Category Archives: Property Law

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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Rule of lis pendens – Applicable to Suit on Mortgagee

Rule of lis pendens applies to suit on mortgagee as well. Lord Justice Turner has succinctly dealt with this principle in the leading case of Bellamy v. Sabine (1857) 1 De G J 566. The doctrine is intended to prevent one party to a suit making an assignment inconsistent with the rights which may be decided in the suit and which might require a further party to be impleaded in order to make effectual the court’s decree. Law is well settled that a mortgagee, who has purchased a mortgaged property in execution of his mortgage decree is entitled to avoid a transfer on the ground that it was mortgaged by the mortgagor during the pendency of a mortgage suit. Section 52 of the TPA prevents a mortgagor from creating any lease during the pendency of mortgaged suit so as to effect the right of a mortgagee or the purchaser. Sunita Jugakishore Gilda v. Ramanlal Udhoji Tanna, 2013 (6) AWC 5652 (SC).

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Possession – Does not give any right or interest in the property

In Sham Lal v. Rajinder Kumar, (1994) 30 DRJ 596, on the question of possession, the Court in Para 13, held as below:

“Possession is flexible term and is not necessarily restricted to mere actual possession of the property. The legal conception of possession may be in various forms. The two elements of possession are the corpus and the animus. A person though in physical possession may not be in possession in the eye of the law, if the animus be lacking. On the contrary, to be in possession, it is not necessary that one must be in actual physical contact. To gain the complete idea of possession, one must consider:

(1)    The person possessing,

(2)    The things possessed and,

(3)    The persons excluded from possession.

A man may hold an object without claiming any interest therein for himself. A servant though holding an object, holds it for his master. He has, therefore, merely custody of the thing and not the possession which would always be with the master though the master may not be in actual contact of the thing. It is in this light in which the concept of possession has to be understood in the context of a servant and a master.”

The ratio of this judgment is that merely because the plaintiff was employed as a servant or chowkidar to look after the property, it cannot be said that he had entered into such possession of the property as would entitle him to exclude even the master from enjoying or claiming possession of the property or as would entitle him to compel the master from staying away from his own property.

Principles of law which emerge in this case are crystallized as under:

(1)    No one acquires title to the property if he or she was allowed to stay in the premises gratuitously. Even by long possession of years or decades such person would not acquire any right or interest in the said property.

(2)    Caretaker, watchman or servant can never acquire interest in the property irrespective of his long possession. The caretaker or servant has to give possession forthwith on demand.

(3)    The courts are not justified in protecting the possession of a caretaker, servant or any person who was allowed to live in the premises for some time either as a friend, relative, caretaker or as a servant.

(4)    The protection of the court can only be granted or extended to the person who has valid, subsisting rent agreement, lease agreement or licence agreement in his favour.

(5)    The caretaker or agent holds property of the principal only on behalf of the principal. He acquire no right or interest whatsoever for himself in such property irrespective of his long stay or possession. Maria Margarida Sequeira Fernandes and others v. Erasmo Jack De Sequeira (dead) through Lrs. (2012) 5 SCC 370.

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