Transfer of property
Updated: Nov 16, 2019
A. Transfer of property and conveying
In India transfer of property are govern by the provisions of The Transfer of Property Act, 1882.
According to Section 5 of the Act “Transfer of Property” means an act by which a living person conveys property in present or in future, to one or more other living person, or to himself, and one or more other living persons, and “to transfer property” is to perform such act.
There are of transfer & conveying of property by way of contract, deeds or agreements.
Following are the ways of transfers:
‘‘Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale of immovable property is governed by The Transfer of Property Act.
Sale of movable property governed by Sale of Goods Act, 1930.
A mortgage is the transfer of an interest in specific Immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
Types of mortgage:
Simple mortgage-Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.
Mortgage by conditional sale-Where, the mortgagor ostensibly sells the mortgaged property- on default of payment of the mortgage-money on a certain date the sale shall become absolute, or on condition that on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller, the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale:
PROVIDED that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.
Usufructuary mortgage-Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest or in payment of the mortgage-money, or partly in lieu of interest or partly in payment of the mortgage-money, the transaction is called a usufructuary mortgage and the mortgagee a usufructuary mortgagee.
English mortgage-Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.
Mortgage by deposit of title-deeds-Where a person in any of the following towns, namely, the towns of Calcutta, Madras, and Bombay, and in any other town which the State Government concerned may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.
Anomalous mortgage-A mortgage which is not a simple mortgage, a mortgage by conditional sale, a usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.
The transfer of property deals only with mortgage of immovable property.
In respect of movable property it is called as pledge which is deals by the Indian contract Act. The bailment of goods as security for payment of a debt or performance of a promise is called “pledge”. The bailor is in this case called the “Pawnor”. The Bailee is called the “Pawnee”.
The term ‘hypothecation’ is used to define a charge formed on any movable asset by the owner, to raise funds from the bank, without transferring the ownership and possession to the lender. In this agreement, the borrower (owner) of goods borrows money against the security of assets, i.e. inventories.
The term ‘charge’ implies the creation of right by any person (borrower) including a separate legal entity over its assets and properties, in favour of a bank or any other financial institution (lender), to raise funds. It is an impediment in the title which does not permit the borrower to sell the asset or transfer the ownership to any other person or entity. The various types of charge created on the asset include mortgage,
, pledge, assignment and lien.
A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. Lessor, lessee, premium and rent defined.—The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.
when two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both the things being money only, such a transaction is called an exchange.
Transfer of certain existing movable and immovable property made voluntarily and without consideration, by one person called the donor, to another, called the donee, and accepted by or on behalf of the donee.