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Modes of Acquisition of Ownership
Original Mode: The original mode is the result of some independent personal act of the acquirer himself. This mode of acquisition may be of three kinds:
Absolute: When a ownership is acquired over previously ownerless object i.e. who took it first became the owner. For example when one shoots a bird or deer in a jungle open to public get gets the ownership.
Extinctive: Where there is extinction of previous ownership by an independent adverse act on the part of the acquirer, e.g. prescription. This is how a right of easement is acquired after a passage of time prescribed by law.
Accessory: When requisition of ownership is the result of accession. E.g. if tree bears fruits, the produce belongs to the owner unless he has parted with the right to the same.
When ownership is derived from a previous owner it is called derivative acquisition. This is derivative mode takes place from the title of a prior owner. It is derived either by purchase exchange, will, gift etc. Every legal system of the world provides some rules for the requisition of ownership by this mode. Indian Transfer of Property Act provides rules for the transfer of immovable property, Sale of Goods Act lays down rule for the transfer of movable property, Partnership Act for the transfer of property of the firm and the Companies Act for the transfer of Company property. Thus, the Derivative mode of acquisition of ownership may be:
- Title of prior owner
- Transfer of Ownership
Title of Prior Owner:
Agreement is an important means for acquiring property. In agreement a title is acquired with the consent of the previous owner. A wide connotation has been given to agreement as the model of acquiring property.
A contract for sale does not confer title in immovable property. Section 54 of the Transfer of Property Act provides that a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settles between the parties; it does not of itself, create any interest in or charge on such immovable property. However still, if a person has entered into possession over immovable property under a contract for sale and is in peaceful and settled possession of the property with the consent of the person in whom vests the title, he is entitled to protect his possession against the whole world, excepting a person having a title better than what he or his vendor possesses.
This is the one and only instrument, which allows a person to dispose his property while he is alive and to take effect after his death.
The Hindu Succession Act has not made any provisions for making a gift by a manager of a joint family of his interest in the joint family property and as such Section 30 does not avail to the appellant and clearly of the opinion that the gift by the first defendant are invalid even as regards his interest in the joint family properties. There can be a valid gift of property in the possession of a lessee or a mortgagee and a gift may be sufficiently made by delivering constructive possession of the property to the donee. Some authorities still take the view that a property in the possession of a usurper cannot be given away but this view appears to us to be too right. The donor may lawfully make a gift of a property in the possession of a trespasser. Such a gift is valid, the donee or des all that he can to put it within the power of the donee to obtain possession
Transfer of Ownership:
The rights of a transferee from a co-owner are regulated by Section 44 of the Transfer of Property Act which provides that whereas one or two or more co-owners of the immovable property legally competent in that behalf transfers his share of such property or any interest therein, the transferee acquires as to such share or interest and so far as is necessary to give effect to the transfer, the transferor’s right to joint possession or other common or part enjoyment of the property, and to enforce a partition of the same but subject to the conditions and liabilities affecting at the date of the transfer, the share or interest so transferred. According to this statutory provision also what transferee gets is the right of the transferor to joint possession and to enforce a partition of the same irrespective of the fact whether the property sold is fractional share of specified portion, exclusively in possession of the transferor.
The natural way of acquiring title to property is by succession. By succession property devolves on a person as a matter of course by operation of law, partition, custom or usage under intestate succession and testamentary succession operates in a different way and is dealt with hereunder.
Section 118 of Transfer of Property Act defines exchange as “when two persons mutually transfer the ownership of one thing for ownership of another, neither thing or both things being money only, the transaction is called as exchange.
Sale is the most convenient mode of transfer of immovable property and consequently purchase is the ideal mode for acquiring title.
Identification of relevant documents:
Tracing and scrutiny of title:
For the purpose of scrutiny of title, property can conveniently be divided as registered and unregistered.
As a general rule, the seller should show a good title. For making the Buyer’s job easier, he should deliver to the Buyer an abstract of title (such as Wills, deeds of conveyance and also the events causing devolution of the ownership) at his (Seller’s) expense. Observe if there are any defects.
Unlike the unregistered property where the responsibility of the Seller is heavy, the Buyer has more care to be taken in case of registered property. The seller here, no longer need to trace the history of the property. The maxim caveat emptor applies and the Buyer carries more responsibility to trace the title of the Seller.
Document Check List:
- Absolute Sale Deed/Conditional Sale Deed/auction sale deed executed by the statutory bodies.
- Encumbrance Certificate from the Sub Registrar from the date of the allotment till date or 30 years earlier till date.
- Possession Certificate issued by the statutory body/society.
- Allotment letter issued by the statutory body/society.
- Khatha Certificate issued by the statutory authority.
- Certified or copy of the Lease-cum-sale agreement/auction sale agreement.
- Latest Tax paid receipt
- Auction sale confirmation issued by the statutory authority in case of auction sites.
- Genealogical Tree.
3.Map:Obtain an authenticated copy of the site plan. See, if the schedule of the property tallies with the plan
4. Searches:Searches in various offices like, Sub Registrar’s office, Taluk Office, Municipal Council, City Corporation, Registrar of Companies, Civil Courts etc. have to be carried out and find out if the Seller has concealed any thing that is vital about the property in question.
5. Revenue Records:Search into revenue records is very important because the entries in revenue records depict possession.
6.Presumption regarding entries in revenue records:If name of a person is entered in revenue records, a presumption arises in favour of the person and unless and until this presumption is rebutted, the entries have to be considered as true and correct.
7. Effects of entries in revenue records:However, the entries in revenue records alone will not convey and title or will not have the effect of extinguishing the already existing title.
8. Two revenue records relating to same property:If there are two sets of revenue records regarding the same property and their entries are conflicting then the latest of the records will prevail.
9.Unchanged entries:The entries in revenue records which are unchanged fairly for a long time till not be rebutted by some stray entries.
10.Patta book:Entries in Patta Book do not confer any title.
11.Mutations:Whenever transfer of immovable property takes place, the name of the transferee (purchaser, lessee, mortgagor etc.) and nature of transfer will be entered in the revenue records. The entries are called the mutation entries.
12.Searches in the revenue records:Search of revenue records in revenue offices, Municipalities, Panchayats, City Corporations, etc. evidences possession of the property and also payment of property tax or land revenue as the case may be which fact can be further ascertained from the receipt issued at the time of payment.
13. Searches in Sub-Registrar’s office:Book No.1 and Index thereto are the registers to be looked into. These registers show name of the Village, town or area and also the names of the transferor and the transferee. They also describe the property, page Numbers, document Numbers and also volume Numbers. Once the name of the proposed transferor’s name is found, compare the description of the property with that of the deed produced by him.
14.Searches in land acquistion offices:This is an extra precaution to be taken. By making searches in the office of Land Acquisition Officer, check whether the land in question is proposed for acquisition in future. In Urban areas this fact can be ascertained from what is called as the Comprehensive Development Plan or Outline Development Plan as the case may be, which can be obtained from the concerned development authority.
15.Searches in Registrar of companies:The Register of Charges is the Chief record to be looked into the office of the Registrar of Companies. By looking into this register, see the particulars as to date of creation of charge, date of its registration, assets covered by the charge, name of the charge holder etc.
16.Searches in courts:Though this is somewhat tedious job, it is inevitable. Visit the Ministerial Office or the concerned office of the Jurisdictional Civil Court where sits and probate and succession cases are filed. Inspect the concerned register and make a search for at least 15-20 years and find out whether there is any dispute pending regarding the property in question. If the property is bequeathed, find out whether the same is probated.
17.Report:The title report is the sum and substance of the findings that have cropped up during tracing and scrutiny of title. Therefore a title report is the sum and substance of the various exercises under taken for investigation of title.
18.Specimen title report:
- Title report of the property address…………………. of M/S. ………………
- Title: Title report regarding the land and building belonging to…………
- Name and Address of Buyer/Lessee/Mortgagee etc.
- Discuss on the title of the property in the context of the Seller’s title
- Discuss on the title of the property with respect to the predecessors
- Searches: Discuss the results emerged as a result of searches made in the Sub Registrar’s office, ROC, Courts etc.
- Defects: Point out about the defects if any, in the title. Discuss about the remedies for curing the defects in the title
- Conclusion: As a conclusion discuss about the title of the seller or lessor or mortgagor as the case may be and give recommendations about the property and point out if the Buyer/lessee/mortgagee can proceed with the property or not and if not state reasons.