Report No. 70
Sources and Scheme of Provisions
Before proceeding to consider the Act section by section, it will be useful to deal briefly with the sources of its provisions and with its general scheme.
3.2. Previous statute law.-
There was not much of statute law in India on the subject of transfer of property, and, in drafting the present Act, the framers do not seem to have drawn much on the pre-existing Central Acts. The Act cannot, therefore, be described as a mere re-enactment of pre-existing statutory provisions. It drew upon English rules. While English terminology and conveyancing practice have left their mark on many of the general provisions-particularly, Chapter 2-and on the specific provisions, relating, for example, to mortgages, it is not to be overlooked that the Act has, in the content of many of its provisions, deliberately departed from the English law.
For example, in England, at the time when the Act was drafted, loss arising from destruction by fire of leased immovable property was to be borne by the lessee, while in India, under section 108, it is not so. Similarly, in England, at the time when the Act was enacted, an alien could not hold immovable property except in certain cases. This was also the position are ancient Rome1.
But it was not the law in India even before the Act2, and is not the law under section 7. That section, so far as is material, provides that every person competent to contract and entitled to transferable property is competent to transfer such property. It may be stated that an adult alient is competent to contract.
1. Hunter Introduction to Roman Law, Chapter on Law of Property.
2. Mayor of Lyons v. East India Company, 1 Moores Indian Appeals 175.
3.2A. English law followed only to a limited extent.-
It is apparent from the above that it is only to a limited extent that the Act is based upon the English law of real property1. It would, therefore, be correct to say that the general scheme adopted in the Act in regard to the pre-existing law is to lay down settled rules where there was a conflict, to add certain rules where there was obscurity, and to abrogate rules which were found to be unjust or inappropriate, and to regulate the transfer of property in its general principles and, to a limited extent, in its modes of transfer.
1. Tajjo Bibi v. Bhagwan Prasad, ILR 16 All 295.
It would be of interest to note that equity supplied the source of material for some of the rules, and was also the guiding spirit in many others. This has both a positive and a negative aspect. It would not be improper to mention that when certain provisions of the Act based on corresponding rules of equity recognise the overriding rights of a bone fide purchaser for value without notice, the ultimate rationale is that an equitable right cannot be a jus in rem in an undiluted sense1. It is the very key-note of equitable jurisdiction that equity acts in personam. Hence, equity will not act against a person who is innocent and has given value.
1. Maitland (quoted by H.G. Hanbury) Field of Modern Equity, (April 1929) LQR.
3.4. It was pointed out by Maitland1 that equity has added to our legal system, together with a number of detached doctrines, "one novel and fertile institution, namely, the trust, and three novel and fertile institutions, namely, specific performance, injunction and judicial administration of estates". Indian statute law has made full use of all these creations of equity. The topics just now mentioned did not find a place in the Act (as originally enacted), but it may be noted that par- performance is a part of its provisions after the amendment of 1929.
1. Maitland (quoted by H.G. Hanbury) field of Modren Equity, (April 1929) LQR.
3.5. Sale of wife.-
That there were certain antiquated practices which were, fortunately, not given legislative sanction in express terms is worth illustrating. In England, as late as the 18th century, the wife was treated as a chattel. The following extract from a short article1 by Mr. Courtney Kenny published in the Law Quarterly Review makes interesting reading. After recording some early instances including an aristocratic instance as old as the reign of Edward I, of the transfer of a wife, the writer tells us-
"The great majority of those who took part in wife-selling seem to have had no doubt that what they did was lawful, and even conferred legal rights and exemptions. They were far from realising that their transaction was an utter nullity; still less that it was an actual crime and made them indictable for a conspiracy to bring about an adultery.
Lord Mansfield could recall (3 Burross 1438) 'a cause in the Court of Chancery wherein it appeared that a man had formerly (formally) 'assigned his wife over to another man. And Lord Hardwicke directed a prosecution for that transaction, as being notoriously and grossly against public decency and good manners.
From the beginning of the last quarter of the eighteenth century until nearly the end of the nineteenth one, journalists frequently recorded instances of wife-selling. The last that I have noticed was in 1887 at Sheffield. That town and also Manchester and the metropolitan market of Smithfield and a market of the same name at Birmingham-appear to have been conspicuous for the practice. Had it not penetrated into Wessex too, Hardy would scarcely have ventured to make it the starting point of his 'Mayor of Casterbridge'.
In no instance of which I have read does the wife appear to have exhibited any reluctance to be alienated. Nor is this surprising; for she might well think that by any average Englishman she would likely to be better treated than by a husband who had so conspicuously shown his disregard for her.
The prices paid differed very markedly from a pint of beer to a handful of guineas. For there would be corresponding differences in the attractiveness of the ladies themselves; and also in the zeal of their purchasers, for the buyer might be merely a casual stranger or, on the other hand, an attached paramour.
Customary solemnity required that the husband should lead the wife into the market by a halter-usually of rope but sometimes of ribbon-and that the purchaser should take his halter and lead her away by it.-Cf. The Times of March 30, 1796, and July 18, 1797.
But the strongest proof of the high current estimate of the efficacy of these transactions is the trouble sometimes taken to create formal evidence of them. A striking instance of this is preserved in the British Museum (Additional Mas. 32,084). It is a bill of sale of a wife, couched in such full technical form as to suggest that it may have followed some accustomed precedent."
1. Kenny Wife Selling in England, (October 1929), LQR 57 MLJ 182, 183.
3.6. The Act, though the first of its kind introduced in India, does not entirely create new rights, or impose new obligations. It does not professedly do more than "define and amend" the law relating to the transfer of property by act of the parties. It is not, therefore, exhaustive. However, it is self-contained,1-3 in so far as it goes. The Act relates to the transfer of property inter vivos, as the Indian Succession Act relates to the devolution of property after death. In the words of the framers, "read with the Contract Act, this Bill covers almost the whole of the ground which could be profitably occupied by law relating to the transfer inter vivos of interests in property, and for the convenience of the practitioner it could hardly be enacted in a more accessible form".4
1. Chotesha v. Mt. Maklum Bi, AIR 1928 Nag 223.
2. Ghasi Rain v. Kundan Bai, AIR 1940 Nag 163.
3. Corporation of Calcutta v. Arun Chandra, AIR 1934 Cal 862.
4. Report '1879'.
This, then, is a general description of the sources of the provisions of the Act. The scheme of the Act may be briefly described at this stage. After certain preliminary matters dealt with in the first few sections, the Act proceeds to indicate a few general principles relating to the transfer of property by act of parties.
These are first dealt with in relation to transfers of all property, whether movable or immovable, and the sections concerned contain important provisions, enacted as matters of legal policy, in regard to what property may be transferred, who are the persons competent to transfer, the mode of transfer, the operation of a transfer and similar matters (sections 5 to 9). The actual content of the transfer is sought to be governed by detailed provision in sections 10 to 34; these principally deal with the conditions on which interests of various classes may be created.
It is in this context that the difficult but unavoidable subject of contingent and vested interests comes up for consideration. While simple and absolute transfers do not create many legal problems, conditional transfer raises the question how far the condition is valid, what happens if the condition is fulfilled and what happens if the condition is not fulfilled. A discussion of the nature and effect of the conditions is a necessary concomitant of the two kinds of interests-vested and contingent-contemplated by the Act, to which reference has been already made above.
Since the draftsmen of conveyances are not always precise or exhaustive in their description or anticipation of the possible events, it is desirable that the legislature should give a clear indication as to what happens when a transfer is conditional on the performance of an act but the time for performance is not specified, or the time is specified but the performance is prevented by fraud. All these matters take up sections 10 to 34. The influence of English legal concepts is clearly seen in the structure and terminology of these sections. Many of the illustrations are drawn from reported English cases. Some of them echo arguments addressed at the bar in Chancery.
3.8. These sections have their counterparts in the Succession Act. Occasionally, implementation of the terms of a transfer creates difficulties where a person professes to transfer property which he has no right to transfer and, at the same time, confers a benefit on the owner of the property. This situation is dealt with in the interesting doctrine of "election" (section 35), which concerns the obligation imposed upon a part- originally by the courts of equity-to choose between two inconsistant or alternative rights1.
After this provision of considerable theoretical interest involving ethical issues, the Act goes on to enact two sections of a more prosaic character, dealing with apportionment of periodical payments and apportionment of the benefit of an obligation on severance-sections 36 and 37.
1. Bapathamma v. Shankaranarayan, AIR 1965 SC 214.
3.9. These general principles are intended to apply to all kinds of transfers between living persons by act of parties. In regard to transfers of immovable property, certain principles required to be dealt with in detail. These provisions, contained in sections 38 to 53A, and confined to transfers of immovable property, do not, of course, indicate that if a similar problem arose in regard to a transfer of movable property, the legislative approach would have been necessarily different.
The need for making detailed provisions as to transfers of immovable property arose not because of any radically different approach as a matter of policy, but because certain kinds of problems either arise more frequently from transfers of immovable property or assume greater practical importance be cause of the value which immovable property generally possesses.
It may also be observed that while the general principles as to transfer of property apply whether the land is agricultural or not, and while the Act (in sections 106 and 107) expressly or impliedly recognises the special position of agricultural tenancies, yet sections 38 to 53A were enacted as part of a scheme that was intended to apply, in general, to agricultural land as well as to other immovable property.
Having regard to the tremendous importance of agricultural land in the economy of the country, detailed and elaborate provisions to deal with situations frequently recurring or possessing practical importance seem to have been considered necessary. Perhaps, the sections may not retain their present importance in the coming century.
3.10. After enunciating general principles governing transfer of property, the Act (in sections 54 to 57) deals more particularly with sales of immovable property; in sections 58 to 104 with mortgages of immovable property and charge; and in sections 105 to 117 with leases of immovable property.
Sections 118 to 121, not confined to immovable property, deal with exchange. The logic of dealing first with sales needs to comment. Sale represents a transfer of all the rights absolutely. A mortgage, even where expressed in the form of a transfer of ownership, operates only as a security. A lease does not transfer all the interest of the transferor. Next are dealt with transfers without consideration made voluntarily, that is to say, gifts-in sections 122 to 129. A peculiar species of non-tangible property, which is described in the Act by the name of actionable claims, comes up for consideration in sections 130 to 137.