Transfer of Property Act: Introduction and Important Definitions

The article provides an introduction to the Transfer of Property Act 1882. Transfer of Property Act was enacted to amend the transfer of property law by an act of parties. The article also contains ten important definitions crucial to understanding and interpreting the Act.

The Transfer of Property Act came into existence in 1882. Before that, the transfer of immovable property was governed by English law and equity principles. The preamble of the Act sets out the objectives of the legislation. The purpose of the Act is to define ‘certain’ parts of the Law of transfer of property.

The scope of this Act is limited. It applies only to transfer by the act of parties, not by operation of law. Also, this Act deals with a transfer of property inter vivos, i.e., a transfer between living persons. It contains the transfer of both movable and immovable property, but a major portion of the enactment applies to the transfers of immovable properties only. The Act is not exhaustive.

I.

Transfer of Property Act Introduction

Regulation of Transfer of Act by Parties

Before the Transfer of Property Act came into existence in 1882, the transfers of immovable properties in India were governed by the principles of English law and equity. In the absence of any statutory provisions, the courts have to fall back upon English law on real property, sometimes forcing the courts to decide the disputes according to their own notions of justice and fair play, resulting in confused and conflicting case laws. To remedy these confusions and conflicts, a Law Commission was appointed in England to prepare a code of substantive Law for the Transfer of Properties in India.

This commission prepared a draft Bill and sent it to the Secretary of State for India. This bill was introduced in the Legislative Council in 1877. The bill was then referred to a Select Committee, and it was also sent to the Local Governments for their comments. This Bill was discussed and redrafted on many points and referred to a Third Law Commission. The Third Law Commission consisted of Sir Charles Turner, Chief Justice of Madras, Sir Raymond West and Mr. Whitely Stokes, Law Member of the Council of the Governor-General.

The Bill pertaining to the Transfer of Property Act, 1882 was prepared not less than seven times before the final Bill was passed, and it came into force with effect from the first day of July 1882, as Transfer of Property Act, 1882 (4 of 1882)

Preamble

The provisions of the Transfer of Property Act 1882 have no application in a case where the transfer of property takes place by operation of law as would appear from the Preamble of the Act. The same applies only to transfer by the act of parties. A transfer by operation of law is not validated or invalidated by anything contained in the Act.

A transfer which takes place by operation of law, therefore, need not meet the requirement of the provisions of the Transfer of the Property Act or the Indian Registration Act. Section 11 of the Act provides for a non-obstante clause. An overriding effect, therefore, has been given thereby over all other laws for the time being in force.[1]

Act not exhaustive – it is to be noted that in the language of the Preamble, neither the word ‘consolidate’ nor the word ‘exhaustive’ is used. This means that the Act is not exhaustive of a complete Code. It only defines and amends certain parts of the law relating to the transfer of property, which is already existing. It is not giving any new consolidated law. Therefore, the help of certain principles of English law which are not inconsistent with the present Act may be taken on occasions on the basis of justice, equity and good conscience.

Where any case is not covered by the provisions of the Act, the courts are permitted to administer the principles of equity. But where the case is within the provisions of the Act, the Act must be applied. The principle that courts are authorised to act according to justice, equity and good conscience where there is no specific provision of law governing that case means that the English law is to be applied if its application is suited to the Indian society and its circumstances.

Objects and scope of TPA

the act defines and amends the law relating to the transfer of property by the act of parties. The Act does not cover the transfer of property by operation of law. Further, transfer of property by act of parties again may be inter vivos or testamentary. Inter vivos transfer means the transfer between two living persons, whereas testamentary transfer to transfer by will etc.

The Transfer of Property Act, 1882 covers only inter vivos transfers. Testamentary transfers are governed by the Indian Succession Act of 1925.

The objects and scope of the TPA may be summarized in terms of the following points –

1. This Act applies only to transfers by living persons. It does not regulate transfers by operation by law. In the case of transfer by living persons, both the transferor and the transferee are living at the time of transfer. In case of transfer by operation by law, the property is transferred even though the transferor is not alive on the date of the transfer. In this mode of transfer the property is transferred automatically by the process of law. For example, devolution of the property upon the legal heirs or legatees by inheritance or under wills is by operation of law. Transfer by orders of a court or transmission of property in cases of insolvency, sale or forfeiture in the execution of court’s decree is all by operation of law.
2. The Act mainly deals with the transfer of immovable properties. Although sections 5 to 37 of Chapter II contain provisions which are applicable to both kinds of properties, whether movable or immovable, mainly the Act deals with transfers of immovable property. Transfers of movable property are regulated by the Sale of Goods Act, 1930.
3. Chapter II of the Act, which contains general principles of transfer, does not affect the transfer of Muslims even if it is against any of the provisions of Chapter II. This means that if there is any provision in the Transfer of Property Act, 1882, which is against the rule of Muslim Law, the rule of Muslim Law will prevail over the conflicting provisions of the Act. The gifts made by Muslims are governed by the Muslim law of Hiba. Section 129 of Chapter VII says that provisions of this chapter (relating to gifts) would not be applicable to gifts made by Muslims. However, such exemptions are given only in respect of those rules of Muslim Law which are in conflict with any of the provisions of the Act dealing with the transfers in general.
4. The Act has not only defined the existing rules of transfers but also amended and modified some of them so as to make them suitable to the socio-economic conditions of India.
5. The Act has provided a parallel law to the already existing laws of testamentary and intestate transfers.
6. Certain incidents of any contract or constitution of property are saved by the Act. This means that they are exempted from the operation of the Act provided they are not inconsistent with the provisions of the Act and are allowed by the law for the time being in force. Constitution of property means the essential nature of property. The provisions of the Transfer of Property, 1882 cannot be applied to affect or change the basic nature of the property itself.
7. The Transfer of Property Act, 1882 was not made applicable to the whole of India in the first instance. As originally, enacted, the Act did not enact, and the Act did not extend to the then State of Bombay, Punjab and Delhi.

II. Important Definitions under TPA

1. Immovable Property

The Transfer of Property Act, 1882 has not defined this term. It only says that ‘immovable property’ does not include standing timber, growing crops or grass. The definitions given by the Act is neither comprehensive nor exhaustive and only exclude certain things, it becomes necessary to explore other Acts which have defined the term ‘immovable property’.

Registration Act, 1908 defines ‘immovable property’ as follows –

Property shall include land, building, hereditary allowances, rights to ways, lights, ferries, fisheries or any other 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.

Section 3 (26) of the General Clauses Act, 1897 defines the term ‘immovable property’ as follows –

Property shall include land, benefit to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth.

The definition is not exhaustive but only illustrative as to what physical objects or things are under the term ‘immovable property’.

2. Land

Land includes the following elements when it is considered in its legal aspects –

1. A determinate portion of the earth’s surface.
2. Column of space above the surface.
3. The ground beneath the surface.
4. All the objects, either on or under the surface of the land in their natural state, for example, minerals. Lands also include lakes, rivers and pond which are land covered by water.
5. All objects placed by the human agency either on or under the surface of land with the intention of permanent annexation. With permanent annexation, these objects become part of the land and lose their separate identity. An example may be taken of buildings, fencing and walls etc.
   [2]

3. Benefits arising out of land

All the benefits arising out of land are also considered immovable property because such benefits cannot be severed from the land and are incidents of it. Rights to collect lac, leaves etc, from trees, revenue from agricultural land, right to take out minerals, to collect fish from ponds, debt secured by mortgage of immovable property, rent from the tenanted property are all benefits arising out of land may also be classified as tangible and intangible.

Tangible properties are those properties which have physical existence and which can be seen or touched. Tangible properties are also known as corporeal properties. Intangible properties, also known as incorporeal properties, have no physical existence. They are in the form of some rights under which certain benefits are given to certain persons. Such rights are known as beneficial interests or rights. Therefore, any right which is exercised over land, by which one makes profit or gain is known as his beneficial right and it would be his tangible immovable property.

4. Things attached to the Earth

Section 3 of the Act says that ‘attached to earth’ means –

1. Rooted in the earth, as in case of trees and shrubs;
2. Embedded in the earth, as in the case of wall or buildings; or
3. Attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached.

5. Mortgage debt

A question often arises whether a debt secured by a mortgage of immovable property is a movable or immovable property. Previously, a debt secured by mortgage of immovable property was considered an actionable claim under section 3 of the Transfer of Property Act, 1882.

But after the amendment in 1900, the definition of an ‘actionable claim’ expressly excludes a debt by a mortgage of immovable property, and such debt will not be treated as immovable property and it can be transferred only in the same way as an immovable property, i.e., it can be transferred only by a registered instrument.[3]

6. Instrument

Generally speaking, an instrument is a legal document. Section 3 of the Transfer of Property Act, 1882 defines ‘instrument’ as a non-testamentary instrument. As the Act itself does not deal with testamentary transfers (wills etc.), the term ‘instrument’ does not cover testamentary instruments. It is not only evidence of the transfer of property mentioned in it, but it signifies the transfer of property as such.[4]

7. Attested

attestation means to sign and witness any fact. A property may be transferred by delivery of possession or by a written document. When the property is transferred through a document, it is said that the deed or document of the transfer has been executed by the transferor.

The transferor of property who executes the deed is known as an executant. For the execution of the deed, it is necessary that two persons must be present who must witness that only the executant has written or signed the deed. This process of witnessing the execution of a deed is called attestation, and such persons are known as attesting witnesses.

8. Registered

According to the Transfer of Property act, 1882 ‘registered’ means registered in any part of the territories to which the Act extend under the law for the time being in force regulating the registration of documents.

For registration, it is necessary to fulfil all the requirements of the Registration Act.

9. Actionable claims

According to the Transfer of Property Act, 1882 ‘actionable claim’ means a claim to any debt, other than 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 recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing conditional or contingent.

10. Notice

According to the Transfer of Property Act, 1882 ‘a person is said to have notice of a fact –

When he actually knows that fact [i.e. actual notice]; or When but for –

• Wilful abstention from an inquiry or search which he ought to have made, or
• Gross negligence. He would have known it [i.e., constructive notice]

Notice means information or knowledge of a fact. When a person has knowledge about a fact or under the existing circumstances, it can be proved that he must have knowledge about a fact, it is said that he has notice of that fact. Notice may be of two types –

1. Actual or express notice,
2. Constructive or implied notice.

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[1] Bharat Petroleum Corp Ltd v. P Kesavan, (2004) 9 SCC 772

[2] Fakrudheen v. State Bank of India, AIR 2009 Ker 78

[3] Perumal Ammal v. Perunal Naicker, ILR 44 Mad 196.

[4] Ganga Prasad v Munna Lal, AIR 2018 (NOC) 619 All.

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