Law relating to Transfer of Property: Important Definitions, Types of properties, Movable and immovable property

Transfer of Property Act, 1882, governs the transfer of property in India and contains several key definitions and concepts essential for understanding the legal framework surrounding property transactions.

• Transfer of Property (Section 5):

It refers to an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and one or more other living persons. The term “living person” includes a company or association or body of individuals, whether incorporated or not.

• Property (Section 3):

Property includes anything which is or may be an object of rights, excluding a mere right to sue. This can encompass both movable and immovable property.

• Immovable Property (Section 3):

While the Act does not directly define immovable property, it excludes standing timber, growing crops, and grass from the definition, implying that immovable property includes land, buildings, and anything attached to the earth or permanently fastened to anything attached to the earth.

• Movable Property:

This is not defined in the Act but is understood to be any property that is not immovable. It includes tangible items like goods, furniture, vehicles, etc.

• Actionable Claim (Section 3):

An actionable claim is a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to any beneficial interest in movable property not in possession, either actual or constructive, of the claimant.

• Attestation (Section 3):

Attestation in the context of the Transfer of Property Act refers to the process by which witnesses sign a document to affirm that they have observed the execution of the document by the signatory. For a document to be validly attested, it must be signed by at least two witnesses who have seen the executant sign the document or have received a personal acknowledgment from the executant of his signature.

• Notice (Section 3):

Notice, in relation to a transfer of property, refers to the awareness or knowledge of a fact. The Act distinguishes between actual notice (direct knowledge) and constructive notice (what one could have known under reasonable diligence), affecting the rights and obligations of parties involved in the transfer.

• Sale (Section 54):

Sale of immovable property is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. This is a permanent transfer of ownership from one person to another in return for a value. The key element here is the transfer of ownership, which distinguishes a sale from a lease or mortgage.

• Mortgage (Section 58):

Mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The borrower is called the mortgagor, the lender is the mortgagee, and the principal money and interest of which payment is secured are called the mortgage money.

• Lease (Section 105):

Lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service, or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

• Exchange (Section 118):

Exchange is a transaction where two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only. The transfer of property in exchange is subject to the same conditions as the sale.

• Gift (Section 122):

Gift is the transfer of certain existing movable or immovable property made voluntarily and without consideration by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.

• Actionable Claim (Section 3):

It refers to a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to any beneficial interest in movable property not in possession, either actual or constructive, of the claimant, which the Civil Courts recognize as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional, or contingent.

• Attachment (Section 3):

It refers to the legal process of seizing the property of a debtor to secure the claim of a creditor, which is typically done by court order.

Types of Properties

Transfer of Property Act, 1882, and other relevant statutes, properties are broadly classified into two main categories: Immovable Property and Movable Property. This classification is crucial for determining the applicable legal procedures and rights concerning the transfer, acquisition, and disposition of property. Below are the types of properties delineated under these categories:

1. Immovable Property

Immovable property refers to property that cannot be moved without altering its nature. The Transfer of Property Act, 1882, does not explicitly define immovable property but provides examples of what is not considered immovable property. Based on legal interpretations and other statutes, immovable property generally includes:

• Land:

This is the most fundamental form of immovable property and includes the physical ground or earth’s surface, along with any rights above and below the surface.

• Buildings and Structures:

Any construction on land that is permanently affixed to the ground and cannot be moved without being destroyed or altered.

• Attached to the Earth:

This includes anything that is embedded in the earth (like trees or plants, except for standing timber, growing crops, or grass which are considered movable property) or attached to what is embedded in the earth like buildings and trees.

• Rights over Property:

Certain rights, such as easements, leases for a term exceeding one year, and rights to ways, are treated as immovable property because they pertain to or are enjoyed with immovable property.

2. Movable Property

Movable property encompasses all properties that are not immovable. They can be easily moved from one place to another, without changing their form or nature. The examples are:

• Vehicles:

Cars, bikes, and boats are common examples of movable property as they can be moved without altering their structure or purpose.

• Furniture and Appliances:

Items within a home or office, like chairs, tables, refrigerators, and air conditioners, are considered movable property.

• Machinery:

Pieces of equipment and machinery not permanently fixed to the earth and can be moved.

• Jewelry and Clothing:

Personal items like jewelry, clothes, and accessories fall under movable property.

• Investments:

Stocks, bonds, and other financial instruments are also considered movable property as they represent interests that can be bought, sold, or transferred without any physical movement of property.

• Intellectual Property:

This includes rights to inventions, literary and artistic works, symbols, names, and images used in commerce. Despite being intangible, these are considered movable property for the purpose of their transferability.