Property Law for Business

Property is the thing over which the right of ownership is exercised

Definition of property
According to John Austin ownership is said to exist when:  When the right is available against the whole world (Jus in rem)  Over a determinate thing  Indefinite in point of disposition, and  Unlimited in point of duration

Classification of property 
Movable Property  Immovable property  Tangible Property: Physical existence can be

measured  Intangible Property: copyrights, patent rights

utensils etc. trees attached to the ground Registration is compulsory sales tax and central sales Stamp duty is to be paid tax Delivery of the movable property completes the transaction Registration on the name of the transferee completes the transaction . books.Movable and Immovable property Transferable Ex: Vehicles. houses. Need not be registered Non-transferable Ex: Land.

1930 defines the contract of sale of goods: It is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. 1930  Section 4 (1) of the Act. It may be absolute or conditional .Sale of Goods Act.

contd Sale of Goods Act. 1930  Section 4 (3) deals with the concept of an agreement to sell: The transfer of property in goods is to take place at a future time or subject to some condition thereafter to be fulfilled.«. .

Sale and Agreement to sell Executed contract Executory contract Existing and specific goods Future and contingent goods Risk of loss is borne by the Loss falls on the seller buyer even though the seller possesses the goods The seller can sue if the contract is breached In case of breach. the seller can sue for damages .

Sale and Agreement to sell The seller will not have the right to re-sell ± the subsequent buyer will not have good title to the goods Jus in rem He can re-sell and the buyer will acquire good title. The original buyer can claim for damages. µJus in personam¶ .

Performance of a contract of sale Three stages:  Passing of risk  Transfer of possession of the goods and  Transfer of ownership of title from the seller to the buyer. .

Essential elements of a sale  Parties: Two  subject matter: immovable  Transfer or conveyance: Either registration or delivery of possession of the goods  Price or consideration .

Transfer of Title  The seller must have a good title to the goods  Sale by a non-owner will not be transferring a better title  A person who does not possess the title cannot transfer the title .

. The defendant has no right over the 6 acres of land. Nagamma (1977) The defendant sold 12 acres of land to the plaintiff in 1947.Nemo dat Quod non habet µNo person can give a better title than what he has¶ Shaik Buddan Sab vs. The plaintiff was asked to vacate and dispossess the 6 acres of land in 1967 by the true owners.

The plaintiff took the ground of the nemo dat quod non habet  The defendant took the plea of caveat emptor¶ Is the defendant liable to pay the amount back to the plaintiff? .Nemo dat Quod non habet  The plaintiff sued the defendant for damages for 6 acres of land.

contd Nemo dat Quod non habet Sale by non-owners:  Where the goods are sold with the consent of the true owner  Sale by an agent  Sale by one of the joint owners  Sale with the consent of the true owner  Sale by an unpaid seller .«.

«.where the lawful charges incurred in respect of goods amount to 2/3rds of its value and where the owner refuses to pay the charges .contd Nemo dat Quod non habet  The Pawnee of the goods  A thief or finder of a negotiable instrument endorsed in blank or payable to bearer  Finder of goods ± perishable in nature or  Finder of goods .

Borrowing against property as security  Borrowing against Property as Security  Hypothecation  Pledge and Hypothecation ± Bank Advances  Mortgage of Immovable Property .

.Hypothecation Parties to hypothecation:  Hypothecator  Hypothecatee Hypothecator holds the goods as an agent but not as the owner. The goods are liable to be returned to the hypothecatee under certain circumstances.

Difference b/w Pledge and Hypothecation:  Possession .Hypothecation If the hypothecator refuses to return the goods. the hypothecatee has a right to claim in the court of law.

Hypothecation Caselaw: In Bank of Chittor vs. since it is very important for running cinema. Narsimhulu. . A Cinema projector and some accessories were pledged with a bank. It was held that the sale was subject to pledge. Later on the pledgers sold the machinery. The bank allowed the property to remain with the pledgers.

. 1882 defines mortgage: A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced by way of loan.Mortgage Section 58 (a) of the Transfer of property Act. an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability.

³mortgagemoney´  The instrument ± mortgage-deed .Mortgage Parties to a mortgage:  Transferor is called a ³mortgagor´  Transferee a ³mortgagee´  The principal money .

Mortgage Essential Features of a mortgage:  Two parties ± competent  Transfer of interest  Of Specific immovable property  Such transfer is to provide security of payment  Consideration  Registration .

regtn not compulsory  Anomalous mortgage: combo of simple and usufructuary .right to enjoy the benefits  English mortgage ± repay on certain date.delivers the title deeds. condition of retransfer.Kinds of Mortgage  Simple mortgage ± possession & personal liability  Mortgage by conditional sale ± Agree to sell  Usufructuary Mortgage . enjoy the benefits  Mortgage by deposit of title deeds.

1872) Nature of Hire-purchase Agreement:  The goods are delivered on the condition that the amount will be paid in timely installments  Title is acquired on payment of last installment only  The hirer can terminate the agreementbefore the property passes on to him .Hire Purchase of Property ( ICA.

Ingredients of Hire purchase Agreements  Hirer  Owner  Hire  Hire-purchase price It should be in writing and signed by both the parties .

Contents of Hire-purchase agreement  The cash price and the hire-purchase price of the goods  The date of commencement of the agreement  The date. number and the amount of installments  The name of the person to whom the installment is to be paid. .

Lease of property  Transfer of the possession of property for a fixed period of time  It shall specify the beginning and end of the term of lease  Right of interest in immovable property is transferred  Consideration is Rent or premium .

Essentials of a Lease  The parties  Subject-matter  Demise or partial transfer Term or period of lease  Consideration or Rent  .

Termination of Lease Section 111 to 113 of the TP Act deals without the termination of lease:  By lapse of time  By happening of an event  By termination of lessor¶s interest  By merger  On the expiration of the notice to quit .

Exchange (Sec.118)  Two persons  Mutual agreement to transfer the ownership of one thing for the ownership of another .

Essentials of a valid exchange  Presence of two parties  Exclusive Ownership of property  Mutual transfer of reciprocal estate  Transfer of property includes movable and immovable property  Consideration for transfer is not price  Formalities of sale must be complied with .

Gift (Section 122)  A gift is a transfer of ownership voluntarily or gratuitously Parties to the Gift:  Absence of consideration  The Donor and the donee  The subject matter  The transfer and acceptance .

123)  Registration of a gift deed is compulsory in case of immovable property Revocation of Gift (S.126)  An incomplete gift can be revoked at any time  Mutual consent .Registration of Gift (S.

Revocation of Gift Under Mohammedan Law a gift may be revoked even after the delivery of possession:  Husband to wife  Prohibited degrees of relation  Charity or for any religious purpose .

Revocation of Gift  Death of the donee  Subject matter of gift is destroyed.  When the gift is sold by the donee  when some property is received in exchange of the gift .

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