Report No. 70

50.31. Symbolical delivery.-

We could introduce, on the analogy of Order 21, rule 36, Code of Civil Procedure (symbolical possession), a provision to the effect that any formality which gives notice to all concerned that the interest has been transferred will suffice where the transferor is not in possession.

50.32. Recommendation as to delivery.-

In our opinion the best course would be to define 'delivery' as above,1 i.e. to cover both the modes of delivery-real and symbolical. We recommend that such an amendment be made.2

1. Para. 50.31, supra.

2. For suggested redraft, see para. 50.37, infra.

50.33. Sale of possession-Mortgagor's interest to mortgagee in possession.-

As to the mortgagor's interest, it appears to us that, theoretically speaking, as already stated, there is much to be said in favour of the view that after the possession has been transferred to the mortgagee, the interest has already passed to the mortgagee, including the right to remain in possession and to appropriate the profits. Although the interest of the mortgagor survives and it would not be in-accurate to say that he remains to be the "owner"-a proposition which cannot be disputed-that interest is not tangible property.

He remains the owner without possession. As Sulaiman, C.J., in his dissenting judgment, in the Allahabad case,1 observed, tangible property, according to its literal meaning, would be one which is capable of being touched and therefore capable of being possessed.

"It must, accordingly, be property which is capable of delivery of possession from one person to another". A mortgaged property itself is tangible, but the interest of the mortgagor is not because that interest is not identical with the property itself. The mortgagor's interest is not capable of being touched; and, therefore, it is not capable of being delivered by actual delivery.

1. Sohan Lal v. Mohan Lal, AIR 1928 All 726 (733).

50.34. Possible solution.-

How, then, is a transfer to be effected when the mortgagor sells the property to the mortgagee already in possession? If the mortgagor's right to redeem is not tangible property, 'delivery' is, in the scheme of section 54, as it now stands, out of question. A registered instrument is, at present, the only way of effecting the transfer, if the property is to be regarded as intangible. What happens in practice is that parties regard registration as an irksome and inconvenient formality in such cases. They try to effect the transfer by delivery, where the amount is small. Then difficulty arises.

The remedy for this is not in an artificial construction of the expression "tangible property", but in an amendment in the law as incorporated in section 54 as to the mode of transfer. One possible way of dealing with this would be to provide for an additional mode of transfer, i.e., apart from registered instrument, we have to conceive of some other procedure where the sale is to a person in actual possession of the property.

50.35. Recommendation as to sale to a person in possession.-

Having regard to practical considerations, we recommended1 that in the case of sale to a person in possession, any act effective to make it known that the vendee has acquired the vendor's interest by purchase should be and permissible mode, in addition to registered instrument (which is already provided for) if the consideration does not exceed Rs. 100.

1. For suggested re-draft, see para. 50.37, infra.

50.36. Summary of recommendations.-

It will be convenient to summarise our recommendations for the amendment of section 54-

(i) It should be made clear1 that where immovable property is in the possession of a person (other than the transferor) who has an interest by way of lease, transfer of that property is a transfer of the reversion.

(ii) It should be made clear2 that the words "reversion or other intangible thing" occurring in the second paragraph are confined to immovable property.

(iii) In the case of a usufructuary mortgage, the mortgagor's interest is an intangible thing.3

(iv) It should be made clear that in the limited number of cases where property is in the possession of a person who has no interest therein, so that the property so far as the owner is concerned, still remains tangible immovable property, symbolical delivery is permissible.4

(v) Where a person in possession of immovable property purchases that property, any act effective to make it known that the purchaser has acquired the vendors interest should be a permissible mode of transfer (in addition to registered instrument which is already provided for)5 where the consideration does not exceed one hundred rupees.

1. Para. 50.10, supra.

2. Para. 50.12 supra.

3. Para. 50.23, supra.

4. Para. 50.32, supra.

5. Para. 50.35, supra.

50.37. Re-draft.-

The following is a suggested re-draft of section 54 to implement the amendments recommended above:-

"54.(1) 'Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.

(2) Such transfer-

(a) in the case of tangible immovable property of the value of one hundred rupees and upwards, can be made only by a registered instrument;

(b) in the case of tangible immovable property of the value of less than one hundred rupees, may be made either by a registered instrument or by delivery of the property.

(3) Such transfer in the case of a reversion in immovable property of any other intangible thing constituting immovable can be made only by a registered instrument:

Provided that where immovable property is transferred to a person in possession thereof, who has transfer of the property by its owner to that person may be effected-

(a) either by a registered instrument as provided in this sub section, or

(b) if the consideration for the transfer does not exceed one hundred rupees, by any act effective to make it known that the ownership has been so transferred.

(4) Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

(5) and (6)-(Fifth and sixth paragraph as at present).

Explanation 1.-Where immovable property is in the possession of a person other than the transferor, being a person who has an interest therein by way of lease, transfer of that property is a transfer of a reversion for the purposes of this section.

Explanation 2.-Where immovable property is in the possession of a mortgagee under an usufructuary mortgage as defined in section 58, the interest of the mortgagor is an intangible thing for the purposes of this section.

Explanation 3.-Where immovable property is in the possession of a person who has no interest therein-

(a) the transfer of the property by its owner is a transfer of tangible immovable property, for the purposes of this section.

(b) delivery thereof for the purposes of such transfer may be effected by any act intimating to the person in possession that its ownership has been transferred to the person specified in the intimation."