Discuss the essential components of the valid transfer of property.

Vande Matram! Welcome to the series of Transfer of Property Law. Since the civilisation of humans, the concept of property is present and the laws related to it are evolving day by day.

In previous blog, we discussed about the mode and the test regarding transfer of property. Let’s discuss about the essential components of the valid transfer of property.

Discuss the essential components of the valid transfer of property.

The transfer of property Act, 1882 provides for the transfers, relating to immovable property and it also lays down the principles relating to the transfer of property regarding what constitutes a transfer and the conditions attached to it. It was observed by the Supreme Court that in general, the transfer of property means passing of entire bundle of rights i.e. ownership from the transferor to transferee or there may be the transfer of only some of the rights i.e. partial interest.

According to the Act, “transfer of property” is defined as an act in which a person conveys the property to one or more living persons or himself and one or more other persons. The transfer may be done in the present or for the future and the term “living person” includes companies, body corporate, an association of persons whether incorporated in India or not. The property transferred can be of any type either movable or immovable. The definition is provided in detail in Section 5 of the Act.

Essentials of a valid transfer of property:

To constitute a valid transfer it has to fulfill the following conditions:

1) Transfer must be between two living persons:

Both the transferor and transferee must be living at the date of transfer. The property has to be conveyed from one living person to another. If the new title or interest is not created in favor of the transferee then the property is not conveyed and is not regarded as a transfer of property.

In case of Harish Chandra v. Chandrashekhar, 1977, it was held by the court that a release deed is a conveyance and hence it is a transfer of property.

2) The property must be transferable:

Section 6 of the Transfer of the Property Act, 1882 provides for the exceptional types of property whose transfer is forbidden by the law. These properties include Spes succcessionis i.e. a chance of succession, Right to re-entry, Easement, Restricted interest, Maintenance, Mere right to sue, Public office, Pensions, etc.

In R. Rajegowda v. H. R. Shankar Gowda (2006), it was held that a person having life interest in property cannot bequeath it by executing a will.

In Sundariya Bai Chaudhary v. Union of India, 2008 the court held that the family pension of the deceased was not in the nature of an estate and it was not transferable so it could not be bequeathed by a will. The court observed that other benefits like provident fund, gratuity, and extra remunerations would be included in the category of an estate.

3) The transfer should not oppose to nature of interest:

There are certain things which are known as “res communes”, these things are in their natural form and they do not belong to anyone, like, air, water, sea, light, etc., it is not possible to hold and possess these things separately so if anyone tries to transfer such a thing it would be opposed to its nature.

4) The consideration or the object must be lawful:

To be a valid transfer the consideration and the object must be lawful. As per Section 23 of the Contract Act the consideration or the object is unlawful if It is forbidden by law

a) if it defeats the provisions of any law,

b) if the object or consideration of any agreement is made for fraudulent purposes.

c) If the agreement is made concerning harm to any person or his property.

d) If the agreement which has been entered into is immoral.

e) If the agreement is against public policy.

5) Persons competent to transfer:

Section 7 of the TP Act, provides that if the person is competent to contract then that person is competent to transfer the property either wholly or in part, and either absolutely or conditionally, in the manner which has been permitted by law. Such competency for transfer of property is provided in the Section 11 of the Contract Act.

In case of Mallikarjun v. Mareppa 2008, a person brought a property in the name of his minor son and later sold it again while the son was still a minor. Court’s permission under Section 8 of the Hindu Minority and Guardianship Act 1956 was necessary in this case but was not taken. The provision was mandatory so the sale was held to be void.

Sadiq Ali Khan v. Jaikishore 1928– In this case the Privy Council observed that a deed executed by a minor was null and void. Principle of estoppel cannot be applied to a minor. A minor is not competent to transfer but transfer made to a minor is valid and legal.

Amina Bibi v. Syed Yousuf, 1922- The Allahabad High Court held that a contract made by a lunatic is void under section 11 of the Indian Contract Act. The transfer of his own property by him is also void.

K. Kamama v. Appana- In this case it was held that under section 11 of Hindu Minority and Guardianship Act, a de facto guardian is merely a manager and cannot dispose of the property of a minor. Such sale would be invalid.

Chittu Singh v. Chatan Singh, 1923- It was held that a person who has no right at all to have possession has no right to make any valid transfer. The power of such person cannot exceed the power of the person who has appointed him.

6) The transfer must be made in the manner and the form required by the Act:

Section 9 of the Transfer of Property Act states that the transfer of property can be carried out without a written instrument where writing is not expressly necessary under the law. Sale deed, Mortgage, Transfer of actionable claim, Exchange, relinquishment, gift deed, etc. involving immovable property of valuation, not less than Rs. 100 must be registered.

Conclusion:

If above stated essential requirements are not fulfilled then the transfer will not be considered a valid one or it can be declared void.

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List of references:

Essentials of a valid transfer – Transfer of Property Act, 1882

Essentials of a Valid Transfer Under Transfer of Property Act

What are the mode and the test regarding transfer of property?

Vande Matram! Welcome to the series of Transfer of Property Law. Since the civilisation of humans, the concept of property is present and the laws related to it are evolving day by day. Let’s discuss the mode and the test regarding transfer of property.

In the previous blog, we discussed about the definition of transfer of property.

What are the mode and the test regarding transfer of property?

According to section 8 of the Transfer of Property Act 1882 (The Act), by transferring property, transferor transfers all rights in a property. There are various modes of transferring ownership of property: permanently by 1) relinquishment 2) sale 3) gift; and temporarily by way of 4) mortgage 5) lease and.

Sale:

Sale is mode of transfer of property permanently. Under Sec 54, the sale is a transfer of ownership by a deed (sale deed/transfer deed) for a price, paid or promised or part paid and part promised. The sale deed is compulsorily required to be stamped by paying stamp duty and registered before a Sub-Registrar and is for consideration.

When the value of such tangible immovable property is not more than a hundred rupees transfer may be done either by a registered instrument or by delivery of property. On the other hand when the value of such immovable property is more than a hundred rupees then transfer has to be made only by a registered instrument.

Lease:

Lease is mode of transfer of property temporarily. Sec 105 of the Act defines lease as a transfer of the right to enjoy a property, for a certain period, express or implied, in consideration of a price paid or promised, money or any other thing of value, to be rendered periodically or on such occasions.

Duration of a lease for which no period is specified in the contract is for agriculture & manufacturing purpose, is deemed to be a lease for the year to year which can be terminated by either of the parties on giving a six-month notice. For any other purpose, such period is month to month which can also be terminated by either of the parties on fifteen days notice. The contract of lease for a period of the year to year or exceeding one year is to be effected only by a registered instrument.

Main terms related to lease are as follows:

1) Lessor – Lessor means the transferor. (of right to enjoy property to lessee)

2) Lessee – Lessee means the tranferee.

3) Price – The price in case of lease, means the premium.

4) Rent – Rent in context of lease means money, share, service or any other thing to be so rendered.

Mortgage:

Mortgage is mode of transfer of property temporarily. Sec 58 of the Act defines Mortgage as the transfer of interest in the specific immovable property by way of a mortgage deed or deposition of title deeds for securing payment of a loan.

Except for the mortgage by deposit of title deeds, all other forms of mortgage must be made through a registered instrument if the sum assured is 100 or more. A simple mortgage is effected only by registered documents even if the sum is less than 100. When registration is necessary it must be in writing, attested by at least two competent persons, signed by mortgagor & registered according to provisions of Registration Act.

Main terms related to mortgage are as follows:

1) Mortgagor – Transferor is called mortgagor in this transaction.

2) Mortgagee – Transferee is called as Mortgagee.

3) Mortgage Money – Principal money & interest of which is payment is secured in such transaction.

4) Mortgage Deed – is the instrument by which transaction is effected.

Gift Deed:

Gift deed is mode of transfer of property permanently. Under section 122 of the Act, one can transfer immovable property through registered gift deed. The immoveable property is transferred voluntarily without any consideration.

It is essential that such acceptance by donee must be made during the lifetime of the donor.  The gift is void, if the donee dies before acceptance of such gift.

Main terms related to gift deed are:

Donor- (transferor) who transfers such property in gift.

Donee – who accepts or on his behalf accepts  such property in gift from donor(transferor).

Relinquishment:

Relinquishment is surrendering inherited or parental rights for another “legal heir”/ “another collateral” in the same property. In simple terms, relinquishment is a family arrangement where one legal heir surrenders his share in the property with or without monetary consideration for another legal heir. It also transfers property permanently.

Thus, sale, gift deed, relinquishment, lease, mortgage are the main modes of transfer of property. If the property involved in such transactions is immovable and having valuation of Rs. 100 or more then such transfer must be effected by registered instrument as provided by the laws.

Thanks for reading till the end. Note down all the important points for your preparation and Best of Luck for your exams! Please share this blog.

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List of references:

Procedure of Transfer of Immovable Property

Modes of transfer of property under Transfer of Property Act, 1882

 

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What is meant by transfer of property?

 Vande Matram! Welcome to the series of Transfer of Property Law. Since the civilisation of humans, the concept of property is present and the laws related to it are evolving day by day. Let’s discuss the transfer of property.

What is meant by transfer of property?

Section 5 of the Transfer of Property Act, 1882 defines the Transfer of the Property. The said Sections reads as follows:

5. “Transfer of property” defined.—In the following sections “transfer of property” means 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 act.

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 companies, associations or bodies of individuals.

As per the Section 5, transfer of property means an act by which a living person conveys property, in present or future, to one or more living persons, or to himself or to himself and one or more other living persons. ‘Living person’ includes a company or association or body of individuals, whether incorporated or not.

The property may be movable or immovable, present or future. Such transfer can be made orally, unless transfer in writing is specifically required under any law.

Any person competent to contract and entitled to transferable property, or authorized to dispose of transferable property on his own, is competent to transfer such property. The property can be transferred wholly or in part. It can be transferred either absolutely or conditionally. Such transfer can be only to the extent and in manner allowed and prescribed by law.

The Transfer of Property Act, 1882, which came into force on July 1, 1882, deals with the aspects of transfer of properties between living beings. The term transfer includes transfer through sale, mortgage, lease, actionable claim, gift or exchange. The Act does not cover transfers by the operation of law, in the form of inheritance, forfeiture, insolvency, or sale through the execution of a decree. The Act is also not applicable on the disposal of properties through wills and does not deal with cases of succession of property.

Conclusion:

Thus Section 5 of the Transfer of Property act, 1882 provides for the transfer of properties between living persons. The person may include a legal personality. The term transfer includes transfer through sale, mortgage, lease, actionable claim, gift or exchange.

Thanks for reading till the end. Note down all the important points for your preparation and Best of Luck for your exams! Please share this blog.

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List of references:

1) Section 5 in The Transfer of Property Act, 1882

2) Transfer of property definition

3) Transfer of Property Act, 1882: Key facts

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Relevant case laws distinguishing between movable and immovable properties

Vande Matram! Welcome to the series of Transfer of Property Law. Since the civilisation of humans, the concept of property is present and the laws related to it are evolving day by day. Let’s discuss the relevant case laws related to the difference between movable and immovable properties.

In the previous blog, we discussed the concept of the property and the differences between movable and immovable properties.

Relevant case laws distinguishing between movable and immovable properties:

1) Baijnath vs. Ramadhan and Anr, AIR 1963

Question: – Whether standing shisham or neem trees are standing timber within the meaning of section 2(6) of the act?

Judgment: – In this case, the court held that the prime importance is given to the intention. That the tree in question was meant to be dealt with the parties just to cut off or to use it as standing timber and not merely as a tree.

2) Shantabai vs. State of Bombay, AIR 1958 SC 532

Question: If a tree is beneficial for both wood and timber, like mango, will it be considered as movable or immovable property?

In this case, the court held that real intention will be considered, as to for what purpose was the tree planted. Entering into the land and cutting trees will fall under the category of benefits arising out of the land. If the tree is grown for fruits, it is considered as immovable property and if it is grown for timber then it is considered as moveable property.

3) Kapoor construction vs. Leela Nagaraj & Ors. AIR 2005

In this case, the court held that there are some important factors to determine whether the property is movable or immovable. The factors are: – Intention, Mode of annexation, and Degree of annexation.

4) Marshall Vs Green

It was held that the interest of the contract will determine the tree as moveable property or immovable property. The Contract of sale will be considered in such cases.

5) Mahadeo v. State of Bombay [AIR 1959 SC 735]

The distinction which prevailed in English law between fructus naturales and fructus industriales does not exist in Indian law, and the only question which would ‘fall to be considered in India is whether a transaction concerns ‘goods’ or ‘movable property’ or ‘immovable property’. The importance of this question is twofold: (1) in the case of immovable property, a document of the kind specified in Section 17 of the Registration Act requires to be compulsorily registered and if it is not so registered, the consequences mentioned in ‘Sections 49 and 50 of that Act follow, while a document relating to goods or moveable property is not required to be registered; and (2) by reason of the interpretation placed on Entry 54 in List II in the Seventh Schedule to the Constitution of India by this Court a State cannot levy a tax on the sale or purchase of any property other than ‘goods’.

6) Ananda Behera v. State of Orissa [AIR 1956 SC 17]

A ‘benefit to arise out of land’ is an interest in land and therefore immovable property.

These are all the cases related to the definition of property and distinguishing between movable and immovable properties.

Thanks for reading till the end. Note down all the important points for your preparation and Best of Luck for your exams! Please share this blog.

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List of references:

1) Difference between Movable and Immovable Property

2) Movable And Immovable Property – Meaning And Differences

3) Property

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What is the concept of property? What is the distinction between movable and immovable property? Discuss and explain with the help of suitable case law or illustrations.

Vande Matram! Welcome to the series of Transfer of Property Law. Since the civilisation of humans, the concept of property is present and the laws related to it are evolving day by day. Let’s discuss the concept of property.

What is the concept of property? What is the distinction between movable and immovable property? Discuss and explain with the help of suitable case law or illustrations.

Concept of Property:

Property is an object of legal rights, which embraces possessions or wealth collectively, frequently with strong connotations of individual ownership. The things may be tangible, such as land or goods, or intangible, such as stocks and bonds, a patent, or a copyright. Because property law deals with the allocation, use, and transfer of wealth and objects of wealth, it must reflect the economy, family structure, and politics of the society in which it is found.

Property is defined under Clause (36) of Section 3 of the General Clauses Act, 1897 and clause (9) of Section 2 of the Registration Act, 1908 as well as Section 3 of the Transfer of Property Act, 1882. Indian legislation classifies the term ‘property’ under various categories like tangible and intangible, real and personal, corporeal and incorporeal, and movable and immovable property.

Various Statutory definitions of term property:

The General Clauses Act, 1897

Section 3 (26): “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.

The Benami Transactions (Prohibition) Act, 1988

Section 2(c) “property” means property of any kind, whether movable or immovable, tangible or intangible, and includes any right or interest in such property.

The Sales and Goods Act, 1930

Section 2 (11) “property” means the general property in goods, and not merely a special property.

The Transfer of Property Act, 1882

Section 3 “immoveable property” does not include standing timber, growing crops or grass.

The Registration Act, 1908

Section 2(6) “Immovable Property” includes land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently fastened to anything which is attached to the earth, but not standing timber, growing crops nor grass; and

Section 2 (9) “Movable Property” includes standing timber, growing crops and grass, fruit upon and juice in trees, and property of every other description, except immovable property.

Movable and immovable property:

In Indian legal systems the types of property considered mainly are

a) Movable Property: Anything that is not affixed to the land can fall under the category of movable property, irrespective of its shape, size, quality, or quantity, e.g. Vehicles, electronic devices, jewellery, books, timber, growing crops and grass etc.

b) Immovable property: As the nomenclature suggests, immovable property definition states that it is any property with rights of ownership attached to land and that cannot be moved, e.g. agricultural land, villa, flat, mines, water bodies, etc.

Difference between movable and immovable property:

Movable Property	Immovable Property
The movable property can easily be transported from one place to another, without changing its shape, capacity, quantity or quality.	Immovable property cannot be transported from one place to another.
Movable property refers to movable assets (such as your computer, jewellery, vehicles, etc.).	Immovable property commonly refers to real estate (such as your house, factory, manufacturing plant, etc.)
Movable property is one, which can be transferred from one place to another place with the human efforts.	Immovable property includes land, benefits arising out of land and things attached to the earth or permanently fastened or anything attached to the earth.
It includes stocks and shares, growing crops, grass, and things attached to or forming part of the land, and which are agreed to be severed before sale, or under the contract of sale	It includes land, benefits to arise out of land, and things attached to the earth
If the thing is resting on the land merely on its own weight, the presumption is that it is movable property, unless contrary is proved.	If the thing is fixed to the land even slightly of it is caused to go deeper in the earth by external agency, then it is deemed to be immovable property.
If the purpose was only to enjoy the thing itself, then it is movable property even though it is fixed in the land.	If the propose of annexation of a thing is to confer a permanent benefit to the land to which it is attached, then it is immovable property.
Examples Right of worship; royalty; a decree of sale of immovable property; a decree for arrears of rent; Government promissory notes; standing timber, growing corps and grass.	Benefits to arise out of land such as hereditary allowances, right of way, ferries and fisheries, right to collect rent and profits of immovable property; a mortgage-debt; right to cut grass of one year, a factory; etc.
No registration is required to transfer a movable property.	Transfer of immovable property requires registration of the document.

 

Thanks for reading till the end. Note down all the important points for your preparation and Best of Luck for your exams! Please share this blog.

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List of references:

1) Property Legal Concept

2) Brush Up Your Basic Knowledge About Movable and Immovable Property

3) Difference between Movable and Immovable Property