Transfer of immovable properties,
particularly through transfer of shares, is very common in Mumbai, Gujarat and
West Bengal but not so popular in Karnataka.
The Transfer of Property Act, 1882
defines the transfer of property as “An act by which living persons convey the
property in present or in future to one or more other living persons or to
himself and to transfer the property is to perform such act” (Sec 5).
The act further describes the word
“living persons” to include company, association, body of Individuals, whether
they are incorporated or not.
The recognized mode of transfers are
sale mortgage lease, exchange and gift. In case of mortgage and lease, the
owner of the immovable property retains his ownership rights but transfers some
interest, and in certain cases possessory
rights.
Sale, exchange and gifts are
transfer of absolute rights in the immovable property by the owner to the
other. In sale and exchange, the transfer is for consideration in cash or kind.
In gift, the property is transferred to others out of love and affection and no
other consideration is accepted and the transfer is absolute without any
conditions attached. Section 10 of the Transfer of Property Act mandates that
no absolute restrictions can be imposed on transfer of property and only some
temporary restrictions may be part of the transfer.
Registration of sale and exchange
deeds, if the value of property transferred is rupees one hundred or more is a must. In case of transfer of
immovable property is by gift, the document evidencing the gift should be
registered irrespective of the value of the gifted property. Section 17 of
Indian Registration Act deals with the documents whose registration is compulsory. It includes
deed of gift, non testamentary document
(other than will) which create declare, assign, limit, extinguish any right,
title, interest on immovable property, the value of which is Rs.100 or more.
The Stamps Acts of various states
prescribe the stamp duty payable on such documents of transfer. Thus, any transfer
of immovable property shall be absolute without permanent restrictions, with
power to alienate and shall be by registration of the deed of transfer on which
prescribed stamp duty has to be paid. The prescription that the registration is
compulsory when the value of the immovable property is Rs. One Hundred or more
is only of academic interest, as no immovable property will be less than worth
Rs.100. But, we are dealing in this article, with an altogether different type
of transfer of immovable property adopted by some housing co-operative
societies where the transfer is neither absolute nor the deed of transfer is
registered.
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