Property sale and ownership rights
Matters relating to execution and registration of documents of specific property transactions such as sale, mortgage, lease, easement and licence are dealt with here. A sale of an immovable property is defined in Section 54 of the Transfer of Property Act, 1882, as follows: “Sale” is a transfer of ownership in exchange for a price paid or promised or part paid and part promised.
Such transfer, in the case of tangible immovable property of the value of Rs. 100 rupees and upward, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immovable property of a value less than Rs. 100, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
From the above definition, the following points can be highlighted:
“Sale” is essential for a transfer of ownership rights.
The transfer is effected for a consideration which is always a price, either paid or promised to be paid or paid partly and promised partly.
In this regard, it becomes necessary to define and understand the concept of ownership rights in an immovable property.
Any article or object or thing including an immovable property has rights connected thereto which can be identified as follows:
Right to possess, occupy and enjoy.
Right to sell, mortgage, lease out or transfer otherwise any rights therein.
Right to modify, destroy, abandon, release or relinquish any rights therein.
Right to bequeath to heirs, successors etc., of the rights relating thereto.
Ownership rights means that a person who is the owner has all the aforesaid rights. When a person has such rights comprehensively, it becomes unrestricted ownership. However, some of the rights like possession, enjoyment or right to transfer etc., may get suspended due to some reasons or mortgage on the immovable property.
Residual rights
However, the owner has the basic residual right, which enables and empowers him to get back the rights of possession or sale etc., which have been transferred to others. This residual rights can be referred to as the equity of redemption i.e., a right to redeem the rights which have been lost or suspended temporarily. In these cases, it is a question of restricted ownership and still the person having such restricted ownership is always deemed to be the owner of the property.
In the background of discussions on ownership rights as above, it can be stated that a sale envisages transfer of ownership rights (both the restricted and unrestricted categories). In other words, one can effect a sale of an immovable property absolutely with all the rights intact or can effect a sale of an immovable property subject to a lease or mortgage. In the first case, the purchaser gets absolute ownership rights and in the second case, he gets ownership rights of the immovable property subject to the aforesaid mortgages or leases in favour of others to which the property is subjected to.
A sale of a tangible immovable property of a value of Rs.100 or upwards requires compulsorily registration of a sale deed or instrument to complete the sale and vesting of properties with the purchaser.
In this regard, it is to be noted that a reference to a tangible immovable property means any property which has a physical form or which is capable of being touched and seen and intangible property means any property which cannot be so seen or which does not have physical existence.
(N.C.S. Raghavan is a chartered accountant, and Arvind Raghavan, an advocate)
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