UNIT 1
INTRODUCTION
1. Interpretation clause
Faculty: Asst. Prof. Akanksha Gehlaut
1
WHAT IS PROPERTY?
The term property is derived from Latin term „properietat‟ and French equivalent
‘Proprius’ which means a thing owned/possessed.
Salmond - it means proprietary rights in rem.
John Austin- Property is a right availing against the world i.e. jus in rem.
It is right to possess, use, enjoy, dispose, commercial exploitation, apply for
different purposes, inherit.
Nature of property is important while studying transfer of property.
WHAT IS TRANSFER OF PROPERTY?
Section 5, Transfer of Property Act, 1882
“An act by which a living person conveys property, in present or in future, to one or
more other living persons, or to himself, and one or more other living persons; and “to
transfer property” is to perform such act.”
“living person” includes a company or association or body of individuals, whether
incorporated or not.
LEGISLATIVE HISTORY
Pre British - personal laws governed the transfer of property.
First law commission was appointed by the British Queen Elizabeth I to remove
uncertainties in property law. Then came the second law commission which shaped the
law in a manner that suits the Indian population. Thereafter various amendments and
special committees worked on the law.
Transfer of Property Act came into force on 1st July 1882
Preamble: An act to define and amend the law relating to the transfer of property by p.
Not exhaustive. It Is not to consolidate. It completes ICA, 1872 (Section 4, ToP).
Scope and application:
1. Throughout India
2. Between two living persons
3. Relating to Immoveable property, except Section 5 – 37 are applicable to Immoveable &
moveable. Further provision of gift and exchange are applicable to moveable property.
4. Section 2 says Chapter II (5-53A and Section 129) is not applicable to Mohammedans if
inconsistent, and that of gifts are governed by Law of Hiba.
5. ToP is prospective in nature.
Applicability:
OVERVIEW OF THE ACT
Kinds of transfers under ToP, 1882
1. Sale of immovable property:There is a transfer of ownership from the buyer to the seller in
exchange for the price. Delivery of tangible property from the seller to the buyer.
2. Mortgage of immovable property:The property gets transferred from the buyer to the seller
in the form of a mortgage where the immovable property is mortgaged to secure a loan. The
mortgagor has to pay the principal loan along with the interest to release the immovable
property from the mortgage.
3. Leases of immovable property:The possession of the property is being transferred from one
person to another person for a fixed price in this scenario there is no transfer of ownership.
4. Exchange of immovable property:When two persons mutually decide to transfer property it
would be referred to as an exchange of property.
5. Gift of immovable property: According to the transfer of property Act, 1882, gift refers to a
transfer of movable or immovable property voluntarily or without the consideration, by one
person that is donee, to donor, transfer is accepted by and on behalf of the donee.
SECTION 3, TRANSFER OF PROPERTY ACT, 1882
Interpretation clause:
1. Immoveable property
2. Instrument
3. Attested
4. Registered
5. Attached to the earth
6. Actionable claim
7. A person is said to have notice
IMMOVABLE PROPERTY
General Clauses Act, 1897, Section 3(26), “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 Registration Act 1908: “immovable property includes land, buildings, hereditary
allowances, right 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 or grass.”
Narayana Sa v. Balaguruswami – distillery vats
Moti Singh v. Deoki Singh – fruit trees
Shanti bai v. State of Bombay – intention (wrt trees)
IMPORTANCE OF NATURE OF PROPERTY
IM- transfer through
written and registered
document
To determine
procedure of transfer
MP- transfer by
delivery of possession,
written/registered not
essential
MOVABLE PROPERTY
General Clauses Act, 1897, Section 3(36), “shall mean property of every description,
except immovable property”
The Registration Act 1908, 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;
INSTRUMENT
Where property is transferred via written document, that document is
called instrument.
Section 3, ToP defines instrument as a non-testamentary instruments.
It is a written proof that transfer has been made.
ATTESTED
Property can be transferred orally i.e. by delivery of possession (MP), or through
written document(IP). Transfer via written document needs to be attested.
While executing a written deed of transfer there must be 2 persons who witness the
execution and attest the same by signing the deed of transfer, leading to attestation.
Object
Who can attest?
Kumar Harish Chandra v. Bansidhar Mohanty
Essentials of valid attestation
Lala Kundan Lal v. Mushrafi Begum
Form of attestation
REGISTERED
"Registered" means registered in any part of the territories to which this Act extends
under the law for the time being in force regulating the registration of documents.
It is a document which is officially recorded.
It is under the provisions of Indian Registration Act 1908.
Section 17: Documents of which registration is compulsory.
Registration is valuable evidence regarding the statements made in the document.
Where ever required document must be duly attested and registered.
ACTIONABLE CLAIMS
"Actionable claim" means a claim to any debt, other than a debt secured by mortgage of
immovable property or by hypothecation or pledge of movable property, or to any
beneficial interest in movable 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.
Intangible movable property.
It is an act or claim for which an action can be instituted in civil court for realization of
the benefit.
Actionable claims means;
1) Unsecured money debt, and
2) A claim to beneficial interest in moveable property not in possession of claimant.
• Unsecured money debt: A debt may be secured or unsecured. In secured debt, the
creditor (who gives loan) takes security from the debtor (who take loan) by way of
mortgage or pledge or hypothecation. A secured debt is not actionable claim. A
debt may be existent debt (already become due and is payable) or accruing debt
(present due but payable in future) or conditional or contingent debt (claim exist
but payment depends upon the fulfilment of some condition).
Kinds: Existent debt, accruing debt, conditional or contingent debt.
• Claim to beneficial interest in movable property not in the possession: It is right of a
person to take the possession of movable property from the possession of another.
Provided the claimant has beneficial interest. (right to possess).
For this: 1. the claim is in some movable property; 2. the movable property is in
possession of another person; 3. the beneficial interest or the right of possession of
the claimant is recognized by the court.
• Examples of actionable claims 1. a share in partnership 2. a claim for arrears of rent
3. a claim for money under insurance policy 4. a claim for return of earnest money 5.
a claim for recovery of annuity 6. amount under a decree 7. a claim for fixed deposit
in bank 8. a claim for benefit when contract is broken.
• These are not actionable claim 1. right to damages in tort or breach of contract. 2.
claim for mesne profits. 3. a claim for future decree.
NOTICE
• “A person is said to have notice" of a fact when he actually knows that fact, or when,
but for willful abstention from an enquiry or search which he ought to have made, or
gross negligence, he would have known it.
• Notice: means knowledge or information of fact.
• Actual or express notice: means direct knowledge or information about something.
• Constructive notice: is based on equity, it is a legal presumption. Where a person
actually does not know anything about a fact but the court treats that under some
circumstances he must have knowledge of that fact.
CONSTRUCTIVE NOTICE
Instances where legal presumption of constructive notice is made:-
Willful abstention from an inquiry or search
Gross negligence
Llyods Bank Ltd v. P.E. Guzder & Co.
Registration as notice
Actual possession of notice of title
Notice to agent is notice to principal
REVISION TEST/QUIZ
1. Transfer of Property Act was passed in the year _____
2. Which section of ToP defines transfer of property? Explain.
3. In Transfer of property we study transfer inter vivos and transfer by operation of law.
T/F
4. State the preamble of the ToP Act.
5. Section 4 is the interpretation clause in ToP Act. T/F
6. Identify the following as immoveable or moveable property.
a. Right to collect lac from tree
b. Cheque
c. Decree for arrears of rent
d. Soil
7. Instrument under ToP Act includes testamentary documents. T/F
8. Attestation by party having interest in the transaction is invalid. T/F
9. Which sectionn provides list of documents for which registration is compulsory?
10. Action claim arises in two events, state them.
11. A informs B that he will sell 50 bags of wheat to B if he pays Rs1000/-. B has not paid
Rs. 1000, and there is no contract to effect. Does B have an actionable claim?
12. Actual notice can be disproved, i.e. it can be rebutted. T/F
13. A sold his land to B. A continues to reside on the property as tenant of B. A now
sells the same property to C by registered sale deed. Does C have a constructive
notice of B‟s right?
14. Landlord receiving an email from the tenant listing everything broken and in need of
repairs. Is this a notice? If yes, what kind?