Table of Contents 1. INTRODUCTION
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2. TRANSFER OF PROPERTY
2
3. LAWS RELATING TO MODES OF TRANSFER OF PROPERTY
3
SALES
3
MORTGAGE
5
LEASES
9
EXCHANGES
11
GIFTS
12
4. CONCLUSION
14
5. BIBLIOGRAPHY
15
STATUTES
15
BOOKS AND ARTICLES
15
INTRODUCTION Before the transfer of property act there was practically no law as to real property in India. A few points were covered by the Regulations and the Acts which have been repealed wholly or in part 1 by Section 2 . But for the rest of the law, the Courts in the absence of any statutory provisions, adopted the English law, as the rule of justice, equity and good conscience. this was not satisfactory, as rules of English law were not always applicable to social conditions in India, and the case law became confused and conflicting. To remedy this hug state of affairs, a Commission was appointed in England to prepare a Code of substantive law for India. This commission drafted the Indian Succession Act, the Indian Contract Act, the Negotiable Instruments Act, the Indian Evidence, the Transfer of Property Act. The act came into force on 1st July, 1882. The Act applies to the whole of India. The Preamble to the Act lays down that it is an Act to define and amend the law relating to transfer of property by act of parties (i.e. not by operation of law) The objectives of the Transfer of Property Act are as follows: 1. To bring the rules which regulate the transmission of property between living persons into harmony with the rules affecting its devolution upon death, and thus, to furnish the complement to the work commenced in framing the law of intestate and testamentary succession; and 2. To complete the code of contract law, so far as it relates to immovable property.” The Act is limited to the transfer of property by act of parties, as distinguished form a transfer by operation of law e.g. in case of inheritance (succession), insolvency, forfeiture, or sale in execution of a decree. It relates to transfers of property inter vivos, i.e. voluntary transfers between living persons, and has no application to the disposal of property by will. Some of the general provisions of the T.P Act may be applied even to transfer by operation of law, on principles of justice, equity and good conscience. If the property is movable, the sale of Goods Act will apply, and if it is immovable, the Transfer of Property Act will govern the case. The Act is not exhaustive and it does not profess to be a 2 complete code .this is apparent from the omission of the word “consolidate”, which occurs for instance in the Indian Evidence Act, 1872. Under transfer of property Act 1882 there are 5 modes of transfer of property which are following: Sale Mortgage Lease Exchange Gift ● ● ● ● ●
1
Transfer of property act,1882. H V Low & Co., Ltd v. Pulin Beharilal Sinha (1933)
2
These modes of transfer of property are described in detail in the further chapters.
TRANSFER OF PROPERTY Section 5 of the T.P. Act defines Transfer of Property as an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, or to himself and one or more other living persons; and “to transfer property” is to perform such a ct. In this section “living person” includes a company 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 compa nies, associations or bodies of individuals. The Legislature does not define the word “property” but it is used in its widest and generic legal sense. Section 6 says the “property of any kind may be transferred”, etc. thus an actionable claim 3 is property ; and so is a right to a reconveyance of land. But the power of appointment is not property. Transfer of property is an act in which the property must be conveyed. It is not necessary that all rights or interest in property must be conveyed to another person. The person conveying the property is entitled to the property wanted to be conveyed and it is conveyed to that person who has no prior title in it. Section 5 also allows that the transferor may transfer the property either with immediate effect or to be effective from a future date. It must be remembered that whether the transfer of property will take effect from present or from future but property must exist at the time of transfer. It means that at the time of transfer, the property must be in existence; hence no transfer shall take effect in case of future property. The property must be conveyed by one living person to another living person, it means the transfer must be ‘Inter Vivos’ transfer. In this section “living person” includes a human being, a company or association or body of individuals, whether incorporated or not. A living person conveys property to one or more other living persons, or to himself, or to himself and one or more other living persons. But earlier a person was not able to transfer property to himself, e.g. where a person makes a settlement of his property in trust, and 4 constitutes himself sole trustee . Therefore, this section was amended by the Act of 1929, by the insertion of the word “or to himself”. The Act contemplates the following type of transfer- sales, mortgage, lease, exchange and gift. Section 6 says that Property of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force. a) The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred. b) A mere right of re-entry for breach of a condition subsequent cannot be transferred to anyone except the owner of the property affected thereby. 3
Rudra Prakash v. Krishna (1887) 14 Cal. 241 244. Naranbhai v. Suleman (19750 16 Guj. L.R. 289.
4
c) An easement cannot be transferred apart from the dominant heritage. d) An interest in property restricted in its enjoyment to the owner personally cannot be transferred by him. e) A right to future maintenance, in whatsoever manner arising, secured or determined, cannot be transferred. f) A mere right to sue cannot be transferred. g) A public office cannot be transferred, nor can the salary of a public officer, whether before or after it has become payable. h) Stipends allowed to military, naval, air-force and civil pensioners of the government and political pensions cannot be transferred. i) No transfer can be made (1) insofar as it is opposed to the nature of the interest affected thereby, or (2) for an unlawful object or consideration within the meaning of section 23 of the Indian Contract Act, 1872 (9 of 1872), or (3) to a person legally disqualified to be transferee. j) Nothing in this section shall be deemed to authorize a tenant having an untransferable 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 Wards, to assign his interest as such tenant, farmer or lessee. Section 7 says that every person – 1. Competent to contract under Section 11 of the Indian Contract Act, and 2. Entitled to transferable property, or 3. Authorized to dispose of transferable property which is not his own, is competent to transfer such property, Either wholly or partly, and ● Either absolutely or conditionally. ●
LAWS RELATING TO MODES OF TRANSFER OF PROPERTY There are various sections in the T.P. Act relating to the modes of Transfer of Property. They are: ● Sale (section 54-57) ● Mortgage (section 58-98) ● Lease (section 105-117) ● Exchange (section 118-121) ● Gift (section 122-129) Transfer of immovable property by each of the aforesaid modes has its own significance, advantages and disadvantages. SALES
1. DEFINITION OF SALE Section 54 defines “sale” as a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. In a sale there is an absolute of all rights in the property sold. No
rights are left in the transferor. If the transferee has eventually to pay the entire purchase price, it may be a circumstance indicating that the transaction was meant to be a sale. On the other hand, if the transferee is given a right to terminate the agreement, that may be a circumstance 5 indicating that the transaction is a hire-purchase agreement .
5
Central Finance & Housing Co. v. British Transport Co. (1953) A.L.J. 656. Same sense as
The essential elements of a sale are: 1. the parties; 2. the subject-matter; 3. the transfer or conveyance; 4. the price or consideration. A minor or lunatic cannot be a transferor/vendor as he is not competent to contract under section 11 of the Indian Contract Act,1872. However, it has been held that a minor or a lunatic can be a transferee or purchaser in the case of transfer by way of sale or mortgage, represented by his Guardian. The subject-matter is transferable immovable property. The sale of moveable property is governed by the Indian Sale of Goods Act, 1930. The Supreme Court has held that though “price” is not defined under this Act, it is used in the same sense as in the Sale of Goods Act, 1930, and means the money consideration for sale of 6 goods . If the consideration is not money, but some other valuable consideration, it may be an 7 exchange or barter, but not sale . The price can be paid fully in cash or it can be partly paid and 8 partly promised to be paid in the future. In Tatia v. Babaji , a registered sale deed who was executed before the Act was applied to Bombay in favor of a purchaser who entered into possession without payment of price. Fulton, J., held that the sale was void for want of consideration under Section 25 of the Indian Contract Act, but Farran, C.J., pointed out that conveyance perfected by registration or possession could not be placed in the same category as agreements void for want of consideration. The opinion of Farran, C.J., has been approved by the 9 supreme court in State of Kerala v. Cochin Chemical Refineries . 2. MODE OF TRANSFER BY SALE Section 54 also deals with the mode of transfer by sale, there are 2 modes of transfer by sale● by registered instruments, and ● by delivery of possession. The first overlaps the second, for a transfer may in all cases be made by registered instruments. There is also a distinction been made between tangible and intangible immovable property. The distinction is analogous to that made in English law between corporeal and incorporeal hereditament. Topham explains the distinction as follows: “A corporeal hereditament is an interest in land in possession, i.e., a present right to enjoy the possession of land. An incorporeal hereditament is a right over land in possession of another, which may be a future right to possession, or a right to use for special purpose land in the possession of another, e.g., a right of 10 way” . The contrast is between the estate of one who is possessed of the land, the tangible thing, and that of a man who has the mere right, the intangible thing, without the possession of anything tangible.
6
Commissioner for Income-tax v. Motor and General stores (P) ltd. (1967) 3 S.C.R. 876. State of Madras v. Gannon Dunkerley & Co. (Madras) ltd., (1959) S.C.R. 379. 8 (1898) 22 Bom. 176. 9 (1968) 3 S.C.R. 556. 10 Topham, New Law of Real Property, 4 th Ed., pp. 12 & 13. 7
It is only in case of tangible immovable property of value less that Rs. 100 that the section allows the simple alternative of delivery of possession. In all other cases a registered instrument is compulsory. The formality of registered instrument is not considered necessary for such small 11 value, and the patent evidence of the transfer afforded by the delivery of physical possession . In 12 Bihar eastern Gangatic Fishermen Co-operative Society Ltd. V. Sipahi Singh , it was held that right to catch and carry away fish is a benefit arising out of land and is immovable property, and it has to be registered no matter it being considered a tangible (if the value exceeds Rs 100) or intangible immovable property. The provisions of this section as to modes of transfer is exhaustive, and a sale cannot be affected in any other way. 3. CONTRACT FOR SALE Section 54 also defines ‘contract for sale’ as, “a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties”. Thus, a sale may be preceded by a contract for sale. A contract for sale is merely a document creating a right to obtain another document namely, a duly executed sale deed. On the Other hand, a sale of immovable property is a transfer of ownership. A contract of sale of immovable property differs from a contract of sale of goods, in that the Courts will grant specific performance of its unless 13 special reasons to the contrary are shown . A sale passes an absolute interest in the property to the purchaser, but a contract for sale does not of itself create any interest in, or charge upon the property in favor of the buyer. A contract for sale need not be registered at all. There is a conflict of judicial opinion on the issue whether a contract for sale, which is not in writing nor signed by the parties, is valid. The Jammu and Kashmir High Court has ruled that it 14 is not valid . However, the Andhra Pradesh High Court has ruled that an agreement of sale can 15 be even oral and would be as valid as a written agreement. In yet another judgment, the Andhra Pradesh High Court, has also ruled that even if it is in writing but is not signed by the purchaser, 16 it does not mean that there is no concluded contract . Section 55 deals with the rights and liabilities of the buyer and the seller. MORTGAGE 17
Justice Mahmood in Gopal v. Parsotam has defined mortgage as under: “Mortgage as understood in this country cannot be defined better than by the definition adopted by the Legislature in Section 58 of the Transfer of property Act (IV of l882). That definition has not in any way altered the law, but, on the contrary, has only formulated in clear language the notions of mortgage as understood by all the writers of textbooks on Indian mortgages. Every word of the definition is borne out by the decisions of Indian Courts of Justice.” In Section 58, 11
Bhaskar Gopal v. Padnam Hira (1916) 40 Bom. 313 (1979) A.S.C. 2149. 13 Section 10, Specific Relief Act, 1963. 14 Gh Mohd Matoo v. Gh Rasool Sofi, AIR 2005 J & K 48. 15 Moturi Seeta Ramabrahaman v. Bobba Rama Mohana Rao, AIR 2000 AP 504. 16 B Rajamani v. Azhar Sultana, AIR 2005 Andh Pra 260. 17 (1883) ILR 5 All 121, p. 157. 12
Mortgage is defined as "Mortgage is the transfer of an interest in specific immovable property for the purpose of Securing payment advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to a. pecuniary liability." 18
The Supreme Court in Kedar Lal v. Hari Lal has observed that the whole law of mortgage in India, including the law of contribution arising out of a transaction of mortgage, is now statutory and is embodied in the Transfer of Property Act read with the Code of Civil Procedure. The court cannot travel beyond these statutory provisions. Essential features of a Mortgage: 1. Parties: There are two parties. The transferor is called a mortgager, the transferee a mortgagee. The mortgagor and mortgagee must be competent person to contract. The term mortgagor includes his heir, executors and administrators. It is common in every kind of mortgage. The minors, lunatics, and the persons disqualified by law are not competent to contract. On behalf of minors and lunatics, their legal guardians are entitled to enter into a contract. The ultimate purpose should be welfare of such minor and lunatic. 2. There must be transfer of an interest. 3. The interest must be made in specific immovable property. There should be sufficient distinction of mortgaged property in the mortgage-deed. It must be identified. 4. The transfer must be made to secure the payment of present or future loan of money, of existing future debt, or the performance of an engagement resulting in a pecuniary liability. 5. The mortgage must be supported by consideration. 6. The consideration of a mortgage may be either – ● money advanced or to be advanced by way of loan, or ● an existing or future debt, or ● the performance of an engagement resulting in a pecuniary liability. A mortgage is created for the purpose of securing a debt or other obligation. The mortgagor liable to pay the principal amount of loan and its interest to redeem his property. 7. Registration: When the property is mortgaged it is to be registered under the Indian Stamp Act, 1899 and the Registration Act, 1908. Kinds/Various Forms of Mortgages: A. Simple Mortgage (Section 58(b)): 1) The mortgager retains the possession of the property with himself. 2) The mortgagor undertakes to repay the debt with his personal liability. This personal liability is the very essence of a simple mortgage. 3) The mortgage also undertakes to sell the mortgaged property for the mortgage money, in case, if fails to repay it. 4) In the case of non-payment of loan, the mortgagee has right to have the mortgage-property sold.
18
AIR 1952 SC, p. 50, 1952 SCR 179.
Simple mortgage can be made only through a registered document. Even if the sum of money secured is less than Rupees one hundred, a simple mortgage must be affected by registered 19 instrument . B. Mortgage by Conditional Sale (Section 58(c)): 1. There is an ostensible sale of immovable property. 2. The sale is subject to any of the following condition: On non-payment of mortgage-money the sale would become absolute, or ● On payment of mortgage-money the sale shall become void or the buyer shall ● retransfer the said property to the seller. 3. The condition must be embodied in the same document. 20
In Prakasam v. Rajambal the document was described as a sale deed but the stamp paper was provided by transferor and the consideration (price) was much less than the actual value of the property. There was a specific condition that on payment of 'principal' amount the property should be reconvened. It was held by the Madras High Court that the transaction was a mortgage by conditional sale and not an outright sale. C. Usufructuary Mortgage (Section 58(d)): 1) Delivery of possession of mortgage-property, or an express or implied undertaking by mortgagor to deliver such possession. 2) Mortgagor has no personal liability. 3) Mortgagee is entitled to enjoy the benefits arising out of such property. 4) Mortgagee cannot foreclose or sue for sale of mortgage-property.
It is significant to note that in this form of mortgage no time-limit is fixed for the payment. Mortgagee is entitled to retain possession until the money due is paid. In a usufructuary mortgage the time up to which money may be paid by mortgagor is uncertain. If any time is 21 fixed the mortgage would not be a usufructuary mortgage . D. English Mortgage (Section 58(e)): 1) The mortgagor binds himself to repay the debt on a certain date. 2) Mortgaged property is transferred absolutely to the mortgagee with condition for retransfer. The mortgagee is entitled to possession and mesne profits. E. Mortgage by Deposit of Title-Deeds (Section 58(f)): 1) This is called in English Law an Equitable Mortgage. 2) The mortgagor should deliver documents of title to immovable property on which the security is intended to be created to the creditor or his agent. It is not necessary that the property to which they relate should be situated within one of the towns mentioned in the clause. It is enough if he hands over the title-deeds to the creditor in that town.
19
Section 59 of the Transfer of Property Act, 1882. AIR (1975) Mad. 282. 21 Hikmatulla v. Imam Ali, (1890) 12 All 203. 20
3) Registration is not necessary, but there must be documents reducing the terms of the mortgage in writing. 4) There is territorial restriction. Clause (f) itself names the 3 towns, namely Calcutta, Bombay, and Madras. It empowers the state government to notify the other towns. 5) The mortgagor has his remedy by a suit of sale of the mortgaged property. 22 In K.J. Nathan v. S. Maruthi , the physical delivery of the title-deeds had taken place outside the towns specified. But the intention to create equitable mortgage by these deeds was formed after delivery of the deeds and in a town which was within notified area. The Supreme Court held that an equitable mortgage was created under section 58 (f) of the Transfer of Property Act. F. Anomalous Mortgage (Section 58(g)): 1) As the name itself denotes, an anomalous mortgage is a combination of simple and usufructuary mortgage. 2) Mortgagor is to repay the installments with interest or to redeem at any time. The mortgagee is to remain in possession. 3) A mortgage with possession with stipulation that the transferee should appropriate the rents and profit for specified term of years and then give back the land. 23
In Vaddiparthi v. Appalanarasimhulu , the mortgage was usufructuary mortgage in which the rents and benefits were agreed to be adjusted against interest. It was also agreed that the principal money shall be repaid in five years and if it is not paid within this period, the mortgage was to work out into a sale at the expiry of twenty years. The Madras High Court held that it was a typical mortgage usufructuary by conditional sale. Section 60-66 deals with the rights and liabilities of the Mortgagor. Section 60 deals with the Right of mortgagor to Redeem. The right conferred by this section is called a right to redeem and the suit to enforce it is called a suit for redemption. In English Law it is called Equity of redemption. The term indicates that the right was a creation of the Courts of Equity which, while giving relief against forfeiture, allowed the right to continue even after default on due date. Right of redemption cannot be extinguished by any agreement made at the time of the mortgage as part 24 of the mortgage transaction . The right of redemption is an incident of subsisting mortgage and it exists as long as the mortgage itself subsists. Once a Mortgage, Always a Mortgage. Any clogs on Mortgagor’s right of redemption are void, e.g., 25 In Gangadhar v. Shankarlal , any such condition which imposed this restriction that on a ● certain date, on the non-payment of mortgaged money, the mortgage shall not be converted into sale and if so it shall be void because it is against the provision of the Section 60 of T.P. Act.
22
AIR (1965) SC 430. AIR (1921) Mad. 517. 24 Allec Lab (Garages) Ltd. V. Total Oil (Great Britain) Ltd. (1983) 1 All E.R.944,965 and on appeal (1965) 1 All ER 303. 25 (1958) SC. 23
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●
●
In Indira Kaur v. Shivlal Kaur , the SC held that there is a transaction with a condition that after a certain time on the payment of the said money, the property has to be returned. The transaction is the mortgage not the sale. Following conditions cannot be imposed1. Mortgagor can redeem the property after a prolonged unreasonable time. 2. If, on the certain time, mortgaged-property is not redeemed then after a long time it can be redeemed. 3. If, on the certain time-period, the property is not redeemed, then it will never be redeemed. 4. After the redemption of the mortgage property, the mortgagor cannot transfer the property. In Bora Amin Bai Ibrahim v. Bora Mohammad Ali, the suit of redemption, if dismissed on the mistake of the plaintiff then the mortgagor under Limitation act can bring the fresh suit of redemption. In Achal Das Duragaji v. Ram Vilas26 , in India the right of redemption is a statutory right.
Section 67-77 deals with the rights and liabilities of the Mortgagee. Section 67 gives the right to foreclosure or sale. The right of foreclosure is a right available to a mortgagee to recover his outstanding money. After the principal amount has become due, and before payment of mortgage money by mortgagor or before decree of redemption has been passed by Court, mortgagee has a right to obtain a decree of foreclosure from the Court. A suit to obtain a decree that a mortgagor will be absolutely debarred from exercising his right to redeem the mortgaged property is called a suit for foreclosure. The right to foreclosure can be exercised by mortgagee only when: ● The debt amount has become due for payment. ● There are no contrary conditions in the mortgage deed as to the time fixed for repayment etc. ● Mortgage money has become due but mortgagor has not got a decree of redemption of the mortgaged property. ● Mortgage money has become due but mortgagor has not paid or deposited the amount. After the mortgage money has become due, the mortgagor can pay off his debt in three ways: ● By tendering or making payment of the mortgage money directly to mortgagee ● By filing a suit for redemption. ● By depositing the amount in court. ● Mortgagee should not be mortgagee of public works like canal, railway etc. ● A trustee or legal representative of mortgagee cannot file a suit for foreclosure but for sale only. However, when mortgagor fails to redeem the property, the mortgagee does not become the owner of the property, he has to file a suit for recovery of the amount due. The limitation period for instituting a suit is 12 years. The final decree in a suit for foreclosure on the failure of
26
(2003) AIR SC.
defendant to pay all amounts due extinguishes the right of redemption which has to be 27 specifically declared . LEASES
Section 105 defines a lease of immoveable property as a transfer of a right to enjoy such property, made for a certain time, express 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. As is evident from the definition, lease is not a transfer of ownership in property, it is transfer of an interest in an immovable property. The interest is the right to use or enjoy the immovable property. Essentials:
1. The parties i.e. transferor (also known as less or) and the transferee (also known of lessee). The landlord is called the lessor, and he is the transferor of property. The transferee is called lessee. Both of them must be competent person to contract under the law. A minor or lunatic cannot become the lessee, but can become transferor or transferee under the lawful guardianship. 2. The subject-matter of a lease must be immovable property. 3. The demise i.e. right to enjoy immovable property. Demise means originally ‘any transferor succession of a right’ but now it means ‘to grant a lease of lands or other hereditaments’. A demise or a transfer of a right to enjoy land for a term or in perpetuity in consideration of a price paid or promised or services or other things of value to be rendered periodically or on specified occasions to the transferor. In a lease the ownership always lies with the lessor, but the lessee enjoys it for a fixed period by paying consideration for such enjoyment. 4. The term i.e. the duration. The duration of a lease shall be determined by both the parties. It is not however, that the term of the lease may be for a fixed period. It is sufficient, if it is definite. The lease for more than 1 year cannot be treated unless it is registered. 28
In Hindustan Petroleum Corp Ltd. v. Dolly Das , the Supreme Court observed “A covenant for renewal of lease is not treated as parts of the term prescribing the period of lease but only entitles a lessee to obtain a fresh lease. 29
In Anthony v. KC Ittoop & Sons and others , the SC found that there are 3 interdictions to claim that an instrument can create a valid lease in law. ● The 1st inhibition is that it should be in accordance with the provisions of S ection 107 of T.P. Act. That section reads as under- A lease of immoveable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument.
27
Mhadagonda Ramgonda Patil v. Shripal Balwant Rainade (1988) 3 SCC 298. (1999) 4 SCC 450. 29 (2001) IMLJ 12. 28
The 2nd inhibition, as pointed out by SC, is Section 17(1)(d) of the Registration Act, which states that where a lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent, such document should be compulsorily registered. ● The 3rd inhibition, as noted by the SC, is Section 49 of the Registration Act relating to the consequence of non-compliance of Section 17. Section 49(c) contemplates that no documents required by Section 17 or by any provision of the Transfer of Property Act to be registered shall be received as evidence of any transaction affecting such property of conferring such power, unless it has been registered. 5. The consideration i.e. premium or rent. Consideration in a lease may be premium or rent. The consideration can be rent plus premium as well as rent alone and premium alone. Where the whole amount to be recovered as consideration from the lessee is paid by him in lump sum, (at one time) the consideration is called premium. The money, share of crops, service or other things to be rendered is called the rent. Usually the house-rents are paid monthly, and the agricultural-rents are paid yearly. The mode of payment, the quantity of amount shall be fixed by the lessor and the lessee in the lease agreement itself. 30 The SC in Associated Hotels of India Ltd. V. RN Kapoor , has observed that the real test is the intention of the parties- whether they intend to create a lease or license. If an interest in property is created by the deed, it is lease but if the documents only permits another person to make use of the property of which the legal possession continues with the owner, it is a license. ●
Section 111 deals with the various situations in which a lease is determined. Under this section, a lease may be determined in the following Situations: By lapse of time. ● By happening of specified event, ● By termination of lessor's interest. ● By merger. ● By express surrender, ● By implied surrender, ● By forfeiture, ● By expiry of notice to quit. ● EXCHANGES
The provisions relating to exchange has been defined under section 118-121. Section 118 defines Exchange as under: When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an exchange. Essential Requisites of an Exchange: There must be a minimum of two parties and two properties, one each belonging to each of ● them; 30
(1960) SCR (1) 368.
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● ●
There have to be a mutual transfer of these properties i.e., A transferring his property to B, and B in turn transferring his property to A;
Property can be exchanged with either movable or immovable property; No other consideration should be involved besides these properties.
An exchange involves a mutual transfer between two parties of their respective properties. The main factor that distinguishes an exchange from a sale is that in an exchange, no monetary consideration is involved. Thus, a transfer by a husband to a wife in discharge of her claim to 31 maintenance is not an exchange as the wife does not transfer ownership in anything . Similarly, a document whereby one decree is set off against another and the balance made up by a transfer 32 of land is not an exchange, for there is no mutual transfer of two things . Illustration: Suppose Suresh and Ram agree to exchange a property belonging to Suresh and another of Ram, it is said to be an exchange and it involves sale of Suresh's property to Ramesh and Ram’s property to Suresh. They could also do this by simple exchanging consideration with each other. Where an exchange by sale of two properties have taken place and by any reason of either a defect in the title of the property that person is deprived of his rights, unless a contrary intention is made in the contract, such deprived person can claim his losses by reason of such deprivation. The deprived person can either claim losses or can ask for that thing or property to be returned without consideration in case it is still in possession of the other party or his legal representative 33 or a transferee . Suppose Suresh and Ramesh exchange each other's property in sale in which a defect is there in Suresh's property.
Under the provisions where an exchange transfer takes place, unless other provisions of the law are operating, each of these persons are subject to their respective rights and liabilities in relation to their property. This means each has accepted the thing in exchange as emphasizing their rights 34 and accepting liabilities along with the property . Where exchange of money takes place, each party warrants the genuineness of the money given 35 by him . GIFTS
Giving property without claiming or expecting anything in lieu thereof- no money, no propertyis called a Gift. The conception of the term "gift" as used In the Transfer of Property Act is somewhat different from the use in Mohammedan Law. This chapter of gifts in T.P. Act does not apply Mortis Causa (Marz-ul-Maut). Section 122 of the Transfer of Property Act defines "Gift" as the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, 31
Madan Pillai v. Badrakali AIR 1922 Mad 311. Dina Nath v. Matimala , (1906) 11 Cal WN 342. 33 Section 119 of Transfer of Property Act, 1882. 34 Section 120 of Transfer of Property Act, 1882. 35 Section 121 of Transfer of Property Act, 1882. 32
called the donor, to another, called the donee, and accepted by or on behalf of the donee. Such acceptance may 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. Essentials: 1. The absence of consideration: Gift is valid only when the transfer of property is voluntarily and without consideration on the part of the donor. Voluntarily means that the transfer should 36 be free and should not be obtained by force, fraud or undue influence . 2. The Donor: The donor is a person who gives. Any person who is sui juris can make a gift of his property. A minor, being incompetent to contract, is incompetent to transfer, and a gift by the minor would therefore be void. Trustees cannot make a gift out of trust property unless authorized by the terms of the trust. It has been further held that a guardian of the property of a minor cannot make a transfer of the property without the permission of the court and if he 37 exceeds his power by executing a gift of the property of minor then the same would be void . 3. The Donee: The donee is a person who accepts the gift. A gift may be accepted by or on behalf of a person who is not competent to contract. the Hon'ble Supreme Court has held that 38 done can even be a minor . The donee must be alive at the date of the gift, and the 39 representative for the deceased at the date of the gift cannot take for him . 4. The Subject Matter: Gift must be made of existing movable or immovable property capable of being transferred. It may be land, goods or actionable claims. It may be transferable under 40 Section 6 of TP Act but it cannot be future property . A gift of right of management is valid, 41 but a gift of a future revenue of a village is invalid . 5. Transfer: Section 123 of the Transfer of property Act provides for the requirements that are essential for completion of a gift. Unless and until these legal requirements are not met with, the donee has no legal title as regards property gifted by donor and consequently the gift is not enforceable by law. This section provides for two modes for making a gift, depending upon the nature of the property. In case of gift of movable property, the gift can be affected by delivery of possession of the same, whereas in case of immovable property, registration is essential for transfer of an immovable property by way of a gift. 6. Acceptance: Acceptance of the gift by the donee is necessary. Acceptance may be express or implied. It must be made during the lifetime of the donor. The gift must be accepted by the donee or by someone on his behalf. An offer by acceptance of the donee cannot complete the gift. Acceptance must be inferred prior to the execution of the deed of the gift. Mere silence may sometimes indicate acceptance provided the donee knows about the gift, slightest evidence of acceptance being sufficient.
According to Section 126 of the transfer of Property Act, a gift may be suspended or revoked. Section 126 further provides for two modes of revocation of gift which are as under: 36
Subhas Chandra v. Ganga Prasad , AIR 1967 SC 878. Samitra Devi v. Sukhwinder Pal , AIR 1990 P& H 23. Lakhvinder Singh v. Paramjit Kaur , 2003(4) R.C.R. (Civil) 26 P & H. 38 K. Balakrishnan v. K. Kamalam , AIR 2004 SC 1257. 39 Re Tilt, Lampat v. Kennedy (1896) 74 L.T. 163. 40 Section 124 of Transfer of Property Act, 1882. 41 Amtul Nissa v. Mir Nuruddin (1898) 22 Bom. 489. 37
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Revocation of gift by mutual consent of the donor and the donee. Revocation by rescission as in the case of contracts.
Section 127 describes onerous gifts as a gift that is subject to conditions. These conditions are imposed on the recipient of the gift. Sometimes, onerous gift takes the nature of a sale because it involves the element of consideration. Some features of onerous gift are: 1. The onerous gift is subject to certain charges or obligations imposed on the donee by the donor; 2. The donee is at liberty to accept any transfer of gift which is beneficial to him/her and refuse any gift which are onerous to the donee. Section 128 refers to Universal Donee as one to whom the donor’s whole property is given and who consequently become liable for all the debts due by and liabilities of the donor at the time of the gift to the extent of property comprised in the gift.
CONCLUSION The law of property is often regarded as relating to matters purely of interest to lawyers, and in that sense, it is described as a technical branch of the law. Almost everyone is, at some time or other, likely to be a holder of property. Also, it is a mistake to suppose that the transfer of property Act, 1882 is concerned only with immovable property. certain specific chapters of the Act are very much concerned with movables. For example, the proposition that one can make a gift of the small things of life to one’s nearest and dearest is an elementary postulate; but its legal validity is entirely derived from the chapter on gifts, particularly sections 122 and 123. It may also be mentioned that the level of culture of a civilization may impose restrictions on the transfer of property. Concepts of property change with social concepts. 42
As far as the political aspect of the property is concerned, in Arndi v. Grigg , a case dealing with the Nebraska “quiet-title” statute, the Supreme Court of the United States observed: “The sovereignty of the State (gives it) control over property within its limits, and the condition of ownership of real estate therein, whether the owner be stranger or citizen, is subject to its rules concerning the holding the transfer, liability to obligations, private or public, and modes of establishing title thereto.” Apart from different modes of transfer of property, as mentioned in the transfer of property Act, 1882, will is also an effective mode of transfer of property. The only difference between other modes of transfer and transfer by will is that the latter takes effect only after the death of the testator. However, will is also equally important mode of transfer of one 's property.
42
(1890) 134 U.S. 316, 320-321.
BIBLIOGRAPHY
STATUTES , 1872. ● Indian Contract Act , 1872. ● Indian Evidence Act , 1908. ● Indian Registration Act ● Muslim Personal Laws. Transfer of Property Act , 1882. ● BOOKS AND ARTICLES ● Mulla, The Transfer of Property Act, 1882, NM Tripathi Private Ltd. ● Dr. GP Tripathi, The Transfer of Property Act. ● Parul Chahal, Transfer of Immovable Property in India- A Comparative Study of Law of 43 Wills, 2013 . MI
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http://hdl.handle.net/10603/39900
