The ownership of an immovable property
may be broadly classified into six types. The property may be owned by an
individual company. Apart from this, the property may also be owned by two or
more persons, jointly called co-owners.Co-ownership is of three types(1) Joint
tenants(2) tenants-in-common (3) Co-parceners.The other type of ownership, are
Benami Ownership, dual ownership, trustee and beneficiary, legal and equitable,
ownership. We shall discuss each type:
a)Joint ownership or Joint Tenancy
Joint ownership or tenancy is created by grant, device, dissension.
When a property is purchased by more than one person jointly and the deed does
specify that the each purchaser has separate interest in the property, the
ownership is called joint tenancy.The joint tenancy has four characters. Unity
in title, unity in interest, unity in possession, and unity of time. Each owner
has common interest in the property as a whole the interest of the each of the
owners is similar in extent, nature and duration.
Similarly when the property is bequeathed jointly to more
than one person, without specifying the each beneficiaries specific share, the
ownership is joint tenancy and interest of each is similar in extent, nature, duration.
No simple owner has priority of title interest, right over others or separate
interest right or title.
Acquiring the property under joint tenancy by dissersion
more than one person enter into possession without title under such
circumstances, the statutes of limitations possession titled in joint tenancy
unless the circumstances point to contrary.
In case of joint tenancy or joint ownership the property
goes to the other co-ownership, survivorship and nor to the legal heirs of
deceased co-owners. This concept of joint tenancy is basically a British
Concept, but unknown in India except in cases of joint family property of
undivided family governed by Mithakshara law. Law where the passes by
survivorship. It is to be noted that transfer of property act does not provide
for formation of joint tenancy. However Section 45 of the act states that When
a property is purchased for consideration by more than one person and when the
consideration is paid out of common fund, bequeathing to all, and when the
terms of contract does not provide, how the property is to shared, right, title
and interest of all the purchases is as that of what they are entitled to the
common fund and in the absence of evidence of share of each in common fund all
are presumed to be equal interest.
The joint tenancy is in our country is an
outcome of contract and nor a matter of law.As such if in case of joint
purchasers, if the purchasers, wants to the property to held as joint tenants.
Where the succession is by survivorship, a specific clause to that effect need
to be added in the document. In the absence of such clause, the two courts may
consider the title of tenancy in common. We may also refer to section 106 of
succession act 1925, which recognizes the joint tenancy. The section states
that if an asset is given to two more pensions, jointly and if one of the
beneficiaries dies before the testator will (one who makes the will), the other
beneficiary takes the entire property. This section is applicable to Hindus
also. Though this section prefers to only two beneficiaries, it has been held
that reference to more than one person jointly means and includes not just two
persons.
This mode of joint tenancy is of only temporary nature and
ceases when one of the owner assigned his undivided share to a third party or
when of the, owner contract to sell his share, by mutual agreement of all the
owners by reverence of possession or partition, by notice by one or more owners
to others or when the entire property vests with last surviving co-owner.
b) Tenancy in common
This is different from joint tenancy or joint ownership. If
joint ownership has four deciding parameters unity in interest, title,
possession and time the tenancy is common has two characters, unity of tenancy
where the owners do not have distinct share and own the property as a whole the
tenancy in common, each owner has some specific undivided share in the
property. This right, is passed to their legal heirs or beneficiaries under
will and not to other tenants in common. Their share in the property is as per
the terms of contract, or linked in their investment in property. In the
absence of any evidence terms to share in the property is as per the terms
contract, or linked to their investments in property. In the absence of any
evidence terms to share in investments. All the owners have equal shares in the
property.
c)Hindu co-parceners
Hindu co-parceners are joint body of persons of Hindu
undivided joint family. Each of the members are related to the head of the
family within four degrees. The ownership of the property is like that of joint
tenancy / ownership. Where each co-parcener do not have specific, distinct
separate Share in the property, until partition is effected, on death of any
co-parcener, the surviving co-parceners where is within four degrees to the
hand of the family succeeds to the property as a member of co-parceners.Every
member for in joint family, acquires the right in the family by birth.
d)Benami Ownership
In Benami transaction, the persons who invests is
different, and the person to whom property is transferred is different. The
substance of the Benami transaction is that the consideration for transfer must
flow from one person and transfer is taken in the name of another person and
the consideration so paid for transfer of the property is nor a gift to the
person to whose name the property is transferred. The Benami transaction
prohibition act, 1988 completely prohibits the Benami transaction. The act has
come into effect from 18th May 1988. Section 3(1) of the act provides that no
person shall enter into a benami transaction, and succession 3 x 4 makes benami
transaction, a criminal offence. Mainly exception is the purchase of property
in the name of wife or unmarried daughter. However acquisition of the property
in the name of the wife of co-parcener is benami transaction.
Section 4 of the act does not allow any legal action by the
real owner to enforce his right against benamidar with some exceptions. When a
person in whose name the property is held as a co-parcener is Hindu, undivided
family which held for the benefit of such family and when a person who is
holding the property is trustee Section 5 are more interesting. It provides
that properties held in benami are subject to acquisition without compensation.
However, benami transactions made prior to the act are not illegal, but cannot
be enforced as such by courts.
e)Dual Ownership
In dual ownership the land belongs to one person and the
structure on the land belongs to other person. Thus the property has two
owners, one for the land and another for the structure. This type of dual
ownership is very common where the owner of the Land ceases the Land to another
with right to contract structures on the land and enjoy the fruits of such
structures. The lease will be for certain specific period. The terms of the
lease provide for as to how the ownership of the structure is to be determined
after the expiry of the lease period. The ownership of structure may pass on the
owner of the land or he may have paid certain amount to the lessee of the land
to acquire the ownership of the building. Generally in most cases the lease
will be renewed.
f)Trustee and beneficiary
The trust in fact
is another mode of dual ownership. There are two owners to the property in trust.
Trustee and beneficiary.The trustee is the legal owner and the beneficiary is
the beneficial owner. The ownership of trustee is of special type. Anyway he is
not the absolute owner, and he has to abide by the terms and conditions of
trust deed, and the author of the trust. He cannot exercise his rights for his
benefit that for the benefit of the beneficiary.
g)Legal and Equitable Ownership
In English law the ownership
may of two types, legal ownership and equitable ownership. Legal ownership has originated from common law and equitable ownership from principles of equity.But
Indian law does not recognize the ownership by equity though certain equitable
principles are recognized in India.
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