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BUSINESS LAWS
SYMBIOSIS INSTITUTE OF
BUSINESS MANAGEMENTPune
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BUSINESS LAWS
Prof. Bala
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Session 8
The Transfer of Property Act 1882
Presentation on 6.1.201011.45 to 13.00 Hr.
Marketing A - X-201
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BUSINESS LAWS
Agenda
1 Recap
The Negotiable Instruments Act 1881
2 Days discussion on
The Transfer of Property Act 1882
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Why this Act is importantTransaction involves considerable amount of
money Property consists of permanent structure
linked with the government land records Land records 7 /12 extracts index II to
tally with the records Agricultural vs. commercial aspect Rights of the minor after attaining majority
when property is sold especially by Karta ofHUF
Boundaries / demarcation etc.
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The Transfer of Property Act 1882The Act consists of
8 chapters with
137 sections and deals with sale / purchase / mortgage / lease /
exchange and gift and
finally it ends up with actionableclaims.
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Contents of The Transfer of
Property Act 188
2Chapter Topics
1 Preliminary
2 Transfer of property by act of parties3 Sale of immovable property
4 Mortgage of immovable property & charges
5 Lease of immovable property
6 Exchanges
7 Gifts
8 Actionable claims
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The Transfer of Property Act 1882
Covers Transfer of property between two living persons
Kinds of transfer of property
- sale of property,
- lease or renting of property,- mortgage of property,
- gifting property and
- exchange of property.
Property transactions generally involve huge amounts ofmoney and so, it is advisable to know the relevant laws and
procedures so that proper precautions could be taken.
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The Transfer of Property Act 188
2Contracts relating would be governed by The
Indian Contract Act of 1872
The chapters and sections of this act whichrelate to contracts shall be taken as part of theIndian Contract Act 1872
Applicability of Indian Registration Act 1908
And section 54, paragraphs 2 and 3, 59, 107and 123 shall be read as supplemental toIndian Registration Act 1908
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Immovable propertyDoes not include
Standing timber, growing crops or
grassRegistration
Registered in any part of the
territories to which this Act extendsunder the law
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Immovable propertyAttached to the earth
Rooted in the earth as in the case of
trees and shrubs Embedded in the earth, as in the case
of walls or buildings or
Attached to what is so embedded forthe permanent beneficial enjoymentof that to which it is attached
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Transfer of property by act of
parties (Ss6
to53)
Transactions between two Livingpersons (includes company,association, body of individuals-incorporated or not) Transfer of aninterest
What could be transferred and
What cannot be transferred
Persons competent to transfer
Transfer by operation of law
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Transfer with certain conditions /
contingent transfers Transfer with certain conditions
Transfer of contingent on happening
or specified uncertain eventExample
A transfer property to B for life andafter B to C and D equally to be
divided or to the survivor of them. Cdies during the life of B. D survives B.At Bs death the property passes to D
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Conditional transfers
Example
A lease a farm B on condition that he
shall walk 100 miles in an hour.The lease is void
A gives Rs. 4 lacs to B on condition
that he shall marry As daughterC
-at the date of transfer C was dead
The transfer is void
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Conditional transfers
Example
A transfers Rs. 4 lacs to his niece C if
she will desert her husbandThe transfer is void
A transfers Rs. 4 lacs to B on
condition that he shall murderC
The transfer is void
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Conditional transfers
Example
A transfers Rs. 5 lacs to B on condition heshall marry with the consent ofC, D and E.
E dies. B marries with the consent ofC andD.
B is deemed to have fulfilled the condition
Same example. B marries without the
consent ofC, D and E but obtain theirconsent after the marriage.
B has not fulfilled the condition
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Conditional transfers
Example
A transfers property to his wife; but in caseshe should die in his life time, transfers toB that which he had transferred to her. Aand his wife perish together; undercircumstances which make it impossible toprove that she died before him.
This disposition in favour of B does not takeeffect.
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Sale of transfer of property
(Ss54 to
57)
Transactions between two Livingpersons (includes company,association, body of individuals-incorporated or not) Transfer of aninterest
What could be transferred and
What cannot be transferred
Persons competent to transfer
Transfer by operation of law
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Sale of transfer of property
(Ss54 to
57)
Sale is a transfer of ownership inexchange for a price paid or promisedor part paid and part promised.
Sale how made
- registration and
-possession handing over
Contract for sale Rights and liabilities of buyer and
seller
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Rights and liabilities of seller
(S.55
) Disclosure any material defect Provide examination of documents To answer all queries to his best On payment execute the document proper time and
place Between contract of sale and delivery take care of
the property Deliver possession to desired person on request of
buyer To pay all charges till the property was with him It is the presumption that seller always had right to
deal with the property and transfers his right to thebuyer for a price
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Rights and liabilities of buyer
(S.55
) Disclosure if he is aware of any sellers interest
To pay the purchase money
When property passes on then to bear all lossarising from the destruction, injury or decrease invalue of the property not caused by the seller
To pay all the charges from day the property passeson to the buyer
Buyer is entitled for all benefit of / any improvementin / increase in value of the property and to the rents
/ profits etc. Provide examination of documents Charges on property ----- terms of contract
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Mortgages and charges
(Ss58
to 104) What is mortgage?
Transfer of an interest
For securing payment moneyadvanced or
To be advanced by way of loan
An existing debt or future debt or
The performance of an engagementwhich may give rise to an pecuniaryliability
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Types of mortgage Simple mortgage (possession
delivered)
Mortgage by conditional sale Usufructuary mortgage
(proceeds used for appropriation)
English mortgage ( transfer and re-transfer)
Mortgage by deposit of title deeds
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Rights and liabilities of mortgagee To foreclosure / sale
To bring suit
Sue for mortgage money
Power of sale when valid
Appointment of receiver
Renewal
Right to proceeds of revenue sale /compensation on acquisition
Pay the earlier mortgage charges in case ofsubsequent mortgage
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Rights and liabilities of mortgagor To redeem Re-transfer- owner to third party as
required
Inspection / production of documents Redemption separately or simultaneously
in case more than one property To recover possession Accession to mortgaged property Improvements to mortgaged property Renewal Implied contracts
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Leases of immovable property
(Ss 105
to 117) Parties
Lessor and Lessee
Lease contract written or local usage
Lease generally for a year / mode of renewal Rights and liabilities of lessor and lessee
Determination of lease
Waiver
Right against forfeiture for non-payment of rent Relief against forfeiture and other cases
Surrender
Effect of holding over
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Leases of immovable property
(Ss 105
to 117) What is lease?
Transfer of right to enjoy property
For certain time Express or implicit or in perpetuity
For consideration of a price paid or
promised Money / a share of crops / service or
any other thing - periodical
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Exemption of leases for agricultural
purposes Section 117
None of the provisions apply to leasefor agricultural purposes
Exception notification by the stategovernment specifying the applicationof lease provisions
Effect only when published in officialgazette after the expiry of sixmonths from publication
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Exchange (Ss 118
to 121) When two persons mutually transfer
the 0wnership of one thing foranother, neither thing or both things
being money only, the transaction iscalled an exchange.
Transfer of property in completion ofan exchange can be made only in themanner provided for the transfer ofsuch property by sale
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Gift (Ss 122 to 129
) Gift transfer of immovable property
without consideration by one (donor)
to another (donee) during the lifetime If donee dies before acceptance the
gift is void
Registration of the property for
transfer with two witness is therequirement.
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Gift (Ss 122 to 129
) Gift of future property is void
When gift be suspended or revoked
A gives a field as gift to B Bs assent that
A takes back the filed if B and hisdescendants die before A. B dies withoutdescendants. A could take back the filed
A gives 1 lac to B reserving himself with
Bs assent the right to take back Rs. 10,000for his pleasure out of the lac. The giftholds good as to Rs. 90,000 but is void asto RS. 10,000 which continue to belong A
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Onerous Gift (s 127)Onerous Gift
A has shares in X a prospective company
A has shares in Y which is difficulties
He gifts both to B B can refuse the gift in Y company
A gives gift of independent property to B along with one
more property on which he has debt which is more thanthe property worth. B is not bound accept the second gift.
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Actionable claims When property gets transfers the
debt on the property / mortgage /charge etc goes with the property and
the transferor is bound to give notice even if the notice not given, theliabilities are dischargeable by thetransferee.
Insurance unless assigned it is notvalid
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The Transfer of Property Act 1882 Actionable claims (Ss 130 137)
Actionable claims:-
- Transfer of actionable claims (insurance)
- Transfer of marine insurance exception
- Notice to be in writing signed
- Liability of transferee of actionable claim
- Warranty of solvency of debtor
- Mortgaged debt- Assignment of rights under policy of
insurance against fire
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Examples
A owes to B
B transfers debt to C
(notice not given) B demands debt from A
B pays to A
Question can C demands from AC cannot sue A for the debt
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Examples
X takes policy on his own life
Assigns to Bank and takes loan
A dies
Bank is entitled to receive money frominsurance company against policy
Without the concurrence of As heir /executors
Bank would recover money frominsurance company and the heirscannot get the money
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WHEN WE MEETNEXT TIME
Next Session on
WED
NESD
AY27 JANUARY 2010
TOPICSThe Factories Act 1948
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THANK YOU