Section 2 of The Transfer of Property Act, 1882
In the territories to which this Act extends for the time being the enactments specified in the Schedule hereto annexed shall be repealed to the extent therein mentioned. But nothing herein contained shall be deemed to affect:
(a) the provisions of any enactment not hereby expressly repealed;
(b) any terms or incidents of any contract or constitution of property which are consistent with the provisions of this Act, and are allowed by the law for the time being in force;
(c) any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability; or
(d) save as provided by section 57 and Chapter IV of this Act, any transfer by operation of law or by, or in execution of, a decree or order of a Court of competent jurisdiction, and nothing in the second Chapter of this Act shall be deemed to affect any rule of Muhammadan law.
The only amendment made in this section by the amending Act 20 of 1929 is to omit the words “ Hindu ” and “ or Buddhist ” in the last paragraph of the section. The result is that Chapter II also now applies to Hindus and Buddhists.
These words refer to the whole Act and not to this section only.
The Act did not apply to regions which were governed by the Patni Regulation, Bengal Regulation 8 of 1819. The effect of clause (a) is to maintain in tact the statutory force which the Legislature has given to local usage in the Punjab and Oudh.
A right of partition is an incident of property held in joint tenancy or tenancy in common which is not affected by the Act and partition may be made orally. Another such incident would be a right of pre-emption. The English rule of Equity is that a mortgagee is entitled to be reimbursed for all costs reasonably incurred in respect of the mortgage security; and this has been described as an implied term of a mortgage saved by this clause. See now Code of Civil Procedure, 1908, O.34, r.40.
This clause follows the general rule that in the absence of a clear indication to the contrary, statutes affecting substantive rights are not retrospective. All rights, liabilities and remedies constituted before the Act came into force are left in precisely the same position as if the Act had not been passed. Thus a mortgage executed before the Act is not invalid because it does not comply with the requirement of sec. 59 as to attestation.
The provisions of the Act do not apply to a tenancy created before the Act. Section 108 is not retrospective, and a tenancy, which was not transferable before the Act, does not become so, by virtue of that section. The provisions of sec. 108 (o) as to waste do not apply to a lease executed before the Act. Similarly sec. 111(d) has no application to leases executed before the Act, and a mokarari lease granted before the Act is not extinguished by merger in a patni subsequently granted. The Judicial Committee have observed that the provision as to forfeiture in sec. 111(g) is by virtue of sec. 2 not retrospective although it in substance places in statutory form a rule already existing in India. A landlord's right to eject a tenant who holds on a periodic tenancy is a substantive right, and, in a suit filed before the Act to eject a tenant it is sufficient if reasonable or customary notice is given.
The same rule applies if the legal relation has been constituted under one of the Acts or Regulations repealed by the section. In this respect the Act covers the same ground as sec. 6 of the General Clauses Act. If the mortgage is before the Act and subject to Bengal Regulation 34 of 1803, the mortgages cannot claim more than the maximum of interest allowed by that Regulation. A usufructuary mortgagee on a mortgage before the Act may institute a suit for sale, although such a suit is not allowed by this Act. Again when proceedings for foreclosure had been completed under the Bengal Regulation 17 of 1806, the consequent suit for foreclosure would be governed by that Regulation and not by this Act. But if the legal relation had been created after the Act, the Act will apply; and an assignment of a mortgage after the Act will be governed by the Act, although the mortgage was executed before the Act came into force.
Both this clause and sec. 6 of the General Clauses Act refer to substantive rights and not to procedure, for no one has a vested right to any form of procedure. The clause is not a disabling provision, for it is intended to preserve existing rights. A mortgagee coming into Court after the commencement of the Act to enforce a mortgage must follow the procedure enjoined by the Act, even though the mortgage be before the Act. The word “relief” in this clause like the words “right” and “liability, ” denotes a substantive right. There is a clear distinction between a relief and the procedure for obtaining that relief. Thus the mortgagee’s remedy or relief is the right to sell the property mortgaged. That is a substantive right, but the procedure for obtaining that relief is a suit for sale under section 67 and not by execution of a money decree for the debt. The repealed section 99 of this Act, now replaced by the Code of Civil Procedure, Order 34, rule 14, is a matter of procedure and is therefore retrospective.
A rule of procedure cannot revive a right which has been lost. A mortgagee under a mortgage of 1865 took proceedings under Bengal Regulation 17 of 1806, but failed to sue for possession, so that his right to possession was lost by adverse possession in 1878. He could not afterwards sue for foreclosure under sec. 67 relying on the 30 years rule in the Limitation Act. Lord Hobhouse said : “ The subsequent creation of suits for foreclosure could not, except by clear enactment, revive the extinct right. And in effect the clear enactment is the other way, for section 2, clause (c), of the Transfer Act says that nothing therein shall affect any right or liability arising out of a legal relation constituted before this act comes into force, or any relief in respect of such right or liability.”
The Act, but for certain exceptions referred to below, does not apply to transfers by operation of law, but is limited, as stated in the preamble, to transfers “ by act of parties.” A transfer by operation of law is not validated or invalidated by anything contained in the Act. Transfers by operation of law occur in cases of testamentary and intestate succession, forfeiture, insolvency and court-sales. A purchaser at a court-sale acquires title by operation of law, and at such sales title is transferred without a registered deed; and a purchaser of a debt at an execution sale is not affected by sec. 135. When property vests in an Official Receiver on insolvency, there is a transfer by operation of law and no deed is necessary; but when the Official Receiver sells the property of the insolvent that has vested in him the sale is a transfer by act of parties to which the Act applies, and a registered dead is necessary if the property is tangible immoveable property of the value of Rs. 100 and upwards too, section 54.
A transferee of a lessor is entitled to have rent apportioned under sec. 36 of this Act; but there can be no apportionment when the transferee is an execution purchaser at a court-sale. For instance if A sells to B his house which is let at a monthly rent of Rs. 500 payable on the last day of each month, and the sale takes place on the 15th of June, then A and B are each entitled to half the rent payable on the last day of June, i.e., Rs. 250 each. But if the sale were a court-sale, B would take the whole of the rent, i.e., Rs. 500.
But although sec. 2 (d) makes the Act inapplicable to transfers by operation of law, the principle of some section, e.g., sec. 36 and seo. 53, has been applied to such transfers.
An exception is made with reference to sec. 57 and Chapter IV as the latter provides for the transfer and extinction of a mortgagor's interest by a decree of the Court, and the former provides for the discharge of incumbrances by order of a Court.
Sec. 2 says that “ nothing in the second Chapter of this Act shall be deemed to affect any role of Muhammadan law.“ The reason for this provision is that some of the rules of that law differ from the general rules as to the transfer of property enacted in Chapter II. Thus a Mahomedan may settle property in perpetuity for the benefit of his descendants provided there is an ultimate gift in favour of Charity; see the Wakf Validating Act, 1913, to which retrospective effect has been given by the Musalman Wakf Validating Act, 1930. This rule is not affected by sections 13 and 14 of the Act. The Mahomedan law of gifts is expressly saved by section 129. Under that law writing is not essential to the validity of a gift, but delivery of possession or of such possession as the subject of the gift is susceptible of is necessary for a transfer by way of gift.
Although section 2 saves rules of Mahomedan law it does not follow that the general rules in Chapter II cannot apply to Mahomedan transfers. These general rules excluded only if there is an inconsistent rule of Mahomedan law. Where there is no inconsistent rule of Mahomedan law, the sections in Chapter II apply proprio vigore for all that section 2 says is that nothing in Chapter II shall be deemed to affect any rule of Mahomedan law. But in any case not covered either by the sections in Chapter II or by Mahomedan law, the English law is applied on the ground of justice, equity and good conscience.
The Act as it stood before the Amending Act, 20 of 1929, also saved rules of Hindu law. The word “ Hindu ” has been omitted as the differences between that law and the Act have now been removed.
These differences were:
Gifts to Hindu women are subject to special rules of construction, but these are not inconsistent with the Act.
Rule of damdupat:,The Hindu rule of damdupat, under which interest exceeding principal cannot be received at any one time, ceases to operate from the date of a suit on a mortgage. There are conflicting decisions as to whether the rule applies in the case of mortgages governed by the Transfer of Property Act, it being held in Madras that it does not and in Bombay and Calcutta that it does. The amendment of sec.2(d) by Act 20 of 1929 does not affect those decisions. For a fuller discussion of the rule of damdupat, see Mulla’s Hindu Law.
Before 1929 the Act saved rules of Buddhist law, but words “ or Buddhist ” which occurred in sec. 2 (d) have now been omitted. It may observed that by section 13 of the Burma Laws Act 13 of 1928, Buddhist law is applied only if the parties are are Buddhist and the question for decision is one regarding succession, inheritance, marriage or caste or any religious usage or institution.
Crown grants are exempted from the operation of the Act by the Crown Grants Act, 15 of 1895, section 2.