The
ownership of immovable property is recognised under various laws. Before dwelling upon the rights and interest
in immovable property, we shall understand what is immovable property.The
Transfer of Property Act 1982 does not define the word immovable property in
detail,what mentions it as “immovable property does not include standing timber, growing crops or grass”
General
clauses Act defines immovable property, “which includes land, benefits which
arise out of the land and things attached to the earth.The words “attached to the earth” has
been elaborately described in Transfer of Property Act which include following;
- Rooted in the earth as in case of
trees and shrubs;
- Imbedded in the earth as in case
of walls or buildings or
- Attached to what is so imbedded
for permanent beneficial enjoyment of that to which it is attached.
However,
we must remember that it does not include standing timber, growing crops or
grass.
The Karnataka Stamp Act defines immovable property as “includes land, buildings,
right of ways, air rights, development rights, whether transferable or not,benefits to arise out of land and things attached to the earth or permanently
fastened to any thing attached to the earth.But in common parlance immovable
property means land, buildings, things permanently attached to the land.
Rights
The
word right has a wide meaning.It is which gives powers to the person said to
have rights to do something, act, or not to do such thing, act, in relation to
his property which may be immovable or movable.The right are of different
types.
The
most important is “Right in Rem”. This
right is available against the whole world.Next is “Right in Personam”, which is available against a specified
person, or group or group of persons.But this is not available, enforceable against the whole world.The owner of any property has legal right,
which is recognised by the laws of the land and protected under such laws.
Interest
The
other most frequently used word in property transaction is “interest”. It is a right available against the entire
world, when it is related to some property, land, building,immovable and
movable.It is transferable under modes
recognised by law and also is inheritable.Such interest is recognised and protected under law.
Where
as contingent interest is an interest available only on future date and not at
present, which is subject to happening of some uncertain event.In vested interest the happening of the event
is certain,where as in contingent interest it is uncertain, hence
contingent.As the interest is
contingent, it is not transferable or inheritable.But on happening of such uncertain event, the
contingent interest becomes vested interest,when it is transferable and
inheritable.
Title
Ownership
The
ownership is an amalgam of rights, interest and title which is recognised and
protected bylaw. In simple words it is right available against the entire
world. Such right has no riders, restrictions as to the point of user and point
of duration.The word absolute ownership is a bundle of rights connected to
some specified property. It consists of following rights.The
list is only illustrative and not exhaustive;
1.Possession and occupation.
2.Use and enjoy.
3.Alienation by modes
recognised by law in favour of any person/s without any restrictions.
5.Gift, transfer by Will,
creation of trust.
6.The right is a right in
rem available against the whole world.
7.The right is unrestricted
in duration of time and use.
However,
these rights are subject to various laws like Land Reforms Act, Land Revenue
Act, Town Planning Act, and other local laws.
Co-ownership
More
than one person may jointly own the same property.Both the persons have equal or certain
percentage of rights to possess and enjoy the property.One important ingredient of co-ownership is
undivided share.Though all the owners
own equal or a part of the whole property their respective shares are not
physically ascertainable with definitive boundaries.The shares are undivided.In case four persons own a property of 1200sqft, each persons share is 300 sft.This
300 sft is any part of the building property and is not confined to specific
area.This is called undivided share in
the property.
Share
of the co-owners in the property need not necessarily be equal. It depends on their share, investment in the
property as detailed in purchase document.
In the absence of any such details as to the share of investments made
for acquisition of property in purchase document, it is presumed in law, that
all the co-owners have equal undivided share of interest, right and title in
the property as per section 45 of Transfer of Property Act.
It
is always advisable to clearly mention the share of investment of each co-owner
in the property and their undivided share in right, interest, title in the
property for the purpose of alienation, inheritance and taxation.The
Co-owners share in the property is inheritable, transferable.The concept of this co-ownership is often
termed as “Tenants in common” in legal parlance.
Joint Tenancy
This is different from Tenants in Common or Co-ownership.In Co-ownership,
the legal heirs succeed to the right and title of the deceased co-owner.
In
Joint tenancy, the other Joint owners succeed to the right of the deceased
joint owner and not his legal heirs.This concept is not in practice in India, unless specifically made
certain in documents.In the absence of
any such specific reference the court presumes the ownership as ‘Tenants in
common’, and legal heirs succeed to the share of the deceased joint owner.
Dual ownership of land and
building
Many
owners of land, lease the land property to others for long lease. The terms of lease also gives right to the
lessee to construct buildings and enjoy the benefits of such buildings on
leased lands.This practice has led to
dual ownership of land and building.The land is owned by one person and the
structures thereon is owned by other person. The terms of lease also stipulate,
whether the ownership of the building will get transferred to the lesser, owner
of the land, free of cost on expiration of the lease period or has to pay for
acquisition of such structures.The
Income Tax Act recognises the dual ownership concept and the owner of the
building is taxed for the income received from the property.
Ownership by part
performance
In
sale and purchase of immovable property, the parties generally enters into a
sale agreement detailing the terms of contract;
the registration of sale deed is done later on completion of performance of duties by the parties as detailed in sale agreement.At times the seller receives major portion of
consideration, and hands over the vacant possession of the property to the
purchaser pending registration of sale deed.This is called part performance.The purchaser / transferee who is in possession of property gets,
equitable title over the property.This
is recognised under section 53 A of the Transfer of Property Act.Even in the absence of registered sale deed,
and though legal title is not conferred on purchaser / transferee, the rights
of the purchaser / transferee is secured against the seller or any person
claiming through the seller. The only
remedy available to the seller is to file a suit for payment of balance sale
consideration.The requirements of part
performance as detailed in Section 53A are as follows;
1.There must be a contract
like sale agreement, etc., in writing containing the details of contract
including the handing over the vacant possession of the property to the
purchaser, signed by the seller.
2.The contract shall be for
transfer of immovable property for consideration.
3.After the contract is
entered the seller has put the purchaser in possession of the property and the
purchaser has taken the possession of the property in part performance as per
the terms of contract.
4.The purchaser has done
something in pursuance of the contract like payment of consideration or has
performed or willing to perform his part of contract.
However,
this equitable right derived from part performance is available only against
seller or anybody claiming under or through him.But the provisions of this section does not
affect the rights of person, who purchased the property for consideration, who
has no notice of contract or part performance.Equitable rights of transfer by part performance are recognised by the
Income Tax Act 1961, and also for Capital Gains and part performance
constitutes transfer as defined in Income Tax Act.
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