Property Law

Immovable property is not explicitly defined in the Act. Still, it is generally understood to include land, buildings, and other benefits arising from the ground, rights of way, lights, ferries, fisheries, and intangible properties such as ownership and tenancy. Standing timber, growing crops, and grass are excluded from the definition of immovable property, according to Section 3. The Indian Registration Act additionally includes hereditary allowances as immovable property. For a transfer to be valid, it must be between two or more living persons (which consists of a company or association or body of individuals, whether incorporated or not). It must be completed by the Act’s section 5.

Sale of Immovable Property: Section 54 of the Transfer of Property Act, 1882 deals with the regulations for the transfer of ownership of tangible immovable property in exchange for a price paid or promised, or part-paid and part-promised. This transaction between two parties, the seller and the buyer, is a contract for sale. Necessary elements for this sale to be considered valid include a lawful object, free consent of the parties, and consideration. Additionally, the property must be one hundred rupees or more and requires deed registration. Rights and duties of both the seller and the buyer must adhere to before and post-completion of the sale. These include an obligation to disclose any material defects, to produce documents of title, to take care of the property, to pay public charges and rents, and to deliver possession of the property. A buyer’s rights after completion of the sale include the benefit of any improvements, rents and profits of the property and a right to claim back payments if the seller fails to hand over the charge.

Mortgage of immovable property is the transfer of an interest in some definite immovable property to secure the payment of money, an existing or future debt, or the performance of an engagement which may give rise to financial liability. The transferor is the mortgagor, and the recipient is the mortgagee. Essential Elements of Mortgage For a mortgage to be valid, the following must be present in the transaction: transfer of interest, a specified immovable property, and consideration. The interest transferred is less than full ownership of the property. The review can be money, a debt, or an engagement giving rise to financial liability. Kinds of Mortgage Section 58 of the Transfer of Property Act identifies six types of mortgage: simple mortgage; by conditional sale; usufructuary mortgage; English mortgage; title deeds; and analogous mortgage. Payment The mortgagor can pay the money to the mortgagee or their authorised agent. If the mortgagee is a minor, the payment or tender must be made to their lawful guardian. In multiple joint mortgagees, payment must be made to all of them jointly. If the mortgagee passes away, payment must be made to their legal heir. The payment must be made in coins or currency notes of the country, or it can be agreed upon in any other form. After the principal money is due, the mortgagor also has the right to redeem the mortgage. The Amendment Act of 1929 amended the Act to include that the mortgagor has the power to use their right to request that the mortgagee transfer the property and mortgage debt to a third party at their direction. This right’s objective is to assist the mortgagor in paying off the mortgagee by obtaining a loan from a third party secured by the same property.

The lease of immovable property is defined under Chapter V of the Transfer of Property Act 1882. It is a transfer of a right to enjoy such property for a specific time, express or implied, or in perpetuity, considering a price paid or promised, or of money, a share of crops, service or any other value. The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other things to be rendered is called the rent. Essential elements of a Lease include parties to the lease (lessor and lessee), the demise (transfer of an interest in the immovable property), duration of the lease (specified period or perpetuity) and consideration (payment of rent). Without a lease agreement, parties can end the lease with a notice to quit. The rights of the lessor include the right to recover rent, the right to take back the possession in case of breach of condition, and the right to recover damages for any damage to the property.

Liabilities of the lessor include:

• Disclosure of material defects.
• Transfer of the ownership of possession.
• Entering into a contract with the lessee.

Rights of the lessee include the right to avail of alterations made during the duration of the lease, the right to avoid the lease if the property is destroyed, the right to deduct expenses from rent for repairs done, fitting to recover payment from the lessor, and correct to transfer the property or his interest in it. Liabilities of the lessee include disclosure of material facts, amount of rent, maintenance of the property, giving notice to the lessor, preventing stranger from using assets, and returning of the possession of the property.

Section 118 of the Transfer of Property Act 1882 defines ‘Exchange’ as a transaction where two people mutually transfer ownership of one thing to request another, neither thing nor both things being money only. This kind of transfer differs from ‘Sale’, which involves the transfer of any property against consideration, and ‘Gift’, which consists of transferring property without consideration. The exchange may apply to immovable and movable properties and may include money. Oral exchange is not permissible under the Transfer of Property and Registration Act of 1908. Exchange documents are not admissible as evidence of any transaction and do not affect the immovable property.

Critical features of exchange include the transfer of ownership, either immovable or movable properties, and ‘barter’. The transfer mode for exchange is the same as for sale. Registration is necessary if the properties exchanged are immovable. Their value is more than Rs.100. It is essential to note the difference between exchange and partition. While the exchange is a mutual transfer of ownership by two persons of two different properties, the partition is an arrangement by which the co-owners hold the property separately. Exchange is brought about by a contract, while the right to partition is a natural right and does not need to be entered into an agreement. In exchange, the parties exchanging properties have no interest in each other’s properties before the exchange.

In contrast, in partition, each party has an equal interest in the entire property. Section 120 of the Transfer of Property Act 1882 does not explicitly mention the rights and liabilities of parties to the exchange. It provides that each party has the rights and is subject to the penalties of a seller as to that which he gives and the rights and liabilities of a buyer as to that which he takes. As such, the rights and liabilities of parties in the exchange are the same as in the case of sale. In the case of movable properties, the provisions of the Sale of Goods Act 1930 are applicable in exchange as well. Section 121 of the Transfer of Property Act 1882 states that in a discussion of money, each party warrants the genuineness of the money given by him. This means that money transferred must be genuine and not counterfeit or fake.

Gift of immovable property, as defined in Section 122 of the Transfer of Property Act, is the voluntary transfer of an existing moveable or immovable property without consideration. The transferor is the donor, and the transferee is the donee. For a gift to be valid, the following essential elements must be present: transfer of ownership, existing property, transfer without consideration, voluntary transfer with free consent, and acceptance of the gift by the donee. The donor must be competent, i.e., have the capacity and right to make the gift. At the same time, the donee may be any person in existence and doesn’t need to be competent to contract. The property, which is the subject of the gift, must be in existence and transferable, and the transfer must be without any consideration. The donor must voluntarily and without any force, fraud, coercion, or undue influence make the transfer with the free consent of both parties, and the donee must accept the gift.

Modes of making a gift Section 123 of the Transfer of Property Act deals with the formalities necessary to complete a gift. According to this Section, there are two modes for effecting a gift depending upon the nature of the property. In the case of immovable property, registration is necessary; movable property may be transferred by delivery of possession. Actionable claims may be transferred as a gift by an instrument in writing. An advantage of the future property is void under Section 124. Suppose a property is gifted to multiple persons, one of whom does not accept it. In that case, the gift becomes void to the extent of the interest he would have taken. Onerous gifts refer to the gifts which are a liability rather than an asset, and the one has the right to reject such gifts. The concept of the universal donee is recognised in Hindu law, and the donee is liable for all the debts and liabilities of the donor due at the time of the gift. A gift may be revoked by mutual agreement or by the rescission of the contract. In the case of fraud, misrepresentation, etc. The limitation for withdrawing a gift is three years from the date on which such facts come to the plaintiff’s knowledge.

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