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Modes of Acquisition of Property

Introduction

The civilization and progress of mankind have always been boosted by the never-ending avarice; the appetite for power was one of the driving factors of development. Though the term ‘property’ has been used more in a generalized form rather than specifically denoting land and assets, its parent word ‘Properietate’ provides that a property is something that is/can be owned. Through the eyes of John Locke, “Every man has a property in his person. Every individual has the right to preserve his property, that is, his wife, liberty, and estate.” Another renowned jurist, Salmond propounded that the term property encompasses all legal rights of a person, not personal rights but proprietary rights as it talks about his/her ownership over the corporeal and incorporeal things. In layman’s terms, everything, tangible or intangible property with ownership having some value is categorized as property. R. C. Cooper v. Union of India[1] is the case, wherein the Apex Court has reinstated that the catchall term property comprises both corporeal and incorporeal things. In this article, we will be discussing various modes of acquisition of property.

The concepts of ownership and property are inextricably linked as there is no property without ownership and no ownership without property. In the case of Guru Dutt Sharma v. the State of Bihar, [2]the court has held that ownership is attached with a bundle of rights viz. right to enjoy, retain, destroy, alienate, and possession.

Modes of Acquisition of Property

As far as acquisition of property is concerned in pursuance of Salmond’s perception, the five various ways through which a property could be acquired are as follows,

  1. Possession
  2. Prescription
  3. Agreement
  4. Inheritance
  5. Gift

Possession – As Mode of Acquisition of Property

Possession is the objective realization of ownership i.e. taking physical custody of the property. Salmond believed that a property could be acquired through possession as possession is the continuing exercise of a claim to the exclusive use of an object. In general, the possessor of an object/good/asset is perceived to be the owner of such property unless the contrary is proved. Property being under one’s direct control itself conveys that the occupant is the owner. Possession is a de facto relationship between a man and an object; it is an exclusive right that excludes others from its usage. Though possession doesn’t indicate the ownership, it is prima facie evidence of ownership. Now, the question is how properties could be acquired through possession, and what is its legality? It is a Res Integra question as Indian laws recognise the principle lay down by the maxim Res Nullius. Principally, the term Res Nullius means a property that belongs to no one or property with no owner. The first possessor of Res Nullius would be considered the owner and conferred with a valid title, which acts against the world. In the case of Anil Bhardwaj & Ors v. The State, [3] the Bombay High Court upheld the legality of the principle established by the maxim Res Nullius.

Kinds of Possession

Possession is of two types,

(1) Possession in fact (De Facto Possession): It is the actual possession of a property, which indicates the physical control over the property and shows the physical relation between a person and a thing.

(2) Possession in law (De Jure Possession): As it is possession in the eye of the law, it protects the possession. The protection is given for two reasons,

  • To confer the possessor of certain legal rights attached to the property
  • To bestow him/her with the right to get damages for trespassing.

Modes of Acquiring Possession

(1) Delivery: It is the actual/constructive and voluntary delivery of a property by one person to another. The actual delivery is when the property is physically given into the possession, whereas, constructive delivery is when neither symbolic nor physical delivery is made. Nevertheless, both are lawful modes of possession.

(2) Taking: as the term itself provides, it is an act of taking possession by a person of a property without the consent of the former possessor. On the one hand, it could be Possessio Civilis (Possession for the purpose of usucapion) since the possession is taken without the knowledge of the previous possessor. On the other hand, it could be Possessio Juris, which is legal according to law.

However, it is common knowledge that mere possession does not confer the possessor with ownership. Comprehensively, ownership and possession may or may not be with the same person, and possession alone can be transferred to another via contract.

Prescription – As Mode of Acquisition of Property

Prescription is one of the other modes of acquiring property. Salmond defines Prescription as the effect of lapse of time in creating and destroying rights; it is the operation of time as a vestitive fact. Prescription is the acquisition of the title of a property through the manner prescribed by law; it is the constraint on the creation of new rights by obliterating the old rights. In other words, a person being a possessor can acquire a property or right over such property by claiming that he has had the property’s possession for long years.

Kinds of Prescription

Prescription is of two types,

(1) Positive Acquisitive Prescription: it is when the rights form with the lapse of time.

For instance: if an easement right has been established by continued, prolonged, and uninterrupted de facto use for a prescribed period, it is considered to be acquired through a positive acquisitive prescription.

(2) Negative or Extinctive Prescription: it is when the rights got extinguished with the lapse of time.

For instance: the Limitation Act of 1963 prescribes a limitation period for suits, default in compliance results in the destruction of suing rights.

Agreement – As Mode of Acquisition of Property

Acquisition of property through an agreement enforceable by law is a renowned practice and one of the prominent modes of acquisition, as well. The one factor that determines the legality of an agreement is its validity, which relies on the following five conditions,

  1. Presence of two parties
  2. Their consent
  3. Communication of the same
  4. Depiction of common intention
  5. Consideration

An agreement always conveys the mutually agreed transfer as it is always driven through formal consensus between the parties involved. An agreement culminates in the transfer of the title deed of a property and its possession by one party to another by the virtue of the terms and conditions prescribed in the agreement. If an agreement is made without consideration, it is a gift deed and not a deed for sale or exchange. As for the former, the consideration is a bedrock component, whereas the latter involves no consideration, yet the transfer of equivalent properties traced its origin from the barter system.

For example, Nila has agreed to sell her villa worth 72, 00,000 INR to Ram through an agreement for sale, Ram purchases and acquires the property through the agreement for sale.  Likewise, if the same villa has been transferred for any property owned by Ram, the transfer is perceived to be an exchange

Inheritance – As Mode of Acquisition of Property

It is a convention of transferring properties, titles, rights, and obligations to the legal heirs upon the death of the possessor. In other words, through inheritance, the properties of the deceased would be doled out to his/her family members. The transfer takes place through either law of succession or testamentary will.

Kinds of Succession

Succession is of two types,

  1. Intestate succession
  2. Testamentary succession

In the latter, the testator is the person who creates a will in favour of the legatee, any person of his/her own wish, and the same shall be executed only after his death. If anything like will have not been created, then such person is said to be died intestate, and his/her properties would be transferred among his relatives in light of succession law called intestate succession.

For instance: Allen has died intestate without making any will, now pursuant to the personal law that applies to Allen, his property would be shared among his legal heir. If Robert, son of Allen got his share, it is said to be acquired through inheritance.

Gift – As Mode of Acquisition of Property

If a person transfers his/her property to another person without receiving any consideration in return, is called a gift. The legal instrument that renders legal validity to such transfer is the gift deed. It is the legal document to transfer the property from Donor (Transferor) to Donee (Transferee). The following are the essentials of a valid gift,

  • Property
  • Legitimate Title
  • Free consent devoid of coercion, misrepresentation, and undue influence
  • No consideration

Transfer of Property Act, 1882 dealt with the concept of gift between Sections 122 and 129. In pursuance of Section 122 of the Transfer of Property Act, a property either movable or immovable, which has been transferred involuntarily, without free consent, and for consideration is void.

It can be exemplified by the wordings of case Ajmer Singh v. Atma Singh,[4] wherein an old man executed a power of attorney in the favour of Mr. Charan Singh, who had taken advantage of the opportunity and allegedly executed a gift deed in favour of his son through misrepresentation. It was held by the court that the transfer is void and does not fall under the ambit of the concept of gift.

Conclusion

In a nutshell, Salmond propounded five modes of acquisition of property. The most primitive way of acquiring property is through possession. In agreement and gift, the property is transferred between two agreed parties, but the sole difference is whether or not the transfer is for consideration. If a property is transferred for consideration, it is said to be acquired through agreement, if not, then, it is considered to be acquired through gift. If a property is acquired through a lapse of time, it is a prescription. Inheritance is the transfer of the property through testament or succession law in the case of intestate succession.

References:

  • https://www.legalserviceindia.com/legal/article-8460-theories-and-modes-of-acquisition-of-property.html
  • https://blog.ipleaders.in/concept-of-property/

[1] AIR 1970 SC 564 ; 1970 SCR (3) 530.

[2](15) (1962) 1 S. C. J 382, 395.

[3] 1985 (8) DRJ 75.

[4] AIR 1985 PH 315.

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Snegapriya V S

A third-year student of law at Vellore Institute of Technology (VIT School of Law), budding first-generation lawyer cum legal researcher with multiple publications in various web journals and portals on different subject matters of law in issue. Being a zealous-natured person with thoughts enrooted in epistemophilia has boosted my passion for research writings by interpreting diversified legal facets. As a perceptive observer and reader, I pay greater attention to the overlooked legal fields where divergent challenges might arise, that include cyber law, environmental law, consumer law, and several constitutional provisions. Besides, I prioritize construing legal problems with social psychology. My dream and vision are to catch myself as a skilled legal adroit.