Transfers of Immovable Property

TRANSFERS OF
IMMOVABLE
PROPERTY
INTERPRETATION
CLAUSE (S.3)
INSTRUMENT
◦ Means a non-testamentary instrument;
◦ Is a legal document through which property is

transferred;
◦ Signifies the transaction of transfer and also is the

written proof of transfer.
ATTESTED
◦ Documents recording transfer must be attested by
two witnesses;
◦ Attestation = affirming or becoming witness to the

fact that the executant has signed the deed of
transfer;
Conti..
◦ OBJECT :
1. the executant has signed the document;
2. the instrument has been executed with free
consent;
◦ Is not evidence of the contents of documents.
WHO CAN ATTEST?
◦ Any person of the age of majority and possessing a
sound mind can attest;
◦ Party to the instrument cannot attest;

REQUISITIES OF VALID ATTESTATION
◦ Must be done by two / more persons;
◦ Each witness must:

◦ See the executant signing the instrument or fixing his mark on
it; or
◦ See some other signing the instrument in presence of and under
the direction of executant; or
◦ Have received from the executant a personal acknowledgement
of his sign / mark / of the sign of such other person
CONTI…
◦ Each attesting witness has signed in the presence of
the executant.
REGISTERED
◦ Process by which document is recorded;
◦ Registered documents = evidence of statements in the

document;
◦ Indian Registration Act, 1908

NOTICE
◦ Knowledge / information of the fact;
◦ Notice = Actual / Constructive

ACTUAL NOTICE
◦ Direct or express knowledge;
◦ Requisites:
◦ Knowledge must be definite and not heresay;
◦ Only the knowledge of the parties interested in the
transaction is regarded actual notice regarding transaction;
◦ Knowledge must relate to the transaction in question.
CONSTRUCTIVE NOTICE
◦ Where the person may not actually know the fact, but the
Court treats that under the circumstances the concerned
person must be deemed to have knowledge of that fact, the
notice is constructive;
◦ Legal presumption
WHEN PRESUMPTION OF NOTICE
IS MADE ?
◦ WILFUL ABSTENTION FROM AN INQUIRY OR
SEARCH;
◦ GROSS NEGLIGENCE;
◦ REGISTRATION AS NOTICE;
◦ ACTUAL POSSESSION AS NOTICE OF TITLE;

WILFUL ABSTENTION FROM AN INQUIRY OR SEARCH
◦ Deliberate avoidance from taking notice;
◦ Actual notice of a deed = constructive notice of contents;
◦ Inferred only when person has means of knowing a fact

but has omitted to know it.
GROSS NEGLIGENCE
◦ Omission to do something that a reasonable and a prudent
man would have ordinarily done;
◦ Carelessness of gross nature
◦ Lloyds Bank Ltd. v. P.E. Guzder & Co.

REGISTRATION AS NOTICE
◦ Registration = notice of all the facts in the documents;
◦ Applicable to only compulsorily registerable documents;
◦ Notice only for subsequent transferee.

ACTUAL POSSESSION AS NOTICE
OF TITLE
◦ It is constructive notice of such title as possessor
may have;
◦ Possession means some interest in property and

hence nobody can claim ignorance of the fact of the
possession
NOTICE TO AGENT
◦ Imputed notice; principal is bound by it;
◦ Section 229 of ICA, 1872, “Any notice given to or information

obtained by the agent, provided it be given or obtained in the
course of the business transacted by him for the principal, shall, as
between the principal and third parties, have the same legal
consequences as if it had been given to or obtained by the
principal. ”
CONDITIONS TO BE FULFILLED
◦ Notice must have been acquired by a person as an agent; not in any
other capacity;
◦ It must relate to the particular business or transaction for which the

agent has been appointed;
◦ Must have been obtained during the course of agency;
◦ It must not have been fraudulently concealed by the agent.

TRANSFER BY
OSTENSIBLE OWNER
S.41
OSTENSIBLE OWNER
◦ Ostensible means something stated or appearing to be true, but not
necessarily so.
◦ Ostensible owner = person who has all incidents of ownership,

without being the true owner;
◦ Person in whose name property is purchased by another;
◦ A.k.a benamidar
CONSIDERATIONS FOR DETERMINING
WHETHER A PERSON IS OSTENSIBLE OWNER
◦ Subjective question to be decided on facts and

circumstances;
◦ Source of purchase money;
◦ Nature of possession after the purchase;

◦ Motive behind the purchase in the name of another;
◦ Relationship between parties;
◦ Conduct of the parties in dealing with the properties;
◦ Custody of title deeds

WHETHER A TRANSFER BY AN
OSTENSIBLE OWNER IS VALID?
◦ Transfer by Ostensible owner cannot be challenged by the
real owner if:
◦ It has been done with his express or implied consent;
◦ Transfer is for consideration;

Conti..
◦ Transferee has acted in good faith; and
◦ The transferee has exercised reasonable care in

finding out the transferor’s power to make transfer
RAMCOOMAR KOONDOO v.
MACQUEEN
◦Mr. A purchases property in Calcutta in name of his
mistress, Ms. B, in whose name sale deed was and also
who managed the property;
◦Mr. Macqueen is one of the child of both;
◦Ms. B during the lifetime of A sold the property to Mr. R

◦ After B’s death Macqueen filed suit against Mr. R claiming the
properties under the Will of Mr. A on the ground the Mr. B
benamidar;
◦ Mr. R contended that he was a bona fide purchaser;
◦ Privy Council ruled in favor of Mr. R.
◦ Mr. A had allowed Ms. B by implied consent to hold herself out as the real
owner and hence, his representative could not recover upon their secret title
unless they could prove that they had actual/ constructive notice
STATUTORY CHANGES
◦ S.41 Subject to THE BENAMI TRANSACTIONS
(PROHIBITION) ACT, 1988 which prohibits
benami transactions and the right to recover properly
held benami;
◦ Prohibits such transaction as they may be used to

evade taxes and launder money;
Conti…
◦ Exceptions:
◦ where the person in whose name the property is held is a
coparcener in a Hindu undivided family and the property is held for
the benefit of the coparceners in the family; or
◦ where the person in whose name the property is held is a trustee or
other person standing in a fiduciary capacity, and the property is
held for the benefit of another person for whom he is a trustee or
towards whom he stands in such capacity.
Conti…
◦ purchase of property by any person in the name of his wife or
unmarried daughter and it shall be presumed, unless the contrary is
proved, that the said property had been purchased for the benefit of
the wife of the unmarried daughter.
LIMITED POWER TO
TRANSFER (S.38)
LIMITED POWER TO TRANSFER
◦ Applies to transfers made by person who have a limited
power to transfer property, only on the existence of certain
circumstances;
◦ Hindu widow’s power to dispose immovable property in

case of necessity, Power of Karta of HUF, guardian of
minor’s property;
Conti..
◦ For validity of transfer, actual existence of
circumstances is not necessary.
◦ It is sufficient if transferee has acted in good faith

has exercised reasonable care in ascertaining that
such circumstances existed
TRANSFER WHERE
THIRD PERSON
ENTITLED TO
MAINTENANCE (S.39)
◦ Applicable where a provision has been made w.r.t
immovable property allowing therefrom:
◦ Maintenance
◦ Provision for advancement;
◦ Provision for marriage
Conti…
◦ Such property has been transferred;
◦ Such right may be enforced against a gratuitous

transferee and a transferee for consideration having
notice.
◦ Intention of transfer not relevant.

TRANSFER BY CO-
OWNERS (S.44)
◦ Co-owned property = property owned by two or more persons;
◦ Each co-owner entitled to common enjoyment of property,

irrespective of their shares;
◦ Transfer by one co-owner = transferee entitled to all rights &

liabilities of that co-owner
◦ Principle: substitution
EXCEPTION - DWELLING HOUSE
◦ In case of dwelling house belonging to undivided family, a
transferee is not entitled to common enjoyment or
possession of the property if:
◦ The house used as a residence by a joint family
◦ Object: to avoid inconvenience that may be caused by

substitution of a stranger
Conti…
◦ Remedy available = sue for possession and claim
separation of his share
JOINT TRANSFERS
(S.45)
◦ When two or more persons purchase property for
consideration, their interest in the property are in shares of
the consideration that they have advanced;
◦ If consideration paid out of common fund = share same as

interest in common fund;
◦ In absence of evidence as to interest in the fund =

presumption of equal interest.
◦ Deals with the quantum of interest & not nature thereof;
◦ Rule of equity, subject to an intention to the contrary;
◦ Does not provide the method of creating common

ownership or the manner in which several persons can be
co-owner;
Conti…
Joint-Tenants Tenants in Common
◦ Unity of titles + unity of ◦ Unity of possession;
possession;
◦ Upon the death of any one of them ◦ Upon death share goes to
his share goes to the survivors heir or representative
◦ Coparcenary b/w HUF

TRANSFERS BY
PERSONS WITH
DISTINCT
INTERESTS (S.46)
◦ Opposite of S.45;
◦ Deals with appropriation of consideration b/w joint

transferors;
◦ Transfer by two or more person having distinct interest;
◦ Consideration to be divided equally b/w them if equal

interest;
◦ Consideration to be divided proportionately if they
have unequal shares.
◦ Joint transferors need not be co-owners; may have

different kind of interests also
◦ Eg. Life interest holder and a reversioner

TRANSFER OF
SHARE IN COMMON
PROPERTY (S.47)
◦ Deals with transfer of a share, without specifying
from which of the several shares of a common
property the transfer has been made;
◦ In such cases, share of each co-owner is reduced

proportionately;
PRIORITY OF RIGHTS
CREATED BY
TRANSFERS (S.48)
◦ Deals with transfers made successively by the transferor;
◦ Conflict b/w rights of transferees;
◦ Rule of priority applicable i.e. priority is given to the prior

interest and the latter transfer is subject to the prior
transfer;
Conti…
◦ Person purports to create rights in or over the same
immovable property;
◦ At different times;
◦ Subsequent transfers are such that the rights in property

cannot be exercised to their full extent;
◦ There can be an agreement to the contrary.

Conti..
◦ Principle: qui prior est tempore potior est jure – ‘first in
time is better in law’;
◦ Operates from the date of execution of deed;

INSURED PROPERTY
(S.49)
◦ Right of transferee where property transferred to him is
insured against loss or damage by fire;
◦ Transfer must be for consideration;
◦ Transferee may require transferor to apply all money

received as is necessary for the restoration of property;
BONA FIDE
PAYMENT OF RENT
(S.50)
◦ Protects rent paid bona fide to a holder under a defective
title;
◦ Person paying rent not required to pay rent again to the

person having title;
◦ Payment must have been made in good faith

IMPROVEMENTS MADE BY
BONA FIDE HOLDERS
UNDER DEFECTIVE TITLES
(S.51)
◦ Where the transferee of immovable property;
◦ Makes an improvement on the property;
◦ Believing in good faith that he is absolutely entitled

thereto; and
◦He is subsequently evicted by any person
having better title
◦The transferee has a right to require the person

causing eviction to either
◦ To give value of improvement; or

◦ Sell his interest in the property
◦ Scope : applicable to only absolute transfers;
◦ Principle: one who seeks equity must do equity;
◦ Provision w.r.t crops

Transfers of Immovable Property

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TRANSFERS OF

◦ Is a legal document through which property is

◦ Signifies the transaction of transfer and also is the

◦ Attestation = affirming or becoming witness to the

◦ Party to the instrument cannot attest;

◦ Each witness must:

◦ Process by which document is recorded;

◦ Registered documents = evidence of statements in the

◦ Indian Registration Act, 1908

◦ Notice = Actual / Constructive

◦ ACTUAL POSSESSION AS NOTICE OF TITLE;

◦ Deliberate avoidance from taking notice;

◦ Actual notice of a deed = constructive notice of contents;

◦ Inferred only when person has means of knowing a fact

◦ Carelessness of gross nature

◦ Lloyds Bank Ltd. v. P.E. Guzder & Co.

◦ Applicable to only compulsorily registerable documents;

◦ Notice only for subsequent transferee.

◦ Possession means some interest in property and

◦ Section 229 of ICA, 1872, “Any notice given to or information

◦ It must relate to the particular business or transaction for which the

◦ Must have been obtained during the course of agency;

◦ It must not have been fraudulently concealed by the agent.

◦ Ostensible owner = person who has all incidents of ownership,

◦ Person in whose name property is purchased by another;

◦ Subjective question to be decided on facts and

◦ Source of purchase money;

◦ Nature of possession after the purchase;

◦ Relationship between parties;

◦ Conduct of the parties in dealing with the properties;

◦ Custody of title deeds

◦ It has been done with his express or implied consent;

◦ Transfer is for consideration;

◦ The transferee has exercised reasonable care in

◦Mr. Macqueen is one of the child of both;

◦Ms. B during the lifetime of A sold the property to Mr. R

◦ Mr. R contended that he was a bona fide purchaser;

◦ Privy Council ruled in favor of Mr. R.

◦ Prohibits such transaction as they may be used to

◦ Hindu widow’s power to dispose immovable property in

◦ It is sufficient if transferee has acted in good faith

◦ Such right may be enforced against a gratuitous

◦ Intention of transfer not relevant.

◦ Each co-owner entitled to common enjoyment of property,

◦ Transfer by one co-owner = transferee entitled to all rights &

◦ Object: to avoid inconvenience that may be caused by

◦ If consideration paid out of common fund = share same as

◦ In absence of evidence as to interest in the fund =

◦ Rule of equity, subject to an intention to the contrary;

◦ Does not provide the method of creating common

◦ Coparcenary b/w HUF

◦ Deals with appropriation of consideration b/w joint

◦ Transfer by two or more person having distinct interest;

◦ Consideration to be divided equally b/w them if equal

◦ Joint transferors need not be co-owners; may have

◦ Eg. Life interest holder and a reversioner

◦ In such cases, share of each co-owner is reduced

◦ Conflict b/w rights of transferees;

◦ Rule of priority applicable i.e. priority is given to the prior