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Report No. 70

1.21. Bentham's view.-

The idea of property, Bentham observed, consists in an established expectation, in the persuasion of being able to draw such or such an advantage from the thing possessed, according to the nature of the case1. Now, this expectation, this persuasion, added Bentham, can only be the work of law. "I cannot count upon the enjoyment of that which I regard it is this law alone which permits me to forget my natural weakness. It is as mine, except through the promise of the law which guarantees it to me, only through the protection of law that I am able to enclose a field and to give myself up to its cultivation with the sure though distant hope of harvest."

1. Bentham Theory of Legislation (Hilderath Ed.), Chapter 8, p. 111.

1.22. Kinds of transfer regulated by the Act.-

The Act does not now define "property" nor does it lay down any criteria for the purpose. It pre-supposes the existence of property recognised by law. It is to be noted that the Act does not profess to deal exhaustively with all kinds of transfers. Certain provisions of the Act apply to all kinds of transfers between living persons (in particular, the earlier half of Chapter 2). Some of its provisions are meant only for transfers of immovable property (Chapter 2, latter half). In so far as the Act deals with the modes of transfer, it mainly deals with-

(a) sale (of immovable property);

(b) lease and mortgage (of immovable property);

(c) exchange (of both kinds of property);

(d) gift (of immovable as well as movable property); and

(e) transfer of actionable claims-in this case, however, every mode of transfer is regulated if it is by act of parties.

1.23. The Act does not specifically deal with settlements, partitions or trusts as modes of creation of interests in property. Settlements and partitions were proposed to be included in the draft Bill of 1877, clauses 49 to 53 and clause 93 to clause 98 respectively, but were later omitted as unsuitable. This does not, of course, mean that the Transfer of Property Act is entirely irrelevant to the creation of a trust, because, under the Trusts Act, the creation of a trust itself requires the transfer of property1, unless the author is his own trustee2.

Where there is no transfer and the author is not the trustee, a trust cannot arise. This is precisely the reason why special statutory provisions, such as section 6 of the Married Women's Property Act, 1882, were needed to deal with the situation where, though there was no transfer within the framework of the law and no trust in accordance with the statutory provisions, the legislature desired, as a matter of policy, to confer on certain persons-the wife and children of the insured-beneficial rights in regard to moneys payable under the life insurance policy3.

1. Section 6, Indian Trusts Act, 1882.

2. Bai Mahakore v. Bai Mangla, ILR 35 Born 403 (407).

3. Cleaver v. Middle Reserve Fund Life Association, (1892) 1 QB 147.

1.23A. Matters outside the Act.-

There is yet another aspect which shows that the Act is not exhaustive even in regard to transfers by act of parties. Since the Act in most of its provisions is confined to transfers between living persons, it does not affect dispositions of property which do not partake of that character. In particular, it does not govern transfers to an idol otherwise than by the medium of a trust in favour of a living person.

This is for the reason that section 5 of the Act, which defines-so far as is material-a transfer of property as an act by which a living person conveys property to another living person, is not attracted, since a gift to an idol is not a gift to a living person. "A juristic person is not necessarily a living person, and the fact that for some purposes the law by a fiction invests the non-animate bodies with the fights of persons would not make juristic persons living persons for all purposes"1.

Similarly, a declaration of trust in relation to immovable property for a public religious purpose, not being governed by the Trusts Act, is also not governed by the Transfer of Property Act in regard to its provisions as to the formalities5. Section 123 of the Act (Gifts) has also no application to dedication of land to the public, since the section applies only where the donee is an ascertainable person by whom or on whose behalf a gift can be accepted or refused2.

1. Narainaswamy v. Venkatalingam, (1927) 53 MLJ 203 (208) (FB).

2. Palliayya v. Ramavadhanulu, (1903) 13 mg 364.

1.24. Lines of revision.-

So much by way of introduction. We need not, at this stage, anticipate all that we are going to recommend in this Report. In the American case of Arndt v. Grigg, (1890) 134 US 316 (321), the following observations were made with regard to the law of property which lucidly bring out the importance of the law of property:-

"The well-being of every community requires that the title of real estate therein be secure, and that there be convenient and certain methods of determining any unsettled questions respecting it. The duty of accomplishing this is local in nature and is this duty is one of the State, the manner of discharging it must be determined by the State, and no proceeding which it provides can be declared invalid, unless in conflict with some special inhibitions of the Constitution or against natural justice."

This basic principle will apply whether the property is private or public. If the property belongs to the State or public authority, the title of the State or public authority has also to be made secure.

Our approach, therefore, will be to bear the importance of the law of property in mind in making our recommendations. At the present stage it will be sufficient to state that the present Act has worked with remarkable smoothness, and the careful and competent revision undertaken in 1929 solved many of the problems that had arisen up to that period. However, as our further discussion will show, some problems still remain. Some of the provisions of the Act have created difficult problems in interpretation-for example, section 5.

Some of them have been found to be obscure-e.g. section 6. Some have revealed lacuna or incompleteness-e.g. section 10. Some, while appearing to be clear in themselves are found, when read with others, to disclose internal inconsistency in the Act which requires attention-e.g. sections 5, 6 and 43, when read together. The sociological or commercial Importance of some of the provisions-e.g. section 120 to 123 and the last Chapter-is now far greater than in 1882. It will therefore, be our concern to remove defects in all these provisions.

The Transfer of Property Act, 1882 Back

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