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Report No. 70

Chapter 2

History

2.1. Policy of codification.-

The Transfer of Property Act was prepared in pursuance of the policy of the Government to prepare a self-contained Civil Code for India. The Commission appointed for the purpose prepared the draft of the Succession Act, which according to their recommendation was to be enacted as the first chapter of the Civil Code. When the draft was submitted for the approval of the Secretary of State, it was returned with instructions that that Act should be enacted without reference to the projected Civil Code. It was so enacted and became Act 5 of 1865.

The draft of the Transfer of Property Act which the Third Law Commission prepared was submitted with the following note: "It is probable that several of these rules will eventually find a different place whenever a final distribution and rearrangement of the whole law shall have been effected; but some blending of subjects is unavoidable in a work which the Government has, for sufficient reasons, instructed us to submit to it in portions, as each portion is completed.1"

The Government had agreed to scientifically arrange at a later stage the various chapters of the Civil Code thus produced. But as this was never done, the Select Committee had to make the present Act, as far as possible, self-contained. Hence the reference in section 4 to the Contract and the Registration Acts. Referring to that section, the Law Commissioners wrote: "We would declare that all chapters and sections of the Bill which relate to contracts should be taken as part of the Contract Act, 1872."

1. 3rd Law Commission, (1879), 6th Report.

2.2. Previous law.-

Prior to the passing of the Act, the state of law relating to transfers was in a chaotic state.1 One of the earliest Madras cases illustrates this chaos.2 The law on the subject was, for the most part, fragmentary. The enactments mentioned in the Schedule to the Act, now superseded and repealed,3 covered only a part of the field.

1. Gour Comment on section 1.

2. Thumuswamy v. Hossain Rowthen, ILR 1 Mad 1 (PC); See para. 2.3, infra.

3. Section 2.

2.3. Situation in 1850.-

The background in which the Act was enacted could be best illustrated by taking up first the question of applicability of English law. The situation which presented itself during the fifties of the nineteenth century as regards the law applicable to those parts of the country which were under British rule was not a very happy one. On the one hand, it was not clear how far the English law applied, even in the Presidency Towns.

In the celebrated case of Mayor of Lyons v. East India Company, (1837) 1 Moore Indian Appeals 135, Lord Brougham expressed the opinion that the Indian inhabitants were governed by their own laws and that English law applied only to British subjects and other foreigners who sought the protection of the factories, but even in their case good many parts of English law which from the nature were unsuited to the conditions of the colonies could not be taken to have been so introduced. It was on this reasoning that he held that the Mortmain Act and the statutes which incapacitated aliens from holding land, did not apply to Calcutta.

2.4. So far as the mofussil courts were concerned, Bengal Regulation III of 179.- subsequently re-enacted in the Bengal Civil Courts Act, 1887, Bombay Regulation IV of 1827, section 26, and similar provisions in Civil courts Acts directed, in substance, that where no specific rule existed, the court shall decide according to justice, equity and good conscience. Although this direction was generally construed as authorising the courts to apply rules of English law, that position was subject to the important qualification that the rules of English law must be found appropriate to Indian circumstances.1

This qualification became of importance in the field of law of property. How far the English law would apply became a subject of debate in almost every instance. In a case of 1874, for example,2 the question whether the rule against perpetuities applied to charitable trusts was considered at length by the Privy Council. The appeal was from the Settlement of Penang, but the observations made by Sir Montague Smith apply also to the territories in India then under the British rule. The observations were as follows:-

"Whilst English Statutes relating to superstitious uses and to mortmain ought not to be imported into the law of colony, the rule against perpetuities was to be considered to be part of it. This rule which certainly has been recognised as existing in the law of England independently of any Statute, is founded upon considerations of public policy, which seem to be applicable to the conditions of such a place as Penang as to England, viz. to prevent the mischief of making property inalienable unless for objects which are in some way useful or beneficial to the community.

It would obviously be injurious to the interests of the island if convenient for the purposes of trade or for the enlargement of town or a port could be dedicated to a purpose which would for ever prevent such a beneficial use of it. The law of England has, however, made an exception also on grounds of public policy in favour of gifts for purposes useful and beneficial to the public and which in a wide sense of the term are called charitable uses and this exception may properly be assumed to have passed with the rule into the law of the colony."

1. Warden Seth Sam v. Luckpathy Royjee Lallah, (1862) 9 Moors Indian Appeals 303.

2. Prap Chash Neo v. Ong Cheng Neo, 1874 Law Reports 6 PC 381 (394).

2.5. In a case decided in 187.- this time on appeal from Calcutta1-the Privy Council made these general observation which are relevant to the subject-"If the principle invoked depends on any technical rule of English law, it would, of course, be inapplicable to a case determinable like this on broad principles of equity and good conscience.

It is only applicable because it is agreeable to general equity and good conscience. And again, if it possesses that character, the limits of its applicability are not to be taken as rigidly defined by the course of English decisions, although these decisions are undoubtedly valuable in so far as they recognize the general equity of the principle and show how it has been applied by the courts of this country". Thus, in each case it became obligatory to consider how far the English rule was appropriate for the physical, social and historical conditions in India.

1. Raja Kishendatta Ram v. Raja Mumtaz Ali Khan, 1879 ILR 5 Cal 198 (210).

2.6. Necessity for codified law.-

It was in this background that it was considered necessary to have a codified law on the subject. The Act was first drafted as far back as 1868-1870. Macaulay had, in 1833, written "that no country ever stood so much in need of a Code of law as India, and I believe also that never was a country in which the want might be so easily supplied." The British Parliament accepted this view and at one time intended to draft an Indian Code, for which several efforts were made, but ultimately given up. The Transfer of Property Act itself passed through numerous hands, and was revised by several Commissions, with the result that its final draft remained in suspense for twelve years from 1870.

2.7. The Act was passed in 1882. In the same period were enacted the Negotiable Instruments Act (in 1881), and the Acts on Trusts and Basements (in 1882). History of the drafting of the Act is represented by the following stages:

(a) The Third Law Commission.-This Commission drafted the First Bill on the subject.

(b) Despatch of 1877-A body of substantive civil law had long been in course of formation for India. In 1877, whitely Stokes, who had for long been the Legislative Secretary, became the Law Member in succession to Lord Hobhouse. The Government's despatch of 1877 contained Whitely Stockes's programme of work and plan of operations.1 It laid stress on reduction to a clear, compact and scientific form, of the uncodified brandies of the substantive law.

This, it was said, was preferable to ascertaining the law "only from English text-books written solely with reference to the system of English law, and from a crowd of decisions, often obscure and sometimes contradictory, to be found in the English and Indian law reports." The Government, therefore, proposed the codification, besides others, of the following branches of substantive law-Trusts, Easements, Alluvion and Diluvion, Master and Servant, Negotiable Instruments, and Transfer of Immovable Property, in the order mentioned. This despatch was the genesis of further work on the subject.

(c) Work subsequent to the despatch.-The Secretary of State accepted these proposals of the Government of India. Dr. Whitley Stokes was appointed to remodel the Bills relating to the Transfer of Property and Negotiable Instruments and to prepare Bills on other subjects. The work took about two years.1

(d) Fourth Law Commission.-On the 11th February, 1879, through a notification issued by the Governor-General-in-Council a Commission was appointed to enquire into and consider the provisions of the draft Bills mentioned above and to report thereon, and to make such suggestions as to the codification of the substantive law of British India as might seem desirable. The members of the Commission which came to be known as the Fourth law Commission-were:

Whitley Stokes, Sir Charles Turner, Chief Justice of the Madras High Court, and Raymond West, a judge of the Bombay High Court. For our purposes it is enough to state that the Fourth Law Commission recommended that the law relating to the subject dealt with by the Transfer of Property Bill should be codified, and the Bill already drawn for the purpose by the Commission should be passed into law.

1. Stokes The anglo-Indian Codes, vol. I, para. xix.

2.8. Objective of Civil Code.-

The intention was that when the body of substantive civil law enacted for India is re-arranged in a more compact and convenient form than that of a series of fragmentary portions from time to time passed by the Legislature, the chapters on Sale, Mortgage, Lease and Exchange (contained in the present Act), will probably be placed in close connection with the rules contained in the Contract Act. But, till then, they may fitly be left in a law containing what the contract Act does not contain, namely, general rules regulating the transmission of property between living persons.

2.9. Amendments.-

It may be convenient to mention briefly the important amendments that have taken place since the Act was enacted. The first important amending Act was Act 6 of 1904, which amended sections 1, 59, 69, 107 and 117. The Code of Civil Procedure, 1908 (5 of 1908) repealed sections 85 to 90, 92, to 94, 96 and 97 and amended section 100. The amendments were mainly consequential on the inclusion, in the Code, of certain provisions as to mortgages. Act 11 of 1915 amended sections 59 and 69. In 1920, 1925, 1926 and 1927, the Act was amended in certain points of detail.

The most important amendment was, however, made by Act 20 of 1929, which was passed to implement the recommendations made by a special Committee. The special Committee consisted of distinguished lawyers and forwarded its report in 1927.

The Act of 1929 made extensive amendments. It amended sections 1, 2, 3, 4, 5, 6, 11, 15, 39, 40, 43, 52, 55, 59, 60, 62, 63, 64, 67, 69, 71, 72, 76, 82, 83, 84, 98, 100, 102, 103, 106, 107, 108, 111, 128, 129 and 130. It revised sections 16, 17, 18, 53, 56, 61, 68, 73, 81, 91, 95, 96, 101 and 119.

It also inserted new sections-53A, 59A, 60A, 60B, 63A, 65A, 67A, 69A, 92, 93, 94 and 114A. It also omitted sections 74, 75 and 80.

2.10. Principally, the Amendment Act was concerned with the doctrine, of notice, the doctrine of part-performance, sale of immovable property, the law relating to mortgages and actionable claims. If it is not pedantic to say so, one would like to state that many of the amendments effected in 1929 brought the statute law nearer to some of the important doctrines of equity. The fusion of law and equity that took place in England in the latter half of the nineteenth century has a striking parallel in the amendment Act of 1929.

The device adopted was different; the very doctrines were being given legislative recognition. But the result was to bring the statutory law in harmony with the dictates of equity. We shall later deal in detail with the amendments effected by this Act. Act 4 of 1938 and Act 6 of 1944 effected certain amendments concerning policies of insurance-an instance of the impact of increasing commercialisation. The other amendments as well as the adaptations made by various Adaptation Orders need not be mentioned in the present rapid survey.



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