on property
0here several co$owners of immovable property transfer a share therein without specifying that the transfer is to ta*e effect on any par ticular share or shares of the transferors, the transfer, as among such transferors, ta*es effect on such shares e'ually where the shares were e'ual, and, where they were une'ual, proportionately to the etent of such shares! , Prorty of r'&ts create #y transfer
15
0here a person purports to create by transfer at different times rights in or over the same immovable property, and such rights cannot all eist or be eercised to their full etent together, each later created right shall, in the absence of a special contract or reservation binding the earlier transferees, be sub5ect to the rights previously created!
e, I!pro"e!ents !ae #y #ona fe &o$ers +ner efect"e tt$es
0hen the transferee of immovable property ma*es any improvement on the property, believing in good faith that he is absolutely entitled thereto, and he is subse'uently evicted therefrom by any person having a better title, the transferee has a right to re'uire the person causing the eviction either to have the value of the improvement estimated and paid or secured to the transferee, or to sell interest in the property to the transferee at the then mar*et value thereof, irrespective of the value of such improvement! The amount to be paid or secured in respect of such improvement shall be the estimated value thereof at the time of the eviction! 0hen, under the circumstances aforesaid, the transferee has planted or sown on the property crops which are growing when he is evicted therefrom, he is entitled to such crops and to free ingress and egress to gather and carry them 0, 7ra++$ent transfer
314 &very transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed! othing in this sub$section shall impair the rights of a transferee in good faith and for consideration! othing in this sub$section shall affect any law for the time being in force relating to insolvency !A suit instituted by a creditor 3which term includes a decree$holder whether he has or has not applied for eecution of his decree4 to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor shall be instituted on behalf of, or for the benefit of, all the creditors! 324 &very transfer of immovable property made without consideration with intent to defraud a subse'uent transferee shall be voidable at the option of such transferee! #or the purposes of this sub$section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subse'uent transfer for consideration was made!
16
Sale of immovable properties- S 54,55,56 Sale S-54-Sale is the transfer of ownership, in exchange of price paid, or promises to paid or part paid or part promise. When sale made rior owner distitle and new owner gets the title of the property !onstit"entTransfer of ownership- #n sale there m"st be transfer of absol"te ownership, means •
•
ownership with liability. $oney consideration- when ownership is transfer in money consideration its call sale, the ade%"acy of consideration is immateriali&e. The price may be paid f"ll, part, immediately or in f"t"re.
'ssential of (alid Sale • • • • •
Two parties seller and p"rchaser !ompetent parties S"b)ect matter i.e. property in existence. $oney consideration, price of the property The conveyance* contract made in accordace with existing law
$ode of Sale +egistration of Sale eed - Sale relating only with tangible immovable property, if the val"e of property above +s , it m"st be registered, in case of val"e of tangible immovable property less then +s s"ch transfer may be made either by registered instr"ment or transfer of property. elivery of property - eliver of tangible immovable property ta/es place when b"yers ta/es the possession of the property. S55- +ights and 0bligation of 1"yers and Seller
Before the Sale Seller +ights
1! To get the rent and profits of the property till he possess the
ellers Duty 1! isclos"re of material defect in
1"yers +ights
1"yers "ty
1!-uyers charges$ In
."ty of disclos"re, if
case the sale does not
the seller is ignorant
the property if any. ta*e place due to any 2! rod"ce of title deed reason, buyers has a
abo"t his own right in property. #t is the d"ty of 17
ownership.
of the property. .! 2nswer relevant
right to ta*e bac* his
the b"yer to disclose the
payment made in
seller that some material
advance with interest!
fact can increase the cost
%"estions, as/ed by b"yer. ;! !are of property
of the property in f"t"re.
2!Payment of price! To pay
and title deed as its
the agreed payment@ price
own, li/e a normal
for the property in the
pr"dence person
contract of sale!
care. ! ayments of o"tgoing till date of sale.
2fter Sale Seller +ights 1!allers +ien or
charge$
Se$$ers D+ty 1! (iving possession of
1"yers +ights 1! &n5oy all the rights
1"yers "ty 1!-ear the loss to
the property 2! Convent for title! .! Delivery of the title
arising out of the
property!
property
2!To pay the out goings
deed!
on property!
Seller3s ien or !harge Sec 554b
If after completion of sale, if the price or any part of it remains unpaid, the seller ac'uires a lien or charge on the property! 9eans when the ownership is transfer to the buyer after co mpletion of sale, and the seller remain unpaid7 the seller can neither refuse the delivery of possession nor can claim bac* the possession of the property! Therefore u@s 3;4 3b4 the seller has given a right to recover the unpaid purchase money form out of the property! This is called the statutory charge of the seller for unpaid seller! In other, word this is the only remedy left with the seller to recover of the balance purchase money! There is creation of a right of payment out of the property7 it may be created by the act of the parties or by operation of law! ince under this right the seller is not entitled to retain the possession of the property this charge is said to be the non$possession lie! #or the recovery of unpaid purchase money the seller shall enforce his charge u@s 1GG by a suit 18
against buyer for sale of the property! -ut such a charge can not b e enforced against any subse'uent buyer, and not after the epiry of 12 years of the date of sale! Interest on Unpa Prce ! The seller is also entitle to claim not only the unpaid part of the purchase money but also
interest on such amount but not from the date of transfer of ownership but form the date on which the possession was delivered! Transfer of Se$$er c&ar'e* a charge created in favour of the vendor is an unsecured debt,
therefore it is a Actionable Claim, and transferable! E6c$+son of t&e C&ar'e* can be possible by contract between the parties! Se$$er Unpa Prce (e +ner En'$s& (a/
Bnder &nglish law the seller ac'uire lie on property under the principle of e'uity! 0hen the contract of sale is constituted the seller gives to the bu yer an e'uitable estate even before the completion of sale, in return he also ac'uire the lie on the property from the date of contract, sub5ect to price unpaid! In India contract of sale does not given an y interest in the property, the charge is created only after the conveyance! In India the charge is created by +aw not by e'uity
DISCHARGE O7 ENCU2BRANCES ON SA(E Pro"son #y co+rt for enc+!#rances an sa$e free t&erefro!
3a4 0here immovable property sub5ect to any encumbrances, wh ether immediately payable or not, is sold by the court or in eecution of a decree, or out of court, the court may, if it thin*s fit, on the application of any party to the sale, direct or allow payment into court,$ 314 in case of an annual or monthly sum charged on the property, or of a capital sum charged on a determinable interest in the property$of such amount as, when invested in securities of the Central (overnment, the court considers will be sufficient, by means of the interest thereof, to *eep down or otherwise provide for that charge, and 324 in any other case of a capital sum charged on the property$ of the amount sufficient to meet the encumbrance and any interest due thereon! -ut in either case there shall also be paid into court such additional amount as the court considers will be sufficient to meet the contingency of further costs, epenses and interest, and any other contingency, ecept depreciation of investment not eceeding one$ tenth part of the original amount to be paid in, unless the court for special reasons 3which it shall record4 thin*s fit to re'uire a large additional amount! 19
3b4 Thereupon the court may, if it thin*s fit, and after notice to the encumbrances, unless the court, for reasons to be recorded in writing thin*s fit to dispense with such notice, declare the property to be freed from the encumbrance, and ma*e any order for conveyance, or vesting order, proper for giving effect to the sale, and give directions for the retention and investment of the money in court! 3c4 After notice served on the persons interested in or entitled to the money or fund in court, the court may direct payment or transfer thereof to the persons entitled to receive or give a discharge for the same, and generally may give directions respecting the application or distribution of the capital or income thereof! 3d4 An appeal shall lie from any declaration, order or direction under this section as if the same were a decree! 3e4 In this section =court= means 314 a igh Court in the eercise of its ordinary or etraordinary original civil 5urisdiction, 324 the court of a District %udge within the local limits of whose 5urisdiction the property or any part thereof is situate, 3.4 any other court which the tate (overnment may, from time to time, by notification in the )fficial (a>ette, declare to be competent to eercise the 5urisdiction conferred by this section! 2ORTGAGES O7 I22OVAB(E PROPERT; AND CHARGES A mortgage is a method of creating charge on immovable properties li*e land and building!
ection 8 of the Transfer of Property Act 1882, define a mortgage as follows6 =A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an eisting or future debt, or the performance of an engagement which may give rise to a pecuniary liability!= In terms of the definition, the following are the chara cteristics of a mortgage6 314 A mortgage can be affected only on immovable property! Immovable property includes land, benefits that arise out of land and things attached to earth li*e trees, buildings and machinery! -ut a machine which is not permanently fied to the earth and is shift able from one place to another is not considered to be immovable property! 324 A mortgage is the transfer of an interest in the specific immovable property! This means the owner transfers some of his rights only to the mortgagee! #or eample, the right to redeem the property mortgaged!
20
3.4 The ob5ect of transfer of interest in the property must be to secure a loan or performance of a contract which results in monetary obligation! Transfer of property for purposes other than the above will not amount to mortgage! #or eample, a property transferred to +i'uidate prior debt will not constitute a mortgage! 3;4 The property to be mortgaged must be a specific one, i!e!, it can be identified by its si>e, location, boundaries etc! 34 The actual possession of the mortgaged property is generally with the mortgager! 34 The interest in the mortgaged property is re$conveyed to the mortgager on repayment of the loan with interest due on! 3"4 In case, the mortgager fails to repay the loan, the mortgagee gets the right to recover the debt out of the sale proceeds of the mortgaged property! The transferor is called a mortgagor, the transferee a mortgagee7 the principal money and interest the payment of which is secured for the time being are called the mortgage money and the instrument by which the transfer is effected is called the mortgage deed! Essenta$s of a 2ort'a'e
14 Transfer of Interest6 The first thing to note is that a mortgage is a transfer of interest in the specific immovable property! The mortgagor as an owner of the property possesses all the interests in it, and when he mortgages the property to secure a loan, he only parts with a part of the interest in that property in favour of the mortgagee! After mortgage, the interest of the mortgagor is reduced by the interest which has been transferred to the mortgagee! is ownership has become less for the time being by the interest which he has parted with in favour of the mortgagee! If the mortgagor transfers this property, the transferee gets it sub5ect to the right of the mortgagee to recover from it what is due to him i!e!, the principal plus interest! 24 pecific Immovable Property6 The second point is that the property must be specifically mentioned in the mortgage deed! 0here, for instance, the mortgagor stated all of my propertyJ in the mortgage deed, it was held by the Court that this was not a mortgage! The reason why the immovable property must be distinctly and specifically mentioned in
21
the mortgage deed is that, in case the mortgagor fails to repay the loan the Court is in a position to grant a decree for the sale of any particular property on a suit by the mortgagee! .4 To ecure the Payment of a +oan6 Another characteristic of a mortgage is that the transaction is for the purpose of securing the payment of a loan or the performance of an obligation which may give rise to pecuniary liability! It may be for the purpose of obtaining a loan, or if a loan has already been granted to secure the repayment of such loan! There is thus a debt and the relationship between the mortgagor and the mortgagee is that of debtor and creditor! 0hen A borrows 1GG bags of paddy from - on a mortgage and agrees to return an e'ual 'uantity of paddy and a further 'uantity by way of interest, it is a mortgage transaction for the performance of an obligation! ;4 0here, however, a person borrows money and agrees with the creditor that till the debt is repaid he will not alienate his property, the transaction does not amount to a mortgage! ere the person merely says that he will not transfer his property till he has repaid the debt7 he does not transfer any interest in the property to the creditor! In a sale, as distinguished from a mortgage, all the interests or rights or ownership are transferred to the purchaser! In a mortgage, as stated earlier, only part of the interest is transferred to the mortgagee, some of them remains vested in the mortgagor!! Dfference #et/een 2ort'a'e an C&ar'e
14 A mortgage is created by the act of the parties whereas a charge may be created either through the act of parties or by operation of law! 24 A charge created by operation of law does not re'uire the registration as prescribed for mortgage under the Transfer of Property Act! -ut a charge created by act of parties re'uires registration! .4 A mortgage is for a fied term whereas the charge may be in perpetuity! ;4 A simple mortgage carries personal liability unless ecluded by epress contract! -ut in case of charge, no personal liability is created! -ut where a charge is the result of a contract, there may be a personal remedy! 22
4 A charge only gives a right to receive payment out of a particular property, a mortgage is a transfer of an interest in specific immovable property! 4 A mortgage is a transfer of an interest in a specific immovable property, but there is no such transfer of interest in the case of a charge! Charge does not operate as transfer of an interest in the property and a transferee of the property gets the property free from the charge provided he purchases it for value without notice of the charge! "4 A mortgage is good against subse'uent transferees, but a charge is good against subse'uent transferees with notice. ection 8 of the transfer of Property Act enumerates si *inds of mortgages6 314 imple mortgage! 324 9ortgage by conditional sale! 3.4 Bsufructuary mortgage! 3;4 &nglish mortgage! 34 9ortgage +y deposit of title deeds! 34 Anomalous mortgage! =) S!p$e 2ort'a'e
In a simple mortgage, the mortgager does not deliver the possession of the mortgaged property! e binds himself personally to pay the mortgage money and agrees either epressly or impliedly, that in case of his failure to repay, the mortgagee shall have the right to cause the mortgaged property to be sold and apply the sale proceeds in payment of mortgage money! The essential feature of the simple mortgage is that the mortgagee has no power to sell the property without the intervention of the court! The mortgagee can6 3i4
apply to the court for permission to sell the mortgaged property, or
3ii4
file a suit for recovery of the whole amount without selling the property!
) 2ort'a'e #y Contona$ Sa$e
In this form of mortgage, the mortgager ostensibly sells the property to the mortgagee on the following conditions6 23
3i4
The sale shall become void on payment of the mortgage money!
3ii4
The mortgagee will retransfer the property on payment of the mortgage money!
3iii4
The sale shall become absolute if the mortgager fails to repay the amount on a certain date!
3iv4
The mortgagee has no right of sale but he can sue for foreclosure! #oreclosure means the loss of right possessed by the mortgager to redeem the mortgaged
property! The mortgagee has the right to institute a suit for a decree so that the mortgager will be absolutely debarred from his right to redeem the property! The right to foreclosure arises when the time fied for repayment epires and the mortgager fails to repay the mortgage money! 0ithout the fore closure order the mortgagee will not become the owner of the property! -) Us+fr+ct+ary 2ort'a'e
Bnder this form of mortgage, the mortgager delivers possession of the property or binds himself to deliver possession of the property to the mortgagee! The mortgagee is authori>ed to retain the possession until the debt is repaid! The mortgager reserves the right to recover the property when the money is repaid! The essential feature of this form of mortgage is that the mortgagee is entitled to receive rents and profits relating to the mortgaged property till the loan is repaid and appropriate the same in lieu of interest or in repayment of the loan or both! The mortgager is not personally liable to repay the mortgage money! o the mortgagee cannot sue the mortgager for repayment! e can neither sue foreclosure nor sue for sale of the mortgaged property7 the only remedy for the mortgagee is to remain in possession of the property and pay himself out of the rents or profits of the mortgaged property! ince there is no time limit he has to wait for a very long time to recover his dues! ) En'$s& 2ort'a'e
The &nglish mortgage has the following characteristics6
24
314 The mortgager transfers the property absolutely to the mortgagee! The mortgagee, therefore, is entitled to ta*e immediate possession of the property! The transfer is sub5ect to the condition that the property shall be transferred on repayment of the loan! 324 The mortgager also binds himself to pay the mortgage money on a certain date! 3.4 In case of non$repayment, the mortgagee has the right to sell the mortgaged property without see*ing permission of the court in circumstances mentioned in section F of the Transfer of Property Act! 0) 2ort'a'e #y Depost of Tt$e Dees
0hen a debtor delivers to a creditor or his agent document of title to immovable property, with an intention to create a security there on, the transaction is called mortgage by deposit of title deeds! uch a mortgage is restricted to the towns of Kol*ata, 9umbai and Chennai and other towns notified by the tate government for this purpose in the )fficial (a>ette! This type of mortgage re'uires no registration! This form of mortgage is also *nown as e'uitable mortgage! (e'a$ 2ort'a'e "s, E:+ta#$e 2ort'a'e
)n the basis of transfer of title to the mortgaged property, mortgages are divided into two types, namely6 3i4
+egal 9ortgage!
3ii4
&'uitable 9ortgage! (e'a$ 2ort'a'e
In a legal mortgage, the legal title to the property is transferred in favour of mortgagee by a deed! The deed is to be registered when the principal money is :s! 1GG@$ or more! )n repayment of the loan, the legal title is retransferred to the mortgagor! This method of creating charge is epensive as it involves registration charges and stamp duty! E:+ta#$e 2ort'a'e
25
An e'uitable mortgage is effected by mere delivery of documents of title to property to the mortgagee! The mortgagor through 9emorandum of deposit underta*es to grant a legal mortgage if he fails to pay the mortgage money! &ssential :e'uirements of &'uitable 9ortgage 314 An e'uitable mortgage re'uires three essential features i! there must be a debt eisting or future, ii! there must be deposit of title deeds, are the title deeds should be deposited as security for the debt! 324 :egistration of documents is not necessary! :oyal Printing 0or*s and )thers ?s! )riental -an* of Commerce 3"FFG4! It was established in the above case, that where a security is furnished by deposit of title deeds, no registration is necessary! 3.4 An e'uitable mortgage can be effected only in the towns of Kol*ata, 9umbai and Chennai and in certain places notified by the tate (overnment! 3;4 The documents are to be retransferred to the mortgagee on repayment of the debt! 34 The mortgagee is empowered to apply to the court to convert the e'uitable mortgage into a legal mortgage, if the mortgager fails to repay the loan on a specified date! A"anta'es
314 o registration is re'uired in e'uitable mortgage and so stamp duty is saved! 324 It involves minimum formalities! 3.4 The information regarding such mortgage is *ept confidential between the lender and borrower! o the reputation of the borrower is not affected! Dsa"anta'es
26
314 If the mortgagor fails to repay, the mortgagee must get the decree for the sale of the property! (etting a decree is epensive and time consuming! 324 The borrower may hold the title deeds not on his own account, but in the capacity of a trustee! If an e'uitable charge is created, the claim of the beneficiary under the trust will prevail over e'uitable mortgage! 3.4 There is the ris* of subse'uent legal mortgage in favour of another party! If the e'uitable mortgagee parts with the security, even for a short period, the debtor may create a second legal mortgage over the same property! In that case, the second mortgage shall have the first priority over the e'uitable mortgagee! The mortgagee should be very careful in this regard! ) Ano!a$o+s 2ort'a'e
In terms of this definition an anomalous mortgage is one which does not fall under anyone of the above five terms of mortgages! uch a mortgage can be effected according to the terms and conditions of the mortgager and the mortgagee! Bsually it arises by a combination of two or more of the above said mortgages! It mayH ta*e various forms depending upon custom, usage or contract! R'&t of 2ort'a'er*
314 R'&ts of Ree!ptonF The mortgager has a right to redeem the mortgaged property provided6 a! he$pays the mortgage money on due date at the proper place and time, b!
the right of redemption has not been terminated by an act of the parties or by decree of a court!
The mortgager who has redeemed the mortgage is entitled to the following rights6 3a4 to get bac* the mortgage deed and all other documents relating to the mortgaged property, 3b4 to obtain possession of the mortgaged property from the mortgagee, as in the case of &nglish mortgage, 27
3c4 to have the mortgaged property retransferred at his cost to him or to such third person as he may direct! 324 Accesson to 2ort'a'e PropertyF During the possession of the property, if the mortgagee has voluntarily made any improvement in the property, the mortgager, on redeeming the property, is entitled to all such additions or improvements, unless there is a contract to the contrary! 3.4 R'&t to Transfer to T&r PartyF The mortgager may re'uire the mortgagee to transfer the mortgaged property to a third person instead of retransfer to him! 3;4 R'&t to Inspecton an Pro+cton of Doc+!entsF The mortgager has the right to inspect and ma*e copies of all documents of title in the custody of mortgagee! R'&ts of 2ort'a'ee
314 R'&t to s+e for !ort'a'e !oneyF The mortgagee has the right to file a suit in a court of law for the mortgage money in the following cases6 a! 0here the mortgager binds himself to repay the mortgage money, as in the case of simple and &nglish mortgage! b! 0here the mortgaged property is wholly or partly destroyed or the security is rendered insufficient and to mortgager has not provided further security! c! 0here the mortgagee is deprived of the whole or a part of his security by the wrongful act of the mortgager! d! 0here the mortgager fails to deliver the mortgaged property in case the mortgagee is entitled to it! 324 R'&t of sa$eF The mortgagee in case of a simple, &nglish and e'uitable mortgage has the right to sell the property after filing a suit and getting a decree from a court! A mortgagee has a right of sale without the intervention of the court under certain circumstances mentioned in ection F of Transfer of Property Act!
28
3.4 R'&t of forec$os+reF The mortgagee has a right to obtain from the Court a decree for foreclosure against the mortgager, that is, the mortgager is absolutely debarred of his right to redeem the property! The right of fore closure is allowed in 3i4 a mortgage by a conditional sale, and the anomalous mortgage! 3;4 R'&t of accesson to propertyF If any addition is made to the mortgaged property, the mortgagee is entitled to such addition for the purpose of security provided there is no contract to the contrary! #or eample, A mortgages a certain plot of land to - and afterwards constructs a building on it! - is entitled to the building and land as security for the loan! 34 R'&t of possessonF The mortgagee is entitled to the possession of the mortgaged property as per the terms of mortgage deed! uch a right is available in usufructuary mortgage! (EASE (ease can be of a movable or an immovable property! It is a contractual arrangement calling for
the lessee 3user4 to pay the lessor 3owner4 for use of an asset! Bnder the Transfer of Property Act, 1882 3in short T!P!Act4 the sub5ect of +eases of Immovable PropertyJ is dealt with in Chapter ! Definition $ ec 1G lease of immoveable property is a transfer of a right to en5oy such property, made for a certain time, epress or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms! +essor, lessee, premium and rent defined!LThe transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent! Essenta$ e$e!ents of $ease 6 $
3i4 immovable property7 3ii4 right to en5oy such immovable property7 3iii4 the ascertainable duration of the lease7 3iv4 the parties that is the transferor and the transferee who are competent to ma*e contract7 3v4 the consideration that is premium or rent!
29
The lease for more than one year cannot be created unless it is registered! (essee
A lessee of a property has a right to possession and en5oyment of the devise to the eclusion of the lessor whereas a licensee does not have such a right! ince the appellant had the right to eclusive possession and en5oyment of the disputed property, he was a lessee and not a licensee7 (ease
3i4 If the agreement between the parties shows an intention to create an interest in the property in favour of the grantee what results is said to be a lease! A licensee on the other hand does not create an interest in property7 354 3ii4 The furniture and fittings and the tools and implements which have been given alongwith the shop were not meant for the beneficial use of the shop but were meant eclusively for running of the hair dressing saloon, thus creating a lease of the business and not a lease of the shop7 (cence
The Corporation had all the supervisory powers to regulate the running of the refreshment stall! o eclusive right was created in favour of the caterer to run the refreshment stall in the manner the caterer choose to do so! ince there is no transfer of interest in the stall and as per the terms of agreement, the document can be termed as licence only and not a lease7 D+raton of certan $eases n a#sence of /rtten contract or $oca$ +sa'e,
14 In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by si months notice7 and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, b y fifteen days notice!
30
24 otwithstanding anything contained in any other law for the time being in force, the period mentioned in sub$section 14 shall commence from the date of receipt of notice! 3.4 A notice shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub$section, where a suit or proceeding is filed after the epiry of the period mentioned in that sub$section! 3;4 &very notice must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or 3if such tender or delivery is not practicable4 affied to a conspicuous part of the property!M If any person claims to the contrary that the lease was for a fied term or to be a yearly lease instead of a lease from month to month he has to prove by legal, valid and reliable evidence! Therefore the burden lay upon the defendant to prove his contrary claim that lease was for a fied term of five years and the lease would be entered at the option and wish of the lessee7! ervice of notice $ otice sent on correct address to addressee who refused to accept it! Presumption lies with regard to notice on addressee@defendant! It is addressee@defendant who has to prove that either notice was not sent on correct address or same was not served upon him7 (eases &o/ !ae, Sec - =>9
•
! +eases how made!LA lease of immoveable property from year to year, or for any term eceeding one year or reserving a yearly rent, can be made only by a registered instrument!
•
All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession!
•
0here a lease of immoveable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be eecuted by both the lessor and the lessee6
31
Provided that the tate (overnment may from time to time, by notification in the )fficial (a>ette, direct that leases of immoveable property, other than leases from year to year, or for any term eceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession!M
(ease not to app$y for a'rc+$t+ra$ $ease
Principle of section 1G" which envisage mode in which lease is to be made do not apply to agricultural lease ature of lease $ If a lease agreement is neither a registered document nor an oral argeement accompanied by delivery of possession, it cannot create lessor and lessee relationship! uch document shall not effect any immoveable property nor be received as evidence of any transaction affecting such property! R'&ts an $a#$tes of $essor an $essee,
In the absence of a contract or local usage to the contrary, the lessor and the lessee of immoveable property, as against one another, respectively, possess the rights and are sub5ect to the liabilities mentioned in the rules net following, or such of them as are applicable to the property leased6L A) R'&ts an (a#$tes of t&e (essor
3a4 The lessor is bound to disclose to the lessee any material defect in the property, with reference to its intended use, of which the former is and the latter is not aware, and which the latter could not with ordinary care discover7 3b4 the lessor is bound on the lessees re'uest to put him in possession of the property7 3c4 the lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the lease and performs the contracts binding on the lessee, he may hold the property during the time limited by the lease without interruption!
32
The benefit of such contract shall be anneed to and go with the lessees interest as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested! B) R'&ts an (a#$tes of t&e (essee
3d4 If during the continuance of the lease any accession is made to the property, such accession 3sub5ect to the law relating to alluvion for the time being in force4 shall be deemed to be comprised in the lease7 3e4 if by fire, tempest or flood, or violence of an army or of a mob, or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void6 Provided that, if the in5ury be occasioned by the wrongful act or default of the lessee, he shall not be entitled to avail himself of the benefit of this provision7 3f4 if the lessor neglects to ma*e, within a reasonable time after notice, any repairs which he is bound to ma*e to the property, the lessee may ma*e the same himself, and deduct the epense of such repairs with interest from the rent, or otherwise recover it from the lessor7 3g4 if the lessor neglects to ma*e any payment which he is bound to ma*e, and which, if not made by him, is recoverable from the lessee or against the property, the lessee may ma*e such payment himself, and deduct it with interest from the rent, or otherwise recover it from the lessor7 3h4 the lessee may remove, at any time even as he is in possession of the property leased but not afterwards all things which he has attached to the earth7 provided he leaves the property in the state in which he received it7 3i4 when a lease of uncertain duration determines by any means ecept the fault of the lessee, he or his legal representative is entitled to all the crops planted or sown by the lessee and growing upon the property when the lease determines, and to free ingress and egress to gather and carry them7 33
354 the lessee may transfer absolutely or by way of mortgage or sub$lease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it! The lessee shall not, by reason only of such transfer, cease to be sub5ect to any of the liabilities attaching to the lease7 othing in this clause shall be deemed to authori>e a tenant having an transferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate under the management of a Court of 0ards, to assign his interest as such tenant, farmer or lessee7 3*4 the lessee is bound to disclose to the lessor any fact as to the nature or etent of the interest which the lessee is about to ta*e, of which the lessee is, and the lessor is not, aware, and which materially increases the value of such interest7 3l4 the lessee is bound to pay or tender, at the proper time and place, the premium or rent to the lessor or his agent in this behalf7 3m4 the lessee is bound to *eep, and on the termination of the lease to restore, the property in as good condition as it was in at the time when he was put in possession, sub5ect only to the changes caused by reasonable wear and tear or irresistible force, and to allow the lessor and his agents, at all reasonable times during the term, to enter upon the property and inspect the condition thereof and give or leave notice of any defect in such condition7 and, when such defect has been caused by any act or default on the part of the lessee, his servants or agents, he is bound to ma*e it good within three months after such notice has been given or left7 3n4 if the lessee becomes aware of any proceeding to recover the property or any part thereof, or of any encroachment made upon, or any interference with, the lessors rights concerning such property, he is bound to give, with reasonable diligence, notice thereof to the lessor7 3o4 the lessee may use the property and its products 3if any4 as a person of ordinary prudence would use them if they were his own7 but he must not use, or permit another to use, the property for a purpose other than that for which it was leased, or fell -Nor sellM timber, pull down or
34
damage buildings -Nbelonging to the lessor, orM wor* mines or 'uarries not open when the lease was granted, or commit any other act which is destructive or permanently in5urious thereto7 3p4 he must not, without the lessors consent, erect on the property any permanent structure, ecept for agricultural purposes7 3'4 on the determination of the lease, the lessee is bound to put the lessor into possession of the property! R'&ts of $essors transferee,
If the lessor transfers the property leased, or any part thereof, or any part of his interest therein, the transferee, in the absence of a contract to the contrary, shall possess all the rights, and, if the lessee so elects, be sub5ect to all the liabilities of the lessor as to the property or part transferred so long as he is the owner of it7 but the lessor shall not, by reason only of such transfer cease to be sub5ect to any of the liabilities imposed upon him by the lease, unless the lessee elects to treat the transferee as the person liable to him6 Provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if the lessee, not having reason to believe that such transfer has been made, pays rent to the lessor, the lessee shall not be liable to pay such rent over again to the transferee! The lessor, the transferee and the lessee may determine what proportion of the premium or rent reserved by the lease is payable in respect of the part so transferred, and, in case they disagree, such determination may be made by any Court having 5urisdiction to entertain a suit for the possession of the property leased! Deter!naton of $ease,
A lease of immoveable property determinesL 3a4 by efflu of the time limited thereby7 3b4 where such time is limited conditionally on the happening of some
35
eventLby the happening of such event7 3c4 where the interest of the lessor in the property terminates on, or his power to dispose of the same etends only to, the happening of any eventLby the happening of such event7 3d4 in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right7 3e4 by epress surrender7 that is to say, in case the lessee yields up his interest under the lease to the lessor, by mutual agreement between them7 3f4 by implied surrender7 3g4 by forfeiture7 that is to say, 314 in case the lessee brea*s an epress condition which provides that, on breach thereof, the lessor may re$enter or 324 in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself7 or 3.4 the lessee is ad5udicated an insolvent and the lease provides that the lessor may re$enter on the happening of such eventM7 and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease7 3h4 on the epiration of a notice to determine the lease, or to 'uit, or of intention to 'uit, the property leased, duly given by one party to the other! A lessee accepts from his lessor a new lease of the property leased, to ta*e effect during the continuance of the eisting lease! This is an implied surrender of the former lease, and such lease determines thereupon! Doctrne of !er'er
The doctrine of merger is attracted when a leasehold and revision coincide! If the lessee purchases the lessors interest, the lease is relin'uished as the same person cannot at the same time be both landlord and tenant! The doctrine of merger is based on the principle of union of two conflicting interests which cannot be held by one person at the same time! Therefore, the leasehold rights in favour of the appellants stand etinguished7 36
I!p$e s+rrener
There can be implied surrender, if the lessor grants a new lease to a third person with the assent of the lessee under the eisting lease who delivers the possession to such person or where the lessee directs his sub$tenant to pay the rent directly to the lessor! ince the respondents had by eecuting the agreement impliedly surrendered their leasehold rights, they were no longer lessees7! %a"er of forfet+re,
A forfeiture under section 111, clause 3g4 is waived by acceptance of rent which has become due since the forfeiture, or by distress for such rent, or by any other act on the part of the lessor showing an intention to treat the lease as subsisting6 Provided that the lessor is aware that the forfeiture has been incurred6 Provided also that, where rent is accepted after the institution of a suit to e5ect the lessee on the ground of forfeiture, such acceptance is not a waiver! %a"er of notce to :+t,
A notice given under section 111, clause 3h4, is waived, with the epress or implied consent of the person to whom it is given, by any act on the part of the person giving it showing an intention to treat the lease as subsisting! Re$ef a'anst forfet+re for non*pay!ent of rent,
0here a lease of immoveable property has determined by forfeiture for non$payment of rent, and the lessor sues to e5ect the lessee, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives such security as the Court thin*s sufficient for ma*ing such payment within fifteen days, the Court may, in lieu of ma*ing a decree for e5ectment, pass an order relieving the lessee against the forfeiture7 and thereupon the lessee shall hold the property leased as if the forfeiture had not occurred! 37
Effect of s+rrener an forfet+re on +ner*$eases,
The surrender, epress or implied, of a lease of immoveable property does not pre5udice an under$lease of the property or any part thereof previously granted by the lessee, on terms and conditions substantially the same 3ecept as regards the amount of rent4 as those of the original lease7 but, unless the surrender is made for the purpose of obtaining a new lease, the rent payable by, and the contracts binding on, the under$lessee shall be respectively payable to and enforceable by the lessor! The forfeiture of such a lease annuls all such under$leases, ecept where such forfeiture has been procured by the lessor in fraud of the under$lessees, or relief against the forfeiture is granted under section 11;! Effect of &o$n' o"er,
If a lessee or under$lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under$lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 1G! E6e!pton of $eases for a'rc+$t+ra$ p+rposes,
one of the provisions of this Chapter apply to leases for agricultural purposes, ecept in so far as the tate (overnment may by notification published in the )fficial (a>ette declare all or any of such provisions to be so applicable in the case of all or any of such leasesM, together with, or sub5ect to, those of the local law, if any, for the time being in force! uch notification shall not ta*e effect until the epiry of si months from the date of its publication! C&ar'es C&ar'es +ner t&e Transfer of Property Act =<< 6 0here immovable property of one person
is by act of parties or operation of law made security for the payment of money to another, and 38
the transaction does not amount to a mortgage, the latter person is said to have a charge on the property and all the provisions here$in$before contained which apply to a simple mortgage shall, so far as may be, apply to such charge! othing in this section applies to the charge of a trustee on the trust$property for epenses properly incurred in the eecution of his trust, and, save as otherwise epressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge
ec 1G1 o merger in case of subse'uent encumbrance Any mortgagee of , or person having a charge upon, immovable property or any transferee from such mortgagee or charge$holder may purchase or otherwise ac'uire the rights in the property of the mortgagor or owner , as the case may be without thereby causing the mortgagee or charge to be merged as between himself and any subse'uent mortgagee of , or person having a subse'uent charge upon the same property, and no such subse'uent mortgagee or charge$holder shall be entitled to foreclose or sell such property without redeeming the prior mortgagee or charge or otherwise than sub5ect tereto
Gft efne,
(iftJ is the transfer of certain eisting moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee! Acceptance when to be made!Luch acceptance must be made during the lifetime of the donor and while he is still capable of giving! If the donee dies before acceptance, the gift is void! Transfer &o/ effecte !L#or the purpose of ma*ing a gift of immoveable property, the transfer
must be effected by a registered instrument signed by or on behalf of the donor, and attested by
39
at least two witnesses! #or the purpose of ma*ing a gift of moveable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery! uch delivery may be made in the same way as goods sold! Bnder section 12. a gift of immoveable property cannot pass any title to the done if it is not registered! Any oral gift of immoveable property cannot be made in view of the provision of section 12. of the Act, mere delivery of possession without written instrument cannot confer any title! Gft of e6stn' an f+t+re property,
A gift comprising both eisting and future property is void as to the latter! Gft to se"era$ of /&o! one oes not accept,
A gift of a thing to two or more donees, of whom one does not accept it, is void as to the interest which he would have ta*en had he accepted %&en 'ft !ay #e s+spene or re"o@e,
The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revo*ed7 but a gift which the parties agree shall be revocable wholly or in part, at the mere will of the donor, is void wholly or in part, as the case may be! A gift may also be revo*ed in any of the cases 3save want or failure of consideration4 in which, if it were a contract, it might be rescinded! othing contained in this section shall be deemed to affect the rights of transferees for consideration without notice! Onero+s 'fts,
0here a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not burdened by an obligation, the donee can ta*e nothing by the gift unless he accepts it fully! 0here a gift is in the form of two or more separate and independent transfers to the same person of several things, the doneee is at liberty to accept one of them and refuse the others, although the former may be beneficial and the latter onerous!
40
