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This article is written by Tejaswini Bhagat.

 

The rights of persons, and the rights of property, are the objects, for the protection of which Government was instituted.”

-James Madison

Introduction

To understand the multi-dimensional dynamics of Transfer of Property Act 1882 its definition, its scope, its objective, its applicability and its territorial limitations we will first have to understand what the meaning of property is and what the meaning of transfer of property is in basic language. Property means a possession or a belonging and transfer means giving the possession or belonging. The quote used in the initiation of the paper depicts the significance of property. Thus, in modern society it is really important to understand the fact that 60% of Indian population owns a part of land which they call it as their property. Thus, dispute arising is a natural phenomena as where there is property there is an issue of transfer as no one behold a property forever.

The ownership ends with the death of the person it either gets transfer to successor, gifted to someone, sold out to someone etc. Thus, to manage the proper transfer of property from one individual to other and so that the transfer takes place in harmony and not with disputes and to make the process of Transfer of Property easy this particular Act was introduced. 

There are various types of transfers in India. For example if there has to be a transfer of movable goods the act which governs that is Sales of Goods Act 1930, if the transfer is taking place when a party is dead to a living person it comes under Indian Succession Act and where a person dies leaving a will behind then the matter is governed by Testamentary Succession. But when the transfer involves conveys of immovable property with two living person it is governed under Transfer of Property Act 1882.

Before Transfer of Property Act existed India followed the English law and equities to transfer immovable property. Thus, that created confusion and disorientation as the rules were in accordance of English and sometimes they were arbitrary in nature and were in a way did not understand the Indian perspectives. Thus, to remedy these confusion and conflicts a Law commission was created which prepared a bill which ultimately got finalized by the 3rd Law Commission which consisted of Charles Turner, Sir Raymond Wast and Mr. Whitely Stokes and then finally after all the amendments, on February the 17th, 1882 The Transfer of Property Act 1882 came into effect. 

Objective

As discussed above the main reason to bring in the Act was to avoid the arbitrary judgements of the Englishmen which were based on their rules and equity. Another significant reason to introduce this act was to bring a systematic, uniform and unambiguous law which will perfectly facilitate the transfer of immovable property. And as land which is an immovable property was a definite asset which most people had it was the need of the hour to make certain laws which will regulate its transfer, registration and various other property related aspects so that the process becomes easy and less disputes arises. 

Nature and Scope 

  • The Act defines and amends the law relating to transfer of property by act of parties. The Act does not cover transfer of property by operation of law. Transfer of property by operation means even though the transferor is not alive at the date of transferring the property, the property could be transferred. The transfer of property is done only inter alia it means that during the time of transfer both the persons should be living as it does not take into account transfer by operation of law. The testamentary transfers are governed by Indian Succession Act and it is an example of Transfer by operation of law.
  • The act primarily focuses on transfer of immovable properties. However, it certain Sections 5 to 37 contains provisions which are applicable on both movable and immovable property. Relatively the movable property is dealt in Sales of Goods Act 1930. 
  • The act can be implied on Muslims unless the act is in accordance to the Muslim Law of Hiba. If the provisions of the act and Hiba are in a conflict then the later may prevail over the act. Thus, somewhere they prefer personal law over basic laws.
  • The act caters to the need of the society and thus, has been modified and amended accordingly.
  • The law does not disturb the existing laws of testamentary and intestate transfers moreover it goes parallel to it and accustom itself accordingly.
  • Initially, when the law was made it was not applicable in Burma, Bombay and Punjab. However sooner or later soon the states adopted the law. However Punjab still does not follow the act however the courts apply the provisions of the act on basis of equity, justice and good concise.

Analysis and Comment on Scope and Nature

According to me the scope of Transfer of Property Act 1882 is “Narrow”. Reason being firstly, it is Not an Exhaustive Law that means that it is not consolidated and a completed act. It does not have an absolute code and thus is Exhaustive in nature. The law just rephrases and amends the principles which already existed in the English Law. It does not give any new consolidated law. Thus, there are times when there is no way out in a particular case dealing with property law and the act has no provision regarding it thus, in those cases the principle of equity, justice and good concise is applied. Also even when the act is to be applied throughout India it is still not applied in Punjab which makes the act weak as non-enforcement of an act shows that the act is not stringent in nature and people take it in a jocular manner and less seriously.

Also, certain definitions which are of much substance are not clearly defined. For instance the definition of immovable property is very ambiguously defined and leaves a blur in the mind of the reader. I say that the scope is narrow because act defines and amends the law relating to transfer of property by act of parties. The act does not cover transfer of property by operation of law. Transfer of property by operation means even though the transferor is not alive at the date of transferring the property, the property could be transferred. Thus, when transfer can happen only by act of party and not by operation of the law the velocity of the provision automatically and unquestionably becomes narrower in nature and its scope is curtailed. Thus, for the reasons stated above and according to my analysis the scope of Transfer of Property Act 1882 is narrow in nature.

Territorial Limitation 

The Transfer of Property Act, 1882 is a territorial law and its operation extends to the whole of India except for Punjab. It was not enforced throughout the country in one instance. It was made applicable to different parts of the country on different occasions. When the Act was first enforced (1st July 1882), it extended to the whole of ‘British India’ except Bombay, Burma and Punjab. The Act was extended to the territories of Bombay from 1st January 1893. In Punjab, the transfer of immovable property by the act of parties is governed by the rules of Justice, Equity and Good Conscience.

Attributes of Property which can be transferred (Section 3)

The word property has been used in a comprehensive sense. Property is usually bifurcated into three parts Nature, Purpose and Object of Use. Nature generally includes characteristics like tangible, intangible, corporeal, non-corporeal and etc. Purpose generally includes whether the property is for private or public use. Object of Use means whether the property at hand is used for personal or commercial purpose. Moreover, things like Ancestral Property falls under all the three sub-heads. We usually come across only two types of property which can be transferred which are Movable and Unmovable Property. Even though the transfer of movable property is dealt in Sales of Goods Act 1930 and Unmovable property transfers are dealt in Transfer of Property Act 1882. But in Section 5-37 transfer in both aspects are given. But mainly the kind of property which is transferred in the act is stated under Section 3 of the act which is Immovable Property.

It includes land, building, allowances, lights ferries or any benefit to arise out of land or things attached to the earth or permanently fastened to anything which is attached to the earth but not standing timber, growing crops or grass. Thus, the significant factor to be noted here is that the act is not exhaustive in nature but in-exhaustive thus, the way in which definitions are presented are based on the maxim alienation rei prae fetur juri accrescendi which means alienation is favoured by law rather than accumulation. Which means the act does not provide direct definitions with the accumulation of elements rather it just eliminates out or alienates the elements which should not be there. For example “If I have to say the constitution of India is good I would not directly say it I would rather say the Constitution of India is not bad.” Thus, this is the principle on which this act is based. Section 3, Section 6 all are the perfect example of this alienation principle of the act.

Thus, the above mentioned are the kinds of property which can be transferred. A property is a bundle of rights, when a property gets transferred its rights also gets transferred. There may be passing of all rights (ownership) or passing of some rights (partial interest). For example when under Section 3 land is transferred it is not just the land which gets transferred the benefits arising out of land, things attached to it everything is included when property is transferred unless there are any restrains.

The transfer of property may be made to take place with immediate effect or to take place on a future date; however the property must be in existence at the date of transfer. There can be no transfer of future property. The expression ‘in present or in future’ governs the word ‘conveys’ and not the word ‘property’, e.g., A transfers his property to B for life and then to C. The transfer in favour of B is present (although he gets only life interest) but the transfer in favour of C is future transfer. Thus, these are the kinds of Property which could be transferred and the section which deals with same is section 3 of Transfer of Property Act 1882. 

Transfer of Property (Section 5)

According to the bare acts of act Section 5 states 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. Thus, there are four main aspects to Section 5. 

Important Aspects

Transfer must be by a living or juristic person

  • The conveyance of the property must be from one living person to another living person. However transferee need not be a competent person like transferor. A transferee may be a minor, insane or child in mother’s womb. The word “living person” includes corporations and other association of person. A transfer can be made by a person to himself, as for instance when a person vests property in trust and himself becomes the whole trustee. A juristic person was defined in the case Shiromanigurudwara Prabhakar committee, Amritsar v. Sri Somnath Dass. In this case the court said that a juristic person can be an individual, firm, corporate company, association, society, not including partnership firm. Any individual who can sue or be sued under law would satisfy this requirement.

The transfer must be through a conveyance

  • The property must be conveyed by one living person to another, living person does not only include persons but also corporations and associations. Both transferor and transferee should be living at the time of transfer as the act deals with inter vivos transfers. Apart from real people, corporations can transfer property because they are separate legal entity and a juristic person. On the other hand deity is recognized as juristic person but is not living so thus, cannot convey property.

Conveyance to himself or himself with one or more persons

  • Previously the transferor could transfer his property to other living persons or to himself and one or more living persons but not to himself alone. It created difficulty for persons who want to settle property into trusts and declared them to be the sole trustee. Thus, to overcome this difficulty in the amendment of 1929 the word “to himself” was added. Now property can be transferred and self-declared.

Transfer in Future or in Present

  • This term in present or in future is attached to conveys. This means that the transferor may transfer the property either with immediate effect or to be effective from a future date. 

Thus, the Transfer of Property Act 1882 revolves around these four basic Subsets and elements.

What may be transferred (Section 6)

As discussed above the Transfer of Property Act 1882 is based on the maxim alienation rei prae fetur juri accrescendi which means alienation is favoured by law rather than accumulation. Thus, rather than what can be transferred the section deals with what cannot be transferred. Thus, its general principles exclaim that property of all kind can be transferred under section 6 except the general exceptions. In order to be a valid transfer it is necessary that

  1. Property must be transferrable (u/s 6).
  2. Consideration of transfer should be lawful. 
  3. Transferee must be competent. 
  4. Transfer should not be opposed to nature of interest.
  5. Transfer should be made in prescribed manner. 

However, the exceptions include Spes Successions, Right to receive future offerings, Right to re-entry, Easement, Restricted Interest, Right to future Maintenance, Right to sue. Thus, these are the exceptions to Section 6

Modes through which property can be transferred

There are certain modes and ways through which properties can be transferred in the Transfer of Property Act 1882. The following are the modes with their respective sections in the act. 

  1. Sale – According to section 54 of the Transfer of Property Act 1882, Sale is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.  In a sale, there is an absolute transfer of all rights in the property sold.
  2. Mortgage – Section 58 of Transfer of Property Act 1882 defines a mortgage as the transfer of an interest in a specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability. Thus, a mortgage is a transfer of an interest in specific immovable property as security for the repayment of a debt.
  3. Exchange– Section 118 of the Transfer of Property Act 1882  provides that when two persons mutually transfer the ownership of one thing for the ownership of another, neither thing nor both things being money only, the transaction is called an Exchange. 
  4. Gift– Section 122 of the Transfer of Property Act 1882 defines Gift as the transfer of certain existing movable or immovable property made voluntarily and without consideration by one person, called the donor, to another, called the one, and accepted by or on behalf of the one is termed as gift. 
  5. LeaseSection 105 of the Transfer of Property Act 1882  lays down that a lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, 

Thus, these are the different ways and modes through which property can be transferred. 

Key Problems of the act

Even though the Transfer of Property Act 1882 is a very significant act and of outmost importance its scope has always been narrow and one of the reasons is its poor implementation it is necessary that if an act has to be religiously followed the act should be accepted by the parties and should not be seen as the last but the first resort to redress their issues. In India still there are places where immovable property even when the acts exist gets transfer through customs and beliefs. Thus, this practice of people makes the scope of the law narrow. The territorial limitation of Punjab should also be removed because if a law is not implemented in a particular place but gets implemented in rest of the nation it stoops down the position of the law in the eyes of its citizens terming it to be of less importance. Thus, proper implementation is needed to widen the scope of the act and make it more effective in nature.

Analysis and Conclusion

As we studied above that earlier there was no act, law or provision which took into account the transfer of immovable property. Thus, Transfer of Property Act did not came as a luxury but came as a necessity as it was the need of the hour to have certain provisions regarding the transfer of  immovable property like land and building. Even going back decades and years in history we will observe that the major fights among countries have been over territorial jurisdictional on an international level and even nationally even family members kill each other in some instances in order to get property thus, there was a stringent need of bringing down the Act which regulates the transfer of property in a nation. Furthermore in India where property is a big issue has not every bit of the population owns it the Transfer of Property Act 1882 serves as a bane and a sin qua non.

References

Books

Avtar Singh, The Transfer of Property Act, 1-38, 2nd Edition 

Articles

Manupatra Articles


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