West Bengal National University of Juridical Sciences Property Law

Introduction

The Indian Contract Act was passed before the Transfer of Property Act, and as stated in the notes to the preamble of the T.P.Act, one of the objects of the Act was to bring the rules which regulate the transfer of property between living persons into harmony with law of testamentary and intestate succession and to complete the code of contract so far as it relates to immovable property. [1]

T.P. ACT and CONTRACT ACT

T.P. Act is consistent with the Indian Contract Act, 1872 (hereinafter Contract Act). Sec.4 of T.P. Act provides for Chapters and sections of T.P. Act, which relate to Contract Act, to be taken as part of Indian Contract Act, 1872. It, however, does not enact and cannot be read as enacting that the provisions of the Contract Act to be read into the T.P. Act [2] . It is significant to note that the whole of the Contract Act has not been extended to transfer of immovable properties under T.P. Act. Only such provisions of T.P. Act, which relate to contracts alone, are read as part of the Contract Act, but not vice versa. There is a clear distinction between a contract, which still remains to be performed and specific performance, which may be sought and conveyance by which the title to the property actually passes. Thus a mere contract to mortgage or sale would not amount to an actual transfer of interest in immovable property as provided in Sec.54, T.P. Act. It is only when a deed of sale or mortgage is duly registered; it would operate as a conveyance of such interest. However, once a document transferring immovable property has been registered, the transaction passes out of the domain of mere contract into one of conveyance governed by T.P. Act. Such a completed transaction would be governed by the provisions of the T.P. Act and of only so much of the Contract Act, as are applicable thereto. [3]

Practical importance of Sec.4 could be more concretely indicated by stating that the definitions and explanations in the Contract Act could be invoked for construing the T.P. Act. Since the expression “consideration” is not defined in the T.P. Act, though used in several sections, one may presume that it will have the same meaning as defined under Sec.2(d) of the Contract Act.

Another instance of consistency between the two legislation can be observed from the fact that sales, mortgages, leases and exchanges are all transfer of property based primarily on contracts. Consequently, the Chapter of T.P.Act dealing with these transfers must be said to “relate” to contracts and must, therefore, be taken as part of the Indian Contract Act. [4] Actionable claims are also initially based on contracts and are recognised as transfers under Sec.130 of the T.P.Act. [5] Many sections relating to transfer of immovable property, namely, Secs. 33, 38-43, 45 and 53 are taken as a part of the Contract Act. For e.g., if a person who has only expectancy in certain villages and purports to convey it for some consideration, on such conveyance, the vendee would be entitled to refund of consideration under Sec.65 of the Contract Act. [6] The same would happen in the case of an invalid mortgage. The mortgagee will have the right to refund of the mortgage money given to the mortgagor. [7]

The validity of transfer of property must be tested in the light of Sec.23 of the Contract Act read with Sec.6(h) of the T.P.Act. [8] These sections are attracted when the consideration for the transfer is unlawful.

However, a gift is outside the scope of the Contract Act as it is made without any consideration, unless it falls within the ambit of Sec.25 of the Contract Act. [9]

Section 33 of the T.P.Act regarding transfer conditional to performance of an act is consistent with Section 34 of the Contract Act. Both the provisions deal with impossibility of fulfilment of condition precedent, either permanently or for an indefinite period of time. This can be understood by looking to the illustration to Section 34 of the Contract Act.

A agrees to pay B a sum of money if B marries C, C marries D. The marriage of B to C must, now be considered impossible, although it is possible that D may die and that C may afterwards marry B.

Sec.55 of the Contract Act also applies to sale of immovable property. [10] However, Sec.56 of the Contract Act relating to the doctrine of frustration of contract is not applicable to completed transfers. [11]

Furthermore, Section 137 of TPA shall be read as part of Indian Contract Act. [12]

TP ACT and IRA

The Transfer of Property has to be done by a registered non-testamentary instrument. The term “registered” as mentioned in section 3 of Transfer of Property Act, 1882 means registered in any part of the territories to which the Act extends under the law for the time being in force regulating the registration of documents.

For registration, it is necessary that the instrument has been registered and its registration completed in the manner prescribed by Indian Registration Act, 1908

The definition of ‘immovable property’ under Registration Act is broader, [13] but consistent with the one given in the TPA. Under Sec.2(6) it defines ‘immovable property’ to include  “land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently fastened to anything which is attached to the earth, but not standing timber, growing crops nor grass”

T.P. Act is consistent with the Indian Registration Act, 1908. Earlier, there was an inconsistency between the two acts as expressed by Beaman, J. in Dawal Piran Shah v. Dharma Rajaram Manggarudi [14] , that the consequence of reading the provisions of this Act as supplemental to the Registration Act was to render inadmissible under Sec.49 of the latter Act all unregistered instruments to transfer of immovable property whatever may be the value of such property. [15] This inconsistency has been removed by incorporating para 2 of Sec.4 of T.P.Act which gives legislative effect to the view expressed above.

The expression “shall be read as supplemental to the Indian Registration Act” cannot be construed as importing the definitions given in the Registration Act into the T.P.Act.

Provisions of both the legislations run concurrently. For e.g., a lease for a period of not less than one year, if made in writing, must be registered according to Sec.107 of the T.P.Act even though it is not compulsorily registrable under Sec.17 of the Registration Act. [16]

The combined effect of section 54 of the Transfer of Property Act 1882 and section 17 of the Registration Act 1908 is that, a contract of sale in respect of immoveable property of the value of more than one hundred rupees without registration cannot extinguish the equity of redemption. In India, it is only on execution of the conveyance and registration of transfer of the mortgager’s interest by registered instrument that the mortgagor’s right of redemption will be extinguished. In Narandas Karsondas vs. S.A. Kantam & Anr. (AIR 1977 SC 774), it was held that the mortgagor has a right to redeem unless the sale of the property was complete by registration in accordance with the provisions of the Registration Act 1908, and therefore, the appeal was dismissed. A deed of reconveyance does not fall within the ambit of Sec.17(1)(b) or (c) of the Registration Act and as such does not require registration. Nor does it require attestation.

Also, charge being outside the domain of Registration Act is valid, even when not registered. [17] However, a combined effect of Sec.49 and 100 of TP Act is to make all charges in respect of immovable properties compulsorily registrable under the Indian Registration Act, provided that the amount exceeds rupees one hundred – AIR 1962 All. 101

S.48, TP Act should be read subject to Sec.48 of IRA and so a subsequent registered mortgage is entitled to priority over an earlier oral charge, not accompanied by delivery of possession, of which mortgagee has no notice. AIR 1970 Mad. 495 An agreement to execute an usufructuary mortgage-deed need not be registered. It is specifically enforceable and where the mortgagee has been put in possession, it can be set up as a defence to a suit for redemption – AIR 1930 Pat. 479

A registered document operates from the date of its execution and not registration. The result is that if two registered documents are executed by the same person in respect of the two different persons at different times, the one which was executed first has priority over the other, even if the former was registered subsequently to the latter. AIR 1965 SC 430

TP ACT and EASEMENT ACT

The term ‘easement’ has not been defined under T.P.Act. It is defined in Sec.4 of the Easement act as “a right which the owner or occupier of certain land possesses, as such, for the beneficial enjoyment of that land, to do and continue to do something, or to prevent and continue to prevent something being done, in or upon, or in respect of certain other land not his own”

In the Limitation Act, under Sec.25, definition of easement is much more comprehensive and includes the concept of profit a prendre i.e. a right to enjoy a profit out of land of another. There can be no easement right so called, unless there be both servient tenement and dominant tenement. Therefore, an easement must be transferred with dominant tenement. [18] This is enacted in Section 8 of the T.P.Act and Section 19 of the Easements Act. There cannot be an easement in gross. [19]

Difference between easement and lease : Easement does not involve the possession of land over which it exists. A lease of a land confers the right of possession and enjoyment without the ownership of it, while an easement over a land gives the right of use without either ownership or possession. Besides, easement is a right appurtenant to land, while leases are not ancillary to the enjoyment of other lands of the lessee.

Sec.6(c) of the T.P.Act prohibits transfer of easement apart from the dominant heritage. It refers to transfer of an existing easement and not to the grant of an easement. A distinction has to be drawn between a document which creates an easement and a document which transfers it. A document which creates an easement is valid without registration because it is not a transfer of property within the meaning of the Transfer of Property Act [20] , whereas the transfer of an existing easement is a transfer of property.

It may be added that a consistency can be observed between T.P.Act, Easement Act and registration act. Transfer of an intangible thing within the meaning of clause 2 of Section 54 of the Transfer of Property Act can be made only by a registered instrument. Thus, the transfer of an existing easement, being the act of the dominant owner and inseparable from the transfer of the dominant heritage, must be registered. [21] Also, section 2, clause 6 of the Registration Act which defines ‘ immovable property’ for the purposes of that Act, expressly includes ‘rights to ways’ (easementary right). Where, therefore, a right of way is created in writing the writing may require registration but not if the value of the right is less than one hundred rupees.

An easement is a right ancillary to the enjoyment of land which is servient tenement. Such easement cannot be transferred apart from the dominant tenement. [22] For e.g., the right of villagers to hold village fair on another person’s land cannot be transferred. [23]

However, the release of easement right by the dominant tenement in favour of the servient tenement is not a transfer. So it does not attract Cl.(c) of Sec.6, T.P.Act as it is a case of extinguishment and not transfer for easement right. [24]

Furthermore, consistency can be observed between Sec.8 of TPA and Section 19 of the Easements Act. The phrase “easements annexed thereto” in S.8 of T.P.Act refers to those easements which at and prior to the transfer were existing easements. It does not refers to an easement which first came into existence as a consequence of transfer. AIR 1937 Nag 179. Under Sec.19 of IEA, an easement existing at the date of the transfer passes with the dominant heritage to the transferee. For e.g., a purchaser of a house acquires a right to way which the vendor has. [25] Not all easements but only those annexed to the property pass with the transfer. ILR 15 All 270. A right of way, not continuous, do not pass. ILR 2 Mad 46, unless express words of grant are used. ILR 7 Cal 665.

Under Sec.13 of the Easements Act, where a person transfers or bequeaths immovable property to another and an easement in other immovable property of the transfer is necessary for the enjoying the subject of the transfer, the transferee shall be entitled to such easement and where an easement in the subject of the transfer is necessary for enjoying other immovable property of the transferor, the transferor shall be entitled to such easement. [26]

TP act and sec. 60 of iea – When Some property is transferred, and if, in order to enjoy the subject of the transfer it is necessary that the transferee should go or do something on the property of the transferor such license is implied in the very act of transfer and cannot be revoked so long as the transfer remains in force. For e.g., if A sells the trees growing in his land to B. B is entitled to go on the land and take away the trees and this right cannot be revoked later. [27] In English books it is called a “license coupled with interest” and has been thus defined by Pollock ! If a license is part of a transaction, whereby a lawful interest in some property, besides that which is the immediate subject of the license, is conferred on the licensee, and the license is necessary to his enjoyment of that interest, the license is said to be “coupled with interest”. – Ramdayal v. Nasir Husain Xllan, 91 1. C., lO3I, Partap Singh v. DllUm Singh, 13 A. L. J., 886.