Professional Documents
Culture Documents
Unit 1 T.P.ACT
Unit 1 T.P.ACT
Syllabus:-
OBJECTIVES
The focus of this course in on the study of the concept of “property”, the nature of property
rights’ and the general principles governing the transfer of property. A detailed study of the
substantive law relating to particular transfers, such as sale, mortgage, lease, exchange, gift and
actionable claims will also be undertaken. The course also includes an exposure into the concept
of trust.
Course
Contents.
UNIT-I
General Principles of Transfer of Property by act of Parties inter-vivos- concept and meaning of
immovable property- Transfer of immovable property- persons competent to transfer- operation
of Transfer- Conditions restraining alienation and restrictions repugnant to the interest created-
rule against perpetuity and exceptions-Direction for accumulation- Vested and Contingent
interest, void conditions, Rule of acceleration, fulfillment of conditions subsequent.
UNIT- II
Mortgages of immovable property: Definition- Kinds of mortgages and their features- Rights and
liabilities of mortgagor and mortgagee-priority of securities –Marshalling and contribution-
charges.
UNIT-IV
Sale of immovable property : Rights and liabilities of seller and buyer before and after
completion of sale- Difference between sale and contract for sale; Leases of immovable
property: Definition- Scope-creation of lease- rigths and liabilities of lessor and lessee-
Determination and holding over; exchange: Definition and mode- Actionable claims; Gifts:
scope – meaning – mode of transfer- Universal gifts-onerous gifts
UNIT-V
Law of Trusts with fiduciary relations: Definition of Trust and its comparison with others
relationship like debt, ownership, bailment, Agency and Contracts; kinds of trusts- creation of
trust-Appointment of Trustees-Duties and liabilities of Trustees- Rights and powers of Trustees-
Disabilities of Trustee- Rights and Liabilities of the Beneficiary- vacation the office of trustee
and extinction of trusts.
UNIT-I
General Principles of Transfer of Property by act of Parties inter-vivos- concept and meaning of
immovable property- Transfer of immovable property- persons competent to transfer- operation
of Transfer- Conditions restraining alienation and restrictions repugnant to the interest created-
rule against perpetuity and exceptions-Direction for accumulation- Vested and Contingent
interest, void conditions, Rule of acceleration, fulfillment of conditions subsequent.
Transfer of property Act 1882 came into force on 1st July, 1882. The two objects of the Act-
Act does not purport to be exhaustive. It doesn’t cover each and every aspect of transfer of
property.
Inter vios:- it is a Latin term which means “among the living”, usually referring to the transfer of
property by agreement between living persons.
Sale
Mortgage
Gift
Exchange
Charge.
Before The Transfer of Act of 1882, came into force, the transfers of immovable properties in
India were governed by the principles of English Law and equity. A few points were also
covered by the regulations and Acts passed by the Governor-General-in-council.
In absence of any specific statutory provision, the Anglo-Indian Courts had to fall
Sometimes the court had to decide the case-law became confused and conflicting. To remedy
this state of affairs, a Law commission was appointed in England to prepare a code of
substantive law of transfer of properties for India.
The law commission consisted of Lord Romily, M.R. Sir Edward rany, Chief Justice of Bengal,
Lord Sherbrooke, Sir Robert Lush and Sir John Maclood, who had assisted Lord Macaulay in
drafting the Indian Penal Code. A draft Bill was prepared by this commission and it was sent to
India by the Duke of Argyll, who was then the secretary of State For India.
It was introduced in the Legislative council in 1877. The Bill was then referred to a select
Committee and it was also sent to the Local Governments for publication and criticism. The Bill
was criticized on many points and ultimately the Bill was redrafted and referred to a third law
commission consisting of Sir Charles Turner, Chief Justice of Madras, Sir Raymond west, and
Mr. Whitely stokes, Law Member of the council of the Governor-General. Then the final bill was
passed into law on the 17th February 1882.
The Transfer of Property Act, 1882 was amended nine times from 1885 to 1927 and four times
from 1928 to 2002 but no general revision of the Act was undertaken.
Title and extent (section 1) – came into force on the 1st July 1882.
It extends to whole of India except the territories which immediately before the 1st November
1956, were comprised in Part B states or in the states of Bombay, Punjab and Delhi.
Firstly 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 the complement the work
that commenced with the framing of the law of intestate and testamentary succession and
Secondly to complete the code of law of contract, so far as relates to immovable property.
It is limited to transfer of property by act of parties. It does not apply to transfer of property
which takes place by operation of law –( it is a legal term that indicates that a right or liability
has been created for a party, irrespective of the intent of that party, because it is dictated by
existing legal principles, ex- if a person dies without writing a will, his or her heirs are
determined by operation of law)
This Act is not exhaustive. It does not profess to be complete code. It does not contain complete
law for all kinds of transfer of property in India.
Ex post facto or backward-looking. Retrospective effect means that the provisions of the Act
apply to the matter prior to the passing of the Act.
Meaning of Property.
The term property is derived from the Latin term ‘Properietat’ and the French equivalent term is
‘Proprius’ which means a thing owned.
Property can be defined as being the right to possess, use, enjoy and dispose of a thing. The thing
mentioned does not always have a tangible or physical existence. It may be an easement or
anything else that can become the subject of private ownership.
To sum up, property is indicative and descriptive of every possible interest which a person can
have.
Nature of Property:-
In Transfer of property Act, 1882 the word property has been used in any one of the following
senses:
1. Tangible material things e.g. land and houses, furniture and jewellery and pictures.
2. Rights which are exercised over material things e.g. right to enjoy and possess, right to sell or
to make a gift of things.
3. Rights which are not exercised over any material things, e.g. a right to repayment of a debt.
Kinds of property:-
1. Real property or personal property:- is land or building or any thing permanently attached
to or forming part of it.
Personal property:- it comprises all forms of property other than real property.
1. Land
2. Benefits to arise out of Land, and
3. Things attached to the earth, i.e
i. Things embedded in the earth
ii. Things attached to what is so embedded in the earth.
iii. Things rooted in the earth except-
a. Standing timber,
b. Growing crops or
c. Growing grass.
It included everything upon the surface of land, under the surface of land and also above
the surface of land.
Anything upon the land, so long as it is not removed from there, shall be part of the land.
Thus soil, mud, water collected in pond, water flowing in the river.
Everything under the surface of the land like sub-soil, mineral, coal or gold mines etc.
underground streams of water.
The space which is above the land is also part of land and is an immovable property.
The benefits which a person gets from land, is also an immovable property. It is called beneficial
interest or beneficial right.
Beneficial interest in a property is called intangible or incorporeal property. The benefit which a
person gets is called tangible immovable property.
It means
Things which are fixed firmly in the earth and become part of the land are things embedded in
the earth. Ex:- houses, buildings, electricity poles are immovable properties because they are
things embedded in the earth.
Walls and houses are not just placed on the surface of the land, the surface of the earth is dug
deep and thereafter the whole structure is fixed permanently. Where the things are just placed on
the surface of the earth without any intention to make them part of the land, the things may not
be immovable properties even if they appear to be fixed in the land.
Ex. Heavy things such as anchor, road-roller or a heavy stone placed on the land may go two or
three feet deep into the earth. It is not called immovable properties.
where a thing is attached to something which is embedded in the earth for its permanent
beneficial enjoyment, the thing so attached would also become immovable property.
Doors, windows or shutters of a house are attached to its walls for permanent enjoyment of that
house.
Things imbedded in the earth are immovable properties because they become part of the land.
Things permanently attached to what is so embedded would also be part of a thing which in itself
is a part of land. Accordingly, doors or windows are regarded as part of the house which is part
of the land.
However, it may be noted that the thing attached must be (a) attached permanently and must also
be (b) attached for the beneficial enjoyment of the house or building.
Things attached without any intention of making them a part of the house or building would not
be immovable properties. Like electric bulbs, window –screens, articles etc.
Trees, plants or shrubs which grow on land are rooted in the earth. With the help of their roots,
they keep themselves fixed in the earth and become part of the land. Hence they are called
immovable properties, but there is an exception to this general rule. Standing timber, growing
crops and grass, though rooted in the earth, are movable properties.
Standing timber :- standing timber is movable property. A green tree rooted in the earth is
called a ‘standing timber’ provided its woods are generally used for timber purposes.
If there is a tree, the woods of which are fit to be used for making doors, windows furniture the
tree shall be treated as standing timber.
Ex:- sheesham, neem, babool or teak trees are used for making furniture is held as movable
property.
Fruit bearing trees are not standing timber. Fruit-bearing trees are immovable property. Ex:-
Mahua, date-tree, palm trees etc.
Mango tree is a fruit as well as timber tree so it depends upon the intention of the owner whether
it is movable or immovable.
Case Law:-
Hon’ble Supreme Court held that if the owner of a tree is interested in the further vegetative
growth of the tree ( i.e. intends to keep the alive) it is a tree (immovable); but if it is intended that
the tree is to be cut reasonably early, the tree is a standing timber (movable).
Growing crops and growing grass are movable properties. Growing crops means crops standing
in the field. The crop of wheat/paddy/vegetables crops of potato etc. are therefore movable
properties.
Like crops the growing grass rooted in the earth is also a movable property. It shall be fodder for
animals hence it is movable.
1. Beneficial interests arising out of land, for example, right of way, or an easement.
2. Rights under lease or tenancy.
3. Rights to extract gold, silver, coal or other minerals from mines.
4. Right of fishery i.e. right to catch and collect fish from a pond, Tank, lake or river.
5. Right to ferry, i.e. right of transport through rivers.
6. Right to collect dues from fair or hat.
7. Right to hold exhibition or fair on one’s land.
8. Right to take forest produce e.g tendu leaves etc. and soil for making bricks.
9. Right to collect lac from its trees.
10. Mortgage-debt i.e a loan secured by mortgaging an immovable property.
11. Equity of redemption
12. Office of the hereditary priest of a temple and also its emoluments.
13. Right of a maha Brahmin to receive dues at a funeral.
MOVABLE PROPERTY:-
A property which is not immovable is movable. Movable property has not been defined in the
Transfer of Property Act Section 3 of the Act excludes standing timber, growing grass and the
crops from the definition of immovable property. This simply means that standing timber,
growing grass or crops are movable property because what is not immovable may be movable.
The general clauses Act 1897 defines movable property as ‘property of every description except
immovable property’
Section 2(9) of the Registration act 1908, movable property includes standing timber, growing
crops and grass, fruits on trees, fruit-juices in the fruits on the trees and the property of every
description except immovable property.
Property may be movable or immovable but while transferring the property the due required
procedure should be followed.
Especially in immovable property, because if required procedure is not followed then the entire
transfer of property in invalid and becomes void in law.
Instrument:-
Means a legal document. Where a property is transferred through any written document, that
document is called instrument.
Will takes place not after the death of the testator and T.P. Act is only applicable for transfer
between living persons.
Attested:-
A property may be transferred either orally i.e by delivery of possession or through a written
document. Where a property is transferred through document, the transferor is said to execute
the deed of transfer. Such transferor is called the executant.
• It is necessary under the law that two persons must affirm, or become witness to the fact
that executant, and nobody else, has written or signed the deed of transfer. This act of
giving evidence or becoming witness is called attestation and when these persons have
done so, the deed is said to have been attested.
• The witnesses are called attesting witnesses.
Object of attestation,
2 fold.
1. It confirms that executant and none else have executed the document.
2. It also confirms that the executant has executed the document with free consent and there
was no force, fraud or undue influence.
Case law :-
In this case there was a mortgage in which the money was advanced not be the mortgagee
himself but by a third party.
The deed of mortgage was attested by this third person who had advanced (given) the money.
It was held by the Supreme Court that although the money lender (who gave the money to
the mortgagee who finally gave it to the mortgagor) was a person interested in the transaction
of mortgage but could not be regarded as a party to it.
Registration is a process through which a document is officially recorded. It takes place under
the provisions of the Indian Registration Act, 1908. When a document is registered, it becomes
an important and valuable evidence regarding the statements made in the document.
Under the Transfer of Property act, certain transfers must be made only through a registered
deed.
Section 17 of the Registration Act provides a list of documents which are compulsorily
registerable. On the other hand, there are certain documents, dealt with under section 18 of the
Registration Act, the registration of which is optional.
ACTIONABLE CLAIM
Sec. 3.: “actionable claim” means a claim to any debt, other than a debt secured by mortgage
of immoveable property or by hypothecation or pledge of moveable property, or to any
beneficial interest in moveable property not in the possession, either actual or constructive, of
the claimant, which the Civil Courts recognize as affording grounds for relief, whether such
debt or beneficial interest be existent, accruing, conditional or contingent;
c) The beneficial interest or the right of possession of the claimant is recognised by the
court.
3. Right to get back the purchase-money when the sale is set aside.
NOTICE
“A person is said to have notice” of a fact when he actually knows that fact, or when but for
wilful abstention from an inquiry or search which he ought to have made, or gross
negligence, he would have known it.
Actual Notice:-
➢ It should be definite.
➢ A notice must of such a nature that the normal man should take seriously.
➢ Only the knowledge of the parties interested in the transaction is actual notice
regarding that transaction.
➢ The knowledge or information must be about or related to the transaction in
question.
Constructive Notice:-
It is based on equity.
Where a person actually does not know anything a fact but the court treats that under the
circumstances he must be deemed to have knowledge of that fact, the notice is constructive.
G deposited the title-deed of this property with a Bank N to secure his overdraft (loan from
bank). This was, therefore, mortgage by deposit of title-deed in which the only security of
repayment of loan was the possession of the title-deed by the person who gave money.
After sometime G asked the bank N that he was intending to sell the property and the purchaser
wants to see the title-deed and after inspection of the deed by purchaser he would return the same
to the bank. The bank relying upon the statement gave the title-deeds to G. But after taking the
title-deed G deposited it in another bank L and took another loan.
Thus it was second mortgage by G by depositing the same title deed. The question arose
whether the prior loan given by N was to be secured first or the second loan given by L which
was at present in possession of bank L.
It was held that since this was a mortgage by deposit of title-deeds in which the only security for
the repayment of loan is the possession of the title-deeds, bank N committed gross-negligence in
parting with the title-deed.
N cannot be allowed to plead that it has no notice that G would take the deeds and deposit it in
another bank. Thus, the mortgage of bank N was post-poned to mortgage of bank L.
v. property :-
property means it has a very wide meaning and included properties of all description. The
property must be present not future property.
There must also be another person to whom the property may be transferred. He is called
transferee. He need not be a competent person, but should be inexistent during transfer.
EXCEPTIONS:
1. Family settlement: It is not a transfer of property.
When a family settlement takes place, the already existing specific shares of the members of the
family are defined and separated in order to avoid any possible dispute.
It simply acknowledges and defines the title of each member.
In Ramdeo Foods products Pvt. Ltd v. Arvindbhai Rambhai Patel (AIR 2006 S.C. 3304)
A memorandum of understanding was actuated (executed) to resolve the dispute between the
members of family. The Supreme Court held that such memorandum agreed between the family
members can be treated as family settlement and the court cannot interfere with this.
Accordingly it was held as family settlement and not as a transfer of property.
2. Compromise:
means agreement for the settlement of doubtful claims between the parties in respect of some
property. Like family settlement here too the titles of the parties are already existing. A
compromise deed is not a deed of transfer.
3. Partition:
it is not a transfer of Property. It means separating the parts of co-owned property. No
conveyance is involved in the process as the conferment of a new title is not necessary.
In Mohar singh v. Devi Charan (AIR 1988 S.C. 1365)
The Supreme Court explained the legal nature of a partition in the following words.
“Partition is not actually a transfer of property, but would only signify the surrender of a partition
of a joint right, in exchange for a similar right from the other co-sharer.”
4. Surrender:
it is not a transfer of property. It means merging of a lesser (smaller) interest with a greater
interest in such a manner that the greater interest is not enlarged.
Ex: A is a landlord and B is his tenant. Ownership is a larger interest. Tenancy is a smaller
interest. If A vacates the house before expiry of the term of tenancy it would amount
surrendering of his right of residence. The is no creation of any new title in favour of the
landlord.
5. Charge:
➢ Charge is not a transfer of property.
➢ Charge is created on a property for securing a payment out of that property.
➢ When the property of a person is charged for securing certain payments e.g. maintenance,
it is simply securing personal obligation out of his property.
➢ A charge is therefore, not a transfer because the only right created under it is a right to
payment out of the property subjected to the charge.
➢ A property dedicated to god, being of religious use is also non-transferable under Hindu
law.
➢ It prohibits the attachment of necessary cooking vessels and the tools of artisans etc.
Where a person gives the possession of his property to another for a certain period and is
afterwards entitle to get it back, his right of entering into the possession of that property once
again, is technically called as the right of re-entry.
Easement is a right which exists for the beneficial enjoyment of a land and is exercised upon the
land of another person.
The land or tenement (house) for whose beneficial enjoyment this right exists is called dominant
heritage and the land or tenament for whose beneficial enjoyment this right exists is called
dominant heritage and the land or tenement upon which the right is exercised is called servient
heritage.
This section provides that an easement cannot be transferred apart from the dominant heritage.
But, when the dominant heritage itself is transferred, the easementary right appurtenant
(attached) to it is by itself transferred together with the dominant heritage.
An interest in property restricted in its enjoyment to the owner personally has been made non-
transferable.
As a matter of fact, such interest are created in favour of a person only due to his personal
qualifications. Such interest are therefore, purely personal in nature and may be called personal
rights which are non-transferable.
Where a person is entitled to receive maintenance allowance, it is his personal right because it is
given or is promised to be given in future solely for his own benefit. As such, the right of future
maintenance is a restricted interest which is non-transferable under section 6(dd).
Under section 6(e) right to sue means right to sue for the claim of any uncertain sum of money.
Claim for an uncertain sum of money arises where the claim is for any amount which is not
fixed.
There is prohibition on the transfer of a public office and the salaries of public officers. To
ensure the dignity to the office held by a person appointed for qualities personal to him and
getting salary for due discharge of his pubic duties.
The stipends allowed to military, naval, air force and civil prisoners of the government and the
political pensions cannot be transferred.
The pensions of the Government servants whether civil or military are non-transferable on the
same principle laid down in clause (f).
(h) Transfer opposed to nature of interest etc:-
Section 5 of the transfer of the property Act says that the transfer takes place only between the
two living persons. So a transfer to a person who is not born is valid?
Two rules:
Property cannot be transferred directly to an unborn person but it can be transferred for the
benefit of an unborn person. Section 13 provides that property can be transferred for the benefit
of an unborn person subject to following conditions:
• Transfer for the unborn must be preceded by a life interest in favour of a person in existence
at the date of the transfer, and
• Only absolute interest may be transferred in favour of the unborn.
i. Prior Life-Interest.
The transfer for the benefit of an unborn must be preceded by a life interest in favour a living
person in existence at the date of the transfer. Where a person intends to transfer certain
properties for the benefit of an unborn person, such unborn is the ultimate beneficiary. But since
such unborn is not in existence at the date of the transfer, property cannot be given to him
directly. There must be prior life interest in favour of living person so that such living person
holds the property during his life and till that unborn would cum into existence. After the
termination of his life interest. The interest should pass on to the unborn person, who by that
time comes into existence.
eg., A transfers his house to X for life and thereafter to unborn named B. B is the son of A. Here
A cannot make direct transfer to his son therefore A has to make direct transfer of his life interest
in favour X after his death the interest of that house shall pass on to unborn named as B.
Conclusion
The meaning of transfer of property is not exhaustive according to Transefer of Property so we
have to depend upon on the General Clause Act for the better understanding of the meaning we
have to adopt both the defination of Transfer of Property Act and General clause Act. Direct
transfer to unborn person is void. So in order protect unborn interest indirect transfer is valid and
it should be an absolute transfer of interest.