Article on Transfer of Property Act 1882

Introduction

Property is one of the fundamental elements of socio economic life of an individual. Juridically, a bundle of rights in a thing or land, the word property has gradually been given a wider meaning to include every kind of mortgage on another’s land and also the intellectual property e.g. copyrights and patents etc. 

However the economic significance of property rests more on its dispositions rather than on its abstract content. Property law has therefore been an important branch of civil law.

Transfer of property act 1882 deals with the transfer of immovable properties inter vivos i.e. between living persons and some of its provisions are applicable to the transfers also of movable properties as well. 

Before this enactment the transfers of immovable properties were governed mostly by the english equitable principles as applied by the Anglo Indian courts. The act was enacted by the legislature in the colonial period to provide a definite and uniform statutory law governing transfers of immovable properties in India; it comprises 8 chapters, 137 sections. 

There are few other enactments which are inter related to this act such as Indian registration act 1908, Specific Relief act 1963, The limitation act 1963, The Civil Procedure code 1908 and Benami transactions act 1988.

To understand the act one should know the common terms behind this act which we will understand below

Important Terms of Transfer of Property Act 1882

Immovable property

Immovable property is defined in the act but definition given in the act is not exhaustive so aid of another act known as general clauses act is taken and by combining the definition of both the act we can say Immovable property means land, benefits to arise out of land and things attached to the earth except standing timber, growing crops and grass.

Attesters

Attester is a person which signs a formal document as a witness to the transfer. In the process of transfer of property from one person to another there must always be two or more witnesses who must sign the document in the presence of the transferor and also the attesters would not be a party to the transfer.

Notice

This is the most common concept one should understand in the transfer of property act which says a person who is served a notice has the knowledge of the facts and various circumstances surrounding the immovable property.

There are two types of Notice i.e.

1. Actual Notice

Actual Notice means direct or express knowledge or definite information about a fact.

2. Constructive Notice

This is a legal presumption that the court would presume that the person concerned is bound to have the knowledge of the fact.

Actionable Claim

Actionable Claim is any unsecured debt or any interest in any movable property which can be claimed.

Types of transfers under the Transfer of Property Act, 1882

There are 5 Types of Transfers namely-

1. Sale

Transfer of ownership from one person to another in exchange of money is known as sale and this is the simplest kind of transfer of property where one title is shifted from one person to another in one transaction. Section 54 of the act mentions the sale of immovable property.

2. Mortgages

When a property is mortgaged for securing a loan and in the default of the loan the property gets transferred from one person to another is known as transfer of property by a mortgage. Section 58 talks about mortgage in the act.

3. Leases

In Lease, Rights of possession are transferred rather than rights of ownership. It is the transfer of an interest in the property for a certain period of time and not the transfer of ownership of the property. Lease is mentioned in the act from the sections 105 to 117.

4. Exchange 

When there is a transfer of property in exchange of another property is known as Exchange. Section 118 contains the provisions about the Exchange in the transfer of property act.

5. Gifts

When a person voluntarily and without consideration transfers certain existing movable or immovable property to another person is known as gift deed. It is mentioned in Section 122 of the act, Acceptance of the donee is the crucial part in this kind of transfer.

Latest and Landmark Judgments on the Transfer of Property Act 1882:

On Constructive notice

  • Bank of Bombay v Suleman Somji 33 Bom 1 PC 1908
    • Bombay High Court

In this case, One Suleman Somji left a house and land to his son of his first wife and left Rs. 30,000 to the sons of his second wife. The sons of his first wife secured a loan by depositing the title deeds of the house and land to a bank. 

The bank never inquired about the how title of the deed was transferred and it was held that a charge was created in favor of the sons of the second wife through a will and acted as constructive notice to the bank.

  • Lloyds Bank Ltd. v. P.E. Guzders and co. ltd., (1929) 56 Cal 868
    • Calcutta High Court

In this case a title deed was deposited by a person in calcutta with a bank for securing an overdraft from a bank. In a series of events the person who deposited the deeds represented to the bank that a purchaser of the house wants to see the title deeds. 

The Bank gave those deeds to the person who deposited it and subsequently that person deposited that same deed to another bank to secure a loan.

It was held that there was gross negligence on the part of the bank and it has lost his prior rights with respect to the house.

On Immovable Property

  • Shrimati Shantabai vs State Of Bombay & Others 1958
    • Supreme Court of India

This case is based on the definition of immovable property given in the act. It was made clear that the trees are immovable property and come under things attached to the earth and also in case of lease one can enjoy property but has no rights to take it away.

On Senior Citizens

  • Subhashini vs Subhashini on 22 September, 2020
    • Kerala High Court 

In this case, Kerala High Court held that if a senior citizen does a gratuitous transfer of a life interest of a property it cannot be understood as an obligation for the person to whom it is transferred to maintain the senior citizen.

On Inheritance of Hindu daughters

  • Arunachala Gounder (Dead) By Lrs vs Ponnusamy on 20 January, 2022
    • Supreme Court of India

The Apex court in this case held that if a hindu male dies intestate and has obtained self-acquired property or in the partition of a coparcenary or a family property it would be distributed by inheritance and not by survivorship. With this ruling the supreme court also confirmed that daughters of male hindu would be entitled to inherit such property.

Conclusions

We come to the conclusion that Transfer of property act 1882 is a comprehensive and a structured act which shows its effectiveness across the country. As it was introduced way back in the time, it had its shortcomings but with needful amendments with time, it has been keeping pace with the latest laws and living lifestyle of modern India.

Reference:

  • Ipleaders
  • Indiankanoon
  • Transfer of Property Act 1882 by Dr. R.K. Sinha

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