All You Need to Know about Transfer of Property

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Constitutional History

The legendary Home Rule Bill, enacted in 1895, outlined some constitutionally guaranteed rights, including freedom of expression, inviolability of one’s home, and equality before the law. The Commonwealth of India Bill of 1925 envisioned a “statement of rights” that was nearly identical to the corresponding elements of the Irish constitution.

For the first time, the Joint Committee on Indian Constitutional Reforms suggested that certain safeguards against expropriation of private property be granted. However, it was not in favor of ensuring any individual right to property in general. Its recommendation was that laws expropriating or sanctioning expropriation of individual properties be allowed only if the expropriation was for public interests and if compensation is established, either in the first instance or on appeal, by some independent authority.

On December 9, 1946, India’s Constituent Assembly convened for the first time. Inevitably, a robust, workable charter of fundamental rights was drafted, with the right to property being a critical component and a major issue. The right to property was finally integrated into the fundamental rights in the following form: Article 19 enumerated some of the rights granted to all citizens and provided protection for those rights. According to Article 19(1) (f), all citizens have the right to “acquire, possess, and dispose of the property.” Certain safeguards were granted in Article 3 1 against the forcible purchase of individual properties. It was mostly based on the English concept of private property and was modeled after sub-sections (1) and (2) of Section 299 of the Government of India Act, 1935, with certain modifications.

Article 26, which was also part of the fundamental rights chapter (or part III) of the Constitution of India, guaranteed the right to property of religious denominations as long as it was “subject to public order, morality, and health.”

The right to property is perhaps the oldest real right, existing long before words like “right” or “real” were defined. It is frequently seen as a “natural” right coming from nature. As a result, property disputes are almost definitely as old as humanity itself. However, throughout the revolutionary period, the right to property was recognized as a basic right and was incorporated into the charters that were authorized at the time.

Transfer of Property

Prior to the enactment of the Transfer of Property Act in 1882 , transfers of immovable property in India were governed by the principles of English law and equity. In the absence of statutory requirements, the courts must rely on English law on real property, which sometimes forces the courts to determine issues based on their own conceptions of justice and fair play, resulting in confusing and contradicting case laws. To address these misunderstandings and conflicts, an English Law Commission was created to draft a substantive law code for property transfers in India.

The Bill pertaining to the Transfer of Property Act, 1882 was produced at least seven times before the final Bill was enacted, and it went into effect on February 17, 1882, as the Transfer of Property Act, 1882.

Transfer of Property Act

A transfer is the conversion of something from one person to another. Property can be defined as anything tangible or virtual that an individual or group of people owns. A property can be transferred from one person to another by transferring rights, interests, ownership, or possession, and each or all of the ingredients can be satisfied.

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The T.P.A incorporates various crucial terms such as;

  • Immovable Property
  • Mortgage Debt; The definition of an ‘actionable claim’ clearly excludes a debt owed by a mortgage of immovable property, and such debt will not be recognized as immovable property and can only be transferred in the same way that an immovable property can, namely by a registered instrument.
  • Actionable claim; A claim to any debt, other than debt secured by mortgage of immovable property or by hypothecation or pledge of moveable property, or to any beneficial interest in movable property not in possession, is an actionable claim.
  • Instrument; a formal legal document
  • Attested; formal document signed and witnessed or witnessing the execution of the deed.
  • Registered; registered implies registered in any part of the territories to which the Act extends under the law now in force governing document registration.
  • Notice; The term notice refers to information or awareness of a fact. When a person has knowledge of a fact or it can be proven that he must have knowledge of a fact under the current circumstances, it is said that he has notice of that fact.

Modes of Transfer

SECTION 54- SALE

Sale is a transfer of ownership in exchange for a price paid or promised, part paid or promised.”

A sale takes place between two living people, whether it is natural or artificial. According to the Act, sale refers to immovable property, which includes both tangible and intangible property, as well as rights emanating from the land.

In Misabul Enterprises v. Vijay Shrivastava, It was decided that a contract of sale must be founded on mutual agreement between the seller and buyer, and the transferor must either be the owner of the property or have the authority to dispose of it.

By way of Registered Instrument: When the value of the tangible immovable property exceeds 100 rupees, the sale can only be conducted via Registered Instrument.

Possession Delivery: When the property is worth less than 100 rupees, the transfer can be accomplished by a recorded document or through the delivery of possession. It is not necessary to have a registered instrument. Delivery of tangible immovable property occurs when the seller places the property in the possession of the buyer or another person designated by the buyer.

SECTION 58- MORTGAGE

transfer of an interest in a specific immovable property for the purpose of securing payment of money advanced by the way of loan, an existing or future debt and the performance of an engagement which may give rise to a pecuniary liability

Simple mortgage; In a simple mortgage, the mortgagee is not given control of the property, and the mortgagor individually binds himself to pay the mortgage money; if the mortgagor fails to do so, the mortgagee has the right to force the mortgaged property to be auctioned.

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Conditional Sale; The mortgagor apparently sells the mortgaged property with the condition that, if the mortgage money is not paid on a predetermined date, the sale will become absolute or final, and that if such payment is made, the mortgagee will transfer the property to the mortgagor.

Usufructuary mortgage; Where the mortgagor expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property, or any part of such rents and profits, and to appropriate the same in lieu of interest, or in payment of the mortgage-money.

English mortgage; An English mortgage is a transaction in which the mortgagor binds himself to return the mortgage money on a specific date and transfers the mortgaged property absolutely to the mortgagee, with the provision that he would re-transfer it to the mortgagor upon payment of the mortgage money as agreed.

Mortgage By Deposit of Title Deed; mortgage by deposit of title deed is used when a person is from Calcutta, Madras, or Bombay, or any other town specified by the state government, and the mortgagor gives documentation of the title of immovable property with the goal to generate security. On the basis of a comparable word used in English law, this sort of mortgage is commonly referred to as an equitable mortgage.

Anomalous; An anomalous mortgage is not a simple mortgage, a mortgage by conditional sale, a usufructuary mortgage, an English mortgage, or a mortgage by deposit of title deeds within the meaning of this section.

SECTION 105- LEASE

In Vijay Kumar Bajaj v. InderSainMinocha, it was noted that a lease is a type of contract between these parties for a set period of time This relationship exists when an owner of immovable property transfers ownership of his property to another person for a specified tenure and consideration subject to the terms of the contract (rent rate, duration of the lease, purpose, etc.) between them.

A conditional lease is differentiated out of an unconditional lease by the undertaking of either of the parties to perform his promise by limiting the undertaking to the scenario where; the condition occurs and the lease does not occur.

The lease becomes valid if the condition occurs or does not occur, as the case may be. However, if the condition cannot reasonably occur, the lease is null and void ab intio.

SECTION 118- EXCHANGE

When two people exchange ownership of one object for ownership of another, neither thing or both things are money. The definition of trade is an act of giving something and obtaining something else in return. The term “neither item nor both things being money only” in the definition suggests that the trade will be either money for money or thing for a thing. The amendment of section 49 of the Registration Act, 1929 by inserting the words – ‘or by any provision of the Transfer of Property Act, 1882 ’ has made it clear that the documents for which registration is required under TPA but not under the Registration Act falls within the scope of section 49 of the Registration Act. In Satyavan v. Raghubir, it was held that it is not admissible as evidence considering any transaction affecting any immovable property contained therein if they are not registered, and they have no effect on any such immovable property if they are not registered. If the transaction involves any immovable property valued at Rs. 100 or more, it must be carried out using a registered instrument.

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SECTION 122- GIFT

“Gift is the transfer of certain existing 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 done”

A gift is a voluntary transfer of movable and immovable property made by one person called the donor to another person called the done and acknowledged by the done. It can be defined as a transaction in which the sender willingly makes such a transfer without regard for monetary value.

Kinds of Gifts;

1. Void; According to Section 2(d) of the Indian Contract Act of 1872 , past unlawful cohabitation cannot be used as consideration for an agreement or transfer of property. When a gift is made for such a purpose, the present is null and void. A gift is also void if the done is either incompetent or/and dies (before acceptance of the gift).

2. Onerous; when a gift comes with a burden or obligation, it is said to be onerous. This section is based on the maxim qui senticommodumsentiredebetetonus, which states that whoever benefits must also shoulder the load.

Revocation of Gift

A gift is an uncompensated transfer of ownership. Once executed and registered, a seed of gift cannot be canceled unless it can be demonstrated that the section’s mandatory requirements were not met.A donation is irrevocable once made, save in the two instances specified in this section;

It is revocable if the donor and the donee have agreed that the gift should be suspended or canceled if a defined event occurs (without regard to the donor’s will).

It may also be revoked in any of the circumstances (except want or failure of consideration) in which a contract might be canceled.

Conclusion

The ruling in Keshavananda Bharati, as well as later judgments, recognized that the right to equality is a fundamental aspect of the Constitution. This right, along with the right to live in dignity, would continue to recognize the individual’s right to property, not as a separate right but as an inherent part of the twin rights of equality and dignity, which could not be destroyed, harmed, or taken away even by Constitutional amendment.

The Transfer of Property Act of 1882 is an extension of the Indian Contract Act of 1872 , which was acknowledged as an entire code. The Act of 1882 is not exhaustive; it includes the transfer of immovable property from the act of parties. Unlike personal laws, which vary from person to person, the Transfer of Property Act of 1882 is a statute that applies lex-loci to all people living in that jurisdiction.

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