Property Law Including Transfer of Property Act

PROPERTY LAW INCLUDING TRANSFER OF PROPERTY ACT & EASEMENT ACT Revision Lecture By Prof. VIJAY CHAVAN.

T. P. ACT, 1882 – SCOPE & OBJECT • • •

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Substantive civil law Preamble : to define & amend- law relating to transfer of property by act of parties Objects: • Transfer between living persons – Clear & Uniform • Supplementary to Law of Contract • To make changes & clear existing rules • Parallel to Succession Laws Scope of the Act • Not exhaustive- Contract, Limitation, Registration, C.P.C. etc • Transfer by operation of law excluded • Mainly deals with Immovable property • Muslim Law prevails in case of inconsistency • Territorial limitations Three parts of The Act

TRANSFER OF PROPERTY ACT – 80 MARKS •

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Definitions – S. 3 • Immovable property • Notice • Actionable Claims Rules – Ss. 5 to 53-A • Movable & Immovable Ss.5 to 37 • Only Immovable Ss. 38 to 53-A Types of Transfer • Sales of Im Pr- Ss. 54 to 57 • Mortgages of Im Pr- Ss. 58 to 104, Charge S. 100 • Leases of Im Pr – Ss. 105 to 117 • Exchanges – Ss. 118 to 121 • Gifts – Ss. 122 to 129 Actionable Claims – Ss. 130 to 136

IMMOVABLE PROPERTY – S.3 • • • • •

Meaning of property The Act mainly deals with Im Pro Definition of Movable property Definition not clear Three Definitions • T. P. Act, 1882- S.3 • General Clauses Act, 1897 – S.3(26) • Indian Registration Act, 1908 – S.2(6)

DOCTRINE OF NOTICE – S.3 • • •

Need to define e.g. Ss. 39,40 etc. Meaning of notice- actual knowledge of fact Two types• Actual/ Express – direct information • Constructive – based on equity, legal presumption, five cases • Willful abstention • Gross negligence • Registration • Actual possession as notice of title • Notice to agent

MEANING OF TRANSFER - S.5 •

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Definition of transfer of property S.5 • By an act • A living person • Conveys • In present or future • Property • To another living person or to himself Certain instances/ transactions – Not transfer of property e.g. family settlement, release, partition, compromise, relinquishment, charge etc.

ESSENTIALS OF VALID TRANSFER • • • • • • • • • •

Definition S.5 Transferable property – S. 6 Property must be existing Competent transferor – S. 7 Transferee not disqualified by law Free consent Lawful object According to rules in Ss. 5 to 53-A Necessary formalities e.g. writing, attestation & registration S.9 Conveyance

TRANSFERABLE & NON TRANSFERABLE PROPERTIES – S.6 • • • • • • • •

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Mere right of re-entry Easement apart from dominant heritage Restricted interest Right to future maintenance Mere right to sue Public office & salary of public officer Pensions & stipends Transfer • opposed to nature of interest • For unlawful object or consideration • To legally disqualified transferee Nontransferable right of occupancy

UNBORN PERSON – S.13 • •

No direct transfer – S.5 Conditions u/s.13 • Prior life interest • Ultimate beneficiary • Absolute interest • Before ceasing of life interest unborn person comes into existence

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Relation with Ss.14 & 20

RULE AGAINST PERPETUITY – S.14 • • •

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Object of the rule Meaning of transfer in perpetuity Rule u/s. 14 – Scope • Applicability • Maximum remoteness of vesting • Contingent interest till attaining majority Exceptions • Transfer for benefit of public S.18 • Personal agreement • Other cases e.g. lease, mortgage etc. Other relevant provisions Ss. 13, 15, 16 & 20 English law

VESTED INTEREST & CONTINGENT INTEREST - SS.19 TO 24 • •

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Classification of interest (Basis)- quantum/ accrual time Vested Interest • Meaning S. 19 • No time specified • Time specified – immediate to take effect • Take effect – happening of certain event • Not affected by certain limitations- Explanation • Nature • Present fixed • Transferable & heritable • Vested interest in unborn person S. 20 Contingent Interest • Meaning S. 21 • Take effect on happening/ non happening of uncertain event • Nature • Future possible interest • Non heritable • Relevant provisions • Transfer to contingent class S. 22 • Subsequent contingent interest S.23 • Class interest – time not mentioned S.24 • Different from Spes-successionis

DIFFERENCE – VESTED INTEREST & CONTINGENT INTEREST • • • • • •

Time for accrual- immediate / future Nature of title- perfect / imperfect Nature – present, fixed / future, possible Heritable – yes /no Attachment & sale in execution proceeding – yes / no Depend on condition – no / yes

CONDITIONAL TRANSFER – SS. 25-34 • • • • • • • • • • •

Transfer – Conditional/ Unconditional S. 7 Condition – Precedent / Subsequent Impossible / Unlawful Condition Substantial Compliance Ulterior disposition if prior transfer fails Ulterior disposition -Subject to other provisions Void condition subsequent & Ulterior disposition Condition subsequent – happening/ non-happening Condition subsequent must be valid to divest interest No time for performance Time specified – delay by fraud

DOCTRINE OF ELECTION – S.35 • • •

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Principle of Equity, S.180 Indian Succession Act General Rule u/s. 35 • Professes - in lieu of benefits conferred - Same instrument Mode of election • Express • Implied( 3 cases) – knowledge, 2yrs, exhausts Requisition to elect Suspension of right to elect Exception – benefits not in lieu of Rights of disappointed transferee English law

RULES OF APPORTIONMENT - SS. 36 & 37 • •

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Division – interest, income, obligation Apportionment by time – S.36 • In absence of contract • Accrue day to day • Payable on appointed day Apportionment by estate – S.37

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Several shares(interests) Person under obligation Obligation to pay in proportion Must not substantially increase the burden Proviso- reasonable notice Exception- agricultural tenancies

TRANSFER BY OSTENSIBLE OWNER – S41 • •

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Subject to Benami Transaction Act, 1988 Meaning of Ostensible Owner (Benamidar) • All characteristics of owner (all indications) • But not real owner • Certain tests- source of money, nature of possession, relation between the parties Scope of S. 41 • Transfer of an immvoable property • By ostensible owner • With express or implied consent • For considaration • After reasonable care • In good faith • Ramcoomar Koondoo vs. Macqueen (1872)

Purchased property on name of mistress • •

Subsequent transferee – also protected Applicability after 1988

DOCTRINE OF LIS PENDENS – S. 52 • • • • •

Lis = litigation Pendens = pending Pendente lite nihil innovature Basis of doctrine – constructive notice / necessity Object- status quo, jurisdiction of court Essential conditions • Pendency of suit

Proceeding before court Right to immovable property must be involved Suit must not be collusive Property is transferred or otherwise dealt with Transfer by any party to suit Transfer must affect the rights of any other party Effect of rule u/s. 52 – transferee bound by decision of court Exception • • • • • •

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FRAUDULENT TRANSFER – S. 53 DOCTRINE OF PART PERFORMANCE – S.53 A • •

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1929 Amendment- before that law was not clear Rule u/s. 53-A • Written & executed contract for transfer of immovable property • Transfer for consideration • Possession in furtherance of contract • Already in possession – must do something in furtherance of contract • Transferee is willing to perform Nature of right – negative not positive • No title or interest in property • No right of action Rights of subsequent transferee – consideration & w/o notice English law – oral contract, right to take action 2001 Amendment – document which needs to be compulsorily registered

SALES OF IMMOVABLE PROPERTY – SS.54-57 •

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Definition of Sale S. 54 • Transfer of ownership • For price – money consideration Essentials of valid sale • Competent parties • Subject matter – existence • Consideration – price • Mode of transfer – conveyance When ownership is deemed to be transferred?

At the time of execution or registration •

Contract of sale • Rights of prospective purchaser – specific performance, to recover price

Seller’s Duties •

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Before sale • To disclose material defects in the property or title • To produce the title-deeds for inspection • To answer relevant questions as to title • To execute conveyance • To take care of the property and title deeds • To pay the outgoings After sale • To give possession to the buyer

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To covenant for title To deliver title deeds on receipt of the price

Seller’s Rights • •

Before sale • Entitled to all rents, profits or other benefits After sale • Charge on property

Buyer’s Duties •

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Before Sale • To disclose facts which materially increases the value of property • To pay the price After sale • To bear the loss to the property • To pay the outgoings

Buyer’s Rights •

Before Sale

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After sale

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Chare on property for price paid

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Entitled to all benefits

MORTGAGES OF IMMOVABLE PROPERTY SS. 58-104 Meaning – S.58 • • •

Transfer of an interest In a specific immovable property For the purpose of security of • Payment of loan • Payment of debt • Performance of an engagement – giving rise to pecuniary liability

Transferor = Mortgagor, Transferee= Mortgagee, Principal money + Interest = Mortgage money, Instrument if any = Mortgage Deed

Kinds of Mortgages - Ss.58 (b) to (g) •

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Simple Mortgage • Personal Undertaking to pay • Possession not given • If default – right to sell Mortgage by conditional sale • Ostensible sale,

Condition- three types Usufructuary Mortgage • Delivery of possession • Right to enjoy • No personal liability English Mortgage • Personal obligation • Absolute transfer • With proviso to retransfer Mortgage by deposit of title-deeds • Equitable mortgage • Deposit of title deeds • Existence of debt • Intention to create security • Territorial restrictions Anomalous Mortgage • Residuary clause •

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RIGHT OF REDEMPTION - S.60 • • • • •

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To redeem- reclaim, buyback, reversion Once a mortgage always a mortgage – no intention to transfer absolutely, object to protect mortgagor Scope of right When can be exercised- after principal money becomes due Clog on redemption • Absolute statutory right • Not subject to contract • Clog is a stipulation which prevents mortgagor • Instances of clog- condition of sale, long period etc. How to exercise this right of redemption- tender of payment, deposit in court of law Effect of redemption- mortgage deed, title deeds, possession, retransfer Partial redemption Extinguishment of right of redemption

OTHER RIGHTS OF MORTGAGOR S. 61 - 65 • • •

Transfer of mortgage Right to inspect documents- own cost, reasonable time Right to redeem separately or simultaneously – one mortgagee, two mortgages, subject to contract

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To recover possession in case of usufructuary mortgage- additional to s.60, provides time Accession to mortgage property – part of property, natural or acquired, inseparable necessary to preserve property Right to improvements Right to get benefits of renewed lease Mortgagor’s right to lease

LIABILITIES OF MORTGAGOR – S. 65 & 66 •

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Implied covenants of mortgagor for • Title • Defence of title • Payment of public charges • Payments of rent • Discharge of prior mortgage Liability for waste

Not to do anything injurious to property

RIGHT TO FORECLOSURE - S.67 • • •

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Counter part of S.60- closing or withdrawing Subject to contract and not absolute Nature of right• To file suit • To debar mortgagor absolutely from redemption When it arises – after mortgage money becomes due Depends upon type of mortgage • Mortgage by conditional sale • Anomalous mortgage- entitled to foreclose Partial foreclosure

OTHER RIGHTS OF MORTGAGEE SS.68 - 73 • • • • • •

Right to sell – simple, English, m. by title deeds, anomalous-depends Right to sue for mortgage money – personal obligation, property destroyed, etc. Right to sell w/o intervention of court- only in english, certain areas, parties not hindu – muslim Right to accession Right to renewed lease Right to spend money – to keep safe, when necessary, after informing

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Right to get proceeds of revenue sale

LIABILITIES OF MORTGAGEE – S.76 • • • • • • • • • •

Only when is in possession – Duties To manage property To collect rents & profits To pay rents, revenues & public charges To make necessary repairs Not to commit any destructive act With respect to insurance money To keep accounts To apply rents & profits To account for gross receipts after tender or deposit of money

MISC. PROVISIONS • • • •

Marshalling Securities S. 81 Contribution S. 82 Subrogation S. 92 Prohibition of tacking S. 93

CHARGES : S 100 • •

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Similar to mortgage but not mortgage Meaning • Where immovable property made security • For payment of money to another • No transfer of interest • Transaction not mortgage Types • By act of parties • By operation of law Extinction • Release • Novation • Merger

DIFFERENCE BETWEEN MORTGAGE & CHARGE: •

Meaning

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Transfer of interest Mode of creation Right in rem Enforcement against bonafide transferee Registration Future property

LEASES – SS. 105 TO 117 • •

Partial transfer – an interest s. 105 Essential elements • Lessor & lessees – parties • Transfer of right to enjoy • Duration of lease – certain time or in perpetuity, presumptions u/s. 106 • Consideration – premium or rent • Mode of transfer s. 107

Registration or oral- delivery of possession • •

States Rent Control Legislation Different from licence

Rights & Liabilities of Lessor – S.108 •

Rights

Not mentioned specifically, duties of lessee •

Liabilities • • •

To disclose any latent material defect in the property To give possession at lessee’s request Covenant for quiet enjoyment

RIGHTS & LIABILITIES OF LESSEE – S.108 •

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To enjoy accretions To avoid lease in case of destruction of property Too deduct cost of repairs To deduct outgoings To remove fixtures To remove crops To assign his interest Liabilities of lessee • To disclose facts materially increasing the value of property • To pay rent or consideration of lease • To maintain the property • To give notice to lessor of any encroachment on property • To use or enjoy the property in a reasonable way • Not to erect permanent structure without lessor’s consent • To retransfer the possession on determination of lease • • • • • • •

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DETERMINATION OF LEASES – S.111 • • • • • • • •

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

EXCHANGE: SS. 118-121 • • • • • •

A Type of transfer Mutual transfer of ownership Subject matter of transfer – movable or immovable Neither thing or both thing being money only Mode of transfer- same as in case of sale such property Rights and liabilities-Same as seller and buyer

Right of a party deprived of a thing received in exchange • •

Exchange of money – warranty of the genuineness Difference between sale & exchange – consideration price or thing

GIFTS: SS.122-129

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Definition of gift s. 122 Essential elements of valid gift • Donor and donee • Transfer of ownership • Property must be existing • Transfer without consideration- monetary value • Voluntarily – free conent • Accepted by donee Mode of transfer • Immovable property – registration, attestation • Movable property – delivery of possession Exceptions• Gifts in contemplation of death • Mohammedan law

Revocation of a gift S. 126 A) Mutual agreement • • •

Condition subsequent Not depend upon solely the will of donor Must be a part of same transaction

B) Revocation as contract C) Protection to transferee for consideration without notice

Onerous gift: S. 127 • • • • •

Meaning of onerous Single transfer (gift) of several things Either to accept full or nothing If two separate/ independent transfer to same person- no obligation Disqualified (incompetent) donee

Universal donee S. 129 •

Who is universal donee? • Gift consists of donor’s whole property • Donee will be personally liable • To all debts due by and liabilities of donor • At the time of gift • To the extent of gift property

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Object is to protect donor’s creditors Difference between s. 53 and s.128 Subject to s.127

ACTIONABLE CLAIMS: SS. 3, 130-136 •

Definition S.3 Unsecured money debt A claim to beneficial interest in movable property not in possession of claimant • Existing, accruing, conditional or contingent Mode of transfer • Whether with or without consideration • Writing and signed by the transferor • Registration not necessary Notice of transfer- not necessary, but should be given, in writing signed by transferor Transfer subject to liability of transferor Disqualified transferee- judges, lawyers, officers of the court • •

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PART-II Indian Easement Act, 1982 20 Marks MEANING OF EASEMENT S.4

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Austin – ‘Fractional Right’ Salmond – ‘Legal Servitude’ • It is a right

Incorporeal, in rem, re aliena, private right, positive or negative Dominant Heritage & Servient Heritage Dominant owner & servient owner must be different For beneficial enjoyment of dominant heritage Right possessed by dominant owner Different from public right Different from customary right • • • •

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KINDS/ TYPES OF EASEMENTS • • • • • • • • •

Positive & negative S. 4 – definition Continuous & discontinuous S. 5 – act of man Apparent & non-apparent S.5 – permanent sign, after careful observation Permanent & limited by time S.6Limited by use S.6- place, period, hours & purpose Conditional S.6 – happening of specified event Easement of necessity & quasi-necessity S.13 Easement by prescription S. 15 Customary easement S.18

MODES OF ACQUISITION S. 8-19 •

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By grant (Ss. 8-12) • Who may impose, • additional easement, • lessor & mortgagor, • lessee, • who may acquire • Express or implied By necessity (Ss. 13 & 14) • Absolute necessity – presumption of grant • Quasi necessity – not absolute necessity, apparent & continuous • Diection of way of necessity By prescription Ss. 15 - 17 • Manner prescribed by law • Long uninterrupted enjoyment • For 20 years • Openly & peaceably

Exclusion in favour of reversionary Certain rights can’t be acquire by easement By custom S. 18 • •

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By virtue of local custom •

By transfer of dominant heritage S. 19

EXTINCTION OF EASEMENT S. 37-47 • • • • • • • • • • •

By dissolution of right of servient owner By release/ surrender By revocation By lapse of time or happening of dissolving condition On termination of necessity On becoming useless easement By permanent change in dominant heritage By permanent alteration in servient heritage by superior force By destruction of either heritage By unity of ownership By non-enjoyment

SUSPENSION OF EASEMENT S. 49 •

Both tenements in possession of same person for limited period

REVIVAL OF EASEMENTS S. 51 • • •

In case of destruction- if restored within 20 yrs In case of unity of ownership – court set aside such transaction In case of suspension – after completion of period

MEANING OF LICENCE S. 52 • •

Grant – express or implied To do or continue to do

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In or upon immovable property In absence of grant amounts to unlawful But not an easement Also not interest in the property

Nature of license Personal not proprietary right, not transferable, not heritable, only positive in nature, can be revoked at any time, consideration not required

DIFFERENCE BETWEEN LICENCE & EASEMENT: • • • • • • • • •

Personal – proprietary In personam – in rem Need of two set of properties Only positive- may be negative Transferability Heritability Revocation Right to sue third person Source, mode of creation

DIFFERENCE BETWEEN LICENCE & LEASE: • • • • • • • •

Meaning Transfer of interest Nature of right Possession Heritability Transferabilty Right against trespasser Consideration

REVOCATION OF LICENCE: SS. 60-63 •

General rule – revocable at wish of grantor

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Exceptions Coupled with transfer of property Executed work of permanent character & incurred expenditure Revocation may be express or implied Deemed revocation- release, merger, ceasing of grantor’s interest, lapse of time etc. Reasonable time to leave premises Right to compensation on eviction • •

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