Transfer of Property Act 1882

The object of the Transfer of Property Act, as stated in its preamble, is to define and amend
certain parts of law relating to the transfer of property by act of parties. It does not govern the
transfer by operation of law. Transfer by act of parties means a transfer which takes place
between two living person i.e. transfer inter vivos. Transfer under Will or any law of
inheritance is transfer by operation of law. They are mainly governed by personal law of the
parties or by the order of court under Code of Civil Procedure This Act provides a clear and
definite law on transfer of immovable property. The Act, therefore, does not govern the
transfer of property through auction, insolvency proceedings, acquisition etc.
Immovable Property
Property can be classified into various categories me tangible, intangible, immovable,
movable, corporeal, incorporeal etc. For the purpose of this Act we are concerned with
immovable and movable property, Section 3 defines the term “immovable property”. It
provides that immovable property does not include standing timber, growing crops or grass.
This section does not give any clear definition of immovable property. It does not specify
what is included in 'immovable property’. According to Section 3(26) of the General Clauses
Act, 1897 provides that immovable property includes:-
1. Land;
2. Benefits to arise out of land; and
3. Things attached to earth.
The term "things attached to the earth” is not defined in General Clauses Act that it is defined
under Section 3 of the Transfer of Property Act. Section 2(6) of the Registration Act, 1908
provides that immovable property includes land, buildings, hereditary allowances, right is
ways, lights, ferries, fisheries or 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 and grass.
Thus, the cumulative reading of the definitions of Transfer of Property Act, General Clauses
Act and Registration Act spells out that the immovable property includes the following:-
Land
It means surface of the earth. Anything upon the surface of the earth is an immovable
property. Thus, soil or mud deposited on the surface of the earth is immovable property.
Water flowing in the river is immovable property because it remains on the surface of the
earth. It also includes mines and minerals beneath it. A conveyance of land prima facie
includes everything directly beneath the surface of the land and the space directly above it. It
also covers objects placed by human agency on or under the surface of the earth with the
intention of permanent fixation.
Benefits to arise out of land
These are called "beneficial rights', 'beneficial interests or “profits a pendre” According to
Malla, a benefit to arise out of land is an interest in the land and therefore, it is an immovable
property. Beneficial interest or right is a right by exercise of which a person gets certain
benefits. Beneficial rights or interests are regarded as intangible property of a person.
Therefore, any right which is exercised on any land and the person gets certain profits or gain
is beneficial rights. For example, right of way, right to use land under lease, right of fishery,
rents from house, shops etc.
Things attached to carth
It has been defined in Section 3 of the Act. It means (i) things embedded in earth; (ii) things
attached to what is so embedded in earth and (iii) things rooted in earth.
Things embedded in the earth: Things embedded in the earth means the things which are
fixed firmly in the earth and as such become part of the land. It is a thing whose foundation is
laid beneath the normal surface of the earth. For example, buildings, houses, walls or
electricity poles etc. are immovable properties because they are things embedded in the earth.
Things attached to what is so embedded in the earth: Where a thing is attached to something
which is embedded in the earth for its permanent beneficial enjoyment, the thing so attached
also become immovable property. For example, doors, windows or shutters of a house are
attached to its walls for the permanent enjoyment of that house and are regarded as
immovable properties.
Things rooted in the earth: Trees, plants or shrubs which grow on the land are rooted in the
earth. In Suresh Chandra v. Kundan, (2001) Supreme Court held that standing trees being
rooted in earth are part of the land and when there is transfer of property in land the interest
in the property would also include anything attached to the land agreed to be sold unless there
is an intention, express or implied, to the contrary. As a general rule all the trees, plants, herbs
and shrubs are immovable properties except-
(a)standing timber
(b)growing crops
(c)growing grass
Movable property
Movable property has not been defined in the Transfer of Property Act. Section 3 of the
Transfer of Property Act excludes standing timber, growing crops and grass from immovable
properties. Then it logically means that these are movable properties. Further, Section 3(36)
of the General Clauses Act, 1897 defines movable property as 'property of every description
except immovable property'. Section 2(9) of the Registration Act, 1908 defines movable
property as 'movable property includes standing timber, growing crops and grass'.
Doctrine of Election
Section 35 incorporates the rule of election. Election means choosing between two
inconsistent claims. Under this doctrine if any transaction confers certain benefits to a person
and also imposes certain liabilities then the person should either choose the whole transaction
or reject the whole. He cannot be allowed to retain the beneficial part of it and reject the
liabilities. It is an equitable principle based on the maxim “no one can approbate and
reprobate at the same time”.
Doctrine of election does not allow a person to approve that part of transaction which is
beneficial to him and reject that part which is detrimental to him. It is an obligation imposed
upon by courts of equity to choose between two inconsistent or alternative rights or claims in
case there is a clear intention that a person should no t enjoy both. The doctrine has also been
described as a 'rule of conscience', as one proceeding from the highest principles of equity as
also resting upon plain and far dealing.
For example, if by a transaction 'A' is given some money and he is required to transfer his
house to "B' then 'A' will not be allowed to keep the house as well as the money.
Essential elements for applicability of Section 35
Following are the elements of Section 35:
(1) A person professes to transfer a property not his own; and
(2) In lieu of this transfer, the transferor confers certain benefits upon the owner of the
property, and
(3) Transfer of property and conferring of benefits must form part of the same transaction
(instrument).
(4) The owner of the property is bound to elect either to take the benefit and transfer his
property or to retain his property and give up the benefit.
Mortgage
Types of mortgage:
1. Simple Mortgage 58(b)
2. Mortgage by Conditional Sale 58(c)
3. Usufructuary Mortgage 58(d)
4. English Mortgage 58(e)
5. Deposit of Title deeds 58(f)
6. Anomalous Mortgage 58(g)
Gift (S. 122-129)
Section 122 defines 'Gift'. It is the transfer of certain existing movable or immovable property
made voluntarily and without consideration, by one person, called the donor, to another,
called the doner, and accepted by or on behalf of the donee.
Gift is a gratuitous transfer. Therefore, there must be no consideration. Section 25 of Indian
Contract Act stipulates a general rule that agreement without consideration is void. However,
Explanation 1 of Section 25 provides that "nothing in this section shall affect the validity, as
between donor and donee, of any gift actually made'. It means that Section 25 of the Indian
Contract Act is not applicable to provisions of transfer by way of gift. The gift must be made
with free will. The donor must make the gift voluntarily.
Essentials of Gift
1. Transfer of ownership
2. The property must be in existence at the time of transfer
3. Gratuitous transfer (transfer without consideration)
4. Voluntarily transfer (with free consent)
5. Acceptance of gift by or on behalf of the doner (it may be express or implied)
Exceptions
Section 129 of the Act provides the gifts which are treated as exceptions to the whole chapter
of gifts under the Act. These are:
1. Donations mortis causa
These are gifts made in contemplation of death.
2. Muslim- gifts (Hiba)
These are governed by the rules of Muslim Personal Law. The only essential requirements
are declaration, acceptance and delivery of possession.