Transfer of Property Act, 1882
Entry 6 of List III (Concurrent List) of Seventh Schedule to Constitution reads ‘Transfer of property other than agricultural land; registration of deeds and documents’. Thus, transfer of property is a ‘Concurrent Subject’. Both Central and State Government can take legislative action in respect of transfer of property except that relating to agricultural land. [Transfer of agricultural land is a State subject under Entry 18 of List II (State List)]
The Act proposes to prescribe law relating to transfer of property by act of parties. Thus, the Act applies only to voluntary transfer or property. It does not cover transfer of property by ‘will’.
Section 4 of the Act clarifies that the part of the Act which relates to contracts shall be taken as part of Indian Contract Act and some specified sections shall be read as supplemental to Indian Registration Act. Thus, the Act is complimentary to Indian Contract Act and Registration Act. The Act applies both to movable and immovable property.
Transfer of Property – ‘Transfer of Property’ means an act by which a living person conveys property, in present or future, to one or more living persons, or to himself or to himself and one or more other living persons. ‘Living person’ includes a company or association or body of individuals, whether incorporated or not. [section 5]. – – The property may be movable or immovable, present or future. – – Such transfer can be made orally, unless transfer in writing is specifically required under any law. [section 9]. – – Any person competent to contract and entitled to transferable property, or authorised to dispose of transferable property on his own, is competent to transfer such property. The property can be transferred wholly or in part. It can be transferred either absolutely or conditionally. Such transfer can be only to the extent and in manner allowed and prescribed by law. [section 7].
Sale of immovable property – ‘Sale’ is a transfer of ownership in exchange for a price paid or promised or part-paid and part promised. Such transfer in case of tangible immovable property of value of Rs 100 or more can be made only by a registered instrument. Delivery of tangible immovable property is made when seller places the buyer, or such person as he directs, in possession of property. Thus, delivery of immovable property can be only by handing over actual possession to buyer or to a person authorised by buyer. [section 54].
Mortgage – ‘Mortgage’ is the transfer of an interest in specific immovable property for the purpose of securing payment of money advanced or to be advanced, by way of loan or an existing or future debt. The transferor is called a mortgagor, the transferee a mortgagee, the principal money and interest of which payment is secured are called as ‘mortgage money’ and the instrument by which transfer is effected is called a mortgage-deed. [section 58(a)]. Mortgage can be * simple mortgage * Mortgage by conditional sale * Usufructuary mortgage * English Mortgage * Mortgage by deposit of title deeds or * Anomalous mortgage.
When mortgagee can take possession of mortgaged property in case of default – Under provisions of section 69 of Transfer of Property Act, mortgagee can take possession of mortgaged property and sale the same without intervention of Court only in case of English mortgage, if there is default of payment of mortgage money. In addition, mortgagee can take possession of mortgaged property where there is specific provision in mortgage deed and the mortgaged property is situated in towns of Kolkata, Chennai or Mumbai. In other cases, possession of property can be taken only with intervention of Court. [English Mortgage is where mortgagor binds himself to repay the mortgaged money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer the property to the mortgagor upon payment of the mortgage-money as agreed. – section 58(e) of Transfer of Property Act].
Charge – Where immovable property of one person is, by act of parties or by operation of law, made security for payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all provisions in respect of ‘simple mortgage’ will apply to such charge. [section 100]. [Mortgage is not a ‘charge’ as per section 100 of Transfer of Property Act, but it will be a ‘charge’ for purpose of registration under Companies Act, as per section 124 of Companies Act].
A ‘charge’ is not ‘mortgage’. In every mortgage, there is ‘charge’, but every charge is not a mortgage. Section 100 of Transfer of Property Act states that if immovable property is made as security for payment of money and if it does not amount to mortgage, then the later person is said to have a charge on property. However, a ‘charge’ does not create an interest in the property. – Dattatreya Mote v. Anand Datar – (1994) 2 SCC 799. Thus, no particular form is necessary to create ‘charge’. [However, for purpose of registration under Companies Act, ‘charge’ includes mortgage].
Lease of immovable property – A lease of immovable property is transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity. Such transfer of right should be in consideration of a price paid or promised, or of money, or a share of crops, or service or anything of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. [section 105]. Lease of property from year to year or for any term exceeding one year can be made only by registered instrument. [section 107].
Exchange – When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an ‘exchange’. [section 118].
Actionable Claim – ‘Actionable claim’ means a claim to any debt or to any beneficial in movable property not in possession (either actual or constructive) of the claimant. The debt should be other than a debt secured by mortgage of immovable property or pledge of movable property. The claim should be such be such as Civil Court would recognise as affording grounds for relief. Such debt or beneficial interest be existent, accruing, conditional or contingent. [section 3 para 6]. Such transfer of an actionable claim shall be effected only by execution of an instrument is writing. [section 130]. – – One normal example is that receivable from a person is ‘actionable claim’, which can be transferred to another (e.g. one bank may transfer some of its receivables to another).