Transferability of Immovable property

By Anonymous

Introduction

Transfer of a property can be made in two ways, firstly by an act of parties and secondly by law. Under the act of parties, Transfer of Property Act (TOPA) exists, which gives us further divisions that is whether the property is movable or immovable, transfer for movable property and immovable property. In my research paper, I am going to focus on immovable property. Immovable property is divided into six parts- sale, mortgage, actionable claims, lease, exchange, and gifts, charge.

Transfer of property has been defined under Section 5 of the Transfer of Property Act. According to the act immovable property does not include standing timber, growing crops, or grass. Interpretation of the section also allows us to construe the fact that things that are attached to the land and which cannot be detached from the earth and things which are permanently fixed to the earth also come within the definition of immovable property. For example, timber, since it is of no use until one takes it out of the land or detaches it, it is useless therefore it is movable property.

There are six elements, which make a property transferable. The requirements to be met as per Section 5 are four in number.

1. The transfer must be by a living or juristic person.

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.

2. The transfer must be through a conveyance.

Conveyance can be present or future. However conveyance can take place only if there is a creation of a new title. Therefore, there should have been nothing with the transferee before the title. In addition to this, the term future is used to define the future interest in the property and not the future property itself. Therefore, the word future property itself must be transferred. Therefore, the word future is for the conveyance.

3. Thirdly, the property itself must be transferred.

4. Fourthly, it must be made to a living or a juristic person.

Any kind immovable property can be transferred. Any kind of immovable property can be transferred other than that which are given in Section 6 of the TOPA. In the case Samsudden v. Abdul Husen it was held that the chance to transfer couldn’t be transferred. The right to re-entry, easement can’t be transferred. Specific rights cannot be transferred, as there are only certain people who should enjoy the right. The right to sue, public office, unlawful objects cannot be transferred.

The third element is competency as under Section 7 of TOPA. The individual must not be a minor or an insane person. The person must have the title of property or the person must have the authority to transfer; in part or in whole, as held in the case Krishna Khurhai v. Grindlays bank, if transfer is made ultra virus to the authority vested in the agent, the transfer will be void.

The fourth element being that under Section 6(h)(3) the person must not be a legally disqualified transferee. For example under Section 136 of TOPA judges, legal practitioners and officers connected to the court are disqualified from purchasing actionable claims.

The fifth element being that a valid transfer can also happen under Section 9 of TOPA as an oral transfer.

Transfer of immovable property may happen only in certain ways. They can either be through sale, mortgagee, lease, and gifts or through actionable claims. These are modes of transfer.

  1. Sale-
    Contract of sale of immovable property is basically a contract, which states terms for the permanent transfer of property. The sale takes place in accordance to the terms, which are settled by both the parties in the contract itself. Such contract of sale does not create any interest in or charge on such immovable property. A kind of obligation is created in respect of the ownership of the property. Essentials of a contract of sale are several. The parties to the transfer or the vendor should be competent enough to contract under Section 2 of the Indian Contract Act. Price is another essential ingredient for all transactions of sale and in the absence of thisprice, which constitutes consideration, the transfer will not be regarded as a contract of sale.
    Delivery of property is necessary for a transfer by way of sale. In case of tangible property worth less than Rupees one hundred, the transfer can be made by a registered instrument or putting the purchaser in possession of the property. If it is more than rupees one hundred then the instrument has to be registered under Registration Act, 1908. There are certain rights and duties of the buyer and the seller, which are subject to the contract. These rights and duties are governed under Section 55 of the Transfer of Property Act.
  1. Mortgage-
    Transfer of immovable property can also take place through mortgage. Section 58(a) of the TOPA says, a mortgage i the transfer of an interest in 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 deist, or the performance of an engagement which may give rise to a pecuniary liability. Ingredients of mortgage; in a mortgage, the mortgagor transfers any one of his interests in specified immovable property to the mortgagee. Money to be advanced by way of loan arises in the case of a running account between the parties. Future debt is a contingent liability, which arises on the happening of some contingency. If the promise is not completed, an obligation to pay arises. These may be a pecuniary liability.
    An undertaking i.e., a person borrowing money not to alienate his property until the money is repaid is not a mortgage, because there is no transfer of interest in the property.
  1. Charge-
    Transfer of immovable property can also take place through charge.  According to Section 100 when a person by the act of parties or operation of law creates security for the payment of money to another, and the transaction should not be a mortgagee, the latter is said to have a charge on the property. The charge is created by operation of law, this distinguishes mortgage, which is created by act of parties.
  1. Lease-
    Transfer of immovable property can also take place though lease. Section 105 defines lease. According to it, 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, share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
  2. Transfer can also take place through exchange, gifts and actionable claims.

  3. Other ways-

Immovable property can also be transferred by way of law that is if there is insolvency, succession or the absence of a will. In the situation of the absence of a will, the court shall declare the transfer of property by way of interstate.

However, there are some things that cannot be transferred. Section 6 of the Transfer of Property Act discusses the immovable properties, which cannot be transferred. Spec successions cannot be transferred. According to Section 6 (a), it is void. In the case Annada Mohan Roy v. Gom Mohan Mullick, the appellant purchased the rights expectant upon the termination of the surviving widow’s rights from the respondents and further on there was a compromise between the widow and the respondents as a result of which the respondents got certain properties. Thus it was held in the case that compromise is void and cannot be transferred.

In the case Karpagathachi v. Nagarathinathachi, two-widows had divided the husband’s property into two shares and took possession of respective shares. Under the partition deed, each widow gave up her life interest. When one of the widows died her daughter took over the possession. The other widow filed a suit against the daughter claiming for the share, which is in possession of the daughter of the other widow. The court held that each widow transfers her right of survivorship according to Section 6(a) of Transfer of Property Act.

Charge cannot be transferred because it is a right, which is a part of the property. Compromise cannot be transferred. Easement cannot be transferred because these are the rights or interest arising of land, which is a part of the property but cannot be transferred. Family arrangement may be transferred. A will cannot be transferred because it does not operate by the act of parties. Auction sale cannot be transferred because property is in possession of another.

 Are benefits arising out of land immovable? Yes, benefits like crops from your land, fish and the lake and anything 12nm from the mainland are immovable and can be transferred. In the case Anand Bahera v. State of Orissa, it was held that profit arising out of land is immovable property. The right to walk on the land and to draw fish from the lake and taking it away is immovable property as it is the profit arising of the land. Grazing of cattle on the land is also immovable property as it is profit arising of the land.

Conclusion

Therefore for a property to be transferable several conditions need to be satisfied. These include that of constituting a transfer; it to come within the definition of immovable property and it should not be amongst those items, which may not be transferred under Section 6 of the Transfer of Property Act. In addition to this, it is clear that there are several kinds of transfer that may take place. Each kind of transfer as has been explained has different procedures and conditions, which need to be satisfied. These are hence the various elements that are required to be transferred for a property to be transferable.

Formatted on 19th February 2019.

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