Report No. 70
1.11. Change in modes of transfer.-
Modes of transfer permitted by law also change from time to time. English legislation favouring case of disposition furnishes an example of the effect of changing conditions of time and place1. At the same time, changing social conditions may render necessary new restrictions on the freedom of disposition2, not previously known.
English law of the medieval period was dominated by the law of feudal tenures. With the growth of equitable interests in land, the property aspect and aspect of rendering aid to the government declined. The emergence of importance of the family and the "family settlement" gave rise to the elaborate apparatus of life interest, legal and equitable interests and rules of remoteness and limitations. New claims arising from the changing economic process, and new forms of incorporeal interests seeking recognition create problems, for solving which the law must step in at some stage or another.
1. Dicey Law and Public Opinion in the 19th Century, pp. 202, 203.
2. Simpson Stone Law and Society, Vol. 1, pp. 606-620.
1.12. Effect of practical development.-
That the emergence of new commercial practices in real life may necessitate certain minor re-adjustments is strikingly illustrated by what took place in England in relation to negotiable instruments. In the Eastern world, the same process is illustrated by an interesting institution of Japanese commercial law-Jato Tampo (security by assignments), which was developed by the courts without any clear statutory basis1.
This transaction permits a debtor to take possession of goods while vesting the title in the creditor, and has been described as the Japanese equivalent of "chattel mortgage", conditional sale and similar security devices. There is no general provision for public registration even though registration is separately provided for many particular types of security transactions. The device referred to above permits flexibility and, to a certain extent, secrecy. Of course, it seems to postulate that the debtor will not be able to deal with the assets to the prejudice of third parties.
1. Von Mehren Japanese Legal Order, (1963) 76 Harvard Law Review 1170, 1202, 1203.
1.13. Personal property as security.-
Since we propose to discuss, at some length, the question of transfer of future property under the appropriate sections, we may quote certain observations of a leading authority on the subject of personal property security. He has pointed out1 that we have passed from the whole-hearted acceptance of the self-evident proposition that a man cannot transfer property which he does not own, "to a somewhat grudging acceptance of the much less evident proposition that a business enterprise should be allowed to make an irrevocable commitment, to pass the benefit to its present creditors of all its future property."
He was writing of the impact of Article 9 of the Uniform Commercial code, but the observation is, in substance, true of the device known as the floating charge. It has been observed2-3 with reference to floating charges that although the floating charge appears in many ways to be a second-rate security, its wide use would indicate that creditors find it a useful device despite its risks.
1. Grant Gilmore The Purchase Money Priority, (1962) 76 Harvard Law Review 1333, 1334.
2. Coogan and Bark The Impact of Article 9 of the Uniform Commercial Code on the Corporate Indenture, (1959) 69 Yale LJ 203, 251.
3. See also Pennington The Genesis of the Floating Charge, (1956) 23 Modern Law Review 630.
1.14. Instance of ownership Flats.-
The emergence of what are popularly known as "ownership flats" in multi-storeyed apartments offers another interesting example of the adjustment of the law to new developments-this time in private housing. The traditional legal concepts which assume that land is in its ownership divided only on the surface, would not obviously be appropriate for resolving legal issues arising from such flats.
Such co-operative apartments involve many legal problems, foreign to the day-to-day practice of the law and necessitate changing attitudes towards ownership of property. The owner of the flat is not the owner of the land below in an undiluted form. His control over his own apartment is also restricted-in so far as he lacks the freedom of the ordinary home-owner in deciding what services could be had in the building, what expenses can be undertaken and so on.
The title to the entire land might vest in the co-operative society or company which has organised the flats, or as may be provided in the relative documents; the point to be made is that growing urbanisation renders necessary a modification of traditional legal concepts1. These flats also necessitate2 the imposition of restrictions on alienation, not met with in ordinary conveyances. This is not to say that restrictions are not otherwise known. The point is that social and economic forces may give a fresh direction to the law of property.
1. Leiyser The Ownership of Flats-a Comparative Study, (1958) 7 ICLQ 31, 37.
2. Manning The Development of Restraints on Alienation since Grey, (1935) 48 Harvard Law Review 373.
1.15. Law and social notions.-
Of course, these forces take time to put their imprint on the law. It is obvious that in a developed society, the details of law are brought out by the lawyers and while legal details come from the common consciousness of the people in their essence, the details themselves would be worked out by the law. The law might, in this process, become complex and artificial, since it becomes a special science in the hands of the jurist. Nevertheless, the rights which it recognises and the modes of transfer to which it lends it's sanction, would, speaking broadly and in the ultimate analysis, correspond with the generally accepted social notions. If they do not so correspond, it is the business of law reform to consider how far such harmony should be brought about.
1.16. Borrowing from other system.-
Since it is the common consciousness that supplies the ultimate nourishment to legal developments in this field, another interesting feature exhibits itself. When alien juristic notions are borrowed by one country from another country, they do not necessarily operate in their full force or in an unmodified form in the borrowing country. To a certain extent, an alien principle can be successfully integrated into a different system-this is what happened in India where the notion of trust, borrowed from English law, has been adopted.
But this very instance shows how, in the process of borrowing, a modification was considered necessary, and the fragmentation of ownership which was an essential aspect of the English doctrine of trust, was not adopted in India. The theory of dual ownership in its full technical minutiae would not have thrived in the Indian soil.
Those rules of Hindu law which are still in force-for example, that property can be dedicated to an idol without the formalities required for a transfer of property to a living person-also furnish an example of the survival of our own institutions along with legal provisions borrowed from elsewhere.
1.17. Roman law of slaves as modified in Egypt.-
Another illustration of this process is furnished by the Roman law as it travelled into Egypt. While Roman law as Administered in Italy-its home-did not allow slaves to hold property, Roman slaves living in Egypt were treated as capable of owning property1.
Again, the standard Roman contract of sale-emptio venditio-was consensual, and transfer of ownership under it was separate and required physical delivery-traditio. But, in Egypt, the Romans accepted a different mode which was both a formal written contract (drawn up by a public official) and a conveyance2.
1. Alan Watson Legal Transplants, (1973), p. 32.
2. Alan Watson Legal Transplants, (1973), p. 33.
1.18. Property and recognition in society-Hindu juristic thinking.-
That property and its recognition depend on social recognition was an aspect well-known to Hindu jurist. According to some Hindu jurists, the idea of property is exclusively indicated by the Sastras and ownership can be acquired only in the modes recognised1 by them.
This view is favoured by Dhareswara, Jimutayahana and their followers. On the other hand, Vijnaneswara and his followers maintain that the idea of property has its basis on popular recognition without any dependence on Sastras, the modes of acquisition of ownership being to collect and prescribe those means of acquisition recognised by popular usage that are regarded as commendable and as such worthy of being pursued. This latter view represents the doctrine that property has its basis in popular recognition2.
We are not concerned with the merits of the controversy. In its essence, this controversy resolves itself into this: there are certain modes of acquiring ownership recognised by the people on all-hands; they are also the modes laid down in the Sastras as leading to the acquisition of ownership; now, the question is, which is prior?3 So far as the merits are concerned, one would say that public opinion and law act and react. The Sastras do not merely summarise the modes of acquisition of ownership which they find already recognised in popular usage. Nor does the popular usage merely follow and give effect to the Sastric rules laying down the conditions for the acquisition of ownership4.
A lawyer would always feel inclined to give preference to the former view as more consonant with reason and common sense, but that is not the point sought to be made. The point is that the controversy amongst Hindu juristic presents the question in a form surprisingly modern.
1. P.N. Sen Hindu Jurisprudence, (1918), p. 42.
2. P.N. Sen Hindu Jurisprudence, (1918), p. 42.
3. P.N. Sen Hindu Jurisprudence, (1918), p. 42.
4. P.N. Sen Hindu Jurisprudence, (1918), p. 42.
1.19. Meaning of property under the Act.-
Reverting to the Act, it is to be noted that Transfer of Property, Act does not profess to give any comprehensive idea of the concept of "property". Although the Law Commissioners of 1879 were in favour of adding definitions of "ownership" and "property"1;, those definitions2 were never added. Section 5 of the. Act, which defines what is meant by "transfer", but does not define what is meant by "property". It is clear from the sections relating to the sale of property-section 54 in particular-that the word "property" in the Act is not confined to tangible property.
It would appear that the term "property" is, in the Act, used in its most generic sense3. It means not only the actual physical object, but also all interest comprised therein which may be the subject of ownership. When, for example, the Act speaks of property which "can be transferred", (section 6), it does not confine itself to tangible property. The exceptions enumerated in section 6 make this amply clear. On the other hand, when we speak of general property and special property, we refer not to the subject-matter of ownership but to the interest recognised by law therein.
According to Lord Langdale4, "property is the most comprehensive of all terms which can be used inasmuch as it is indicative and descriptive of every possible interest, which the party can have." The "common of turbary", or the right of cutting turf in another person's land and "common of pasture", or the right of depasturing cattle on the land of another, are appendant incorporeal hereditaments, which are regarded in England as falling into the category of real property5. They would be recognised in this country as rights.
1. Gour Transfer of Property Act, Topical Introduction to Chapter II.
2. Para. 1.20, infra.
3. Gour, (1948), p. 53, para. 68.
4. Jones v. Skinner, (1835) 5 II Ch 90.
5. Will Laws, R.P., 18th Edn., 395.
1.20. Definition in draft Bill.-
In the draft Transfer of Property Bill, the following definition was proposed in regard to "ownership" and "property".
"The ownership of a thing is the right of one or more persons to possess and use it to the exclusion of others. Such ownership is either absolute or qualified. The thing of which there may be ownership is called 'property'.1"
In an Allahabad case2, Mahmood J. stated that section 6, in making exceptions to transferability, must be understood to use the term "property" in its widest and most generic legal sense, for otherwise the exceptions would be wholly unnecessary.
The definition given in the then edition of Wharton's Law Lexicon-"The highest right a man can have to anything, being used for that right-as to lands or tenements, goods or chattels, which does not depend on another's courtesy", was quoted with approval by Mahrnood J. in the Allahabad case3.
1. Clause 3 of the Bill of 1879 (following New York Code, para. 159).
2. Mohiyuddin v. Kazim Hussain, ILR 13 All 432 (FB).
3. Mohiyuddin v. Kazim Hussain, ILR 13 All 432.