Introduction to TPA

• Classical law relating to Transfer of

property was purely customary

• Before Britishers came to India, Hindus

and Muslims were governed by their
personal laws about the transfer of
property.
 Did this arrangement worked
adequately?
• Yes, it worked adequately in the traditional
system of panchayats as the person
involved in adjudication were familiar with
the litigants and personal laws and the
nature of dispute
 After the advent of British
• Property matters were adjudicated by
impartial judges unfamiliar with the
litigants and the different social systems of
India.
• These courts applied English rules
governing transfer of property with
modifications to suit the Indian conditions
 Was applying English rules in
Indian situations appropriate?
• No
• Thus the desirability of enacting the law
relating to the transfer of property was
perceived by the Britishers
• Also lack of codification of the law of
property in India led to various High courts
giving contradictory judgments
 First and Second Law
commission
• First Law Commission was appointed by
the British Queen  drafted the bill in
1870 introduced in the assembly in
1877 referred to select committee
• Redrafted and referred to second law
commission
• Passed on 17th Feb 1882 and enforced on
1st July 1882
 Further Amendments
• After the Act came into force, conflicting
case laws were observed
• The Act was amended by 12 amending
Acts
• The amending Act passed in 1929
amended not only several provisions of the
Transfer of Property act 1882 but involved
amendments in several other enactments
 Scope of the Act
• The Act defines and amends certain parts of
the law relating to the transfer of property by
act of parties
• The imp words used in the Act are “ by act
of parties”
• Therefore, it applies and governs the
transfers by act of parties only and does
not govern transfers that take place due
to operation of law
 What TPA does not govern?
• It does not govern transfers of property
through court auction, forfeiture,
acquisition, or due to insolvency
proceedings or government grants

• It does not govern the transfer of property

through an intestate or testamentary
succession
 Objective of the Act
• To bring in harmony the rules relating to
transfer of property between living persons
and those applicable in case of the
devolution of the same in the event of
death of a person through intestate or
testamentary succession
• The Act seeks to complete the law of
contract, as most of the transfers primarily
arise out of a contract between the parties.

• The Act by laying down for the compulsory

registration of the transfers, changed the
nature of a transfer of property from a
private to public affair.
 Act not exhaustive
• The Act is not exhaustive, nor is it a
complete code.
• It does not cover the entire law relating to
transfer of property, but with certain
aspects only
 Consequence of Act not being
exhaustive
• If a particular situation is not covered by
any provisions of the Act, the courts in
India are empowered to settle the same by
applying the rules of equity, justice, and
good conscience or even with the help
of English cases on the relevant aspects,
but only when the same is not prohibited
by any statutory provision of India
 Legislative Competence
• Transfer of Property other than
agricultural land is a subject specified in
the concurrent list
• By virtue of Entry 6 List III, 7th schedule to
Indian constitution, both states and
parliament empowered to frame laws on
this topic
Entry 6 List III
• As far as agricultural land is concerned,
states alone are empowered to legislate
on the same by virtue of Entry 18 List II of
the 7th schedule of the Constitution of
India.
Entry 18 List II
 Application of the Act
• Chapter II of the Act does not apply to
transfer of property among Muslims, in so
far as there is a contrary provision under
Muslim Law
• The rule is not that the TPA does not apply
to Muslims, but the rule is that if there is a
rule of Muslim law at variance or different
from that specified under the TPA, it is the
Muslim law that would prevail
• If there is no contrary or inconsistent rule
under Muslim law, Muslims would be
subject to the provisions of chapter II
 E.G. of inconsistencies
between Muslim law and TPA
• Under the general rules specified under
the TPA, a gift of immovable property must
be executed with the help of a written,
attested and registered gift deed.
• The delivery of possession of the property
is not an essential requirement to the
validity of the gift and will depend upon the
contract between the parties
• Under the Muslim law, however a gift of
immovable property can be effected orally,
and generally, the gift is not valid unless it
is followed by immediate delivery of
possession of the property.
Movable and Immovable
Property
 Corporeal Property
• It is the subject matter of the right of
ownership in material things
• Salmond says "the right of ownership in a
material thing may be defined as the
general, permanent and inheritable right to
the uses of that thing"
Classification of corporeal Property
• Movable
• Immovable

Note: For the Purpose of TPA, it is this

categorisation that is relevant
 Relevance of studying this
distinction
• The transfer of immovable property
must take place with the help of a written
document that is properly executed by
the transferor and the execution should be
properly attested and registered.
• The transfer of movable property in
several cases will be complete by simple
delivery of possession, coupled with an
intention to convey the title by the owner to
the recipient
• The law of limitation specifies different
time periods within which the a civil suit
can be filed w.r.t movable and immovable
property

• Movable--3 years from cause of action

• Immovable---12 years from the date of
cause of action
 Immovable Property(Statutory
interpretation)
• Section 3 of the Transfer of Property Act

• S. 3(26)- The General Clauses Act,

1897

• S. 2(6)-- The Registration Act, 1908

 Section 3 of the Transfer of
Property Act
• “immoveable property” does not include
standing timber, growing crops or grass
S.3(26) General Clauses Act,1897
• "immovable property" shall include land,
benefits to arise out of land, and things
attached to the earth, or permanently
fastened to anything attached to the earth
 S.2(6) Registration Act,1908
• “immovable property” includes land,
buildings, hereditary allowances, rights to
ways, lights, ferries, fisheries or any other
benefit to arise out of land, and things
attached to the earth, or permanently
fastened to anything which is attached to the
earth,
• but not
• standing timber, growing crops nor grass
 Section 3 of Transfer of
Property Act
“Things Attached to the earth” means
a)Rooted in the earth, as in the case of trees
and shrubs;
b)Imbedded in the earth, as in the case of
walls or buildings
c)Attached to what is so imbedded for the
permanent beneficial enjoyment of that to
which it is attached
 Final Definition
Immovable Property includes
• Land
• Benefit arising out of land
• Things rooted in earth
• Things embedded in earth
• Things attached to what is embedded in
the earth for its permanent beneficial
enjoyment
 What does it excludes
• Standing Timber
• Growing crops
• Grass
 Nature of Timber Tree and
Standing Timber
• The moment the plant is planted till the
the time they are immature, they would be
covered under the expression 'Things
rooted in the earth' and hence would be
'Immovable Property'
• When the wood can be used as a timber
then what is to be seen is whether they
are intended to be cut within a short period
of time or not.
• If yes they would be called standing
timber, and if not they would still be
categorised as timber trees and hence
would be immovable property.
 Element of Immovable
Property(Land)
• A determinate portion of the earth's surface
• The ground beneath the surface down to the
centre of the earth
• The column of the space above the surface ad
infinitum
[Correct: A Reasonable space above the surface of
the land necessary and sufficient for the use and
beneficial enjoyment of the land and all things
attached thereto]
• All object which are on and under the
surface in its natural state.They form part
of the land e.g. minerals, natural
vegetation or stones lying loose upon the
surface
• All objects placed by human agency on or
under the surface of the land with the
intention of permanent annexation. These
become the part of the land and lose their
separate entity for e.g buildings, walls and
fences
 Benefit Arising out of Land
• It is also known as Profits a Prendre
• It is immovable Property

• When a person using his land makes a

profit, the right will be a right in immovable
property
 Example
• A person has a vacant piece of land
• Every year during the festival season he
uses the land for holding a fair and for this
purpose he charges Rs.1000 from each
stall holder
• This right to collect the charge from the
stall-holder is profits a prendre
• Therefore a right in immovable property
 Things Attached to Earth
Under S.3 of the TPA , this category is
divided into 3 categories:
1. Things Rooted in the Earth except
standing timber, growing crops and grass
2.Things that are embedded in the earth e.g
walls and buildings
3. Things attached to what is so imbedded
for the beneficial enjoyment of that to
which it is attached.
 Shantabai v. State of Bombay
AIR 1958 SC 532: (1959) SCR 265

• The petitioner’s husband on April 26,

1948, executed an unregistered
document, that called itself a lease, in
favour of his wife, the petitioner.

• The term of the deed is from April 26, 1948

to December 26, 1960, and the
consideration is Rs. 26,000.
• With the passing of the Madhya Pradesh
Abolition of Proprietary Rights (Estates,
Mahals, Alienated Lands) Act, 1950, all
proprietary rights in land vested in the
State under S. 3 of that Act and the
petitioner could no longer cut any wood.
• She applied to the Deputy Commissioner
and obtained from him an order under s.
6(2) of the Act permitting her to enter the
forest and started cutting the trees.
• The Divisional Forest Officer took action
against her and passed an order directing
that her name might be cancelled and the
cut materials forfeited.
• She moved the State Government against
this order but to no effect.

• Thereafter she applied to this Court under

Art. 32 of the Constitution and contended
that the order of Forest Officer infringed
her fundamental rights under Arts. 19(1)(f)
and 19(1)(g).
 Issue before the Court
• What was the nature of right created in
favour of wife- Right in movable or
immovable property?
• The duration of the grant is twelve years.
• It is evident that trees that will be fit for
cutting twelve years hence will not be fit
for felling now.
• Therefore, it is not a mere sale of the trees
as wood. It is more.
• It is not just a right to cut a tree but also
to derive a profit from the soil itself, in
the shape of the nourishment in the soil
that goes into the tree and makes it grow till
it is of a size and age fit for felling as
timber;
• And, if already of that size, in order to
enable it to continue to live till the petitioner
chooses to fell it.
• Right which was provided by the
petitioner’s husband was basically a right
in immovable property.

• Executed, Attested, Registered

• Unregistered Document – vesting legal

right to the wife
State of Orissa vs. Titagarh Paper
Mills Co. Ltd. AIR 1985 SC 1293
• The Government of Orissa in the Finance Department issued two notifications
under the Orissa Sales Tax Act, 1947.
• By the notifications, Govt. made bamboo agreed to be severed and standing trees
agreed to be severed liable to tax at the rate of ten percent on the turnover of
purchase
• Writ petitions under Article 226 of the Constitution of India were filed in the High
Court of Orissa challenging the validity of the aforesaid two notifications
• The High Court allowed all the said writ petitions and quashed the impugned
provisions.
• The High Court held that the impugned provisions amounted to a tax on an
agreement of sale and not on a sale or purchase of goods. It further held that in the
case of Bamboo Contracts, the impugned provisions also amount to levying a tax
on a profit a prendre.
 Issue before the Court
• Whether the bamboo contract was a
contract of sale of goods or a grant of
Profit a Prendre
• Whether it is possible to bifurcate the
Bamboo contract into two, one for the sale
of bamboo existing at the date of the
contract and the other for the sale of future
goods
 Whether Bamboo Contract can be
described as a grant of Profit a prendre
• Bamboo Contract is an agreement for a long period extending to fourteen years,
thirteen years and eleven years with respect to different contract areas with an
option to the respondent Company to renew the contract for a further term of
twelve years and it embraces not only bamboos which are in existence at the date
of the contract but also bamboos which are to grow and come into existence
thereafter.

• Under the Bamboo Contract, the respondent Company has the right to use all lands,
roads and streams within as also outside the contract areas for the purpose of free
ingress to and egress from the contract areas. It is also given the right to make dams
across streams, cut canals, make water courses, irrigation works, roads, bridges,
buildings, tramways and other work useful or necessary for the purpose of its
business of felling, cutting and removing bamboos for the purpose of converting
the same into paper pulp or for purposes connected with the manufacture of paper.
• The Bamboo Contract is not and cannot be a contract of sale of goods. It confers
upon the respondent Company a benefit to arise out of land, namely, the right to cut
and remove bamboos which would grow from the soil coupled with several
ancillary rights and is thus a grant of a profit a prendre.
• The terms and conditions of the Bamboo Contract leave no doubt that it confers
upon the respondent company a benefit to arise out of land, it would thus be an
interest in immovable property.
• As the grant is of the value exceeding Rs 100, the Bamboo Contract is
compulsorily registrable. It is, in fact, not registered. This is, however, immaterial
because it is a grant by the Government of an interest in land and under Section 90
of the Registration Act it is exempt from registration.
• The High Court was, therefore, right in holding that the Bamboo Contract was a
grant of a profit a prendre

• Being a profit a prendre or a benefit to arise out of land any attempt on the part of
the State Government to tax the amounts payable under the Bamboo Contract
would not only be ultra vires the Orissa Act but also unconstitutional as being
beyond the State’s taxing power under Entry 54 in List II in the Seventh Schedule
to the Constitution of India.
State of Orissa vs. Titagarh Paper
Mills Co. Ltd. AIR 1985 SC 1293
• One of the Contracts related to an
agreement of the petitioners company with
the state of Orissa for the purpose of
felling, cutting and removing bamboos
from forest areas for converting the
bamboo into paper pulp
• The agreement extended to 14, 13 and 11
years with respect to different contract
areas with an option to the company to
renew the contract for a further term of 12
years
• It embraced not only bamboos that were in
existence at the date of the contract but
also bamboos that were to grow and even
come in existence thereafter
• The court held that the bamboos contract
related to immovable property as a benefit
to arise out of the land and did not relate
to a contract of movable property.
Duncan Industries Ltd. V. State
of Uttar Pradesh 2000 SCC 633
• The entire fertilizer business was sought to be
transferred by the transferor to the transferee
through a conveyance deed

• The deed mentioned that the possession of the

related plant and machinery of this business
was completed through delivery of possession
of the property as they were movables and they
were excluded from written conveyance deed
• While calculating the stamp duty payable
to the authorities on this transfer, the
transferor did not included the value of
said plant and machinery.
• Th stamp duty was calculated on the value
of only the land and not the value of the
related plant and machinery
• The collector on a complaint by the sub-
registrar about the improper valuation of
the property for calculation of the levy of
stamp duty, conducted on enquiry and
levied around Rs.37 crore as duty and
another Rs. 30 lacs as penalty.
• The collector decided that the plant and
machinery were immovable property, and
their transfer could not be completed
through mere delivery of possession of the
property and had to be effected through
the conveyance deed in a proper manner.
 Issue before the court
• Character of the plant and machinery
related to fertilizer business
 High Court
• HC concluded that the machineries which
formed the fertilizer plant were permanently
embedded in the earth with the intention of
running the fertilizer factory and while
embedding these machineries the intention of
the party was not to remove the same for the
purpose of any sale either as a part of a
machinery or scrap, it was necessary that these
machinery be permanently fixed to the ground
• Therefore these machineries were
immovable properties which were
permanently attached to the land in
question
 SC
• SC upheld the view of the HC and
observed that the whether the machinery
which is embedded in the earth is movable
or an immovable property depends upon
the facts and circumstances of the case.
 Doctrine of fixtures
• To understand under what circumstances
a movable(Chattel) becomes a
fixture(immovable), this doctrine can be
used
 2 maxims
• quicquid(whatever) plantatur(Planted)
solo(Soil), solo credit

• quicquid inaedificatur(embedded) solo,

solo credit
 2 exceptions
• The maxims get applied only when there is
no contract to the contrary

• Trade Fixtures fixed by the tenant

 3 Test to ascertain whether a
chattel(movable) after attachement
became Fixture(immovable)
• Mode of attachment
• Object or intention of attachment
• By Whom attached
 Mode of attachment and
consequences of its detachment
• If a thing or machinery because of its
sheer weight goes down into the earth; the
presumption will be it is still a moveable
property.
• If in attaching it, some external aid(nuts
and bolts) is required, it has become a part
of land
 Object or intention
• Long time period
• Short duration
 By whom attached
• Owner
• Tenant, licensee or a mortgagee
 Bamdev Panigrahi v. Manorama
Raj AIR 1974 AP 226
• A person was running a business in the
name of 'Kumar Touring Talkies'
• He obtained land under Mortgage from
Raja of Mandasa in 1957 and built a
temporary cinema structure
• For running the cinema shows that person
applied and got license that was purely
temporary for the period of one year
• For exhibiting cinema shows he purchased
a cinema projector and a diesel engine

• This equipment was embedded and

installed in the earth by construction of
foundation.
• He entrusted his business to his friend B
• B colluded with the Rajah and obtained
the mortgage in his name
• A issued the notice in May 1961, calling
upon B to render the correct account
• When A asked about accounts, B denied
the liability by a written reply in June, 1961
• After the death of A, his widow filed a suit
in July 1966, praying for a declaration that
she was the owner of Kumar Touring
Talkies and a direction that the equipment
including the cinema projector and the
diesel engine be returned to her
 Issue before the court
• Even before going into the merits of the
case , court has to decide the character of
the property(Movable or Immovable)
 Observation of the Court
• The name "Kumar Touring Talkies" itself
shows that the business was temporary

• Even if 2 items were attached and

embedded in the earth the intention can
only be to have them affixed to the earth
temporarily
• The license to exhibit the shows was only
for a period of one year

• The person who fixed the items was not

the owner of the land

• The Court held these were movable

properties and suit being time barred was
dismissed
 Other Case Laws
• Holland v. Hodgson 1872
• Leigh v. Taylor 1902
• State of Orisa v. Titagarh Paper Mills Co.
Ltd AIR 1985 SC 1293
• Duncan Industries Ltd. v. State of Uttar
Pradesh (2000) SCC 633