A transfer of immovable property is an act where a living person conveys immovable property to another living

person in the present or future. There are various modes through which immovable property can be transferred.
The Transfer of Property Act, 1882 (“Act”) primarily regulates the transfer of immovable property in India. The
Act contains provisions regarding the transfer of immovable property and conditions attached to such transfer.
There are several other laws which provide for other types of transfers such as the Specific Relief Act, 1963,
The Limitations Act, 1963, Easements Act, 1882 and so on.

SALE:

Sale has been defined under section 54 of the Act as “a transfer of ownership in exchange of a price paid or
promised or part-paid and part-promised”. A sale transfer comprises the parties (buyer and seller), the subject
matter i.e. the property, and the price or consideration. The act mandates for the sale of a tangible immovable
property of value over Rupees One Hundred to be made through a registered instrument. by delivery of the
property. If the value of the tangible immovable property is less than Rupees One Hundred, transfer can be
made through a registered instrument or by delivery of the property. The Supreme Court in the case of Ramlal v
Phagua1 stated that for a completion of a sale of transfer of property valued over Rupees One Hundred, the
procedure of writing, attestation and registration should be fulfilled to complete the sale of transfer of property.
A transfer of the ownership of the property only takes place after the sale is registered unless there is a clause in
contrary in the contract of sale.
Indian Courts have interpreted ‘price’ as money consideration for the sale of property 2. It is not necessary for the
price to be paid during the transfer of ownership but can be paid in advance or later depending on the terms of
the contract of sale. If a non-payment of the price occurs in any case, the transferor cannot sue to set aside the
sale3 or sue to have the property returned to him4, but can only sue to receive the price of the property5.
There were various conflicting judicial opinions regarding whether a contract of sale should be written and
signed by both the parties or if merely an oral agreement would be valid. The Supreme Court addressed this
issue in the case of Alka Bose v Parmatma Devi6 where it stated that an oral contract of sale would also be valid.
The contract of sale does not create an interest or a charge in the property but only gives the party a right to
obtain the sale deed.

Mortgage:

Mortgage has been defined under section 58(a) of the Act as, “the transfer of an interest in specific immovable
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.”
Mortgage involves only a transfer of partial interest which acts as a security for repayment of loan, future debt
or performance of an engagement.
The act specifies six different forms of mortgages:

 Simple Mortgage: Simple Mortgages are provided under section 58(b) of the Act. A simple mortgage
is said to take place when the mortgagor agrees to pay the mortgage-money to the mortgagee without
actually delivering the possession of the property. The parties agree explicitly or impliedly that in case
of non-payment of the loan the mortgagee will have the right to sell the property. A simple mortgage
can only be made by a registered instrument irrespective of the value of the debt.

 Mortgage by conditional sale: According to section 58(c) of the Act, if the mortgagor sells the
property under a condition that,
i. On non-payment of mortgage-money by a certain date, the sale would become absolute or;
ii. On payment of the mortgage money, the sale will become void and the property will be
transferred back to the mortgagor.
The condition must be stated in the same contract which is signed between the mortgagor and
mortgagee.

1
Ramlal v. Phagua (2006)1 SCC 168
2
Commr of Income Tax v. Motor and General Stores, AIR 1967 SC 2000
3
Bai Devmani v. Ravi Shankar, AIR 1929 Bom 147
4
Lakshmi Narain Barnwal v. Jagdish Singh, AIR 1991 Pat 99.
5
Sahadeo Singh v. Kubernath, AIR 1950 All 632
6
Alka Bose vs. Parmatma Devi & Ors [CIVIL APPEAL NO(s). 6197 OF 2000]
  Usufructuary mortgage: Usufructuary Mortgages are defined under section 58(d) of the Act. In this
form of mortgage, the mortgagor delivers the possession of the property to the mortgagee in exchange
of mortgage-money and also allows the mortgagee to enjoy the benefits which arise out of that property
in lieu of the interest on loan advanced by him until the repayment of the loan.

 English Mortgage: English Mortgage is defined under section 58(e) of the Act. In this form of
mortgage, 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 retransfer it to
the mortgagor upon payment of the mortgage-money as agreed. The Privy Council in the case of
Ramkinkar v Satyacharan7 stated that only an interest is transferred to the mortgagee and that the
interest is subject to right to redemption. The word ‘absolutely’ is used only as a matter of form and not
substance.

 Mortgage by deposit of title-deeds: Mortgage by deposit of title-deeds has been provided under
section 58(f) of the Act. In this form of mortgage, execution of mortgage-deed by mortgagor is not
necessary. Mere deposit of title-deeds of an immovable property by mortgagor to mortgagee is
sufficient. Title deeds are those documents which are legal proof that a person owns a particular
property. Mortgage by deposit of title-deeds are primarily used for obtaining loans on an urgent basis
as the mortgage is based purely on the title deed of the property and does not involve any change in the
possession of the property.

 Anomalous Mortgage: Anomalous mortgage has been defined under section 58(g) of the Act. Any
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.

LEASE:

Lease has been defined under section 105 of the Act as,” 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.” It is a transfer of partial interest in an
immovable property and not a transfer of ownership. Lease contemplates separation of right of possession from
ownership. The interest which is transferred is the right of property for a fixed period on payment of some
consideration in cash or kind.
Section 107 of the Act provides the modes of making a lease. It states that a lease of immovable property from
year to year, or any term exceeding one year or reserving a yearly rent can only be made by a registered
instrument, whereas all other leases for immovable property can be made by either registered instrument or by
an oral agreement and delivery of possession. Section 17 of the Indian Registration Act, 1908 also has similar
provision for leases where the leases under Group A needs to be compulsorily registered whereas the leases
under Group B may be made either by registered instrument or by delivery of possession. However, a person
holding possession under an unregistered lease (which is invalid) is not a trespasser; he is treated as tenant-at-
will. The lessor is entitled to receive rents or compensation from such tenant. An unregistered lease, though
invalid, is sufficient basis for a suit for the specific performance under section 27-A of the Specific Relief Act,
1963 (“SR Act”). Further, a lessee holding possession under an unregistered lease may defend his possession,
under section 53-A (part-performance) of the SR Act.
Section 111 of the Act provides for different conditions under which a lease may be terminated. A mortgage
may be terminated:
 due to lapse of time;
 happening of specific event;
 termination of lessor’s interest;
 merger;
 express surrender;
 implied surrender;
 forfeiture; and
 by expiry of notice to quit the lease.

7
AIR (1939) P.C. 14.
Section 106 of the Act provides for the termination of periodical leases where it states that a notice is mandatory
to terminate a lease. In case of a year to year lease, the lease terminates after six months after the notice is issued
and in fifteen days in case of a month to month lease.

Leave and License:

License is defined under section 52 of Indian Easement Act, 1882 as, “where one person grants to another, or to
a definite number of other persons, a right to do or continue to do, in or upon immovable property of the grantor,
something which would, in the absence of such rights, be unlawful, and such right does not amount to an
easement or an interest in the property, the right is called a license.” A leave and license agreement is an
agreement wherein the licensor temporarily allows the licensee to use and occupy licensor's immovable property
full or a portion of it, for the purpose of carrying on business activity or residential use. For this, the licensor
shall be paid by the licensee a fixed amount also known as the rent. Leave and License agreements do not create
an interest in the property and are not transferrable. A licence is a personal right given to the licensee and,
therefore Section 56 of the Easements Act, 1882 provides that a licence cannot be transferred by the licensee or
exercised by his servants and agents. Bare licenses and license coupled with grant or interest in land are two
types of licenses which are generally granted.
The provisions relating to granting of licence in India are Sections 53 and 54 of the Indian Easements Act, 1882.
Section 53 of The Indian Easements act, 1882, that states that a licencee may be granted by anyone in the
circumstances and to the extent in and to which he may transfer his interests in the property affected by the
licence. In other words, one cannot grant a licence and one cannot receive a licence if the licensor does not
possess a sufficient lawful interest in the property. Section 54 of The Indian Easements act, 1882, that states that
a the grant of a licence may be express or implied from the conduct of the grantor, and an agreement which
purports to create an easement, but is ineffectual for that purpose, may operate to create a licence. The Bombay
High Court in the case of Vimalaben Gosalia v Veena Dushyant Malgonkar8 stated that a mere licence passes
no interest nor alters or transfers property in any way but merely makes an act lawful which without would have
been unlawful. It is necessary that the licence be in writing or registered.

Development Rights and Transferrable Development Rights:

Development rights are unused rights which allow developers to make changes to the property within the
limitations imposed by state or local laws. Development rights, being a benefit derived from the land, are held to
be immovable property. The same was emphasised by the Bombay High Court in Chheda Housing
Development Corporation v. Bibijan Shaikh Farid9.

Transferrable Development Rights

Though Transferrable Development Rights (TDR) have not been defined under the Indian Law, the term refers
to making available a certain amount of additional built up area in lieu of the area relinquished or surrendered by
the owner of the land, so that one may use extra built up area either himself or transfer it to another in need of
the extra built up area for an agreed sum of money.
For example, if the owner of a property is required to surrender a part of the property to the government or to an
agency owned by the government for infrastructural purpose, then the person who owns the land will be eligible
to obtain TDR. The person will be provided with a Development Right Certificate which he can use for himself,
or he may alternatively transfer the same. The fundamental principle of TDRs is that the owner continues to own
the land. The TDR can be enforced only if the owner is willing. If the owner is not willing, the only option open
to local government is to acquire the property under the respective state’s Land Acquisition Act. Predominantly,
there are four types of TDR that are generated – Road TDR, Reserved plots TDR, Slum TDR and Heritage
TDR. Based on the stage of development, a city is classified into various zones like fully developed, moderately
developed and sparsely developed.
In Mumbai, the zoning for TDR transfer is done as Island City, Suburban city and slums. The Transferable
Development Rights are usually transferred from the fully developed zones to other zones and not vice-versa.
The concept of TDR in Mumbai was introduced vide the Development Control Rules, 1991 of the Mumbai
Municipal Corporation to encourage the acquisition of reserved plots of land and eliminate the concept of
monetary compensation to the owners. Plots in Island city cannot receive a TDR. A Slum Rehabilitation
Authority has been instituted as the planning authority for all slums area, which awards developers of slum areas
with TDR.

8
(2018) 5 AIR Bom R 293
9
2007 (3) MhLJ 402
Possessory Rights:

The concept of possessory rights has not been defined under any statutes of the Indian Law. The Supreme Court
of India settled the concept of ‘possessory title’ in the case of Poona Ram v Moti Ram & Ors. 10, where the court
held that possessory title over a particular property is where the person is settled or has established possession
over the property.
Article 65 to Schedule I of the Limitation Act, 1963 (“Limitation Act”) prescribes a time limit of 12 years for
any aggrieved person to file a suit for the recovery of the possession of the immovable property. If the period of
12 years stays uninterrupted from any other suits then the person is said to have perfected his title over the said
immovable property by the way of adverse possession. The right to file a suit is extinguished after 12 years of
uninterrupted possession.
The Indian Law does not permit to take the possession of an immovable property without the consent of the
person who is in possession of the property. Section 6 of the SR Act gives a person the right to sue to recover
the possession of the immovable property form which he was dispossessed without his consent. However,
Section 6(4) of the SR Act protects the rightful owner of the property and states that nothing shall bar any
person from suing to establish his title to such property and to recover the possession of the property. Under
Section 5 of the SR Act, a suit for recovery of possession can be filed by a person who is entitled to the
possession of the specific immovable property in the manner provided by the Code of Civil Procedure, 1908.
The Supreme Court in the case of Nair Service Society Ltd. v K.C. Alexander & Others11, held that the
Limitation Act does not only disallow any suit to be filed after 12 years of uninterrupted dispossession but also
vests the possessor with absolute title of the immovable property. The possessor can file a suit for recovery of
possession under Article 65 of the Limitation Act in case of dispossession of the property. A two judge bench of
the Supreme Court in the case of Gurudwara Sahib v. Gram Panchayat village Sirthala and Another12, held that
even if the possessor has obtained the immovable property by adverse possession, he cannot claim that such
adverse possession has matured into ownership since the plea of adverse possession cannot be used as a ‘sword’.
This was overruled by a three judge bench of the Supreme Court in the case of Ravinder Kaur Grewal and
others v. Manjit Kaur and others. 13

Tillers Rights:

The Maharashtra Tenancy and Agricultural Lands Act, 1948 (“MTAL”) was introduced with a view to manage
the landowner’s estate and improve the economic and social conditions of farmers and to ensure the full and
efficient use of the agricultural lands. Section 32 of the Act provided that any tenants cultivating land after 1st
April, 1957 (also known as tillers day) would become the owners of the land on a payment of nominal purchase
price which could be paid in reasonable instalments. The MTAL placed various restrictions on the transfer of
such agricultural lands. Section 43 of the MTAL stated that no land purchased by a protected tenant under
section 32 shall be transferred by sale, gifts, exchanges, lease, mortgage or assignment without a prior approval
of the collector. The procedure of obtaining permissions by the collector before transfers had become a
cumbersome bureaucratic and time-consuming process and hence was amended by the Maharashtra government
in 2014 which provided that if 10 years had elapsed since the land was transferred to the tenant, then the
collectors permission was not required, provided that certain conditions are met. The conditions were:
 A fee equivalent to 40 times the land’s revenue is paid to the government;
 The purchaser is an agriculturist;
 The purchaser does not hold land in excess of the cap set out in the Maharashtra Agricultural Lands
(Ceiling on Holdings) Act, 1961; and
 The Bombay Prevention of Fragmentation and Consolidation of Holdings Act, 1947 is not violated.
Section 63 of the MTAL prohibits any transfer to a non-agriculturist without a prior permission of the collector
or the state government. This provision was later amended in 2016 which stated that the bar for transfer of
Agricultural land shall not apply to land situated within the limits of a Municipal Corporation or Municipal
Council or within jurisdiction of Special Planning Authority or New Town Development Authority constituted
under Maharashtra Regional and Town Planning Act, 1966 and land allocated to residential, commercial,

10
Civil Appeal No. 4527 of 2009
11
(1968) 3 SCR 163
12
(2014) 1 SCC 669
13
Civil Appeal No. 7764 of 2014.
industrial or any other Non-Agricultural use in the draft of final Regional Plan or Town Planning Scheme
provided the conditions under the amendment are followed. The conditions under the 2016 amendment were:
 The agricultural land which was obtained for such non-agricultural purposes shall be put into such non-
agricultural use within five years of date of transfer and necessary entry to that effect shall be made in
the Record of Rights.
 If land transferred for any Non-Agricultural use is not put to such Non-Agricultural use within a period
of five years from the date of transfer, the Collector on payment of non-utilization charges at the rate of
2% of the market value calculated as per the Ready Reckoner [Annual Statement of Rates published
under the Maharashtra Stamp (Determination of True Market Value of Property) Rules, 1995] shall
grant a further extension of five years.
 If the land is not put to a Non-Agricultural use as per the previous provisos, the Collector shall send a
one month notice to the defaulting transferee after which the collector shall assume control of the
property. The land shall first be offered to the original land holder by way of grant on the same tenure
on which it was held by him before its transfer and at the same price at which it had been transferred by
the original land owner.
 If the original land owner fails to purchase the offered land within a period of ninety days then the
collector shall auction the land. If the original land owner purchases the land or if the land is sold in an
auction then the defaulting transferee would be entitled to compensation at a price at which he
purchased the agricultural land.
 If the transferee fails to utilize the land fully or partially for Non-agricultural use and wants to sell the
land before 10 years then they can do so by obtaining the collector’s permission provided the transferee
pays a deposit transfer charge at the rate of 25% of the market value of such land.

Section 63-1A of the MTAL provided for transfer of Agricultural land to Non-Agriculturist for bona fide
industrial use and for special township projects, notwithstanding the bar under Section 63 of the MTAL. The
Section was first inserted by an amendment in 1994 where it initially provided that the lands to be put to
industrial use within a period of five years from the date of purchase. Later by another amendment in 2005, this
period was extended to fifteen years. The said amendment also provided that if on the date of the amendment,
the land was not put to bona fide industrial use, the same could be put to such use within the remaining period of
fifteen years from the date of purchase.