INTRODUCTION:
Prior to the enactment of the Transfer of Property Act (TOPA) 1882, the matters relating to the transfer of property were dealt with according to the Principles of Equity and the English Law. The TOPA came into force on 1st July 1882 with the objective of bringing uniform legislation relating to the transfer of property by the Act of the parties. Thus it is pertinent to note here that the TOPA is not a comprehensive act as it applies only to the transfer of property by the act of the parties and not by the operation of Law i.e. between living persons only and not after the death of the parties. Also, the Act majorly focuses on the transfer of immovable property. However, Section 5 to 37 of the act deals with both, immovable as well as movable property.
MOVABLE AND IMMOVABLE PROPERTY:
The term “Property” is not defined anywhere in the TOPA, 1882 however the term is used in a wide sense and includes property of every kind, movable or immovable; Tangible or intangible. However, the act does not define what movable and immovable property are, in the simplest terms, movable property can be defined as any property which can easily be taken from one place to another without destroying its original shape, size, or quality like books, tables, etc. whereas immovable property can be defined as any property which cannot be easily taken from one place to another without destroying its original shape, size or quality like land, building, etc. Section 3 of the Act speaks in regard to the immovable property and lies down that “immovable property” does not include standing timber, growing crops, or grasses [1]. Here, standing timber refers to the trees which are to be cut and used for building houses or other commercial purposes.
For example, Babool, Shisham, Teak, etc. Growing crops refers to those crops which have no existence of their own apart from their produce like sugarcane etc. The Grass is also movable property however when the right to cut grass is in the interest of the land, it becomes an immovable property. These are considered movable property because these are useful only after they are severed from the earth.
The General Clauses Act 1897 specifies that the term “Immovable Property” includes the land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth. [2] The General Clauses Act also defines the scope of “Movable Property” by stating that “movable property” means property of every description, except immovable property. [3] The Registration Act provides that “Movable Property” includes standing timber, growing crops and grass, fruit upon and juice in trees, and property of every other description, except immovable property. [4] In the Indian Penal Code, 1860 the word “movable property” is intended to include corporeal property of every description, except land and things attached to the earth or permanently fastened to anything which is attached to the earth. [5]
As per the provisions of the Registration Act, Registration of movable property is optional but the registration of Immovable property is made compulsory, provided that the value of the property is more that Rs.100.
The rules regarding the transfer of movable property are governed under the provisions of the Sale of Goods Act, 1930. The TOPA, 1882 regulates the transfer of immovable property under Section 54. Immovable property of the value of Rs. 100 or above can be transferred only by a registered instrument. In case of immovable property of the value of less than Rs.100 can be transferred either by registered document by the actual delivery of the property with the intention of transfer.
Trees: Movable or Immovable Property
The question whether Trees are movable or immovable property appeared before the Supreme Court in the case of Shantibai v. State of Bombay [6]. The Court held whether trees are movable or immovable property depends upon the facts and circumstances of each case. If the tree is not intended to be cut down and requires nourishment from the soil for further sustenance, it is immovable. For example, Fruit bearing trees. While in cases when the tree is intended to be cut
down for any domestic or commercial use and does not requires nourishment from the soil to give its benefit in future, it is timber and thus will be considered as movable property.
In the case of Fatimabibi v. Arrfana Begum, [7] it was held that the fruit bearing trees are immovable property and not standing timber.
The reason why standing timber, growing crops and grass are regarded as movable property was highlighted in the case of Baijnath v. Ramdhar [8] the Court stated that though they are standing trees, but are not meant to remain standing and will be cut ,sooner or later. They can be used only after they are severed from the earth. On account of this nature, they are excluded from the definition of immovable property.
TRANSFER OF PROPERTY UNDER THE TRANSFER OF PROPERTY ACT, 1882:
Section 5 of the TOPA, 1882 defines the term “Transfer of Property” as an act by which a living person conveys property to one or more living persons or to himself or to himself and one or more other living persons, in present or in future.
A person who transfers any property is called transferor and the person in whose favour transfer is made is called transferee.
The essentials of a Valid Transfer are:
Transfer must be Inter-Vivos:
TOPA, 1882 deals with transfer of property inter-vivos only i.e. between the persons who are living at the time of transfer. A company or association or a corporate or non-corporate body of individual is also included within the scope of the term “living person”. However there are certain exceptions to it as provided under section 13 of the Act which allows the transfer of property for the benefit of a child in womb of a mother where an interest is created in a property. However the provision does not talk about direct transfer of property to the unborn
child but about the transfer of property for the benefit of unborn child. The property is to vest in the name of this person until the child in womb is born.
Transfer must be through conveyance:
Conveyance refers to the transfer of property and its rights in the favour of a transferee. If it is not done, the property cannot be said to be transferred. It provides that conveyance can be in present or in future i.e. property can be transferred to other with immediate effect or from a future date. However, it is compulsory that the property to be transferred must exist at the time of making the transfer. It implies that a future property that does not exist cannot be transferred in present.
Property must be transferrable:
As per the provisions of the TOPA 1882, property of every kind is transferrable except [9] the following:
- Property that a person is expecting to inherit in future as legacy;
- Right to re-entry into a property after breach of a condition cannot be transferred to anyone except to the owner himself;
- Easement Rights i.e. right to use someone else’s property like right to way, light or water;
- Interest in property which is restricted to a person only;
- Right to future maintenance;
- Right to sue;
- A public office; salary of a public officer;
- Stipends allowed to military, naval, air force; Pensions;
- Occupancy Rights of tenant or farmer.
A property can also not be transferred if it is opposed to the nature of the interest affected; if any unlawful object or consideration [10] is attached to it; or if the person is not legally qualified to be a transferee.
Parties must be competent :
Section 7 of the TOPA, 1882 provides that any person who is competent to contract, i.e. a person who is major and of sound mind and not disqualified by the court to enter into a contract, [11] and is entitled or authorized to transfer the property to be transferred is competent to transfer such property, wholly or partly, absolutely or conditionally, in the circumstance, extent and manner as allowed and prescribed by law. [12]
Therefore, a minor cannot transfer any property however, he can become a transferee. A transferee can be any person, minor, insane, or even a child a womb, provided that the person is not disqualified from being a transferee by a court of law. [13]
WHAT DOES NOT CONSTITUTE A TRANSFER:
To constitute a valid transfer, all the essentials of it must be fulfilled. Transfer of property leads to transfer all rights with respect to the property in favour of the transferee. It is pertinent to note that in the following cases, transfer is not constituted:
- Relinquishment by a reversioner of his reversionary interest cannot be considered as transfer. [14]
- Partition is not transfer as share is merely separated and nothing new is obtained.
- Creation of Easement does not constitute a transfer.
- Will does not amount to transfer as it is executed after the death of a person.
- A compromise may or may not amount to transfer and it depends upon the facts and circumstances of each case. In case of Hussiaa Banu [15] the court said that in case where one party sacrifices his share to receive a sum of money from the other party is a valid transfer.
- Family settlement for the purpose of ending a dispute among family members does not constitute a transfer.
RULE AGAINST PERPETUITY:
Perpetuity in the simplest terms means continuing forever. It can be defined as a disposition that makes a property incapable of being transferred for an indefinite period of time. The Rule against perpetuity, as the name suggests, is a rule which is against a transfer making them inalienable for an indefinite period or forever.
It is important to prevent a property from being tied up forever and to remove the restraint on right to free alienation of any property.
For Example, A transfers property in favor of B for life, and then to his child C, and then to his children D. This will restrict the right of B and C to alienate the property freely. Therefore, Section 14 of the TOPA, 1882 provides for the Rule against Perpetuity. It states that:
“No transfer of property can operate to create an interest which is to take effect after the lifetime of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.”
Therefore, the essential elements of Rule against Perpetuity are:
- A property must be transferred;
- It must create an interest in favour of an unborn person;
- The unborn person must exist before the expiration of interest of the living person;
- The interest created must take effect after the lifetime of one or more persons living at the date of such a transfer and during the minority of the unborn person;
Extent of Perpetuity Period:
Under the English law, perpetuity period exists till the life or lives in being plus gestation period plus minority period, whereas, under the Indian Law, it extends till the life or any number of lives in being plus period of gestation plus minority period.
Section 20 of the TOPA, 1882 enumerated that as soon as the person not in existence is born, acquires the interest in the property, unless the contrary is provided in the law. However, the person will not get absolute rights until he becomes a major.
Exceptions to the Rule against Perpetuity:
The rule of law is not absolute and is subject to certain exceptions:
- Vested interest as it cannot be considered bas for remoteness;
- Land purchased or held by Corporation;
- Charities i.e. transfer for the benefit of the public in advancement of religion, knowledge; health, commerce, etc.
- Properties settled upon individuals for memorable Public Service;
- Personal Agreement [16];
- A covenant of redemption in mortgage;
- Contracts for Perpetual renewal of lease [17];
- Cases where only charges is created;
- Contract of preemption.
CONCLUSION:
There are mainly two kinds of property: Movable and Immovable. While the Sale of Goods Act, 1930 regulates the transfer of movable property, the Transfer of Property Act (TOPA), 1882 is prime legislation that deals with the transfer of immovable properties. A valid transfer can take place only when all the essential elements of a valid transfer are fulfilled. The Act also provides exceptions to the rules of transfer. However, the act does not deal with the cases of transfer of property by operation of law. Further, it does not deal with the transfer of property after the death of any of the parties as these are regulated through the statutes related to Succession and other respective legislations. Therefore, the act is not an exhaustive act as its scope is limited. Still, it is an important legislation in order to provide uniform legislation relating to the transfer of properties by the act of the parties.
[1] Section 3, Transfer of Property Act, 1882
[2] Section 3(26), the General Clauses Act, 1897
[3] Section 3(36,) the General Clauses Act, 1987
[4] Section 2(9), The Registration Act, 1908
[5] Section 22, Indian Penal Code, 1860
[6] Shantibai v. State of Bombay, AIR 1958 SC 532
[7] Fatimabibi v. Arrfana Begum,AIR 1980 All 394
[8] Baijnath v. Ramdhar And Anr. (1962)
[9] Section 6, Transfer of Property Act, 1882
[10] Section 23, The Indian Contract Act, 1872
[11] Section 11, Indian Contract Act,1872
[12] Krishna Kurhai v. Grindlays Bank, AIR 1986 Cal 328
[13] Section 6(h)(3), Transfer of Property Act, 1882
[14] Barati Lal v. Salik Ram, 38 All 107
[15] Hussiaa Banu v. Shivanarayan, AIR 1968 MP 307
[16] Rambaran v. Ram Mohit, AIR 1967 SC 744
[17] Kempraj v. M/s Burton Son 7 & Co., (1970) 2 SCR 140.
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