Property Law

What is property?
Property can be defined as something or anything over which the right of ownership can be exercised. According to Austin, ownership is said to exist when: The right is available against the whole world; Over a determinate thing; Indefinite in point of user; Unrestricted in point of disposition; and Unlimited in point of duration

Classification of Property
Movable and immovable property
Tangible and intangible property

 Movable Property:
is usually referred to as goods. Transitory in nature and generally liable to be consumed or destroyed in usage; And are not subject of perpetual enjoyment.

Goods: according to Sec. 2(7) of Sale of Goods Act, 1930 goods means every kind of movable property other than actionable claims and money; and includes stocks and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale of under the contract of sale.

Classification of goods

Goods

Existing goods

Future goods

Contingent goods

Specific/ascertained goods

Unascertained goods

 Immovable property:
Includes land, benefits to arise out of land and things attached to earth.

 Tangible Property

Intangible property

Contract OF SALE
According to Sec. 4(1) of the Sale of Goods Act, 1930, a contract of sale of goods is a contract where by the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part owner and another.

 Where under a contract of sale, the property in goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in goods is to take place at a future time or subject to some conditions thereafter to be fulfilled, the contract is called an agreement to sell *Sec 4(3)] An agreement to sell becomes a sale when the time elapses or the conditions, subject to which the property in goods is to be transferred are fulfilled {Sec. 4(4)}

Sale and Agreement to Sell

Essentials of a Contract of Sale

Two Parties Goods Price Transfer of general property Essential elements of a valid contract

Difference between contract of Sale & Agreement to Sell

Sale The property In goods passes from seller to buyer immediately. Thus an executed contract Agreement to Sell The transfer of property in goods is to take place at a future time or subject to certain conditions to fulfilled. Thus an executory contract An agreement to sell is mostly in case of future goods If the goods are destroyed, the loss falls on the seller

Transfer of Property

Types of goods

Sale can only be in case of existing or specific goods If the goods are destroyed, the loss falls on buyer even though the goods are in possession of the seller

Risk of loss

Consequences of breach

If the buyer fails to pay the price of the goods, seller can sue for the price

If there is a breach of contract by the buyer, the seller can only sue for the damages and not for price

Sale

Agreement to Sell

Right to re-sell

Seller can not re-sell the goods. If he does so the consequent buyer does not acquire the title of the goods

In case of re-sale, the buyer who takes the goods for consideration and without notice of the prior agreement, gets a good title. In this case the original buyer can only sue for damages
Creates jus in personam

General and particular property

Creates jus in rem

If buyer becomes insolvent If the buyer becomes insolvent and before he pays for the goods, has not yet paid the price the seller the seller must return the goods is not bound to part with the to the official receiver. He can goods, until he is paid for. Insolvency of buyer only claim a rateable dividend for the price of the goods if the seller becomes insolvent, the buyer, being the owner is entitled to recover the goods from official receiver. the buyer can claim rateable dividend only

Insolvency of seller

Buyers Rights
Right of examining the goods Acceptance of delivery Buyer not bound to return rejected goods Re-sale of rejected goods Burden of expense

Buyers Duties
The buyer is required to take delivery of the goods and make payments according to the terms of the contract.

Apart from any express contract, it is the duty of the buyer to apply for delivery. The buyers duty includes a demand to make delivery at a reasonable hour

Buyers Dutiescontd.
The buyer should take delivery of goods within a reasonable time after the tender of delivery. Where the property in goods passes to the buyer, it is his duty to pay the price. To give notice of the rejection of goods to the seller

Rights of Unpaid Seller

Against the goods: Lien on the goods In case of the insolvency of the buyer a right of stopping the goods in transit. Right of resale Against the buyer personally: Suit for damages for non-acceptance Suit for prices Suit for interest

Hypothecation
It is a kind of pledge where the pledged goods remain in the possession of the pledger for his use.
Hypothecation is not a statutory creation but is a product of trade usage. Hypothecator holds such goods as an agent and not as the owner.

Pledge
The bailment of goods as security for payment of a debt or performance of a contract is called pledge.
Pledgor and pledgee

 Bailment: is the delivery of goods by one person to another for some purpose, upon a contract, that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the direction of the person delivering them.

Mortgage of Immovable Property

Sec 58 (a) of Transfer of Property Act, 1882 defines mortgage as, transfer on an interest in specific immovable property for the purpose of

securing the payment of money advanced or to

be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability

 Mortgagor Mortgagee Mortgage money Mortgage deed

Kinds of Mortgage
Simple mortgage [Sec. 58(b)] Mortgage by conditional sale [Sec. 58(c)] Usufructuary Mortgage [Sec. 58(d)] English Mortgage [Sec. 58(e)] Mortgage by deposit of title deeds [Sec. 58(f)] Anomalous Mortgage [sec. 58 (g)]

Simple Mortgage [Sec. 58(b)]

Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to

pay the mortgage-money, and agrees, expressly or

impliedly that in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be

necessary, in payment of the mortgage-money, the

transaction is called a simple mortgage and the mortgagee a simple mortgagee.

Mortgage by conditional Sale [Sec.58(c)]

Where, the mortgagor ostensibly sells the mortgaged propertyI. On condition that on default of payment of the mortgagemoney on a certain date the sale shall become absolute, or; II. On condition that on such payment being made the sale shall become void, or ; III. On condition that on such payment being made the buyer shall transfer the property to the seller, The transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale: PROVIDED that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document, which effects or purports to effect the sale.

Usufructuary Mortgage [Sec. 58 (d)]

Where the mortgagori. Delivers possession, or expressly or by implication binds himself to deliver the possession of the mortgaged property to the mortgagee; and Authorizes him:
a) b) c) To retain such possession until the payment of such money; To receive the rents and profits accruing from the property or any part of such rent and profits; To appropriate them in lieu of interest, or in payment of the mortgage money, or partly in lieu of interest and partly in payment of the mortgaged money; and The transaction is called a usufructuary mortgage and the mortgagee is a usufructuary mortgagee

ii.

d)

English Mortgage [Sec. 58(e)]

Where the mortgagor binds himself
to repay the mortgage money on a certain date, transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage money as agreed, and

the transaction is called an English mortgage.

Mortgage by deposit of Title Deeds [Sec.58(f)]

1. This mortgage by deposit of title deeds is available only in the metropolitan cities of Kolkata, Mumbai, Chennai and

other towns which the State Governments concerned, by

notification in their official gazette, specify

2. When the debtor delivers the original documents of title of his property which is mortgaged to the creditor or his agent

with the intention of creating a security on the same in favor

of the creditor, there is a mortgage by deposit of title deeds created in favor of the creditor i.e., mortgagee.

Mortgage by deposit of Title Deeds *Sec.58(f)+Contd.

3. This is a mortgage which is largely resorted to, as the legal formalities are simple and easy to perform. 4. In this mortgage, no possession is given and there is only a deposit of original documents of title. 5. Normally, the matters relating to the deposits of title deeds are covered by an agreement in writing.

Anomalous Mortgage [Sec. 58 (g)]

Section 58(g) of Transfer of Property Act, 1882 says that Anomalous mortgage is a mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title deeds.

Essential elements of Mortgage

Transfer of interest Specific immovable property Security Consideration Competence of parties Registration

 Lease of Property

Sec.105 of Transfer of Property Act defined Lease as:-

A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time,

express or implied, or in perpetuity, in consideration

of a price paid or promised, or of money, a share of

crops, service or any other thing of value, to be

rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

 Lessor, lessee, premium and rent defined.The transferor is called the lessor, The transferee is called the lessee, The price is called the premium, and The money, share, service or other thing to be so rendered is called the rent.

Essential features of a Lease

Parties Subject matter Partial transfer of immovable property Term of lease Consideration or rent

Termination of Lease
By lapse of time By happening of a specified event By surrender By forfeiture On the expiration of the notice to quit

 Exchange

 Sec. 118 of the TP Act defines exchange as: where two persons mutually transfers the ownership of one thing for the ownership of another, neither thing nor both things being money only, the transaction is called an exchange Ownership of property must be exclusive ownership. Mutual transfer of reciprocal estate to each other. Consideration for exchange is not price

Gift

 Gift
Sec. 122 of TP Act,1882 defines the Gift as a transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. Such acceptance must be made during the lifetime of the donor and while he is still capable of giving. If the donee dies before the acceptance, the gift is void.

Essential elements of a gift

Two parties-Donor and Donee Intention to donate Subject matter
Subject matter should be tangible A gift in future property is not recognized under the law

Absence of consideration Voluntary Transfer of ownership Acceptance Delivery

 Intellectual Property Rights

What is Intellectual Property?

Intellectual property (IP) refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.

IP is divided into two categories: 1. Industrial property, which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and

2. Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs.

What is a Patent?

A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem.

What is a trademark?

A trademark is a distinctive sign which identifies certain goods or services as those produced or provided by a specific person or enterprise.

What is an industrial design?

An industrial design is the ornamental or aesthetic aspect of an article. The design may consist of three-dimensional features, such as the shape or surface of an article, or of twodimensional features, such as patterns, lines or color.

What is a geographical indication? A geographical indication is a sign used on goods that have a specific geographical origin and possess qualities, reputation or characteristics that are essentially attributable to that place of origin. Most commonly, a geographical indication includes the name of the place of origin of the goods. Agricultural products typically have qualities that derive from their place of production and are influenced by specific local factors, such as climate and soil. Whether a sign is recognized as a geographical indication is a matter of national law. Geographical indications may be used for a wide variety of products, whether natural, agricultural or manufactured.

 What is copyright? Copyright is a legal term describing rights given to creators for their literary and artistic works. The kinds of works covered by copyright include: literary works such as novels, poems, plays, reference works, newspapers and computer programs; databases; films, musical compositions, and choreography; artistic works such as paintings, drawings, photographs and sculpture; architecture; and advertisements, maps and technical drawings.

 Shukriya
S.Raghvendra