Law of Property Assignment

DILDHAR AHAMMED T
1431
SEM IV

1. RIGHTS AND DUTIES OF LESSOR AND LESSEE.

The Section 108 of the Transfer of Properties Act talks about the Rights and liabilities of
lessor and lessee.
(A) Rights and liabilities of the lessor
(a) Duty to Disclose (Sec.108 [a]):The lessor is bound to disclose to the lessee any material
defect in the property, with reference to its intended use, of which the former is and the latter
is not aware, and which the latter could not with ordinary care discover;
(b) Duty to give possession (Sec. 108[b]): The lessor is bound on the lessee's request to put
him in possession of the property;
(c) Covenant for peaceful enjoyment (Sec. 108[c]): The lessor shall be deemed to contract
with the lessee that, if the latter pays the rent reserved by the lease and performs the contracts
binding on the lessee, he may hold the property during the time limited by the lease without
interruption.
(B) Rights and liabilities of the lessee
(a) Accession to go to the principal: If during the continuance of the lease any accession is
made to the property, such accession (subject to the law relating to allusion for the time being
in force) shall be deemed to be comprised in the lease;
(b) To avoid the lease in case of destruction: if by fire, tempest or flood, or violence of an
army or of a mob, or other irresistible force, any material part of the property be wholly
destroyed or rendered substantially and permanently unfit for the purposes for which it was
let, the lease shall, at the option of the lessee, be void;
(c) To repair on default of the lessor: if the lessor neglects to make, within a reasonable
time after notice, any repairs which he is bound to make to the property, the lessee may make
the same himself, and deduct the expense of such repairs with interest from the rent, or
otherwise recover it from the lessor;
(d) To recover payment made by the lessee: if the lessor neglects to make any payment
which he is bound to make, and which, if not made by him, is recoverable from the lessee or
against the property, the lessee may make such payment himself, and deduct it with interest
from the rent, or otherwise recover it from the lessor;
(e) Right to remove certain things: the lessee may even after the determination of the lease
remove, at any time whilst he is in possession of the property leased but not afterwards all
things which he has attached to the earth;
(f) Lease of uncertain period: when a lease of uncertain duration determines by any means
except the fault of the lessee, he or his legal representative is entitled to all the crops planted
or sown by the lessee and growing upon the property when the lease determines, and to free
ingress and egress to gather and carry them;
(g) Whether sub-lease is possible: the lessee may transfer absolutely or by way of mortgage
or sub-lease the whole or any part of his interest in the property, and any transferee of such
interest or part may again transfer it;
(h) The lessee is bound to disclose to the lessor any fact as to the nature or extent of the
interest which the lessee is about to take of which the lessee is, and the lessor is not aware,
and which materially increases the value of such interest;
(i) To pay the rent: the lessee is bound to pay or tender, at the proper time and place, the
premium or rent to the lessor or his agent in this behalf;
(j) Keep the property: the lessee is bound to keep, and on the termination of the lease to
restore, the property in as good condition as it was in at the time when he was put in
possession, subject only to the changes caused by reasonable wear and tear or irresistible
force, and to allow the lessor and his agents, at all reasonable times during the term, to enter
upon the property and inspect the condition thereof and give or leave notice of any defect in
such condition; and, when such defect has been caused by any act or default on the part of the
lessee, his servants or agents, he is bound to make it good within three months after such
notice has been given or left;
(k) Duty to use the property reasonably: the lessee may use the property and its products
(if any) as a person of ordinary prudence would use them if they were his own;
(l) Not to create permanent structure: he must not, without the lessor's consent, erect on
the property any permanent structure, except for agricultural purposes;
(m) Duty to restore possession: on the determination of the lease, the lessee is bound to put
the lessor into possession of the property.

2. DOCTRINE OF PART PERFORMANCE

The Doctrine of Past Performance, based on principle of equity, developed in England and
was subsequently added to the Transfer of Property Act, 1882 via the Amendment Act of
1929.
Section 53A says that if a person makes an agreement with another and lets the other person
act on the behalf of the contract; such a person creates an equity himself that cannot be
resisted on the mere grounds of absence of formality in the evidence or contract of such a
transfer. Thus, if the contract has not been registered or completed in the prescribed manner,
the transferor can still not go against the transferee or anyone claiming under him. However,
the deed should not be unsigned or unstamped. Nothing in this section affects the rights of a
transferee for consideration even if he had no notice of contract of part performance.
As per law, a transfer of immovable property valued over Rs. 100 has to be registered. But it
was believed that strict compliance may lead to extreme hardships especially where one party
has already performed his part in the confidence that the other party will honour the
agreement. If such registration or other formalities have not taken place, the doctrine of part
performance will be applicable. If such a transferee takes possession of the property, he
cannot be evicted due to an unregistered contract.
ESSENTIALS OF THE DOCTRINE OF PART PERFORMANCE
a) There must be a written contract for transfer of an immovable property signed by or on
behalf of the transferor. The doctrine cannot be applied if there is a void agreement or no
agreement.
b) There must be consideration;
c) The contracts should give out the terms of the transfer with reasonable certainty;
d) The transferee must have taken possession as a result of this contract or continued in
possession if he was already in possession of the property;
e) The transferee must have done some act in furtherance of the contract. Acts done prior to
the agreement or independent of it cannot be deemed to be part performance of the contract;
and
f) The transferee should have performed his part of the deal or be willing to perform it.
The Privy Council in MOHD MUSA vs. AGHOR KUMAR GANGULI 1(30) held that
doctrine of part performance is applicable in India. There were divergent views a few years
later stating that doctrine cannot be used to override statutory provisions. Finally in 1929, the
Transfer of Property Act was amended and the English law of part performance became a
part of Indian Laws though a little modified.

3. DOCTRINE OF ADVERSE POSSESSION

The concept of adverse possession relates to the process of acquisition of title by the person
in possession of the property despite not being the owner. The Section 3 of the Limitation
Act says that Court will not take cognizance of any suit, which is barred by limitation even if
issue of limitation is not taken as a defence. Thus, the law of limitation bars remedy but not
the right. However, Section 27 of Limitation Act is an exception to the general principle of
law of limitation and addresses adverse possession. According to this section, if a person fails
to file suit for recovery of possession, within a period of limitation, his right to recover the
possession of that property also extinguishes. If such situation occurs, the actual owner
extinguishes his ownership over the property. At the same time property cannot left owner
less. It must be in name of any other person or any other person must be entitled to have right
over it. If any person possesses any property in adverse to the interest of true owner and
actual owner fails to file a suit for recovery of possession within a period of limitation, then
the person in possession becomes owner of property by way of adverse possession. The
Limitation Act, 1963, lays down a limitation period of 12 years for suit of possession of
immovable property or any interest based on the title. The period for limitation for the
government, however, is 30 years by virtue of article 112.

 ESSENTIAL INGREDIENTS FOR ADVERSE POSSESSION

There are certain necessary elements required for adverse possession:
a) There must be a property, whether movable or immovable, which is subject to
possession.

1
AIR 1914 PC 27
 b) Nature of possession required over the property to constitute adverse possession.
c) Possession must be continuous.
d) Possession must be with intention of ouster of the real owner.
e) Dispossession of the true owner.
f) Possession of another essential for dispossession.
Adverse possession was defined by the Supreme Court in Amarendra Pratap Singh v Tej
Bahadur Prajapati2 as: “A person, though having no right to enter into possession of the
property of someone else, does so and continues in possession setting up title in himself and
adversely to the title of the owner, commences prescribing title into himself and such
prescription having continued for a period of 12 years, he acquires title not on his own but on
account of the default or inaction on part of the real owner, which stretched over a period of
12 years results into extinguishing of the latter’s title.”
In the recent judgement of Ravinder Kaur Grewal v Manjit Kaur3, the court held a contrary
position that a plaintiff can file a suit for perfection of title by adverse possession. It also
refuted the contention that there is no conferral of right by adverse possession.

4. BENAMI TRANSACTIONS (PROHIBITION) AMENDMENT

ACT, 2016
The Benami Transactions (Prohibition) Amendment Act, 2016 came into force on November
01, 2016. The Amendment Act seeks to amend the provisions of the Benami Transactions
(Prohibition) Act, 1988 to curb the issues of black money and money laundering in the
country. The aim of the act is to route the unaccounted money into the financial system; seize
Benami properties and prosecute / punish those who are involved in these properties. The
amended law has tried to give a clear definition of Benami transactions; established
adjudicating authorities; set up appellate tribunal and specified the penalties for entering into
the Benami transaction.
The act goes on to describe ‘Property which is and which is not ‘Benami’. A Benami
transaction is one in which property is held by one person but amount for the same is
provided by another. A property that is held in the name of spouse or child for which the
amount is paid out of known sources of income is not Benami. Similarly, joint property of
brothers, sisters or other relatives for which amount is paid out of known resources of income
is also not Benami. A Benami property may include assets of any kind including movable,
immovable, tangible, intangible, any right or assets or legal documents. It may also include
Gold and financial security.
The Amendment Act has tried to give a comprehensive definition of benami transactions
clearly setting out the transactions to be excluded from the definition. It also provides for
establishment of adjudicating authorities; setting up of appellate tribunal and power of
Central Government to designate one or more Courts of Session as Special Courts for speedy
and smooth trial of offences punishable under the New Act and provides for attachment,
adjudication, confiscation and vesting of benami property and has prescribed penalties and
punishments in respect of the offences punishable under the New Act.

2
2004 AIR (SC) 3782
3
2019 SCC OnLine SC 975