Exchange of Immovable Property
Exchange of Immovable Property
Exchange of Immovable Property
An oral exchange is not permissible in view of the amendment of section 49 of the Registration
Act, 1929 by inserting the words – ‘or by any provision of the Transfer of Property Act, 1882’ has
made it clear that the documents of which registration is necessary is necessary under TPA but not
under the Registration Act falls within the scope of section 49 of the Registration Act.
If not registered, they are not admissible as evidence of any transaction affecting any immovable
property comprised therein and do not affect any such immovable property. Transaction by
an exchange which is required to be effected through a registered instrument is if it was to affect
any immovable property worth Rs. 100 or more. 1
I. Characteristic Features
1. Transfer of ownership – exchange involves the transfer of ownership in some existing
property. In transfer of ownership, the absolute interest of the owner is transferred. Partition
of property is not a transfer of ownership.
2. Properties need not be immovable – in exchanges, the properties may be both movable and
immovable. Immovable property may be exchanged with movable property.
3. Exchange includes barter – exchange of one movable property with another movable
property is known as barter. Transfer of ownership in some movable property in
consideration of the transfer of ownership in another movable property is known as barter.
4. Mode of transfer – section 118 provides that a transfer of property in completion of
an exchange can be made only in a manner prescribed for the transfer of such property by
sale. Therefore, the formalities of section 54 are to be complied with. Where both the
properties are movable, an exchange may be effected only by delivery of possession without
registration. Where the properties are immovable and of value less and Rs. 100, registration
is optional, but in case the value of immovable properties is more than Rs. 100, registration
of the document is compulsory. 2
1
Satyavan v. Raghubir, AIR 2002 P&H 290
2
Nivrutti Kushaba Binnar v. Sakhibai, AIR 2009 Bom 93
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It is necessary that the deed of exchange must be a valid contract.
IV. Right of party deprived of the thing received in exchange (S. 119)
Section 119 provides for contingency in which one of the parties to the exchange is deprived of
the property received by him/her due to some defect in the title of the other party.
1. If any party to an exchange (or any person claiming under him/her).
2. Is deprived of the thing received by him/her in exchange by reason of any defect in the title
of the other party.
3. Such other party is liable to him/her (or any person claiming under him/her) – a. For the loss
caused by such defect; or b. For the return of the thing transferred at the option of the person
so deprived, if the thing is still in possession of such other party (or his/her legal
representative or a transferee from him/her without consideration).
4. However, this remedy is subject to the contrary intention appearing in terms of exchange.
The parties may have agreed to the contrary, in such a case, this covenant cannot be implied.
The party suffering loss due to the defective title of other-party to the exchange has been
given two remedies under this section –
He/she can recover for compensation the loss suffered by him/her;
He/she can take back the thing transferred by him/her.
However, the second remedy is available only in three situations –
Where the property is still in the possession of the other party, or
In the possession of his/her legal representative; or
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A transferee from him/her without consideration.
The sine qua non of the applicability of section 119 is a party to the exchange losing possession
by virtue of the defect in the title of the property or thing in exchange. If somebody forcibly
dispossesses a person who has taken the property or thing in exchange by him/her, he/she cannot,
by invoking section 199 of the Act seek recovery of the property or thing, which he/she gave
in exchange to the other party.
In the case of sale also, if the purchaser is deprived of his/her possession of the property purchased
by him/her by a trespasser his/her remedy would be to proceed against the trespasser but not his/her
vendor for recovery of the sale price on the ground of trespass. 3
3
T Bhaskara Rao v. Tangellamudi Gabriel, AIR 2004 AP 106
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