Constitutional Significance of Laws of Transfer of Property

INTERNATIONAL JOURNAL OF RESEARCH AND 2014
ANALYSIS VOLUME 2 ISSUE 1

CONSTITUTIONAL SIGNIFICANCE OF LAWS OF TRANSFER OF
PROPERTY
*Ayush Jaiswal
Introduction
Each of us has a natural right, from God, to defend his person and his property
-Frederic Bastiat
Above lines have been rightly said by Sir Fredric Bastiat. Section 96 of the Indian
Penal Code bestows the right to every person to defend his own property against any act
which is an offence falling under the definition of theft, robbery, mischief or criminal
trespass, or which is an attempt to commit such offence 1. Concept of property has to be
assimilated in order to deal with different aspects and constitutional significance of Laws
of Transfer of Property. The Oxford Dictionary defines property as thing or things
owned. In addition, the things must not only be owned but also protected by the law.
This consummates the legal definition of property. Salmond in his book on Jurisprudence
has pointed out the word Property in different senses. One of it says, Property includes
not all a persons rights but only rights in respect of things and not in respect of
persons.2 According to Justice Aggarwal (Allahabad High Court), the word property
cannot be confined to the material object; it must include rights in and over that object. A
person may have certain rights, like leasehold or mortgagee rights over the property of
another.
These jura in re aliena (Rights over others property) are also property of the
person who owns them, though the material object is owned by another. 3
The Transfer of Property Act, 1882 construes transfer of property as an act by
which a living person conveys property, in present or in future, to one or more other
living persons, or to himself, and one or more other living persons; and to transfer
property is to perform such act 4. Surprisingly, the word Property has not been
expounded anywhere in the Act. Its meaning has to be interpreted either through
1
The Indian Penal Code, Noshirvan H. Jhabwala (C. Jamnadas and Co.) 2013, pg. 113
2
Salmond on Jurisprudence, 9th Edn., pg. 578-580
3
Bans Gopal Sheo Narain And Anr. vs P.K. Banerji And Ors. (AIR 1949 All 43)
4
Section 5, The Transfer of Property Act, 1882
104
precedents, commentaries, or Foreign Laws. In the English Bankruptcy Act, 1914,
Property has been defined as:
Property includes money, goods, things in action, land, and every description of
property, whether real or personal and whether situate in England or elsewhere; also
obligations, easements, and every description of estate, interest, and profit, present or
future, vested or contingent, arising out of or incident to property as above defined 5.
Lord Langdale MR decorously said, Property is the most comprehensive of all
terms which can be used inasmuch as it is indicative and descriptive of every possible
interest which the party can have.6
It is worth noticing, property is a bundle of rights. Each right is similar to that of a
stick; these sticks collectively form a bundle. The owner may gift, sell or lend some of
the sticks or entire bundle to other person. This modus operandi is called Transfer of
Property.
The Bundle of rights includes-
The right of possession 7

The right of control 8
The right of exclusion 9
The right of enjoyment 10
The right of disposition 11
These rights are safeguarded and regulated by several legislations like, The Transfer
of Property Act, 1882, I.P.C, The Indian Constitution etc. In this paper, the
Constitutional Significance of the Laws of Transfer of Property will be discussed.
5
Section 167, The English Bankruptcy Act, 1914
6
Jones v Skinner (1835) 5 LJ Ch 90
7
http://realestate.about.com/od/ownershipandrights/f/bundle_of_right.htm (On 27-07-2013 At 16:36)
8
http://realestate.about.com/od/ownershipandrights/f/bundle_of_right.htm(On 27-07-2013 At 16:36)
9
10
11
105
Statement of Problem
In this project, Constitutional Significance of the laws related to transfer of
property shall be dealt with.
Hypothesis
Constitution is a body of fundamental principles, according to which a state is
governed. Ours is the longest written constitution. It talks about fundamental rights,
duties as well as subjects the government to certain principles which it has to abide by,
while in power. After gaining independence, safeguarding people as well as property was
paramount. The constitution framers borrowed many provisions from the constitution of
other countries to ensure, it serves the best of its purpose.
Rationale behind this research is to analyze the provisions in the Indian
Constitution which deal with the concept of transfer of property, to know about the base
of these laws and also to estimate, how far are they applicable to the Indian scenario?
Objectives
To know about the provisions in the Indian constitution relating to property.
To discuss about the 44th Constitutional amendment.
To identify the applicability of the constitutional provisions in the Society.
To suggest amendments to the present laws.
Method of Study
The data collection is mainly through non-empirical research
106
Right to Property
Today, the Indian constitution does not recognise the right to property as a
fundamental right. However, this right existed till the year 1978. With the 44th
12
Constitutional amendment, Right to Property demised. Before 1978, there existed
two Articles to protect the property, Article 19 (1) (f) and Article 31. Article 19 (1) (f)
guaranteed the right to acquire, hold and dispose of the property. Article 19 (5),
however permitted the state to impose reasonable restrictions in the interest of general
public. Article 31 dealt with compulsory acquisition of the property. 13Several
amendments were made to the Article 31, to make it march in tune with the society,
but it was finally abrogated14. As a replacement, Article 300 (A) was inserted in the
Constitution, which states No Person shall be deprived of his property save by
authority of law. The doctrine was based on the following two Latin maxims 15-
Salus Populi est Suprema Lex, meaning- Welfare of the people is the paramount
law;
Necessita Public Major est Quam meaning, public necessity is greater than
private necessity.
This provision left the property in lurches of the legislature. Today, the right to
property exists, not as a fundamental right but as a constitutional right.16 The amendment
heightened the authority of the state to acquire property for social welfare purposes. In
other words, the amendment bestowed upon the Indian socialist state a license to indulge
in what Fredric Bastiat termed legal plunder. 17
The Supreme Court in Bishamber Dayal Chandra Mohan v. State of U.P.18
observed that, mere executive order is not sufficient for depriving an individual of his
property. It can be done, only by the authority of a law. 19
12
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6 th Edition Pg. No. 1371
13
Indian Constitutional Law, Prof. G.C.B. Subba Rao (S. Georgia and Company) 10 th edition pg. No. 239
14
http://www.legalservicesindia.com/article/article/emergence-of-article-31-a-b-and-c-and-its-validity-1435-1.html (On 07-09-2013 at
20:43)
15
http://www.lawyersclubindia.com/articles/Right-to-Property-under-the-Indian-Constitution-3515.asp#.UitCvDamhvF (On 07-09-
2013 at 20:51)
16
http://articles.timesofindia.indiatimes.com/2011-04-18/india/29443051_1_land-owners-apex-court-land-acquisition-act (On 07-09-
2013 at 20:54)
17
http://www.lawyersclubindia.com/articles/Right-to-Property-under-the-Indian-Constitution-3515.asp#.Uir-STamhvE (On 07-09-
2013 at 16:24)
18
AIR 1982 SC 33,48 (1982) 1 SCC 77
19
107
Similarly, where the state of Punjab, illegally disposed off B, from a property he
owned, The Supreme Court held that the state has no right to take laws in its hand and get
a property vacated by an executive order.20 The court further stated that, a person cannot
be evicted from his property, even if it is done in public interest, without following the
due course of law.
Article 300(A) does not only extend to real estate but also includes all kinds of
property, whether movable or immovable. Right to money as well, is a property21.It has
been held by several High Courts that Lease, Tenancy and Right to recover mortgage
debts also fall under the ambit of Article 300A.
In a recent case, where the NOIDA Industrial Development Authority acquired
205 hectares of agricultural land, under the Land Acquisition Act for the benefit of
private persons, the Supreme Court said that the land was acquired for the benefit of
private individuals, and thereby held the acquisition to be invalid.
Part XI of the Indian Constitution

Part XI of the Constitution defines the distribution of power in the federal
government and the states. This part is divided into two viz. Legislative powers and
administrative powers. The legislative section is further divided into three, The Union
list, the state list and the concurrent list.
The Union List
The union list contains 99 entries; the power to legislate is vested in the
Parliament.22 Entry 32 of the list talks about the property of the Union. It says-
Property of the Union and the revenue there from, but as regards property situated in a
state, subject to legislation by the state, save in so far as Parliament by law otherwise
provides. 23
The expression Property of the union includes all types of properties, mainly funds
and buildings. This entry, mainly bestows two powers to the parliament-
Absolute authority to legislate with respect to all property belonging to the
union24.
20
Bishan Das v. State of Punjab (AIR 1961 SC 1570: (1962) 2 SCR 69.
21
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6 th Edition pg. no. 1426.
22
Babulal Fadia (1984). State politics in India Volume I. Radiant publishers, New Delhi. pp. 92122.
23
Entry 32, The Union List, Part XI, The Indian Constitution
108
It subjects the Union property situated in a state to state legislation, however it
also authorises the Parliamentary legislation to be applicable over the state laws
for the property located in state, belonging to the union25.
To legislate, with respect to agricultural land belonging to the union. 26
Exception- The property of a corporation, wholly owned or controlled by the union, is not
the property of the union27.
The State List
(Entry-18) Land, that is to say, rights in or over land, land tenures including the
relation of landlord and tenant, and the collection of rents; transfer and alienation of
agricultural land; land improvement and agricultural loans; colonization.
The ambit of land in entry 18 is gigantic. It includes agricultural land, non-
agricultural land, rural land, urban land or land of any other kind.28 This entry mainly
deals with the following topics:
Land, Transfer and alienation of agricultural land, Land improvement and agricultural
loans and colonization.
This entry renders the following powers to the legislature:
To put restrictions on the power of landlords in relation to collection of rent.29
To extinguish or put restrictions on the rights in land, or provide for statutory
purchase of land by tenants in occupation, modify the rights of landlords as well
as tenants and to provide for transfer or alienation of agricultural land30.
The word Land in the entry is not restricted to agricultural land only. It also includes
every form of land. The expression Rights over Land includes rights like full
ownership, leasehold, easements, collateral rights or all such rights.31
24 , 25
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6 th Edition Pg. No. 538.
26
Hari Singh v. Military Estate Officer, AIR 1964 Punj. 304
27
28
Accountant And Secretarial Services (p) ltd. V. Union Of India AIR 1988 SC 1708: ( 1988) 4 SCC 324
29
United Provinces v. Atiqua Begum, AIR 1941 FC 16, 25.
30
Sri Ram Ram Narain v. State of Bombay, AIR 1959 SC 459; Gayatri Salt works v. State of A.P., AIR 1975 A.P. 262, Raghu bir
Singh v. Ajmer, AIR 1959 SC 475: 1959 Supp (1) SCR 478
31
109
The Concurrent List
Acquisition and Requisitioning of Property.
Prior to 1956, Entry 33 of List 1 and Entry 36 of List II of the constitution,
Provided for the acquisition of property; former for the purposes of the Union and the
latter for purposes, other than that of the union32. Entry 42 of the concurrent list provided
Principles on which the compensation for property acquired or requisitioned for the
purpose of the union or of a state, or for any other purpose, is to be determined, and the
form and the manner in which such compensation is to be given33
These triple entries dealing with the same concept created rigmaroles, and several
questions were raised on validity of the three entries. So as to simplify the constitutional
position, the entry 33 of List 1 and entry 36 in list 2 were deleted by the seventh
constitutional amendment. This amendment enabled the state government to acquire
property for a union purpose and vice versa.
Under this entry, a legislation passed by the union may acquire a piece of land
belonging to a state, rich in coal to develop coal mines was held to be valid34. The word
acquisition does not only include vesting of the title of the property in question but also
deprivation of property.35
32
34
35
State of West Bengal v. Union of India, AIR 1963 SC 1241
36
Ranojirao v. State of Madhya Pradesh, AIR 1965 MP 77
110
Right of Religious Denomination to Acquire Property

Article 26 (d)
Article 26(c) says, Subject to public order, morality and health, every religious
denomination or any section thereof shall have the right to own and acquire movable and
immovable property. Moreover, Article 26 (d) empowers it to administer the property
according to the law.
The right to management, endowed to a religious body is fundamental in nature,
which cannot be taken away by any law.36 The state can regulate the administration the
property but the right to administer should be vested in the religious denomination. It
cannot divest the right of denomination to administer a property and transfer it to another
body.37 A Law that takes away the right to administer from the denomination would
violate the fundamental right given by the Article 26 (d). The Supreme Court has
explained the position in this regard as follows38-
in regard to matters of religion, the right to management given to a religious body is
guaranteed Fundamental Right which no legislation can take away. On the other hand,
as regards administration of property, which a religious denomination is entitled to hold
and acquire, it undoubtedly has the right to administer the property, but only in
accordance with law
If, the right to administer the properties never vested in the religious
denomination, or has been surrendered by it, or had been lost by it, then Article 26 (d)
could not be taken as a defence against management of such property39. The same was
noticed in the case of State of Rajasthan v. Sajjanlal40, The Jains could not regain the
right by invoking article 26(d), when the property and management of a Jain temple was
taken over by Ruler of Udaipur.
36
Pannalal Bansilal Patil v. State of Andhra Pradesh , AIR 1996 SC 1023:1032.
37
Indian Constitutional Law, Prof. G.C.B. Subba Rao (S. Georgia and Company) 10 th edition pg. No. 224
38
Ratilal Panchanand Gandhi v. State of Bombay AIR 1954 SC 388,391
39
40
AIR 1975 SC 706: (1974) 1 SCC 500.
111
Article 26 (c) and Acquisition of property by state
Though the Right given by this article is fundamental, it doesnt prevail over the
right of the state to compulsorily acquire the property. If a religious body owns large
areas of land and engages in activities injurious to the interests of others, The state may
impose restrictions in the interests of social welfare.The core of religion is not interfered
within the providing for amenities for sufferers of any kind41
The acquisition of a religious Place for example a temple, is possible, only if such
acquisition does not result in extinction of the right to practice religion. Moreover,
Acquisition of such nature could be made only if the situations are unusual and
extraordinary and for a larger national purpose42. The Gujarat High Court has held that
acquisition of religious property for the widening of road is reasonable, as it is intended
for a larger national purpose.43
Acquisition of property of a Minority Educational Institute
Article 31 (A), which was inserted in the constitution by the 44th Amendment in
1978, runs as follows-
In making any law providing for the compulsory acquisition of any property of an
educational institution established and administered by a minority, referred to in clause
(1), the State shall ensure that the amount fixed by or determined under such law for the
acquisition of such property is such as would not restrict or abrogate the right guaranteed
under that clause
As per this article, the state has the right to acquire the property of a minority
educational institute. This provision seeks to protect minority rights somewhat in this
regard but actual implications of this article are not clear.44
The Supreme court has commented on the ambit of article 31 (A) in the case of
St. Josephs College v. Union of India45, that the motive behind inserting the article, was
the apprehension of the parliament that acquiring a minority educational institute may
subject it to curtail down its facilities, or closing down of the institute in question. The
provision of the law should be such, that it ensures the proper functioning of the institute
41
Acharya Maharajshri Narendra Prasadji Anandprasadji Maharaj v. State of Gujarat, AIR 1974 SC 2098 : (1975) 1 SCC 11.
42
Constitutional Law of India, H.M. Seervai (Universal Law Publishing Co.) Fourth Edition, pg. no. 1307
43
Gulam Kaddar Menon v. Surat Muncipat Corporation, AIR 1998 Guj. 234,240.
44
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6th Edition Pg. No. 1371
45
AIR 2002 SC 195: (2002) 1 SCC 273.
112
even after acquiring the property. The amount payable as compensation should take into
account other such factors that are not considered while deciding the compensation for
other properties.
Conclusion
Today, The Transfer of Property Act lays down the guidelines for transfer of a
property; however, there are certain provisions in the Constitution, which deal with the
same concept. The most controversial of such provisions were Articles 19 (1) (f), that
guaranteed to the individuals the right to acquire, hold and dispose of the property, and
Article 31 which laid down, no person could be deprived of his property without the
authority of law. Several amendments were made to these Articles, to make them march
in tune with the society, but they were finally abrogated. Many experts like Fredric
Basitat called these amendments as plunders. These actions however made the
government, the owner of the land of the country and people living on it as tenants.
Provisions in the Indian constitution that deal with the laws of transfer of property,
bestow more power to the state to acquire property. The recent Singur land controversy is
an example.
The present-day constitutional laws undoubtedly facilitate the works of the state,
but it seems, that the framers kept aside the philosophy of the father of the nation, what
is morally wrong, cannot be legally right, while making these laws. The major drawback
of the land acquisition is the compensation. The amount of compensation paid is so
inadequate that it takes generations, to recover the loss. The amount paid as
compensation should be according to the market value of the property and not just
reasonable. Provision shall also be made for compensating the other party within a
specified time, failing to which an interest should be paid.
As noted in the case of State of West Bengal v. Union of India, a provision should
be introduced, to mandate the union to pay at-least 30% of the total profits gained from
acquisition of a piece of land (that belonged to a state) to the state from which it had been
acquired, so that such acquisition does not financially cripple the parent state.
These are few suggestions, by which the present-laws can be reformed.
113

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INTERNATIONAL JOURNAL OF RESEARCH AND 2014

ANALYSIS VOLUME 2 ISSUE 1

The Bundle of rights includes-

The right of possession 7

Part XI of the Indian Constitution

Right of Religious Denomination to Acquire Property

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