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Scope and Application of the Transfer of Property Act in

Bangladesh.

1. Introduction

▪️ Historical background of Transfer of property Act 1882: Enacted during British colonial
rule in India to regulate property transfer3 . It aimed to establish a clear legal framework for
immovable property transfers via sale, mortgage, lease, gift or exchange. Following the
partition of India in 1947, the Transfer of Property Act of 1882 continued to be applicable in
Pakistan, which included present-day Bangladesh. After Bangladesh's independence in 1971,
the Act remained in force, with modifications to suit the local context.

▪️ Purpose of the Transfer of Property Act, 1882: The Transfer of Property Act, 1882 was
enacted to define and amend the laws relating to property transfer by acts of parties. The Act
aims to provide a clear legal framework for these transfers, ensuring transparency and legality
in transactions such as sales, mortgages, leases, gifts, and exchanges. It codifies property
transfer laws to ensure uniformity and predictability. The Act defines key aspects such as the
conditions and procedures for property transfer, and the rights and liabilities of buyers and
sellers.

▪️ Importance of property transfer in legal and economic contexts: The Transfer of

Property Act, 1882 is important in both legal and economic contexts because it defines and
amends the laws related to property transfer by the involved parties. Its main purpose is to
provide a clear and transparent legal framework for transactions such as sales, mortgages,
leases, gifts, and exchanges. The importance of the Transfer of Property Act, 1882 can be
summarised as follows:

> Legal Importance:

○​ It ensures transactions are conducted transparently and legally, protecting the

rights and interests of everyone involved.
○​ It standardises the legal framework, ensuring predictability in legal matters
and reducing inconsistencies and disputes.
○​ The Act serves as the principal source of law governing property transfers
between living individuals.

> Economic Importance:

○​ By providing a structured system for transferring property rights, it is essential

for economic development and social stability.
○​ The real estate industry significantly contributes to economic growth and is a
large employer.
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○​ The Act encourages foreign investment by establishing clear rules for property
transactions.
○​ It facilitates the transfer of immovable property, which is critical for various
economic activities.

2. Scope and Application of the Transfer of Property Act, 1882

This Act is limited to transfer of property by act of parties which is by sale, exchange, gift,
enforceable claim, mortgage and lease. It does not cover transfer of property by operation of
law. It deals with inter vivos transfer of immovable property between living persons. It
deals with voluntary transfers effected by law of the parties and does not cover transfers by
operation of law in the form of inheritance, bankruptcy, forfeiture or sale in execution of a
decree. This Act has no application to disposal of property by will and does not deal with
cases relating to inheritance of property.

Under the Transfer of Property Act, 1882, "property" is broadly defined to include not only
physical objects but also the interests, rights and claims associated with them. This
encompasses both movable and immovable property. Immovable property specifically
excludes standing timber, growing crops, and grass. The definition extends to tangible and
intangible items and includes rights such as equity of redemption, debts secured by charges,
and actionable claims. The Act specifies certain restrictions on what can be transferred, such
as the chance of an heir-apparent succeeding to an estate, or a mere right to sue.

The Transfer of Property Act distinguishes between movable and immovable property.

▪️Immovable Property:

> Section 3 indicates that immovable property excludes standing timber, growing
crops, and grass.

> The General Clauses Act defines immovable property as including land, benefits
arising out of the land, and things attached to the earth or permanently fastened to
anything attached to the earth.

> Examples of immovable property include: Right of way, Right to collect rent,A
Hindu widow’s life interest in her husband’s property, A factory,Fixtures like
windows and doors.

▪️ Movable Property:

> The Transfer of Property Act does not define "movable property".

> Generally, movable property refers to property that can be moved without causing
harm.
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> The General Clauses Act defines movable property as property of every description
except immovable property.

The Act mainly deals with immovable property transfers but also includes certain
incorporeal rights transferred voluntarily between living persons. The key transactions
governed by this Act include:

> Sale: Ownership transfer in exchange for a price agreed upon by the buyer and
seller. A contract for sale is created upon the decision to sell and buy but does not
transfer ownership. The contract must be registered with the Sub Registry Office to
ensure ownership transfer.

> Lease: A right to use a property is transferred for a specified period in exchange for
payment or other valuable assets. This involves a lessor (transferor) and a lessee
(transferee).

> Mortgage: A transfer of interest in a real estate property to guarantee loan

repayment. The transferor is the mortgagor, and the transferee is the mortgagee. The
mortgage money includes the principal and interest payments secured in the
agreement. The Act outlines different types of mortgages, including simple mortgage,
mortgage by conditional sale, usufructuary mortgage, English mortgage, mortgage by
deposit of title deeds, and anomalous mortgage.

> Gift: A voluntary transfer of a specific movable item to another person (the donee)
without compensation, accepted by the donee. The gift must be accepted while the
donor is still alive; otherwise, it is invalid.

> Exchange: An agreement where two parties swap ownership of their possessions,
potentially involving cash or other items. The rules for sales also apply to exchange
transactions.

The Act does not cover every aspect of property transfer. It primarily focuses on immovable
property transfers between living persons and excludes transfers by operation of law, such as
inheritance, insolvency, or the execution of a decree. It also does not apply to property
disposal by will or cases of property succession. Certain properties, like the chance of an
heir-apparent inheriting an estate or an easement separate from the dominant heritage, are
also excluded from transfer under this Act.

▪️ Role of Courts in interpreting the Act:

> Influence on Basic Structure The Act is reflective of the immense influence that
courts have had on the basic structure and foundations of the law of property, both
prior to and after Bangladesh's independence in 1971.
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> Common Law Principles Although Bangladesh is a common law jurisdiction, the
Act is indelibly statutory in origin. The relevance of the Act and the successes are in
large part due to the authority of the legal system as a whole, rather than anything
specific to native property law.

> Constraint and Interpretation Courts continue to see themselves as constrained by

the Act's text and framework. The interpretation of some provisions may be either
literal or otherwise different, which is native to English principles. The interpretation
of the court itself may not be compatible with common law principles, giving either
wider or restricted connotations when compared to common law principles.

▪️ Comparison with other property laws:

Aspect Transfer Of Property Registration Act, Land Laws (e.g. State

Act, 1882 1908 Acquisition and
Tenancy Act, 1950)

Purpose Governs the transfer of Ensures the Regulates land

immovable property registration of ownership, tenancy,
between living persons. property-related and land use,especially
documents to for agricultural and
validate state land.
transactions.

Scope Deals with sale, Mandates the Governs land

mortgage, lease,gif registration of ownership, tenancy
t,and exchange of documents like rights, land acquisition,
immovable property. sale deeds, and land revenue.
mortgages, lease
s,and gifts.

Key Provision Rules for valid Specifies which Abolition of zamindari

transfers(e.g.,compete documents must system.<br>-Tenancy
ncy, consideration, be rights and land
lawfu registered.<br>-Ti redistribution.<br>-Lan
object).<br>-Mortgages me limits and d records.
,leases, and exchanges procedures for
registration.

Applicability Applies to private Applies to the Applies to land

transfers of immovable registration of ownership,tenancy, and
property between documents related state-acquired land.
individuals. to property
transactions.

Focus Focuses on the Focuses on the Focuses on substantive

procedural and procedural rights related to land
substantive aspects of requirement of ownership,tenancy, and
property transfers documenting and land use.
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registering
property
transactions.

Complementarity Works with the Complements the Overrides the TPA in

Registration Act to TPA by providing cases involving
ensure transfers are a mechanism to state-acquired land or
legally valid and validate and tenancy rights.
enforceable. record property
transfers.

Enforcement Governs how property Ensures that Governs who owns the
is transferred but does property land, how it is used,
not address registration transactions are and the rights of
or land ownership. documented and tenants.
publicly recorded
to prevent fraud.

Key Deferences Deals with the Deals with the Deals with land
mechanics of property documentation ownership and
transfer.<br>-Does not and registration of tenancy.<br>-Overrides
address registration or property TPA in cases of
land ownership. transfers.<br>-Do state-acquired land.
es not govern
substantive rights.

Practical Essential for private Ensures the Determines land

Implications property legality and ownership and tenancy
transfers.<br>-Requires enforceability of rights.<br>-Takes
registration under the property precedence over TPA
Registration Act for transactions.<br>- in land disputes.
validity. Work s alongside
TРА.

3. Conclusion

The Transfer of Property Act 1882 remains fundamentally important in Bangladesh as it

provides the essential legal framework for regulating and defining property transactions,
establishing clear rights and liabilities for transferors and transferees, thereby facilitating
economic activity by creating a stable environment for buying, selling, and investing in
property, and ultimately safeguarding individual property rights by providing legal structure
to various forms of property transfer such as sales, mortgages, leases, and gifts, thus serving
as a foundational pillar for land-related legal matters in the country.