Dr. RAM MANOHAR LOHIYA NATIONAL LAW UNIVERSITY.

Meaning of ‘reversion or other intangible thing’ in

Section 54, Transfer of Property Act, 1882.
Project Submission for Partial Completion of Property Law I Internal Assessment.

Submitted to: Submitted by:

Sudeep MalikVikramarthSheo Chand

Roll no. 150
Semester V
 Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

Table of Contents

Introduction .................................................................................................................................................. 3

Meaning of the term ‘Reversion and other intangible things’ ...................................................................... 4

Immovable Property (Things): .................................................................................................................. 4

Other Intangible Things: ........................................................................................................................... 4
Reversion: ................................................................................................................................................. 6

Case Analysis ................................................................................................................................................. 6

Findings ......................................................................................................................................................... 8

Factual Example .......................................................................................................................................... 10

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 Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

Table of Cases and Authorities

Cases Referred

Babulal v. Bhawani (1912) 9 ALJ 776 ......................................................................................................... 3

Ganseh Prasad v. BhaiyaLal, AIR 1938 Nag 253 ......................................................................................... 3
KameshwarChoudhary v. State of Bihar, AIR 1998 Pat 141 ........................................................................ 3
MakhanLal v. BunkuBehari, (1892) ILR 19 Cal 623 ................................................................................... 2
Narayan Swami v. Lakshmi, AIR 1939 Mad 1220 ....................................................................................... 2
Tandonbi Devi v. KalamuSingha, AIR 2009 (NOC) 587 ............................................................................. 3

Cases Discussed

BhaskarGopal v. PadmananHira – AIR 1916 Bom 228 ............................................................................... 6

Manmohan Das v. Official Liquidators – AIR 1940 All 458, 460, Col. 1 : ILR 1940 All 568 : 192 IC 367
.............................................................................................................................................................. 6, 7
Ranthnaswami v. Nagaraja – AIR 1938 Mad 100: 176 IC 402 ................................................................ 6, 7
Savitri v. Dwarka Prasad – AIR 1939 All 305 : ILR 1939 All 275 : 182 IC 84 ....................................... 6, 7
Shahab-ud-din v. Kalendar – AIR 1938 Lah304 : 176 IC 746 ..................................................................... 6

Other Authorities

Darashaw J Vakil, Commentary on The Transfer of Property Act, 2nd Ed, (2004). ...................................... 8
MLJ’s Law of Transfer of Property – 2004 Edition ..................................................................................... 8
Mulla, The Transfer of Property Act, p. 361,(Bombay, N. M. Tripathi Private Limited, 8th Ed.), 1995 ...... 8
The Transfer of Property Act, 7th Edition 2010, Volume 2 – Manohar&Chitaley ....................................... 5
Topham, New Law of Real Property, 4th Ed., pp. 12 & 13 ........................................................................... 4

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 Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

Introduction

Section 54 of The Transfer of Property Act, 1882 defines ‘sale’ as ‘a transfer of

ownership in exchange for a price paid or promised or part-paid and part-promised’. Therefore,
‘sale’ can be simple put as the transfer of ownership of a property for a price, such a transfer
being an absolute transfer which leaves no right to the property in the transferor.

Section 54 further provides for the procedure to make a sale as follows:

‘Sale how made – Such transfer, in case of tangible immovable property of the value of one
hundred rupees and upwards, or in the case of reversion or other intangible thing can be made
only by a registered instrument’

In the case of tangible immovable property of the value of less than Rs. 100, transfer may
be made either by a registered instrument or by the delivery of the property; the delivery of the
property completes the transfer. However, sale of tangible immovable property of the value of
Rs. 100 and upwards or in case of a reversion or other intangible things as aforesaid, can be
made only1 in writing. The deed should be properly attested and registered 2. Therefore, writing,
attestation and registration are the mandatory requirements for the completion of a valid sale of
property, whose value is more that Rs. 100. The transfer of property concludes only on
registration, i.e. once registration takes place, the ownership passes with effect from the date of
execution of the sale deed3; however the law remains vague on this point as Kanta Ben
Chandulal Shah v. Gajiben4, the court held that the ownership issue cannot be decided merely
from the dates of the execution of the sale deeds.

1
Except as provided, there is no other mode of transfer of property by way of sale -
Narayan Swami v. Lakshmi, AIR 1939 Mad 1220; MakhanLal v. BunkuBehari, (1892) ILR 19 Cal 623
2
Tandonbi Devi v. KalamuSingha, AIR 2009 (NOC) 587
3
KameshwarChoudhary v. State of Bihar, AIR 1998 Pat 141; Ganseh Prasad v. BhaiyaLal, AIR 1938 Nag 253
4
AIR 2005 Guj 49

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 Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

Meaning of the term ‘Reversion and other intangible things’

Immovable Property (Things):
Sale is transfer of ownership in some property. The Transfer of Property Act deals only
with immovable property. Sale of movable property is dealt with under The Sale of Goods Act,
1929. So the subject matter of a sale made under the Transfer of Property Act will always be an
immovable property. The definition of ‘Immovable property’ in Section 3 of the Transfer of
Property Act is neither clear nor complete. It simply says that, immovable property excludes
standing timber, growing crops or grass. It is not clear as to what it includes. In any Act, if the
meaning of any word is not given clearly, the meaning of that word may be found in the General
Clauses Act, 1897, if given there. According to Section 4 of General Clauses Act, immovable
property includes land, benefits to arrive out of land and, things attached to the earth. The
definition of immovable property given in the General Clauses Act is applicable to the Transfer
of Property Act5. But this definition is not complete. Moreover, the expression ‘things attached
to the earth’ which is not defined in the general clauses act has been defined separately in section
3 of the Transfer of Property Act. Thus in order to get a clear and complete meaning of
‘immovable property’, it is necessary to consider the definitions given in Section 3 of transfer of
property act as well as the definition given in the general clauses act. On the basis of the
definition given in both these acts the expression ‘immovable property’ may be defined properly
by the following words;

Immovable Property includes –

 Land
 Benefits to arise out of land, and
 Things attached to the earth, i.e.;
a) Things embedded in the earth,
b) Things attached to what is so embedded in the earth,
c) Things routed in the earth except;
a. Standing timber,
b. Growing crops,
c. Growing grass.

Other Intangible Things:

The distinction between tangible and intangible immovable property is similar to that
made in English law between a corporeal hereditament and an incorporeal hereditament. Topham
explains the distinction as follows:

5
Babulal v. Bhawani (1912) 9 ALJ 776

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 Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

“A corporeal hereditament is an interest in land in possession, i.e., a present right to

enjoy the possession of land. An incorporeal hereditament is a right over land in the possession
of another, e.g., a right of way”6

The contrast is between the estate of the one who is possessed of the land, the tangible
thing, and that of a man who has the mere right, the intangible thing, without the possession of
anything tangible.The‘other intangible thing’ in Section 54 is intended to embrace upon those
imponderables related to immovable property.

The following are not ‘intangible things’ within the meaning of the section, as not being
rights in immovable property though in ordinary parlance, they may be considered ‘intangible
things’:

 A right of re-purchase under a contract for a re-purchase of immovable property

 A license to sell electricity
 A permission to plant trees on land and have access to gather their fruits7
 A copyright in books
 A turn of worship
 Debts already become due.
 Simple decree for money or possession of immovable property
 A final decree for sale under O. 34, R. 5 of the CrPC
 The right of a mortgage in immovable property

The following are rights in immovable property and are, intangible things within the meaning
of the section:

 A right of easements
 A right of rents and profits that may accrue in immovable property
 The interest under a deed of agreement or deed of settlement by which a person is granted
an income in future rents and profits of certain immovable property and also a share in
the proceeds of the sale of the property in future
 The right to patta of a land.8

However, for the purposes of this project, it is important to note that there is a conflict of
opinion as to whether an equity of redemption vested in the mortgager is or is not an ‘intangible
thing’. One view is that the equity of redemption vested in the mortgager is ‘tangible immovable
property’ whatever maybe the nature of the mortgage, whether simple or usufructuary.9 Another

6
Topham, New Law of Real Property, 4th Ed., pp. 12 & 13
7
AIR 1952 Nag. 321 (322)
8
The Transfer of Property Act, 7th Edition 2010, Volume 2 – Manohar&Chitaley.
9
AIR 1959 Pat. 153 (155)

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 Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

view is that in all cases the equity of redemption is an intangible thing10. And the third view is
that where the property is subject to a simple mortgage, the equity of redemption is tangible
immovable property, but that where the mortgage is a usufructuary one, the equity of redemption
is an “intangible things” within the meaning of this section11

Reversion:
A reversion is described in Stroud’s Judicial Dictionaryas ‘the undisposed of interest in
land which reverts to the grantor after the exhaustion of any particular estate, such as an estate
for years, or life, or in tail, which he may have created’. The word reversion comes from the
word revert, which in its lexical capacity, simply means to return. Hence, reversion is, simply
put, the act of returning.

Therefore, where property in the possession of tenants is transferred by the owner, what
is transferred is really a reversion within the meaning of this section12 and consequently such a
transfer must be made only by registered instrument13. Reversion is nothing but an intangible
immovable property and a transfer of it requires registration14

Case Analysis
 BhaskarGopal v. PadmananHira – AIR 1916 Bom 228
Facts: This suit was brought in ejectment, and the plaintiff made title on a registered sale-
deed executed to him in 1910 by the widow and daughters of Rama, the original owner of
the property. The defendants resisted the suit on the ground that they were tenants of
Rama prior to the year 1909 and that in the year 1909 the property was sold to them for
Rs. 50 by Rama's widow. Admittedly this sale deed was not registered, but the
defendants' contention was that no registration was necessary, since the value of the
property was under Rs. 100.
Conclusion: Reversion is the undisposed interest, of the grantor or his/her heirs, of a
property after all interests in the property given to others have terminated and the sale of
such reversion can only be made only by a registered instrument.

 Shahab-ud-din v. Kalendar – AIR 1938 Lah304 : 176 IC 746.

10
AIR 1917 Bom. 287 (288) (DB)
11
(1901) 24 Mad. 449 (463) (DB)
12
AIR 1938 Lah 304 (305)
13
Id
14
ILR 40 Bom. 313

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Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

Facts: The plaintiff sued for possession of a site on the allegation that he was owner of
the site by virtue of a sale deed in his favour executed by one Shujayat Ali. The plaintiff
recited that the defendants had a kutcha structure on the site, that they had refused to
remove it and hence the plaintiff sued for possession. The District Judge held that by
virtue of Section 54, T.P. Act, the deed of sale required registration. The deed of sale was
for Rs. 99 and was un-registered.
Conclusion:As tenants were in possession, all that Shujayat Ali could actually transfer
was a right to possession or a right to receive rent and this is included in the expression
'intangible thing’ and such a sale can only be made by a registered instrument.

 Ranthnaswami v. Nagaraja – AIR 1938 Mad 100: 176 IC 402

Facts: The suit was to recover arrears of rent on the basis of a lease, dated 25th
December, 1920, executed by the defendant in favour of A. The said lease was to run for
ten faslis commencing from Fasli 1333 to Fasli 1342. The lands comprised in the lease
were about 59 acres 37 cents in the village of Sathyamangalam. Subsequent to the
execution of this lease, on the 23rd September, 1925, A gave a lease in favour of the
plaintiff of the whole of the Sathyamangalam village for ten faslis from Fasli 1335 to
Fasli 1344. The document was executed by the plaintiff in favour of
SeethalakshmiAmmal. Not only did it comprise the lands which were the subject-matter
of the lease of 1920, it also included lands comprised under three other leases whose
terms were outstanding. This lease deed was attested by the first defendant in whose
name the lease of 1920 had been executed. In and by the terms of the said document the
plaintiff was authorised to collect the lease paddy and cash rent due from all the lessees
mentioned in the said document including the lease of 1920. This suit had been instituted
for the recovery of arrears for Faslis 1335 to 1339 payable under the new lease.
Conclusion: The transfer of property in the possession on tenants is really the transfer of
a reversion, and can be only made by a registered instrument.

 Savitri v. Dwarka Prasad – AIR 1939 All 305 : ILR 1939 All 275 : 182 IC 84
Facts: A wrote a book and the same was published by the defendant. After the death of A,
the copyrights of the book were transferred to the plaintiff and this suit was filed as a
copyright infringement. The defendants claimed that the copyrights of the book were
transferred to them by A, through an unregistered sale deed.
Conclusion:The words ‘intangible thing’ have reference only to immovable property, and
hence copyright can be sold without a registered sales deed.

 Manmohan Das v. Official Liquidators – AIR 1940 All 458, 460, Col. 1 : ILR 1940 All
568 : 192 IC 367

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 Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

Facts: The license to sell electricity was transferred from Messrs. P.L. Jaitly& Co. to the
Lower Ganges Jumna Electricity Distributing Co. Ltd. The said transfer was not effected
by the means of a registered instrument. The question before the court was whether the
said transfer was valid in the eyes of law. The court held the transfer valid.
Conclusion: The "other intangible thing" referred to in the Section is intended to embrace
those imponderables which are related to immovable property such as, for example, a
reversionary right. There is nothing in the Section or Act to justify the conclusion that all
licenses which are intangible things can only be transferred by a registered instrument.

Findings
The legal thesis, in furtherance of which this project is submitted, is that ‘although the
language of the Section and interpretation of courts15 declare reversion to be an intangible thing,
it is of paramount importance that reversion is not grouped together with the other intangible
things for the purpose of this section’.

For the purpose of proving this thesis, we need to show that reversion, despite being an
intangible immovable property, is different from the other intangible things, for the purpose of
interpretation of this section. In furtherance of the same, we need to revisit the basic definition of
the terms with a subjective approach.

Immovable Property: As explained earlier in this project, interpretation clauses provided

in the Transfer of Property and the General Clauses Act define immovable property to include
the benefits that arise out the land. The right of ownership or of possession is one such right.
Moreover, the Transfer of Property Act deals only with immovable property16, and therefore it is
logical to presume that reversion and the other intangible things mentioned in the section can be
classified as immovable property.

Intangible Property: The word tangible means something that can be touched, i.e., a
material object. An immovable property is capable of being touched and must, therefore, be
always tangible. On the other hand, all abstracts rights including the right of ownership or
possession are incapable of being touched and are, hence, intangible. A property is tangible
because it can be touched by any one and not because it is capable of being touched by a person
who is in possession and has an immediate right to touch it. Incapacity to deliver possession

15
ILR 40 Bom 313
16
AIR 1939 All 305

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 Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

immediately will not, therefore, make any difference to the transfer of the property by the
owner.17

However it is important to note that due to the vagueness of the law on the point of what
is included in other intangible things, the term is subject to the judicial interpretation of courts.
For example, licence to sell electricity, despite being an intangible property related to the land,
can be transferred without a registered instrument.18

Reversion: Reversion is nothing but the act of returning; effectively, reversionary rights
are rights which are supposed to be returned. Reversion is the undisposed of interest in land
which reverts after the exhaustion of the particular estate which may have been
created.19Reversion is particularly mentioned, probably because the lessor, although out of
possession, is able to give symbolic possession by his lessee attorning to the transferee. But such
a symbolic possession is not equivalent to physical possession and a reversion is therefore
intangible. A transfer of a reversion is a transfer of a right to future rents which is a ‘benefits to
arise out of land’ within the meaning of the phrase used in the definition of immovable
property20.

Hence it is submitted that reversion is an immovable, intangible property and a transfer

of it requires registration.21

What remains to be shown, for the purpose of proving the proposed thesis, is the
importance of not clubbing reversion with the other intangible things provided in the Section.
Referring back to the definition of other intangible things, we see that there is a conflict of
opinion as to whether an equity of redemption vested in the mortgager is or is not an ‘intangible
thing. One view is that the equity of redemption vested is ‘tangible immovable property’
whatever may be the nature of the mortgage, whether simple or usufructuary. Another view is
that in all cases, the equity of redemption is an intangible thing. And a third view is that where
the property is subject to simple mortgage, the equity of redemption is tangible immovable
property, but that where the mortgage is a usufructuaryone, the equity of redemption is an
‘intangible thing’ within the meaning of this section.22

Equity of redemption simply means the right of a mortgagor over property, especially the
right to redeem the property on payment of the principal, interest, and costs. This right to redeem
the property on payments of dues is a right, which is returned to a person on the fulfillment of the
subjective conditions. Therefore, this being a right which is returned to a person coupled with the

17
MLJ’s Law of Transfer of Property – 2004 Edition
18
AIR 1940 All. 458
19
Darashaw J Vakil, Commentary on The Transfer of Property Act, 2nd Ed, (2004).
20
Mulla, The Transfer of Property Act, p. 361,(Bombay, N. M. Tripathi Private Limited, 8th Ed.), 1995
21
AIR 1916 Bom 223
22
Manohar&Chitaley, The Transfer of Property Act, Volume 2, p. 56,(7th Ed.), 2010

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 Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

provided definition for reversion, makes these kinds of transaction fall under the legal category
of reversion. However, certain courts have interpreted these kinds of transactions by taking the
interest left in the owner of a mortgaged property to be a tangible property and the same, if of
value less than Rs. 100, can be effected by delivery of possession and does not require a
registered instrument.23 Therefore, there exists a point of conflict in the law on the subject
whether such transaction are transfers or tangible or intangible property.

However the general trend is towards interpreting such transactions to be transaction of

reversion, and hence transfer of intangible property. If reversion was clubbed with other
intangible things under the section, then such transaction would be open to a wider scope of
interpretation, resulting in further conflict on the subject.

It is further submitted that not only does specific inclusion of the term reversion reduces
ambiguity of the law, it also provides for security of the tenants24, as the transfer is that of an
intangible right of reversion, i.e. future possession, and not that of the tangible property, i.e.
present possession of a mortgaged property25; and facilitates such transaction with minimum
friction.

Factual Example
A is the owner of a mortgaged property. He leased this property to B for a period of 20
years. However, before the said leave expired, A transfers the property to C and the same is done
for Rs. 99 and without effective the deal via a registered instrument. C tries to evict B claiming
that since he bought the property from A.

If we look at this with respect to the 2 interpretations applied by the courts when dealing
with such transaction the following 2 scenarios are possible, this transaction can either be seen as
the transfer of the intangible right of reversion from A to C; or, this transaction can be seen as the
transfer of the tangible property from A to C.

As it has been explained in this project, the second interpretation is flawed in the sense
that the right to the tangible property has been lease to B for a said period and the intangible right
of ownership of the said property will only return to A after the lease expires. Till the point of
time the lease remains in effect, A can only sell the intangible right of reversion that he owns and

23
MLJ’s Law of Transfer of Property – 2004 Edition (ILR 1952 Nag. 37)
24
AIR 1938 Mad 100.
25
AIR 1938 Lah 304.

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 Meaning of ‘reversion or other intangible thing’ in Section 54, Transfer of Property Act.

not the tangible property lease by him. Therefore, in such cases it is of paramount importance
that the transfer be interpreted as that of an intangible reversionary right and not the tangible
property and in furtherance, can be only done via a registered instrument.

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