Category Archives: Property Law

Bona Vacantia or Escheat

Law relating to bona vacantia provides for conservation of abandoned properties. The nature of the property to which the Escheats Act applies must necessarily be abandoned property in the sense that there should be no claimants to the property.

        The question is, what exactly is “abandoned property” or what property is “bona vacantia”. In Bombay Dyeing Manufacturing Co. Ltd. v. State of Bombay, AIR 1958 SC 328, a Constitution Bench of the Hon’ble Supreme Court while deciding the challenge to the constitutional validity of the Bombay Labour Welfare Fund Act observed and held that the expression “abandoned property”, or to use the more familiar term “bona vacantia”, comprises properties of two different kinds, those which come in by escheat and those over which no one has a claim.

        Property is subject to the right of escheat, where upon intestacy, there is no heir. Escheat was a right, whereby land of which there was no longer any tenant, returned by reason of tenure, to the Lord by whom, or by whose predecessors in title, the tenure was created.

        In A-G of Ontario v. Mercer, (1883) 8 App Cas 767, it was held, that “Escheat is a term of art and derived from the French word escheat that is cadere excidere or accidere and signifyeth property when by accident the lands fall to the Lord of whom they are holden.” Escheat was an incident of feudal tenure and was based on the want of tenant to perform the feudal services. State of Rajasthan v. Lord Northbrook, 2020 (1) AWC 122.

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Conditional Gift – Where Possession Remains with the Donor during his lifetime

Gift means to transfer certain existing movable or immovable property voluntarily and without consideration by one person called the donor to another called the donee and accepted by or on behalf of the donee as held by the Hon’ble Supreme Court in Naramadaben Maganlal Thakker v. Pranjivandas Maganlal Thakker, (1997) 2 SCC 255. As further held by the Hon’ble Court in Naramadaben Maganlal Thakker, (1997) 2 SCC 255:

“It would thus be clear that the execution of a registered gift deed, acceptance of the gift and delivery of the property together make the gift complete. Thereafter, the donor is divested of his title and the donee becomes absolute owner of the property.”

 A conditional gift with no recital of acceptance and no evidence in proof of acceptance, where possession remains with the donor as long as he is alive, does not become complete during lifetime of the donor. When a gift is incomplete and title remains with the donor, the deed of gift might be cancelled.

In Renikuntla Rajamma v. K. Sarwanamma, (2014) 9 SCC 445,  a Hindu woman executed a registered gift deed of immovable property reserving to herself the right to retain possession and to receive rent of the property during her lifetime. The gift was accepted by the donee but later revoked.

 In Renikuntla Rajamma  v. K. Sarwanamma, (2014) 9 SCC 445, it was held that the fact that the donor had reserved the right to enjoy the property during her lifetime did not affect the validity of the deed. The Court held that a gift made by registered instrument duly executed by or on behalf of the donor and attested by at least two witnesses is valid, if the same is accepted by or on behalf of the donee. Such acceptance must, however, be made during the lifetime of the donor and while he is still capable of making an acceptance. S. Sarojini Amma v. Velayudhan Pillai Sreekumar, (2019) 11 SCC 391.

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Assertion of Possessory Title – Over a Particular Property

The crux of the matter is that a person who asserts possessory title over a particular property will have to show that he is under settled or established possession of the said property. But merely stray or intermittent acts of trespass do not give such a right against the true owner. Settled possession means such possession over the property which has existed for a sufficiently long period of time, and has been acquiesced to by the true owner. A casual act of possession does not have the effect of interrupting the possession of the rightful owner. A stray act of trespass, or a possession which has not matured into settled possession, can be obstructed or removed by the true owner even by using necessary force. Settled possession must be (i) effective, (ii) undisturbed, and (iii) to the knowledge of the owner or without any attempt at concealment by the trespasser. There cannot be a straitjacket formula to determine settled possession. Occupation of a property by a person as an agent or a servant acting at the instance of the owner will not amount to actual legal possession. The possession should contain an element of animus possidendi. The nature of possession of the trespasser is to be decided based on the facts and circumstances of each case. Poona Ram v. Moti Ram, (2019) 11 SCC 309

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Self Acquired Property – Character of Joint Family Property

The law on the aspect of blending is well settled that property separate or self acquired of a member of a joint Hindu family may be impressed with the character of joint family property if it is voluntarily thrown by the owner into the common stock with the intention of abandoning his separate claim therein; but to establish such abandonment, a clear intention to waive separate rights must be established. Clear intention to abandon separate rights in the property must be proved. Even abandonment cannot be inferred from mere allowing other family members also to use the property or utilization of income of the separate property out of generosity to support the family members. S. Subramanian v. S. Ramasamay, (2019) 6 SCC 46.

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Corpus Possession & Permissible Possession

Corpus Possession means that there exists such physical contact of the thing by the possessor as to give rise to the reasonable assumption that other person will not interfere with it. Existence of corpus broadly depends on (1) upon the nature of the thing itself, and the probability that others will refrain from interfering with the enjoyment of it; (2) possession of real property, i.e., when a man sets foot over the threshold of a house, or crosses the boundary line of his estate, provided that there exist no factors negativing his control, for example the continuance in occupation of one who denies his right; and (3) acquisition of physical control over the objects it encloses. Corpus, therefore, depends more upon the general expectations that others will not interfere with an individual control over a thing, then upon the physical capacity of an individual to exclude others.

The animus possidendi is the conscious intention of an individual to exclude others from the control of an object.

There is also a concept of “constructive possession” which is depicted by a symbolic act. It has been narrated with an illustration that delivery of keys of a building may give right to constructive possession of all the contents to the transferee of the key.

A person other than the owner, if continued to have possession of immoveable property for a period as prescribed in a Statute providing limitation, openly, without any interruption and interference from the owner, though he has knowledge of such possession, would crystallize in ownership after the expiry of the prescribed period of limitation, if the real owner has not taken any action for reentry and he shall be denuded of his title to the property in law. “Permissible Possession” shall not mature a title since it cannot be treated to be an “adverse possession”. Such possession for however length of time be continued, shall not either be converted into adverse possession or a title. It is only the hostile possession which is one of the condition for adverse possession. Bhikhari v. D.D.C., 2018 (141) RD 130.

 

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Transfer of – Right, Title or Interest in Tangible Property

It is a settled principle of law that a person can only transfer to other person a right, title or interest in any tangible property which he is possessed of to transfer it for consideration or otherwise. In other words, whatever interest a person is possessed of in any tangible property, he can transfer only that interest to the other person and no other interest, which he himself does not possess in that tangible property. So, once it is proved that on the date of transfer of any tangible property, the seller of the property did not have any subsisting right, title or interest over it, then a buyer of such property would not get any right, title and interest in the property purchased by him for consideration or otherwise. Such transfer would be an illegal and void transfer. In such eventuality and subject to any terms and conditions, if agreed between the parties, a buyer will have a right to claim refund of sale consideration from his seller, which he paid for purchase of the property under the law of contract. The reason is that the contract to purchase has failed and, therefore the parties have to be restored back to their original positions, which existed at the time of execution of the contract. Eureka Builders v. Gulabchand¸(2018) 8 SCC 67

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GPA Transaction – Does Not Convey Any Title

In Suraj Lamp & Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656, it was observed as under:
“Therefore, an SA/GPA/will transaction does not convey any title nor creates any interest in an immovable property. The observations by the Delhi High Court in Asha M. Jain v. Canara Bank, (2001) 94 DLT 841, that the concept of power of attorney sales has been recognized as a mode of transaction when dealing with transactions by way of SA/GPA/will are unwarranted and not justified, unintendedly misleading the general public into thinking that SA/GPA/will transactions are some kind of a recognized or accepted mode of transfer and that it can be a valid substitute for a sale deed. Such decisions to the extent they recognize or accept SA/GPA/will transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law.
Transactions of the nature of ‘GPA sale’ or ‘SA/GPA/will transfers’ do not convey title and do not amount to transfer, nor can they be recognized a valid mode of transfer of immovable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of Section 53-
A of the Transfer of Property Act. Such transactions cannot be relied upon or made the basis for mutations in municipal or revenue records. What is stated will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered assignment of lease. It is time that an end is put to the pernicious practice of SA/GPA/will transactions known as GPA sales.” Delhi Development Authority v. Gaurav Kukreja, (2015) 14 SCC 254.

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Ouster – Essential Elements

‘Ouster’ does not mean actual driving out of the co-sharer from the property. It will, however, not be complete unless it is coupled with all other ingredients required to constitute adverse possession. Broadly speaking, three elements are necessary for establishing the plea of ouster in the case of co-owner. They are: (i) declaration of hostile animus, (ii) long and uninterrupted possession of the person pleading ouster, and (iii) exercise of right of exclusive ownership openly and to the knowledge of other co-owner. Nagabhushanammal v. C. Chandikeswaralingam, 2016 (3) AWC 2721.

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Rent – Meaning of

In P.L. Kureel Talib Mankab v. Beni Prasad, AIR 1976 All 362, it has been said that it is an established proposition that ‘rent’ includes not only what is ordinarily described as ‘rent’ but also payment in respect of special amenities provided by the landlord. Rent includes all payments agreed by the tenant to be paid to the landlord for the use and occupation not only of the building but also of furnishing, electric installation and other amenities.
The Apex Court also in Karnani Properties Ltd. v. Miss Augustine and others, AIR 1957 SC 309, held that the ‘rent’ is comprehensive enough to include all payments agreed by the tenant to be paid to the landlord for the use and occupation not only in respect of the building and its appurtenances but also in respect of furnishings, electric installations and other amenities agreed between the parties to be provided to the tenant.
In Raj Kumar Pandey v. Rama Nand Upadhyay, while dealing with the definition of ‘rent’ in the light of the provisions of Section 105 of the Transfer of Property Act held that the definition of the ‘rent’ is very comprehensive and it includes service or any other thing of value to be rendered periodically or on any other specific occasions to the transferor by the transferee to enjoy the property transferred. It also held that water tax is a part of rent unless there is contract to the contrary.
In Smt. Raj Rani Kapoor v. Bhupinder Singh, 1986 (2) ARC 457, it was held that if tenant agrees to pay taxes, two situations may arise, either the taxes are payable alongwith the rent as part thereof or the tax amount may be payable separately in addition to the rent. It is always open to the parties to agree that the house tax and water tax to be paid as part of the rent. It was further held by the Hon’ble Apex Court in Smt. Raj Rani Kapoor v. Bhupinder Singh, 1991 (17) ALR 29, that for creating relationship of landlord and tenant the landlord transfer to the tenant the right to enjoy the property for a certain time or in perpetuity and anything which the tenant pays for this transfer of right to enjoy the property will be taken to be the ‘rent’ of the property.
The word ‘rent’ has been considered in Milap Chandra Jain v. Roop Kishor, 2014 (103) ALR 484 and it has been held therein that any periodic payment made by the tenant to the landlord for the enjoyment of the property which has been leased out either in the form of money or service or other things of value would constitute ‘rent’.
In Baleshwar Singh v. K.P. Singh, 2015 (108) ALR 136, it was held that as all taxes and charges towards fixtures and fittings were being paid together with rent, they will form part of the ‘rent’. Smt. Savitri Devi Didwania v. M/s Allied Pharmaceutical, 2015 (108) ALR 767.

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Lease and Mortgage – Difference between

Lease and Mortgage are species of the same genus viz., the ‘transfer of property’. Both of them bring about transfer of property, but with a substantial change as to the nature of disposition. The principal objective of a mortgage is to provide security for repayment of amount, whereas the one under lease is that the owner of an item of immovable property permits another to use it on payment of rent. Except in the case of usufructuary mortgage and mortgage through conditional sale, the possession of the property continues to be with the mortgagor.
In the case of lease, the transferee invariably gets the possession of the property. Apart from the broad difference, there are certain minute important aspects, that differentiate the mortgage from lease. Once a transaction of mortgage is brought about, the mortgagor gets the right to redeem and the mortgagee gets the corresponding tight to foreclose the mortgage. The nature of decree to be passed in a suit for foreclosure of mortgage differs substantially from the one to be passed in a suit for recovery of possession of property from a lessee. A preliminary decree is to be passed and it is followed by final decree. Chapter IV of the Transfer of Property Act, 1882 confers rights and places obligations on the mortgagors, on the one hand, and mortgagees, on the other hand, which are typical and germatone to such transactions. Prescription of any fixed term is alien to mortgages.
Lease, on the other hand, involves, just the permission being accorded by an owner of property, to another, to use it. The consideration therefor is the rent fixed with the consent of the parties. In a given case, the lease may be nominal or phenomenal. Further law does not prohibit the rent being paid in the form of adjustment from the amount due from the lessor to the lessee. What becomes important is the objective underlying the transaction, namely use of the property belonging to the lessor by the lessee, on payment of rent and for a stipulated term. Chapter V of the Act enlists the rights, which a lessor has against the lessee and vice versa. Termination of lease on the one hand, and foreclosure/redemption of mortgage, on the other hand, have nothing in common. When such is the radical difference between the two transactions, it is not at all possible to take the one for the other. Gita Cotton Trading Company v. CCRA, Hyderabad and another, 2013(121) RD 661 (AP).

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