OWNERSHIP

Introduction

The word ownership strikes the imagination with the picture of property,
property without which there can be no ownership or possession. During the
earliest of times when humans were nomads and did not posses the skill of
cultivation and civilization the concept of ownership never crossed through the
minds. However, the concept of possession was formulated before the concept
of ownership and that too only when humans started to cultivate.

Property as a legal concept has been defined by the Supreme Court of India in
Guru Dutt Sharma v/s State of Bihar, as ‘a sum of a bundle of rights and in
case of tangible property would include the right to possession, the right to
enjoy, the right to destroy, the right to retain, the right to alienate and so on.’
And along the clear concept of property comes the ideas of possession and
ownership.

Concept of Ownership

With the growth of civilization, humans settling down to cultivate and produce
their own food and staying at one place they began to develop the idea of
ownership and recognized the terms ‘mine and thine’. First came the concept of
possession then the concept of ownership evolved. The Roman Law had two
distinct terms ‘possessio’, which denotes physical control over a thing and
‘dominium’ which denotes the absolute right to a thing. Ownership as an
absolute right in English Law evolved through the developments in the law of
possession, according to Holdsworth and the term ‘ownership’ was first used in
English Law in 1583.

Definition
Ownership has been defined by many jurists, some opine it is the relation
between a person and a right vested in him and some opine that it is the relation
between a person and the thing that is the object of the ownership.

Nature and Incidents of Ownership

On analyzing the concept of ownership one can find certain attributes which
reveal the nature or characteristics of ownership such as usage, enjoyment,
disposition etc. Nature of ownership is as follows: –

1. It is indefinite in point of user i.e., the user may use the thing owned in
any way he so desires and is in no obligation to not to use it. The user is
at liberty to use it.
2. It is unrestricted at point of disposition. The owner may transfer or
dispose of the property by conveyance either during his lifetime or even
after his demise by way of will.
3. The owner has the right to possess the thing owned although if he
actually possesses it or not is immaterial, only the right o possess is of
material in nature.
4. The owner has the right to exhaust the thing owned while using it if the
nature of the thing is so.
5. It is residuary in nature. Even if some rights to a certain property may be
given to someone else in way of lease or rent, still the owner remains to
be the owner due to the residuary characteristics to it.
6. The owner has the right to alienate the property as well as the right to
destroy it.

Incidents of ownership

1. Right to possess – ownership entails the right to possess the thing owned
even if there is no actual possession of it, only the right is of the essence.
 2. Right to use – ownership implies that the owner can use or enjoy the
thing owned in any manner he thinks fit without injuring others and
within the limits of the law.
3. Right to manage – ownership contains within it the right to manage the
property. It means that only the owner can decide what to do with it, how
to do and by whom it is to be done, to transfer or to alienate or to destroy.
4. Right to income – ownership also entails the income generated out of it is
owned by the owner. All benefits attached to the thing owned is the right
of owner.

Kinds of Ownership

Corporeal and Incorporeal Ownership –

Corporeal ownership is the ownership of material object. It is the ownership of
tangible things which can be perceived by the senses. For example, ownership
of house, factory, machines, etc.

Incorporeal ownership is the ownership of a right. It is the ownership of

intangible things which cannot be perceived by the senses. It also includes
intellectual property and encumbrances. For example, ownership of shares,
trademark, copyright, etc.

Trust and Beneficial Ownership –

Both ownerships are found in a trust involving a trust property. In the trust one
is made a trustee and given property to hold and use such property for the
benefits of the beneficiary.

The ownership of the trustee is trust ownership. This is a nominal ownership

and is not real as it is only for the benefit of the beneficiary. In the eyes of law,
the trustee is the representative of the beneficiary and has no right of enjoyment
of the trust property. This ownership is only a matter of form and not of
substance as the property is given fictitiously by the law and is only deemed to
be the owner of the property due to the fiction of the law.

The ownership of the beneficiary is the beneficial ownership. Although in the

eyes of law trustee is the owner but between the trustee and beneficiary the
latter is the owner of the trust property.

For example, a property is given to A on trust for B then A is trustee and B is

beneficiary. A has trust ownership, the legal owner in the eyes of law who is
obligated to use the trust property for the benefit of B who has beneficial
ownership.

Legal and Equitable Ownership –

Legal ownership has its origin in the rules of common law. This is a right in
rem as it can be enforced against the whole world.

Equitable ownership has its origin in the laws of equity. This ownership is
a right in personam as it can be enforced against a particular person. This
ownership is recognized even when there is a legal defect.

For example, A sells his shares to B but a transfer deed is not made. The
company refuses to acknowledge B as the owner and law gives no relief. Rule
of equity helps here as A is the legal owner but he holds the shares as a trustee
of B. B here is the equitable owner.

Vested and Contingent Ownership –

Vested ownership means where the title of the owner is already perfect. In this
the ownership is absolute. For example, in a gift deed a donee (to whom the gift
is gifted) cannot take possession of the gift property but he has vested interest
till the death of the donor and his wife. The donee can although transfer the said
property after the death of the donor.
Contingent ownership implies that the ownership is not absolute but
conditional. The ownership is imperfect and becomes absolute and perfect only
on fulfillment of some condition. For example, A leaves his property to B and
on B’s death to C. The ownership of C is contingent ownership as he will get
the property only after the death of B.

Sole Ownership and Co-ownership –

Sole ownership is when only one person has the whole and sole right in a
property and no one else can claim any right whatsoever over the property in
question.

Co-ownership is when more than one person has a right that is the undivided
and vested in all of them at the same time. The parties do not separately own a
part but co-owners of the same property.

Co-ownership and Joint Ownership –

Co-ownership the property in question is commonly owned by both the parties

and on demise of one party the heirs of that party would inherit part of it. For
example, A and B are in a co-ownership. On death of A, A’s heirs will get half
of the property.

Joint ownership is when a property is jointly owned by parties and on the death
of one party the ownership dies with him and cannot be inherited. For example,
A and B are joint owners of a property. On death of A, B becomes the sole
owner of the said property.

Absolute and Limited Ownership –

Absolute ownership means that except the owner in whom all the rights are
vested there are no other person who can claim any right over that property. But
there may be legal or contractual restrictions upon the usage of the said
property.

Limited ownership means in the ownership there are limitations on the rights of
usage, duration or disposal of the property. For example, before 1956 a Hindu
woman had only limited ownership over a property and after her demise the
property would be inherited by the heirs of the last holder.

Conclusion

Ownership in its nature is residual and can be said to have a bundle of rights
attached to it, but at the same time it also denotes the relation between a person
and the thing to be owned. That throughout the years the concept of ownership
and possession has evolved and has been embedded in the minds of human that
may or may not be in a legal sense. It has impacted society and even society has
impacted its definition, meaning, scope and understanding. Ownership may
mean different things to different people but what does not change is the fact
that along with the rights attached comes liability, obligations, duties toward
others and society in general.

Modes of acquiring Ownership

Under modern law, modes of acquiring ownership may be classified under two
heads:

(i) Original mode; and

(ii) Derivative mode.
(i) Original mode: This mode is the result of some independent personal act of
the acquirer himself. It is of following kinds:
(a) Absolute mode: In this mode, ownership is acquired over previously
ownerless object.
(b) Extinctive mode: In this mode, there is extinction of previous ownership by
an independent adverse act on part of the acquirer.
(c) Accessory mode: In this mode, requisition of ownership is the result of
accession.
(ii) Derivative mode: When ownership is derived from a previous owner, it is
called derivative acquisition of ownership. It is derived by any of the following
modes:
(a) Title of prior owner: In agreement, a title is acquired with the consent of
the previous owner. It is only limited to contracts but includes all bilateral acts
which create an interest. Such agreement may be either by grant or by
assignment.
(b) Purchase: A contract for sale does not confer title in immoveable property.
As per Section 54 of the Transfer of Property Act, a contract for sale of
immoveable property is a contract that such sale shall take place on terms
settled between the parties. However, if a person has entered into possession
under a contract for sale and is in peaceful and settled possession of the same
with the consent of the person having the title thereto, he is entitled to protect
his possession against the whole world.
(c) Gift: It should be voluntary and without consideration and it may be
movable or immovable. As per Section 123 of the Transfer of Property Act, the
transfer by way of gift must be affected by a registered instrument signed by or
on behalf of donor and attested by at least two witnesses, or by way of delivery.
(d) Succession: In this regard, it has been held in several judgments that
genuineness of will has to be established.