TPA Section.1-4

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THE TRANSFER OF PROPERTY ACT, 1882(ACT NO. 4 of 1882.) [17th February, 1882.]

An Act to amend the law relating to the Transfer of Property by act of Parties.

'An Act to amend the law relating to the Transfer of Property by act of parties' is given in the Transfer of Property Act, 1882,

(a) Immediately after preamble (b) Immediately before preamble

(c) In preamble (d) Both (b) and (c)

Preamble.-- WHEREAS it is expedient to define and amend certain parts of the law relating to the transfer of property by act of parties; It is hereby enacted as follows:--

As per its preamble the Transfer of Property Act, 1882 is enacted to.......................certain parts of the law relating to the transfer of property by act of parties

(a) Amend (b) Define (c) Amend and define (d) To consolidate and define

Object of the Act.—

The object of the Transfer of Property Act, 1882, is given in its preamble.

In the beginning of almost every Act, there is a ‘preamble’ which briefly gives the objects or purpose of that enactment.

The preamble to the Transfer of Property Act, 1882, lays down that the Act has been enacted because it was ‘expedient to define and amend certain parts of the law relating to the transfer of property by act of parties.’

This Act was, therefore, enacted because it was necessary to give a definite meaning and make changes in some of the rules which at that time regulated the transfer of properties by act of parties.

Transfer ‘by act of parties’ is a transfer which takes place between two living persons. Such transfers are also called ‘transfer inter vivos’. For example, sale or gift is a transfer of property by act of parties because transferor and transferee both must be living persons on the date of sale or gift.

Transfer of Property under will, inheritance or by an order of the Court is a transfer by ‘operation of law’. It is not a transfer by act of parties because such transfers the transferor is not a living person and the transfer takes place automatically under the given law.

Transfer of properties by operation of law are governed by personal laws e.g. Hindu and Muslim law of wills and inheritance or by order of the Court under the Civil Procedure Code.

Transfer of movable properties by act of parties was regulated by Chapter VII (Sections 76 to 123) of the Indian Contract Act, 1872.(Chapter VII of the Indian Contract Act, 1872 was taken out from this Act, in 1930 and since then there is a separate enactment, the Sale of Goods Act, 1930 which contains rules for the transfer (sale) of movable properties. Movable properties are commonly known as ‘goods’.)

Thus, before 1882, although there were specific provisions for the transfers by operation of law under the personal laws and there was also law for the transfer (sale) of movables by act of parties, but there was no definite law for the transfer of immovable properties by act of parties.

In the absence of any specific enacted law for the transfers of immovable properties by act of parties, the Anglo-Indian Courts used to decide the cases by applying the principles of equity, justice and good conscience as it prevailed in England.

There were certain Regulations which also contained rules for the transfer of immovable properties. For example, the Madras Regulation of 1802,Bombay Regulation of 1827, Bengal Regulations of 1798 and 1806 etc., had laid down some of the basic rules for the transfer of immovable properties. But these Regulations were not exhaustive.

There were no sufficient provisions in these Regulations for all types of transfers. The result was that in most of the cases the courts had to apply the rules of English law on the ground of equity, justice and good-conscience.

The principles of equity are such fundamental principles of justice which the courts apply in the absence of any specific law on a point so as to do justice with the case. The Anglo-Indian Courts, in which the Judges were mostly British people who used to apply the principles of equity as was known in England.

But the application of English equity to Indian cases was doing less than justice because the socio-economic conditions in India were altogether different from those of England. Moreover, while applying the rules of equity, the Judges were free to give their own interpretations and explanations of English rules.

Therefore, their decisions were not uniform and the case-law had become conflicting and confusing. A clear, certain and uniform law for the transfer of immovable properties by act of parties was, therefore, urgently required in India.

The task of drafting a definite and uniform law suitable for this country was taken up by the First Law Commission. After suitable modifications made several times, the draft-bill was, referred to the Second Law Commission. Finally, the bill was passed by the Legislative Council and became law on 17th February, 1882. Thus came into existence a clear, certain and uniform enacted law relating to transfer of property by ‘act of parties’ in the name of the Transfer of Property Act, 1882.

The Act was made enforceable with effect from 1st July, 1882.

Besides providing a uniform enacted law on transfers of immovable properties, this Act also fulfils the requirement of completing the Code of Contract (the Indian Contract Act, 1872).

Although for a contract there was already the Indian Contract Act, 1872 but the transfer of property, there was no enacted law. Therefore, before 1882, the Code (enacted law) of contract was not complete. The Transfer of Property Act, 1882, has completed the Code of Contract. (That this Act completes the Code of Contract is evident from Section 4 of the Act. According to Section 4, those chapters and sections of the Transfer of Property Act, 1882, which relate to contract should be taken as part of the Indian Contract Act, 1872.)

Before the commencement of the Transfer of Property Act, 1882, the transfer of immovable properties in India were governed by the

a) Principles of English law and equity (b) Indian Registration Act, 1908

(c) British State of Goods Act, 1880 (d) Indian Contract Act, 1872.

The courts, before the enactment of the Transfer of Property Act, 1882, were forcing to decide property disputes according to their own notion and justice and fairplay,

a) Because judges were making own laws

b) Because of absence of any specific statutory provisions on the property matters

c) Because British Judges were confused with Indian property disputes

d) Because judges were educated in British property laws.

The object of the Transfer of Property Act may now be summarised as under:—

1. The Transfer of Property Act, 1882 provides a definite, clear and uniform law for the transfers of immovable property by act of parties i.e., transfer between living persons.

2. The Act has modified and made changes in some of the rules which xisted before this enactment: The changes were made so that the laws may be suitable to the socio- economic conditions of India.

3. The Transfer of Property Act has completed the Code of Contract. Before this Act, although there was Code (enacted law) for the Contracts, but there was no enacted law for the transfers which used to take place in furtherance of a contract.

4. By making provisions for inter vivos transfers, the Transfer of Property Act has provided a law parallel to the already existing laws of testamentary and intestate transfers i.e., transfer of property under wills and under the law of inheritance.

Scope of the Act.—

The scope of the Transfer of Property Act is limited.

It is not a complete code of transfer of property.

The scope of the Transfer of Property Act may briefly be stated as under:

1. Not Exhaustive.—

The Act is not exhaustive. It does not contain complete law for all kinds of transfers in India. There are several modes or methods of transfer. There are also several kinds of properties. The Act does not incorporate rules for all the modes of transfers of property of every kind.

The Preamble to the Act itself makes it clear that the main purpose of the Act is to ‘define and amend parts’ of the pre-existing law of transfer of property by ‘act of parties.’ The Act does not say that its object is to collect and consolidate all the laws of transfer of properties in India.

For example, although the ease-mentary rights are proprietary rights but the Transfer of Property Act is not applicable to easements. (The easements are dealt with separately under the Indian Easements Act, 1882.)

2. Transfers by Operation of Law Excluded.—- The Act does not apply to transfers by operation of law.

3. Transfers Mainly of Immovable Properties.— The Act deals mainly with the transfer of immovable properties.

Transfers of movable properties are regulated by the Sales of Goods Act, 1930. However, it may be noted that Sections 5 to 37 of Chapter II of Transfer of Property Act, 1882 incorporates fundamental principles relate to the nature of transfers in general and are applicable to the transfer of both kinds of properties, movables as well as immovables. The remaining Sections (38 to 53-A) of this Chapter contain rules for the transfer of only immovable properties.

In so far as specific transfers are concerned, the definitions of gifts and exchange in the Act are not limited to immovable properties; they include the gift and exchange also of the movables.

On the other hand provisions regarding sale, lease, mortgage and charges are applicable to the transfer of only immovable properties.

4. Muslim Law.—

According to Section 2 of the Act, provisions of Chapter II of this Act, dealing with concept and principles of transfers generally, do not affect any inconsistent rule of Muslim Personal Law.

Accordingly, if there is any provision in the Transfer of Property Act which is against any rule of Muslim Law, the rule of Muslim Law would prevail over the conflicting provision of this Act.

For example, provision of Section 14 dealing with the rule against perpetuity would not be applicable to family-waqfs (Waaf-alal-aulad) created by Muslims because rules of the family-waqfs under Muslim Law are inconsistent with the provisions of Section 14.

Moreover, gifts made by Muslims are governed by the Muslim Law of Hiba. Section 129 of the Transfer of Property Act specifically provides that provisions of Chapter VII (on Gifts) would not be made applicable to gifts made by Muslims.

However, it may be noted that exemption from the operation of this Act is with respect to only such rules of Muslim Law which are in conflict with any provision of the Act dealing the transfers in general (given in Chapter II of this Act).

Except gifts, provisions of the Act dealing with specific transfers such as, sale, lease, mortgage etc., are applicable to transfers made by any person, including Muslim, irrespective of religion, caste and creed.

5. Saving of certain Incidents and Rights.—

Section 2 of the Act exempts certain incidents of a contract or constitution of property from the operation of this Act. Constitution of property means essential nature of property. Thus, the provisions of this Act cannot be applied so as to change or affect the, basic nature of the property itself.

The Act also saves certain property rights from the mischief of this enactment, For example, right of partition of immovable properties is an incident of property, but this right is not affected by the provisions of the Act and a valid partition may be made orally.

6. Territorial Limitations.—

The Transfer of Property Act has territorial limitations as well. The Act is not applicable to the territories included in the State of Punjab.

In other parts of the country where the Act is now applicable, it was not enforced at one stretch.

The Act was made applicable to different territories in India on different occasions.

CHAPTER I—PRELIMINARY

1. Short title. Commencement.-

This Act may be called the Transfer of Property Act, 1882.

Commencement.- It shall come into force on the first day of July, 1882.

Extent.- It extends in the first instance to the whole of India

except the territories which, immediately before the 1st November, 1956, were compromised in Part B states or in the States of Bombay, Punjab and Delhi. But this Act or any part thereof may be by notification in the official Gazette be extended to the whole or any part of the said territories by the State Government concerned.

And any State Government may, from time to time, by notification in the Official Gazette,exempt, either retrospectively or prospectively, any part of the territories administered by such State Government from all or any of the following provisions, namely:- Sections 54, paragraphs 2 and 3, 59, 107 and 123.

Notwithstanding anything in the foregoing part of this Section, Sections 54, Paragraphs 2 and 3, 59, 107 and 123 shall not extend or be extended to any district or tract of country for the time being excluded from the operation of the Indian Registration Act, 1908 (XVI of 1908), under the power conferred by the first section of that Act or otherwise.

2. Repeal of Acts.- Saving of certain enactments,incidents,rights, liabilities, etc.-

In the territories to which this Act extends for the time being the enactments specified in the schedule hereto annexed shall be repealed to the extent therein mentioned.

But nothing herein contained shall be deemed to affect—

a. the provisions of any enactment not hereby expressly repealed:

b. any terms or incidents of any contract or constitution of property which are consistent with the provisions of this Act, and are allowed by the law for the time being in force:

c. any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability: or

d. save as provided by section 57 and Chapter IV of this Act, any transfer by operation of law or by, or in execution of, a decree or order of a Court of competent jurisdiction:

and nothing in the second chapter of this Act shall be deemed to affect any rule of Muhammadan law. ( the word Hindu and Buddhist are omitted)

Before the commencement of the Transfer of Property Act, 1882, the transfers of property in India were governed by the principles of equity and certain statutes in the form of Regulations.

After this Act, there was no need of old law on this subject and the statutes were no more required.

Accordingly, Section 2 of the Transfer of Property Act, 1882, provides for the repeal of old law and statutes dealing with the transfer of property.

But, while repealing the earlier statutes, Section 2savescertain pre-existing enactments and also some of the rights and incidents of property which accrued before the promulgation of this Act.

It is significant to note that the expression “nothing herein contained shall be deemed to affect” in this section means ‘nothing contained in the Transfer of Property Act, it refers to the whole Act rather than Section 2 alone.

The provisions of this Act do not affect, in particular, the following statutes and rights or incidents of property etc.

(a) Acts and Statutes not expressly repealed.— Only those enactments, Regulations and provisions thereof are repealed by this Act which are expressly mentioned in its schedule to have been wholly or partially, repealed therein. Other Acts, Statutes or Regulations which have not been expressly repealed under the Schedule, still prevail.

(b) Terms or incidents of contract or of constitution of property.— Terms or incidents of any contract or of constitution of property has also been saved provided they are permissible under the law for the time being in force in India and are not inconsistent with the provisions of the Transfer of Property Act.

‘Incident’ signifies a ‘thing naturally attached to’ and ‘constitution of property’ means ‘essential nature of property’.

Pre-emption is a right which, appertains to an immovable property, therefore, this right is saved from the mischief of this Act. Pre-emption is recognised as a legal right in India and is also not contrary to the provisions of the Transfer of Property Act.

Similarly, partition is a permissible right of every co-owner of a joint-property; it is naturally attached to a property in which there are several owners. Therefore, partition remains unaffected by the provisions of this Act and shall be valid even if it is made orally.

Mortgagees right to claim the expenses incurred properly in the maintenance and management of the mortgaged property is an implied term of a mortgage. Since such claims are permissible under Order XXXIV, Rule 10 of the Civil Procedure Code, 1908, they shall remain unaffected.

2 (c) Rights, liabilities or reliefs created before commencement of this Act.—

Therefore, the rights or liabilities with respect to any property which existed before commencement of this Act shall remain unaffected.

There is a general rule that unless a contrary intention is expressly indicated, a new enactment is not retrospectively applicable. Clause (c) of Section 2 lays down this general rule with regard to the provisions of Transfer of Property Act.

This clause provides that the Act is prospective and not retrospective and the rights, liabilities and reliefs which were created before the commencement of this Act shall not be affected by any contrary provisions of this enactment.

In other words, the Act is not retrospective in its operation. T e rights, liabilities or any remedy there under which already vested out of any legal relationship before this Act was enforced, remain in tact even if they are against any provision of this Act.

If a mortgage executed before the commencement of the Act was valid without attestation, it had not become invalid for want of attestation under Section 59 of this Act.

However, the rule of prospective operation of a new Act is applicable only to substantive rights and liabilities.

The provisions of the Transfer of Property Act may, therefore, apply retrospectively in the matters of procedure.

It may be noted that rights, liabilities and reliefs, as such, are one thing and the method or procedure for obtaining them is a different thing.

Rights and liabilities which were already vested have not been affected by this Act and have been preserved by Section 2(c).

But, the method or form of procedure to be followed for enforcing such pre- existing rights has not been saved by this clause. The provisions of this Act may be applied to procedural matters.

Thus, in a mortgage executed before this Act, the rights of a mortgagee say, for the sale of the mortgage-property, is a substantive right and has been saved but filing of the suit and the procedure to be followed thereafter must be in accordance with the provisions (Sections 67 and 67-A) of this Act.

59. Mortgage when to be by assurance.-

Where the principal money secured is one hundred rupees or upwards, a mortgage other than a mortgage by deposit of title-deeds can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses.

Where the principal money secured is less than one hundred rupees, a mortgage may be effected either by a registered instrument signed and attested as aforesaid, or (except in the case of a simple mortgage) by delivery of the property.

(d) Transfers by operation of law.-- The Transfer of Property Act is not applicable to transfers by operation of law. Preamble to this Act, makes it clear that the Act is meant to regulate the transfers of properties only by act of parties.

Section 2(d) further makes it clear that except as provided in Section 57 and Chapter IV, the Act shall not affect any transfer by operation of law or a transfer in execution of a decree or, by order of Court.

After the death of a person his properties devolve upon the heirs or legatees by operation of the law of inheritance or the law of wills, as the case may be. The transmission of property in these cases does not take place under this Act.

Transfer of Property by an order of the Court is not a transfer by Act of parties and as such, the Act is inapplicable to these transfers.

In a Court-sale, the property is transferred by operation of law and the ownership of the property vests in the purchaser without any registered deed as required under Section 54 of this Act.

Similarly, transfer of a debt (which is transfer of actionable claim) in the execution sale under the authority of Court is also excluded and Section 135 of this Act is inapplicable to such sales.

It is significant to note that Section 5 of the Transfer of Property Act which defines a ‘transfer for purposes of this Act, excludes transfer by operation of law.

Whereas, exemption under clause (d) means to suggest that with regard to Section 57 and Chapter IV the Act is applicable.

There is, therefore, an apparent conflict between the provisions of Section 5 and the exemption of Section 57 and Chapter IV from the saving of transfers by operation of law under clause (d) of Section 2.

In Laxmi Devi v. Mukund Kanwar,²² the Supreme Court has held that there is no such conflict because with regard to the exemption of Section 57 and Chapter IV the provision of Section 2(d) overrides the definition of transfer of property given in Section 5 of this Act.

Rules of Muslim Law.—

(and nothing in the second chapter of this Act shall be deemed to affect any rule of Muhammadan law. ( the word Hindu and Buddhist are omitted))

The concluding part of Section 2 saves contrary rules of Muslim personal law from application of Chapter II of this Act.

Chapter II of the Transfer of Property Act contains rules relating to transfers generally, irrespective of the mode of transfer and the kind of property transferred.

For example, provisions regarding transferability of property (Section 6), vested and contingent interests (Sections 19, 21), rule against perpetuity (Section 14), doctrine of election etc. are applicable whether the property transferred is movable or immovable and the mode of transfer is sale or gift or exchange etc. Specific modes of transfers such as sale, gift, exchange, lease and mortgages have been dealt with separately in other Chapters.

The exemption from the application of Transfer of Property Act is with regard to only those rules of Muslim personal law which relate to any provision of law contained in Chapter II.

For example, Muslim law of family-wakfs is contrary to the rule against perpetuity as laid down in Section 14 of this chapter. As a result of this exemption, the family-wakfs are valid even though they are contrary to the provisions of Section 14.

However, other chapters of the Act have not been exempted. Therefore in the cases of sale, exchange, lease, mortgage and transfer of actionable claims the provisions of this Act are applicable also to Muslims and Muslim law of sale or exchange is not applied.

As regards gifts, Section 129 expressly exempts gifts by Muslims from the application of Chapter VII (gifts) of the Act. Gifts made by Muslims are governed by Muslim law of Hiba and the provisions of this Act are inapplicable to such gifts.

But, only the contrary rules of Muslim law have been exempted. In cases where there is no inconsistency between the rules of Muslim law and the provisions of law in Chapter II of this Act, the provisions of the Act are to be applied.

Before 1929, the concluding part of Section 2 exempted also the contrary rules of Hindu law and Budhist law. The Amending Act 20 of 1929 has deleted that part of Section 2 which exempted Hindu or Budhist law because inconsistencies under these laws have now been removed by this amendment.

Section 3 to be dealt separately

4. Enactments relating to contracts to be taken as part of Contract Act and supplemental to the Registration Act.-

The chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872 (IX of 1872).

And sections 54, paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, 2*[1908] (16 of 1908).]

16. Section 54 paragraph 2 and 3, and sections 59, 107 and 123 shall be read…………………………… the Indian Registration Act, 1908:

(a) As part of

(b) As supplemental to

(c) In addition to

(d) Subject to

Section 4 of this Act makes it clear that all such provisions of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872.

Therefore, if there is any provision or word in the Transfer of Property Act which relates to contracts, the meaning of the provision or word shall be the same as given in the Indian Contract Act.

For example, the word ‘consideration’ as used in the Transfer of Property Act shall be given the same meaning as laid down in Section 2(d) of the Contract Act. No other meaning can be given to it.

Wherever in the Transfer of Property Act it is provided that the transferor must have capacity to transfer the property, the ‘capacity’ is to be determined under Sections 10, 11 and 12 of the Contract Act.

Second paragraph of Section 4 provides that Sections 54 (2, 3), 59, 107 and 123 shall be read as supplement to the Indian Registration Act, 1908.

It may be noted that the above-mentioned sections of the Transfer of Property Act provide for the registration of documents under which these transfers are being made.

For example, in the case of sale of immovable property of the value exceeding one hundred rupees or in the case of mortgage, lease and gift of immovable property, it is provided that the transfers are to be made through registered documents.

Here, the registration of document and its procedure would be the same as laid

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