Constitutional Significance of Property Laws

By

Ayushi

X Semester

Damodaram Sanjivayya National Law University, Visakhapatnam

 Abstract

“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 offence1. 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.

Transfer of property means an act by which a living person conveys property to one or more
living persons, company, and association, a group of individuals or to himself.

In this project, I’ll deal with the Constitutional significance of the laws relating to the transfer of
property. Following questions would be looked into:

 What are the provisions in the Indian constitution relating to property?

 What is the impact of the 44th Constitutional amendment?
 How far are the provisions applicable in the Indian Society?
 What are the provisions in the constitution of other countries?
 How the existing Laws can be reformed?

1
The Indian Penal Code, Noshirvan H. Jhabwala (C. Jamnadas and Co.) 2013, pg. 113
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 offence2. 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 person’s rights but only rights in respect of things and not in respect
of persons.”3 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 other’s property) are also “property” of the person who
owns them, though the material object is owned by another.4
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” 5.
Surprisingly, the word “Property” has not been expounded anywhere in the Act. Its meaning has
to be interpreted either through 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,
2
The Indian Penal Code, Noshirvan H. Jhabwala (C. Jamnadas and Co.) 2013, pg. 113
3
Salmond on Jurisprudence, 9th Edn., pg. 578-580
4
Bans Gopal Sheo Narain And Anr. vs P.K. Banerji And Ors. (AIR 1949 All 43)
5
Section 5, The Transfer of Property Act, 1882
easements, and every description of estate, interest, and profit, present or future, vested or
contingent, arising out of or incident to property as above defined6.”
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.”7
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 8

 The right of control 9
 The right of exclusion 10
 The right of enjoyment 11
 The right of disposition 12

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.

6
Section 167, The English Bankruptcy Act, 1914
7
Jones v Skinner (1835) 5 LJ Ch 90
8
http://realestate.about.com/od/ownershipandrights/f/bundle_of_right.htm (On 25-04-2017)
9
http://realestate.about.com/od/ownershipandrights/f/bundle_of_right.htm(On 25-04-2017)
10
http://realestate.about.com/od/ownershipandrights/f/bundle_of_right.htm(On 25-04-2017)
11
http://realestate.about.com/od/ownershipandrights/f/bundle_of_right.htm(On 25-04-2017)
12
http://realestate.about.com/od/ownershipandrights/f/bundle_of_right.htm(On 25-04-2017)
 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

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 Constitutional amendment, Right
to Property demised. 13 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.14Several amendments were made to the Article 31, to make it march in tune with
the society, but it was finally abrogated15. 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 maxims16-
 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. 17 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.18
The Supreme Court in Bishamber Dayal Chandra Mohan v. State of U.P.19 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.20
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.21 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.

13
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6th Edition Pg. No. 1371
14
Indian Constitutional Law, Prof. G.C.B. Subba Rao (S. Georgia and Company) 10th edition pg. No. 239
15
http://www.legalservicesindia.com/article/article/emergence-of-article-31-a-b-and-c-and-its-validity-1435-1.html (On 07-04-2017)
16
Ibid
17
Ibid
18
http://www.lawyersclubindia.com/articles/Right-to-Property-under-the-Indian-Constitution-3515.asp#.Uir-STamhvE (On 07-04-2017)
19
AIR 1982 SC 33,48 (1982) 1 SCC 77
20
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6th Edition Pg. No. 1420
21
Bishan Das v. State of Punjab (AIR 1961 SC 1570: (1962) 2 SCR 69.
 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 property 22.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. 23 Entry 32 of
the list talks about the property of the Union. It says-
Property of the Union and the revenue threrefrom, but as regards property situated in a state,
subject to legislation by the state, save in so far as Parliament by law otherwise provides.24
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 union25.
 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 union.
 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 union’27.

22
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6th Edition pg. no. 1426.
23
Babulal Fadia (1984). State politics in India Volume I. Radiant publishers, New Delhi. pp. 92–122.
24
Entry 32, The Union List, Part XI, The Indian Constitution
25 , 25
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6th Edition Pg. No. 538.
26
Hari Singh v. Military Estate Officer, AIR 1964 Punj. 304
27
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6th Edition Pg. No. 538
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

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 given”

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, Raghubir Singh v. Ajmer,
AIR 1959 SC 475: 1959 Supp (1) SCR 478
31
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6th Edition Pg. No. 552
32
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6th Edition Pg. No. 570
 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 valid. The word acquisition does not only
include vesting of the title of the property in question but also ‘deprivation’ of property.

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.33 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. 34 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 follows35-
“… 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 property36. The same was noticed in the case of State of Rajasthan v.

33
Pannalal Bansilal Patil v. State of Andhra Pradesh , AIR 1996 SC 1023:1032.
34
Indian Constitutional Law, Prof. G.C.B. Subba Rao (S. Georgia and Company) 10th edition pg. No. 224
35
Ratilal Panchanand Gandhi v. State of Bombay AIR 1954 SC 388,391
36
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6th Edition Pg. No. 1331
Sajjanlal37, 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.
Article 26 (c) and Acquisition of property by state
Though the Right given by this article is fundamental, it doesn’t 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 kind”38
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 purpose39. 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.40
Acquisition of property of a Minority Educational Institute
Article 31 (A), which was inserted in the constitution by the 44 th 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.41
The Supreme court has commented on the ambit of article 31 (A) in the case of St.
Josephs College v. Union of India42, 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

37
AIR 1975 SC 706: (1974) 1 SCC 500.
38
Acharya Maharajshri Narendra Prasadji Anandprasadji Maharaj v. State of Gujarat, AIR 1974 SC 2098 : (1975) 1 SCC 11.
39
Constitutional Law of India, H.M. Seervai (Universal Law Publishing Co.) Fourth Edition, pg. no. 1307
40
Gulam Kaddar Menon v. Surat Muncipat Corporation, AIR 1998 Guj. 234,240.
41
Indian Constitutional Law, M.P. Jain (Lexis Nexis) 6th Edition Pg. No. 1371
42
AIR 2002 SC 195: (2002) 1 SCC 273.
should be such, that it ensures the proper functioning of the institute 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.