School of Law

1. Fundamental Legal Concept

(Acknowledgement: G.W. Paton, John Salmond, Chief Justice Mehr Chand Mahajan and Dr. Avtar Singh)

Law: Law means some rules and regulations made by the competent authority with a view to regulating external behaviour of human being and applied in the administration of justice. According to Austin, “Law is the command of sovereignty. According to Holland, “Law is a rule of external human action enforced by the sovereign political authority.”

Thus,

Law is some rules and regulations;
It is made by the competent authority of the state;
The objective of law is to regulate external behaviour of human being;
It is applied in the administration of justice.

Article 152 of the Constitution of Bangladesh, “law” means any Act, ordinance, order, rule, regulation, bye law, notification or other legal instrument, and any custom or usage, having the force of law in Bangladesh.

Article 65 of the Constitution of Bangladesh empowers the Parliament (the House of the Nation) to enact laws for the Republic.

Proviso to Article 65 of the Constitution of Bangladesh empowers the Parliament (the House of the Nation) to delegate to any person or authority, by Act of Parliament, power to make orders, rules, regulations, bye laws or other instruments having legislative effect.

Article 111 of the Constitution of Bangladesh empowers the Appellate Division and the High Court Division to declare law.

Article 93 of the Constitution of Bangladesh provides that at any time when Parliament stands dissolved or is not in session, if the President is satisfied that circumstances exist which render immediate action necessary, he may make and promulgate such Ordinances as the circumstances appear to him to require, and any Ordinance so made shall, as from its promulgation have the like force of law as an Act of Parliament.

Statutory law/Statute: The law made by any formal legislative authority is called statutory law. For example:

As per Article 65 of the Constitution of Bangladesh, law enacted by the Parliament (the House of the Nation) is called statutory law;
As per Proviso to Article 65 of the Constitution of Bangladesh, rules and regulations made by any delegated authority are called statutory laws;
As per Article 93 of the Constitution of Bangladesh, ordinance promulgated by the President is called statutory law.

Judge made law/Precedent/Ruling: Law declared by the judiciary is called judge made law. For example: As per Article 111 of the Constitution of Bangladesh, law declared by the Appellate Division or the High Court Division of the Supreme Court of Bangladesh is called judge made law.

Customary law: The law which not made by any formal authority but grown and prevailing in the society from time immemorial without conflicting other law is called customary law. For example: As per Article 152 of the Constitution of Bangladesh, “law” means — any custom or usage having the force of law in Bangladesh.

International law: When the law is applicable beyond territorial jurisdiction of one state is called international law. It can again be divided into two types: Public International Law: Law applicable between two or more states. Private International Law/Conflict of Laws: Law applicable between citizens of two or more states.

National/Municipal/Domestic Law: When the law is applicable within territorial jurisdiction of one state is called national law. It can again be divided into two types: Public Law: Law determines and regulates the different organs of a state and relationship between citizens and the state, e.g. the Constitution of Bangladesh, the Penal Code, 1860 etc. Private Law: Law determines and regulates the relations between citizens of a state, e.g. the Contract Act, 1872, The Transfer of Property Act, 1882 etc.

Civil Law: Law deals with property and status, e.g. the Contract Act, 1872, the Code of Civil Procedure, 1908 etc.

Criminal Law: Law deals with crime and punishment, e.g. the Penal Code, 1860, the Code of Criminal Procedure, 1898 etc.

Substantive Law: Law determines rights, defines crimes, e.g. the Contract Act, 1872, the Penal Code, 1860 etc.

Procedural/Adjective Law: Law deals procedures to enforce the substantive law, e.g. the Code of Civil Procedure, 1908, the Code of Criminal Procedure, 1898 etc.

Supreme Law: Law prevails over all other laws and no other law can exits in contravention of this law, e.g. the Constitution of Bangladesh.

Subordinate Law: Law made by formal authority under the supreme law, e.g. the Bangladesh Labour Act, 2006, the Environment Conservation Act, 1995.

Delegated Law: Law made by delegated authority under the subordinate law, e.g. Bangladesh Bar Council Canons of Professional Conduct and Etiquette, the Environment Conservation Rules, 1997

Special Law: Law deals with special matter, e.g. the Family Courts Ordinance, 1985, the Bankruptcy Act, 1997

General Law: Law deals with general matter, e.g. the Contract Act, 1872, the Penal Code, 1860, the Code of Civil Procedure, 1908, the Code of Criminal Procedure, 1898 etc.

Legislation: Legislation consists of law made by or under the authority of legislature and may comprise statute law and statutory instruments, which are orders, rules and regulations made by the Government under authority of a statute or bye laws made by local government or other authorities exercising powers conferred upon them by legislature. Legislation is the most important formal source of law. It is express will of the state.

Custom: Customs are the oldest source of law. They are some unwritten principles of human actions having binding effect under similar circumstance. According to Holland, “Custom is a generally observed course of conduct.” Essentials of a valid custom are ancient/ immemorial, reasonable, continually observed, peacefully observed, specific, clear and definite, compulsorily observed, uniform and universal, not opposed to public policy and morality and not conflicting with the statutes.

Precedent: Precedent is one of the important sources of law. It is declared by the Judge through Judicial decision. It is also known as ruling of the court.

The functions of the court are, inter alia, to settle dispute by applying the law made by the Parliament. That is, in principle the court by itself should not make law; rather in deciding a case it will apply the law made by the parliament. However, in practice the court sometimes faces unique problem for which the relevant law is not clear or absent. As a result, the court has to apply his judicial mind and give its decision on the merit of the case.

The duty of the court is not only to apply law but also to administer justice. A court cannot refuse to deliver justice on the ground of absence of law or obscure of law. It is the solemn duty of a court to deliver justice and it cannot be denied under any circumstance. As a result, in deciding a case the court sometimes declares law when the relevant statutory laws are absent or not clear.

Article 111 of the Constitution of Bangladesh empowers the High Court Division and Appellate Division of the Supreme Court of Bangladesh to declare laws.

Doctrines relating to Precedent: There are three important doctrines relating to precedent: Stare decisis, Ratio decidendi and Obiter dictum. Stare decisis means the principles upon which the decision stands. It has actual binding force. Stare decisis is the principle of the law, which has become settled by a series of decisions and is generally binding on in similar cases. Ratio decidendi means rationality of the decision i.e. reasoning of the decision. Obiter dictum means relevant comments of the court in the decision.

Administration of Justice: Administration of justice means the process for determining the rights between the parties in conflict and thereby inflicting punishment to the wrongdoer and awarding compensation to the victim.

The primary functions of a state are to protect sovereignty from external aggression and to maintain internal law and order situation through administration of justice. Thus, administration of justice is a key factor to determine the character of a government. According to Lord Bryce, “There is no better test of the excellence of government than the efficiency of its judicial system.” George Washington said: “Administration of justice is the firmest pillar of government.”

The origin and Growth of Administration of justice is as ancient as the origin and growth of human being in the world. From the very beginning, human being realized that conflict of interests is unavoidable between human interaction and dispute is inevitable between them. Thus, administration of justice is essential to resolve the dispute and thereby to restore a sustainable relationship between human being. However, at the primitive stage, the concept of state was unknown to them and thus administration of justice was done by themselves on the basis of vengeance. At the latter stage, the concept of state emerged and the state started to play a role in the administration of justice not as an actor itself but as a regulator. In this period, the justice was administered on the principle of ‘tooth for a tooth’ or ‘eye for an eye’. Subsequently, the state started to play a role in the administration of justice as a actor itself as per relevant law.

Natural Justice: It is based on the principles of good conscience and equity and the judge is not bound to follow any predetermined rules and regulations. Judgment is given on the case to case basis by application of judicial mind and discretion.

Legal Justice: It is based on the predetermined rules and regulations. Judgment is given on accordance with law and the court has a very limited scope to apply its judicial mind and discretion.

Civil Justice: The purpose of civil justice is to determine the rights between the parties in conflict and ensure the rights of the deprived party by taking compensation or any other appropriate remedy from the defaulter party.

Criminal Justice: The purpose of criminal justice is to determine the guiltiness of the accused person and to inflict punishment to the offender or to take any other action suitable for preventing the offender or other would be offender from committing the offence again.

Theories of Punishment: The purpose of criminal justice is to determine the guiltiness of the accused person and to inflict punishment to the offender. But what is the purpose for inflicting punishment? To answer this question the following five theories of punishment have emerged: Deterrent theory, Preventive theory, Reformative theory, Retributive theory and Theory of compensation.

Deterrent theory: According to this theory, the object of inflicting punishment is to make the wrongdoer an example to other persons who have criminal tendencies. That is, under this theory punishment is given to the criminal so that the others may learn a lesson from him. According to Salmond, “The chief end of the law of crime is to make the evildoer an example and a warning to all that are likeminded with him.” A judge once said, “I don’t punish you for stealing the sheep but so that sheep may not be stolen.” It is also called exemplary punishment. Under this theory, very harsh and cruel punishment like mutilation of limbs, death sentence etc. is imposed.

Preventive theory: According to this theory, object of inflicting punishment is to prevent the wrongdoer from doing a wrong a second time. The offenders are disabled from repeating the offences under this theory. For example, an offender is preventing from committing another offence by imprisonment.

Reformative theory: According to this theory, object of inflicting punishment is to reform the wrongdoer. The reformative theory wants to punish the criminal as little as possible and improve him as mush as possible. While awarding punishment, the judge should study the character and age of the offender, the early breeding, his education and environment, the circumstances under which he committed the offence and other relevant factors.

Retributive theory: According to this theory, object of inflicting punishment is to allow the victim to have his revenge against the wrongdoer. Under this theory the principle of “an eye for an eye” or “a tooth for a tooth” is recognized and followed.

Theory of compensation: According to this theory, object of inflicting punishment is to compensate the victim of the crime. It is argued that the main reason for committing crime is greed and if the offender is bound to return the ill-gotten benefits of crime, then the criminal tendency would be decreased.

Right: Definition of rights has been given by many jurists in various ways. As for example, according to Hibbert, “a right is one person’s capacity of obliging others to do or forbear by means not of his own strength but by the strength of a third party. If such third party is God, the right is divine. If such third party is public generally acting through opinion, the right is moral. If such third party is the State acting directly or indirectly, the right is legal.”

According to Salmond, “A right is an interest recognized and protected by a rule of law. It is any interest — and disregard of which is wrong.”

Thus, we can say that right means such claim, demand or interest which is recognized by the rules or enforceable by the court of law.

Human rights: Human rights are those inherent, universal, inalienable and interdependent rights which belong to all human being without any restriction and discrimination as to race, colour, gender, religion etc.

Moral rights: Moral rights are those rights which are recognized by the society and protected by the public opinion.

Divine rights: Divine rights are those rights which are recognized by the rules of religion.

Equitable rights: Equitable rights are those rights which are recognized by the state and enforceable by the court of law by exercising its discretion.

Legal rights: Legal rights are those rights which are recognized by the state and enforceable by the court of law by performing its duty. According to Salmond, every legal right has the following five essential elements:

There must be a person who is the owner of the right or the person of inherence.
Legal right must accrue against another person who is subject of the duty. He is called the person of incidence.
Legal right must have content or substance. It is also called subject of right.
There must have object of right.
There must have title of right. That is, there must have some facts or documents which will show the creation of the right.

Illustration: Mr. Abdus Salam has purchased a house from Ms. Salma Begum. Here, Mr. Abdus Salam is the person of inherence. Ms. Salma Begum is the person of incidence. The house is the subject matter of right. The object of right is that the seller and every person should not disturb the peaceful possession and enjoyment of the house by Mr. Abdus Salam.The title is found in the fact of the sale of the house.

Perfect and imperfect rights: A perfect right is recognized by law as well as enforceable by law; on the other hand, an imperfect right is recognized by law but not enforceable by law. For example: A claim barred by limitation is imperfect right.

Positive and negative rights: In the case of positive right, the person subject to duty is bound to do something; on the other hand, in the case of negative right, the person subject to duty is bound not to do something.

Right in rem and right in personam: A right in rem is available against the whole world; whereas, a right in personam is available against a particular individual.

Rights in re propria and rights in re aliena: A right in re propria is right over the own property; while a right in re aliena is right over the property of another person.

Municipal rights and International rights: A municipal right is available under municipal law; whereas, an international right is available under international law.

Ordinary rights and fundamental rights: An ordinary right is guaranteed by ordinary law; whereas, fundamental right is guaranteed by constitutional law. That is, fundamental rights are those human rights which are guaranteed by the Constitution and are enforceable by the court of law. That is, all fundamental rights and human rights but not vice versa.

Person: Person is an entity which is capable to perform duties and enjoy rights. That is, in order to be a person in legal sense, two essential conditions must be fulfilled: Capability to perform duties; and Ability to enjoy rights including to own property and capacity to sue and be sued.

Natural person: Any human being capable to perform duties and enjoy rights is called natural person. Once upon a time, the slave was not regarded as person because they were regarded as chattels and they did not enjoy many basic rights like other free men. Under the provisions of the Contract Act, 1872, a minor and a human being of unsound mind is not competent to enter into a contract. A human being who has not attained at the age of majority i.e. 18 years is called minor in view of the provisions of the Majority Act, 1875. Under the provisions of the Limitation Act, 1908, a minor, an insane or idiot is called a person of legal disability.

In view of the above, we can say that a human being who has attained at the age of majority and is of sound mind is called competent natural person.

Legal person: An entity is called legal person when it is created in compliance with prescribed law and it is capable to perform duties and enjoy rights under the law. That is, two essential conditions are to be fulfilled in order to be a legal person: It must be created in compliance with prescribed law; and it must be capable to perform duties and enjoy rights under the law.

When a company is incorporated upon registration with the Registrar of Joint Stock Companies and Firms (RJSC) under the provisions of the Companies Act, 1994, the company will be regarded as legal person. This legal personality is distinct from its shareholders and directors.

A legal person is also called: Juristic person and artificial person

Property: In general sense, property means money, land, building etc. However, in legal sense the word property is used in different senses. In wide sense, property means any sort of rights. That is, all personal and proprietary rights are included within the definition of property. However, in narrow sense, property means and includes only the proprietary rights. That is, all personal rights are excluded within the definition of property.

Corporeal property: Corporeal property means the property which can be touched and seen. It is also known as tangible property. For example: land, building etc. Corporeal property may again be divided into two classes: Movable property and immovable property.

Movable property: Movable property means the property which can be transferred from one place to another place. For example: chair, table car, timber etc.

Immovable property: Immovable property means the property which cannot be transferred from one place to another place. For example: land, building, a tree standing on land etc.

Incorporeal property: Incorporeal property means the property which cannot be touched and seen. It is also known as intangible property. For example: copyright, trade mark etc. Incorporeal property may again be divided into three classes: Copyright, Trade Mark and Patent. Copyright means the rights of author over his books and designer over his artistic work. Trade mark means the rights of businessman over his marks of goods or service. Patent means the rights of inventor over his invented things.

Modes of acquiring property: Property may be acquired by of Possession, Prescription and Transfer. Possession is the primitive mode for acquiring property. Any person may acquire property by taking its own possession when the property in question is owned by none or abandoned. For example: a fisherman catches fish from the river.

Prescription: Prescription is another mode for acquiring property by way of adverse possession. Here, the property is already owned by someone but another person enjoys it openly and peacefully without any express consent of the owner.

Transfer: Transfer is the most popular mode for acquiring property. Acquiring property by way of transfer may be classified into two types: By act of the parties and by operation of law. Property may be acquired by act of the parties by means of the transfer in the following ways:

by Deed of Sale popularly known as Saf Kabla Deed
by Deed of Exchange popularly known as Ewaz Deed
by Deed of Gift popularly known as Heba Deed or Heba-bil Ewaz Deed
by Deed of Will popularly known as Wasiyat Nama
by Deed of Mortgage
by Deed of Lease
by Deed of Trust

By operation of law: Property may be acquired by operation of law after death of the owner to his heirs by way of inheritance.

Ownership: Ownership is such right over the property by which:

the owner can enjoy the property as he wishes subject to reasonable restriction by law;
the owner can transfer property either completely or partially in compliance with relevant laws.

Possession:

Possession means the control over the property either directly or indirectly with a view to enjoying the property. That is, there are two basic features of possession:

Control over the property either directly or indirectly
The object of such control is to enjoying the property.

Possession is very important in acquiring the ownership of property and to maintain the ownership over the property. That’s why it is said that:

Every possession is a good possession unless contrary is proved;
Possession is the nine-tenth of ownership.

Title: Title means the facts by which a person acquires the ownership of property. Suppose, a person is an owner of a piece of land situated at Uttara, Dhaka. How did he acquire the ownership? He purchased the land from some one. That is, the Saf Kabala Deed is the title deed by which he becomes the owner of the property.

Obligation: Obligation is a kind of duty, which is correlative of rights in personam. According to Paton, “An obligation is that part of the law which creates rights is personam. According to Holland, “An obligation is a tie whereby one person is bound to perform some act for the benefit of another.”

Direct obligation: When one person is directly bound to perform obligation, the obligation is called direct obligation. For example, a borrower is bound to repay loan to his creditor.

Indirect obligation: When one person is not directly responsible to perform the obligation, the obligation is called indirect obligation. For example, a guarantor is bound to repay the loan when the borrower fails to do so.

Individual obligation: When one person individually responsible to perform the obligation, the obligation is called individual obligation. For example: a tenant is bound to pay rent to the landlord individually.

Joint obligation: Where two or more persons collectively bound to perform obligation, the obligation is called joint obligation. For example, in case of partnership, all partners are jointly responsible to pay all debt of the firm.

Individual and joint obligation: When two or more persons severally and collectively responsible to perform obligation, the obligation is called individual and joint obligation. For example, both borrower and guarantor are individually and jointly responsible to repay the loan to the creditor.

Contractual obligation: An obligation arises out of contract is known as contractual obligation.

Quasi contractual obligation: An obligation arises out of quasi contract is known as quasi contractual obligation.

Delictal obligation: An obligation arises out of tort is known as delictal obligation.

Innominate obligation: An obligation arises out of other than the above three sources is known as innominate obligation.

Sources of obligation: Obligations may arise from the following four sources:- Contract, Quasi contract, Torts and Others.

Contract: Contract is the main source of obligation. Contract means an agreement enforceable by law. The basis of contractual obligation is mutual consent between the parties. For example: Mr. Rumi has executed Baina nama to sell his 5 decimals land situated at Uttara. Here, the purchaser is under obligation to pay the value of the property in order to get a Saf kabla Deed in his favour by Mr. Rumi.

Torts: A tort is a civil wrong, the remedy of which is damages or compensation. This civil wrong is outside the purview of contractual obligation. For example, Mr. Abdus Salam published a defamatory statement against Mr. Abdur Rahim in the Daily Star on 04 April 7, 2009. Here, Mr. Abdus Salam is under obligation to pay compensation to Mr. Abdur Rahim. It is to be mentioned here that Mr. Abdur Rahim may also file criminal case against Mr. Abdus Salam because defamation is also an offence under the Penal Code,1860 but the nature allegation and the remedy provided for defamation under torts and criminal law are different.

Quasi Contract: Quasi contract is also regarded as one of the source of obligation. Here, there is no actual promise but the law presumes a contract between the parties. Therefore, it is not based on consent of the parties but based on conduct pf the parties by operation of law. For example: Mr. Sharif mistakenly delivered some goods to Mr. Kamal as if he (Kamal) were the right person and Mr. Kamal accepted the goods. Here, Mr. Kamal is under obligation to pay the price of the goods to Mr. Sharif.

Other sources: Obligation may also arise from other sources. For example: by virtue a trust deed, the trustee is under obligation to fulfill the trust as per the terms and conditions of the trust deed.

Liability: Liability means responsibility for committing any wrong. And a wrong is committed because of breach of duty. That is, when a person fails to perform his duty or does something beyond his authority, then he commits a wrong and liability arises because of this wrong. In other words, liability is a means of remedy against the wrongdoer and in favour of the injured party. According to Salmond, “Liability or responsibility is the bond of necessity that exists between the wrongdoer and remedy of the wrong.

Civil liability: Civil liability arises because of committing civil wrong i.e. violation of civil right. For example: when a person fails to perform his contractual obligation, civil liability arises against him. The following conditions are to be fulfilled for creation of civil liability:

Duties or obligation
Negligence
Commission of wrong
Injury i.e. violation of legal right
- Damnum sine injuria
- Injuira sine damnum
- Volenti no-fit injuria

Damnum sine injuria: Damnum sine injuria means damage without injury. According to this maxim, no liability will create only because of damage without any injury. For example: Advocate Kamal has set up a law chamber near the law firm of Advocate Mamun. As a result, Advocate Mamun has undergone damage without violation of his legal right (injury) and as such no labiality will arise on the part of Advocate Kamal.

Injuira sine damnum: Injuira sine damnum means injury without damage. According to this maxim, liability will create only because of injury without any damage. For example: Mr. Kamal could not cast his vote for the symbol of pen. However, the symbol of pen wins in the election. As a result, Mr. Kamal has not undergone any damage despite violation of his legal right (injury) and as such labiality will arise on the part of Election Conducting Authority.

That is, violation or legal right or injury is the fundamental essence to create liability with or without damage.

Volenti no-fit injuria: No liability will arise if a person voluntarily agrees to suffer injury.

Criminal liability: Criminal liability arises because of commission any act or omission from any act in contravention of law. For example: when a person fails to obey traffic laws, criminal liability arises against him.

Conditions for criminal liability

The following conditions are to be fulfilled for creation of criminal liability:

Duties prescribed under any law
Mens rea e. guilty mind
Mala fide intention
Preparation
Attempt
Commission of act or omission from any act in contravention of law
Necessitatis non habet legem

Necessitatis non habet legem: Necessitatis non habet legem means necessity knows no law. According to this maxim, if an act is done under dire necessity in circumstances where no fear of punishment would deter the person from so acting, he would not be punished severely. The leading case on the subject is that of R. Vs. Dudley, (1881), 14 QBD 273. Three shipwrecked sailors in a boat were without food for seven days and two them killed the third, a boy, and fed on his flesh under such circumstances that were appeared to the accused every probability that unless they fed upon the boy or one of them, they would die of starvation. In the circumstances, the court held that they were guilty of murder and accordingly convicted them and sentenced them to death but pardon was recommended and granted.

Thus, jus necessitates is not a ground for releasing a person from penal liability but it may be relevant for assessing the measure of liability.

Vicarious liability: Vicarious liability means the liability of one person for the act of another person. For example, a master may be liable for the act of his servant.

Absolute or strict liability: When liability arises only on the basis of wrongful act without any proof of mens rea or mala fide intention is called absolute liability. For example: a wrongful act committed because of mistake of fact. The maxim is this is that Ignoratia juris neminem excusat: Ignorance of law is no excuse.

Theory of law: Theory of law is the thoughts of different jurists with regard to: origin of law, growth of law and nature of law. It is also called school of law.

Analytical theory of law: John Austin is the proponent of this theory. This theory is also known as: Positive school of Law and English school of law. According to this theory, law is the command of sovereign authority. Parliament is regarded as the main source of law.

Pure theory of law: Hans Kelson is the father of this theory. According to this theory, law is made by the sovereign authority but it is influenced with humanistic element.

Historical theory of law: At first, Montesquieu emphasized on this theory. According to this theory, law is made by none but recognized in different counties in different ways through historical evolution.

Philosophical theory of law: Hugo Grotius, the father of modern international law is the exponent of this theory. According to this theory, law is not made by any special authority or historical evolution but because of basic human reason with a view to developing human personality. Accordingly, law is nothing but to surrender of individual will to the collective will.

Sociological theory of law: Auguste Comte, the father of Sociology is the proponent of this theory. According to this theory, law is a part of social functions and social demonstration of external relations of every individual. This theory gives importance on social justice.

3. Land and Property Law

Transfer of Property: In view of section 5 of the Transfer of Property Act, 1882, transfer of property means an act by which a living person conveys his property to one or more other living persons. That is, transfer of property includes only transfer of property inter vivos and it does not include transfer by operation of Law like inheritance. It is to be mentioned here that living person means natural person as well as artificial juristic person like a company or incorporated association.

Kinds of transfer of property

The Transfer of Property Act, 1882 deals with the following modes of transfer-

Sale (chap-3) -complete transfer
Mortgage (chap-4) –partial transfer
Lease (chap-5) – partial transfer
Exchange (chap-6) – complete transfer
Gift (chap-7) – complete transfer

Sale:

As per Section 54 of Transfer of Property Act, 1882, sale is a transfer of ownership in exchange of price.

Exchange:

As per Section 118 of Transfer of Property Act, 1882, exchange is a transfer of ownership of one thing in exchange of another thing.

Gift:

As per Section 122 of Transfer of Property Act, 1882, gift is a transfer of ownership without any consideration.

Mortgage:

As per Section 58 of Transfer of Property Act, 1882, mortgage is a transfer of an interest in the immovable property for the purpose of securing repayment of loan.

Lease:

As per Section 105 of Transfer of Property Act, 1882, lease is a transfer of right to enjoy of immovable Property in consideration of a price.

Modes of transfer:

There are 3 modes of transfer

Oral transfer
Law transfer by written document.
Transfer by registered document.

As per Section 9 of Transfer of Property Act, 1882, oral transfer is valid if no written document is required under any law.

Generally, oral transfer is allowed for transferring movable property but immovable property cannot be transferred without written document.

Transfer by written document on stamp paper is permitted in the case of lease not more than one year. An agreement for sale (Baina nama) could be executed on stamp paper. But now registration is compulsory for executing an agreement for sale (Baina nama). In fact, under the present laws, any transfer of immovable Property is to be made by a registered document.

Doctrine of Election

As per Section 35 of the Transfer Property Act, 1882 “Doctrine of Election” means to choose an option either to accept the deed or reject it as a whole, i.e. under this doctrine a person can not take an advantage without incurring disadvantage on the same instruments of transfer.

Generally, a person can not transfer any property which he is not entitled to transfer. However, Section 35 of the Transfer Property Act, 1882 provides an exception to this general rule under the doctrine of election.

According to this Section a person can transfer property even he has no right to transfer if he gives any benefit to the owner of the property in the same transition. In this case, the transfer will be effective if owner of property confirm the transfer by taking the benefit as well as by giving up his own property. If the owner does not give up his own property, he can not take the benefit from the transaction.

Analysis of the section

The transferor must profess to transfer a property which he has no right to transfer;
He must confer a benefit on the owner whose property he purports to transfer to another person;
The two things: the transfer and conferring of the benefit must from parts of the same transaction;
The benefit must be directly upon the owner of the property.
The benefit must be conferred on him in the same capacity in which he is the owner of the property.

For example:

Maisha is owner of an apartment at Uttara. Saima by executing a deed transferred the apartment of Maisha to Rifat and by the same deed Saima transferred her own property of Banani to Maisha. Now Maisha may take the property of Banani by giving up the property of Uttara or she may reject the whole transaction.

Definition of estoppel:

According to the principle of estoppel a person is stop to deny a fact which he has admitted intentionally.

According to section 115 of the Evidence Act, 1872 when a person has intentionally permitted another person to believe a thing to be true and to act upon such belief, then the person shall not be allowed to deny the truth of that thing.

Application the doctrine of estoppel under the Transfer Property Act, 1882:

Section 41 and 43 of the Transfer Property Act, 1882 are based on the principle of estoppel.

Section 41: Transfer by ostensible owner:

Where an ostensible owner transfers for consideration, then the transfer shall be valid if the transferor has acted in good faith after taking reasonable care to ascertain that the transferor had power to make the transfer.

Section-43: Transfer by unauthorized person:

When a person transfer’s property of another person on a representation that he is authorized to such transfer and the transferee takes the transfer for consideration, then the transfer shall be effective at the option of transferee if the transferor acquires the property subsequently.

ONCE ADMITTED CANNOT BE DENIED

Doctrine of Lis-Pendens: Lis pendens means a pending suit. As per the doctrine, nothing should be changed during pending a suit. This doctrine is applied in the provisions of Section 52 of the Transfer of Property Act, 1882. According to Section 52 of the said Act, a property cannot be transferred during the pendency of a suit relating to the property.

In order to apply the doctrine of Lis pendens under the Transfer of Property Act, 1882, the following essential conditions must be fulfilled:

There must be pendency of a suit or proceeding;
The suit or proceeding must be pending in a competent court;
The suit or proceeding must not be collusive;
A right to immovable property must be directly and specifically in question in that suit or proceeding;
The property in dispute must be transferred or otherwise dealt with by any party to the litigation;
The alienation must affect the rights of the other party.

Definition of sale:

According to Section 54 of the Transfer of Property Act, 1882, “Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.

Thus, sale is a recognized method to transfer of property. Transfer of ownership of property is made in consideration of price.

However, it should be kept in mind that sale and contract for sale is not same thing. A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parities. It is popularly known as Baina Nama. It does not, of itself, create any interest in or charge on such property. But a sale creates absolute ownership of buyer on the property.

The transferor is called a seller/vendor, the transferee a buyer/purchaser/vendee; the price is called the purchase–money (earnest money in case of Baina Nama), and the instrument by which the transfer is effected is called a sale–deed/Saf Kabala deed.

Formalities for transferring of immovable property by way of sale:

As per Section 54 of the Transfer of Property Act, 1882, transfer of immoveable property can be made only by a registered instrument.

Section 54A was inserted by section 5 of the Transfer of Property (Amendment) Act, 2004. As per this section 54A, registration of a contract for sale of any immoveable property has also been made compulsory even the buyer has taken possession of the property.

For registration of any instrument, we have to follow the procedures prescribed by the Registration Act, 1908.

RIGHTS AND LIABILITIES OF BUYER AND SELLER

According to Section 55 of the Transfer of Property Act, 1882, the buyer and the seller of immoveable property shall have the following rights and liabilities:

Disclosing any material defect

The seller is bound to disclose to the buyer any material defect in the property or in the seller’s title thereto of which the seller is aware, and which the buyer could not discover with ordinary care.

Producing all documents of title

The seller is bound to produce to the buyer on his request for examination all documents of title relating to the property.

Replying relevant questions

The seller is bound to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto.

Executing a proper conveyance

The seller is bound to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place on payment of the amount due in respect of the price.

Caring of the property and all documents of title

The seller is bound to take as much care of the property and all documents of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents between the date of the contract of sale and the delivery of the property.

Delivering possession of the property

The seller shall give possession of the property to the buyer or such person as he directs.

Paying public charges and rent

The seller is bound to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all encumbrances on such property due on such date.

Delivering all documents of title

Where the whole of the purchase-money has been paid to the seller, he is also bound to deliver to the buyer all documents of title relating to the property which are in the seller’s possession or power. However, where the seller retains any part of the property comprised in such documents, he is entitled to retain them all, and, where the whole of such property is sold to different buyers, the buyer of the lot of greatest value is entitled to such documents.

The person who possesses the title documents is bound to produce the said documents and furnish such true copies thereof or extracts there-from as may be required upon every reasonable request by other buyer(s) at the cost of the person making the request. Meanwhile, the person who possesses the title documents shall keep the said documents safe and un-cancelled unless prevented from so doing by fire or other inevitable accident.

Rents and profits of the property

The seller is entitled to the rents and profits of the property till the ownership thereof passes to the buyer.

Disclosing the facts which may materially increases the value

The buyer is bound to disclose to the seller any fact as to the nature or extent of the seller’s interest in the property of which the buyer is aware but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest.

Paying purchase money

The buyer is bound to pay at the time and place of completing the sale, the purchase-money to the seller or such person as he directs. However, where the property is sold free from encumbrances, the buyer may retain out of the purchase-money the amount of any encumbrances on the property existing at the date of the sale, and shall pay the amount so retained to the persons entitled thereto.
Bearing any loss arising from the destruction etc

The buyer is bound to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller where the ownership of the property has passed to the buyer.

Paying all public charges and rent

Where the ownership of the property has passed to the buyer, as between himself and the seller, the buyer is bound to pay all public charges and rent which may become payable in respect of the property, the principal moneys due on any encumbrances subject to which the property is sold, and the interest thereon afterwards accruing due.

Benefit of any improvement in, or increase in value

The buyer is entitled to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof where the ownership of the property has passed to him.

Definition of Gift

According to Section 122 of the Transfer of Property Act, 1882, “Gift” is the transfer of certain property made voluntarily and without consideration.

The person who makes gift is called the donor and the person accept gift is called the donee.

Essentials of Gift

There must be transfer of ownerships,
The ownership must related to a property in existence,
The transfer must be without consideration,
It must have been made voluntary,
The donor must be competent person,
The transferee must accept the gift.

GIFT HOW EFFECTED

Gift of immoveable property

As per Section 123 of the Transfer of Property Act, 1882, a gift of immoveable property must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.

Gift of moveable property

As per Section 123 of the Transfer of Property Act, 1882, a gift of moveable property may be effected either by a registered instrument signed as aforesaid or by delivery. In other orders in case of gift of movable property, there are two alternative modes of transfer,

registration deed, or
delivery of possession.

Gift under Muslim law

Erstwhile, a heba under Muslim law could be made without registration. However, now registration is mandatory even for declaration of heba under Muslim law.

WHEN GIFT MAY BE SUSPENDED OR REVOKED

As per Section 126 of the Transfer of Property Act, 1882, the donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked.

Moreover, a gift may be revoked on the same grounds as a contract may be rescinded. The circumstances, under which a contract may be rescinded, are contained in section 19 of the Contract Act. “When consent to an agreement in cased by coercion, undue influence, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so obtained.’ Thus where an improvident gift is made to a person who is in a position to dominate the will of the donor, the presumption is that the gift was obtained by under influence. Instances of such undue influence are a gift by a child to a parent, a beneficiary to a trustee, to a trustee, a feeble-minded person to a spiritual; adviser, a patient to physician or a solicitor.

Definition of Exchange: Section 118 of the Transfer of Property Act, 1882 provides that, “When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an “exchange”.

Exchange how made:

As per Section 118 of the Transfer of Property Act, 1882, a transfer of property in completion of an exchange can be made only in manner provided of the transfer of such property by sale. That is, transfer of immoveable property by way of exchange can be made only by a registered instrument.

Rights and Liabilities of the parties:

As per Section 120 of the Transfer of Property Act, 1882, the rights and liabilities of the parties will be the rights and liabilities of seller and buyer. In case of exchange of immovable property section 55 of the Transfer Property Act, 1882 will be applicable and in case of exchange of movable property, relevant provisions of the Sale of Goods Act, 1930 will be applicable.

Thus, in view of Section 120 read with Section 55 of the Transfer of Property Act, 1882, the rights and liabilities of exchange of immovable property will be as follows:

Disclosing any material defect

Each party is bound to disclose any material defect in the property or in the title thereto of which one is aware, and which the other could not discover with ordinary care.

Producing all documents of title

One party is bound to produce to the other party on request for examination all documents of title relating to the property.

Replying relevant questions

One party is bound to answer to the best of his information all relevant questions put to him by the other party in respect to the property or the title thereto.

Executing a proper conveyance

Each party is bound to execute a proper conveyance of the property.

Caring of the property and all documents of title

Each party is bound to take as much care of the property and all documents of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents between the date of the contract of exchange and the delivery of the property.

Delivering possession of the property

Each party shall give possession of the property to the other party.

Paying public charges and rent

Each party is bound to pay all public charges and rent accrued due in respect of the property up to the date of the exchange, the interest on all encumbrances on such property due on such date.

Delivering all documents of title

Each party is bound to deliver to the other party all documents of title relating to the property which are in their possession or power.

Rents and profits of the property

Each party is entitled to the rents and profits of the property till the ownership thereof passes to the other.

Disclosing the facts which may materially increases the value

Each party is bound to disclose to the other any fact as to the nature or extent of interest in the property of which one is aware and other is not aware.

Bearing any loss arising from the destruction etc

Each party is bound to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the other where the ownership of the property has passed to each other.

Paying all public charges and rent

Where the ownership of the property has passed to the one another, the respective party is bound to pay all public charges and rent which may become payable in respect of the property.

Benefit of any improvement in, or increase in value

Each party is entitled to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof where the ownership of the property has passed to them.

However, it is to be noted here that as per section 119 of the Transfer of Property Act, if any party to an exchange is deprived of the thing received by him in exchange by reason of any defect in the title of the other party, then, he may claim

compensation for loss; or
return of the property transferred.

RIGHTS AND LIABILITIES OF THE LESSEE

Right of accession

If during the continuance of the lease any accession is made to the property, such accession shall be deemed to be comprised in the lease.

Right to declare void of the lease contract in case of destruction

If by fire, tempest or flood, or violence of an army or of a mob or other irresistible force, any material part of the property be permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void.

Right to deduct the expense of repairs from the rent

If the lessor neglects to make any repairs, the lessee may make the same himself, and deduct the expense of such repairs with interest from the rent.

Right to deduct payment from the rent

If the lessor neglects to make any payment which he is bound to make, and which is recoverable from the lessee, the lessee may make such payment himself, and deduct it with interest from the rent.

Right to transfer

The lessee may transfer the whole or any part of his interest in the property. The lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease.

Duty to disclose some facts

The lessee is bound to disclose to the lessor any fact as to the nature or extent of the interest which the lessee is about to take, of which the lessee is, and the lessor is not, aware, and which materially increases the value of such interest.

Duty to pay rent

The lessee is bound to pay the premium or rent to the lessor or his agent at the proper time and place.

Duty to take reasonable care

The lessee is bound to keep the property in as good condition as it was in at the time when he was put in possession, subject only to the changes caused by reasonable wear and tear or irresistible force.

Duty to allow inspection

The lessee is bound to allow the lessor and his agents, at all reasonable times during the term, to enter upon the property and inspect the condition thereof.

Duty to give notice of any defect

The lessee is bound to give or leave notice of any defect, when such defect has been caused by any act or default on the part of the lessee, his servants or agents.

Duty to give notice of any proceeding

If the lessee becomes aware of any proceeding or any interference with the lessor’s rights concerning the leased property, he is bound to give notice to the lessor with reasonable diligence.

Duty to use the property

The lessee may use the property and its products (if any) as a person of ordinary prudence would use them if they were his own.

Duty not to do certain things

The lessee must not use the property for a purpose other than that for which it was leased, or fell or sell timber, pull down or damage buildings belonging to the lessor, or commit any other act which is destructive or permanently injurious thereto. He must not, without the lessor’s consent, erect on the property any permanent structure, except for agricultural purposes.

Duty to put the lessor into possession of the property

On the determination of the lease, the lessee is bound to put the lessor into possession of the property.

Definition of Mortgage:

According to Section 58 of the Transfer of Property Act, 1882, a mortgage is the transfer of an interest in specific immoveable 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.

The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage–money, and the instrument by which the transfer is effected is called a mortgage–deed.

Thus, Mortgage is a contract by which the mortgagor transfers his interest in immovable property for the purpose of securing loan.

Kinds of Mortgage:

As per section 58 of the Transfer of Property Act, 1882 the mortgages are of six kinds-

Simple Mortgage
Mortgage by conditional sale
Usufructuary Mortgage
English Mortgage
Mortgage by deposit of title deeds
Anomalous Mortgage.

Simple Mortgage

Where the mortgagor binds himself personally to pay the mortgage-money without delivering possession of the mortgaged property and agrees that in the event of his failing to pay, the mortgagee shall have a right to cause the mortgaged property to be sold in payment of the mortgage-money, the transaction is called a simple mortgage.

The mortgagor binds himself personally to pay the mortgage-money;
No delivery of possession is required;
If fails to pay the mortgage-money, the mortgagee shall have a right to cause the mortgaged property to be sold in payment of the mortgage-money.

Simple Mortgage is also known as Registered or Legal Mortgage.

Mortgage by conditional sale

Where the mortgagor ostensibly sells the mortgaged property on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or on condition that on such payment being made the sale shall become void, or n 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.

Usufructuary Mortgage

Where the mortgagor delivers possession of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property and to appropriate the same in lieu of payment of the mortgage-money, the transaction is called an usufructuary mortgage.

English Mortgage

Where the mortgagor binds himself to re-pay the mortgage-money on a certain date, and 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, the transaction is called an English mortgage.

Mortgage by deposit of title deeds

Where a person delivers to a creditor of title to immoveable property with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.

This type of mortgage is allowed in the town of Dhaka, Narayangonj and Chittagong and in any other town which the Government may, by notification in the official Gazette, specify in this behalf.

Mortgage by deposit of title deeds popularly known as Equitable Mortgage.

Anomalous Mortgage.

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 within the meaning of this section is called an anomalous mortgage.

Execution of Mortgage Deeds

Registration is compulsory for executing a mortgage deed. However, Creation of an equitable mortgage was permitted without going through the formalities of registration. It did not attract any stamp duty and even no writing was essential. However, registration for executing Mortgage by deposit of title-deeds (equitable mortgage) executed in favour of Government, scheduled banks and financial institutions has been made compulsory under the newly enacted Transfer of Property (Amendment) Act, 2004 read with Registration (Amendment) Act, 2004 effective from 01.07.2005. It is to be mentioned here that registration fee has been reduced remarkably. [Section 17(1)(cc) of the Registration Act and Proviso to Section 59 of the TP Act]

Registration fee: [Section 78A(c) of the Registration Act]

Under previous laws/before 01.07.2005	Under existing laws/from 01.07.2005
Tk. 500.00 (Upto Mortgage Value Tk. 1 lac)	@ Tk. 1% [Min. Tk. 200.00 –Max. Tk. 500.00] (Upto Mortgage value Tk. 5 lac)
Tk. 2,000.00 (Upto Mortgage Value above Tk. 1 lac upto Tk. 5 lac)
Tk. 7,000.00 (Upto Mortgage Value above Tk. 5 lac upto Tk. 10 lac)	@ Tk. 0.25% [Min. Tk. 1,500.00 –Max. Tk. 2,000.00] (Mortgage value above Tk. 5 lac upto Tk. 20 lac)
Tk. 8,000.00 (Upto Mortgage Value above Tk. 10 lac upto 25 lac)
Tk. 15,000.00 (Upto Mortgage Value above Tk. 25 lac upto 50 lac)	@ Tk. 0.10% [Min. Tk. 3,000.00 –Max. Tk. 5,000.00] (Mortgage value above Tk. 20 lac)
Tk. 25,000.00 (Upto Mortgage Value above Tk. 25 lac upto 1 Crore)
(Maximum Tk. 50,000.00)	(Maximum Tk. 5,000.00)

Necessary Papers and documents for executing mortgage:

For creation of mortgage, the following documents and papers are recommended to submit:

Title deed: Original deed of sale/lease/gift/exchange showing title of the mortgagor to the specific property.
Bia/Via deed for the purpose of determining unbroken chain of ownership at least for 25 years.
Deed of partition, if applicable.
Mutation certificate
S., S. A. R. O. R., R. S. Khatian (record of rights) as applicable, showing his share of the land.
Upto date ground rent payment receipt and if applicable municipal tax payment receipt.
Maps/approved plan.
Upto date non-encumbrance Certificate.
Valuation certificate; and
Non-objection certificate of Rajuk/Ministry of Works or any other authority, if applicable.
Etc.

RIGHTS AND LIABILITIES OF MORTGAGOR (SS. 60-66)

Right of mortgagor to redeem (Section 60)

Upon payment of the mortgage-money after the principal money has become due, the mortgagor has a right to require the mortgagee to deliver all deeds and documents relating to the mortgaged property and to deliver possession thereof to the mortgagor.

Right to Transfer the mortgaged property to third person (Section 60A)

Upon fulfillment of the relevant conditions, the mortgagor may require the mortgagee to assign the mortgage-debt and transfer the mortgaged property to a third person.

Right to inspection and production of documents (Section 60B)

The mortgagor is entitled to inspect and make copies the documents of title relating to the mortgaged property which are in the custody or power of the mortgagee.

Right to redeem separately or simultaneously (Section 61)

Where a mortgagor has executed two or more mortgages in favour of the same mortgagee, he shall be entitled to redeem any one such mortgage separately or any two or more of such mortgages together.

Right of usufructuary mortgagor to recover possession (Section 62)

In the case of a usufructuary mortgage, the mortgagor has a right to recover possession of the property, when the mortgagee is authorised to pay himself the mortgage-money from the rents and profits of the property and when such money is paid.

Right to accession of the mortgaged property (Section 63)

If the mortgaged property received any accession during the continuance of the mortgage, the mortgagor shall be entitled to such accession.

Right to improvement of the mortgaged property (Section 63A)

Where mortgaged property has been improved during the continuance of the mortgage, the mortgagor shall be entitled to the improvement.

Right to make lease (Section 65A)

The mortgagor shall have power to make leases of the mortgaged property.

Waste by mortgagor in possession (Section 66)

A mortgagor is not liable to the mortgagee for allowing the property to deteriorate; but he must not commit any act which is destructive or permanently injurious thereto.

RIGHTS AND LIABILITIES OF MORTGAGEE

Right to foreclosure or sale (Section 67)

After the mortgage-money has become due, the mortgagee a right to file a suit for foreclosure and thereby obtain a decree that the mortgagor shall be debarred of his right to redeem the property, or a decree that the property be sold.

Right to sue for mortgage-money (Section 68)

The mortgagee has a right to sue for the mortgage-money under some circumstances.

Power of sale mortgage-money (Section 69)

The mortgagee shall have power to sell the mortgaged property in default of payment of the mortgage-money, without the intervention of the Court under certain circumstances.

Right to appoint Receiver (Section 69A)

A mortgagee having the right to exercise a power of sale under section 69 shall be entitled to appoint a receiver of the income of the mortgaged property.

Right of accession to mortgaged property (Section 70)

If any accession is made to the mortgaged property, the mortgagee shall be entitled to such accession for the purposes of the security.

Renewal of mortgaged lease (Section 71)

When the mortgaged property is a lease, and the mortgagor obtains a renewal of the lease, the mortgagee shall be entitled to the new lease for the purposes of the security.

Rights of mortgagee in possession (Section 72)

The mortgagee may spend such money for the preservation of the mortgaged property from destruction, forfeiture or sale; for supporting the mortgagor’s title to the property etc.

Right to proceeds of revenue sale or compensation on acquisition (Section 73)

Where the mortgaged property is sold owing to failure to pay arrears of revenue in respect of the property, the mortgagee shall be entitled to claim payment of the mortgage-money.

Liabilities of mortgagee in possession (Section 76)

When the mortgagee takes possession of the mortgaged property, he must manage the property as a person of ordinary prudence would manage it if it were his own.

RIGHTS AND LIABILITIES OF MORTGAGOR (SS. 60-66)

Right of mortgagor to redeem (Section 60)

Upon payment of the mortgage-money after the principal money has become due, the mortgagor has a right to require the mortgagee to deliver all deeds and documents relating to the mortgaged property and to deliver possession thereof to the mortgagor.

Right to Transfer the mortgaged property to third person (Section 60A)

Upon fulfillment of the relevant conditions, the mortgagor may require the mortgagee to assign the mortgage-debt and transfer the mortgaged property to a third person.

Right to inspection and production of documents (Section 60B)

The mortgagor is entitled to inspect and make copies the documents of title relating to the mortgaged property which are in the custody or power of the mortgagee.

Right to redeem separately or simultaneously (Section 61)

Where a mortgagor has executed two or more mortgages in favour of the same mortgagee, he shall be entitled to redeem any one such mortgage separately or any two or more of such mortgages together.

Right of usufructuary mortgagor to recover possession (Section 62)

Right to accession of the mortgaged property (Section 63)

If the mortgaged property received any accession during the continuance of the mortgage, the mortgagor shall be entitled to such accession.

Right to improvement of the mortgaged property (Section 63A)

Where mortgaged property has been improved during the continuance of the mortgage, the mortgagor shall be entitled to the improvement.

Right to make lease (Section 65A)

The mortgagor shall have power to make leases of the mortgaged property.

Waste by mortgagor in possession (Section 66)

A mortgagor is not liable to the mortgagee for allowing the property to deteriorate; but he must not commit any act which is destructive or permanently injurious thereto.

RIGHTS AND LIABILITIES OF MORTGAGEE

Right to foreclosure or sale (Section 67)

Right to sue for mortgage-money (Section 68)

The mortgagee has a right to sue for the mortgage-money under some circumstances.

Power of sale mortgage-money (Section 69)

The mortgagee shall have power to sell the mortgaged property in default of payment of the mortgage-money, without the intervention of the Court under certain circumstances.

Right to appoint Receiver (Section 69A)

A mortgagee having the right to exercise a power of sale under section 69 shall be entitled to appoint a receiver of the income of the mortgaged property.

Right of accession to mortgaged property (Section 70)

If any accession is made to the mortgaged property, the mortgagee shall be entitled to such accession for the purposes of the security.

Renewal of mortgaged lease (Section 71)

When the mortgaged property is a lease, and the mortgagor obtains a renewal of the lease, the mortgagee shall be entitled to the new lease for the purposes of the security.

Rights of mortgagee in possession (Section 72)

The mortgagee may spend such money for the preservation of the mortgaged property from destruction, forfeiture or sale; for supporting the mortgagor’s title to the property etc.

Right to proceeds of revenue sale or compensation on acquisition (Section 73)

Where the mortgaged property is sold owing to failure to pay arrears of revenue in respect of the property, the mortgagee shall be entitled to claim payment of the mortgage-money.

Liabilities of mortgagee in possession (Section 76)

When the mortgagee takes possession of the mortgaged property, he must manage the property as a person of ordinary prudence would manage it if it were his own.

Definition of Actionable Claim

As per section 3 of the Transfer of Property Act, 1882, “Actionable claim” means a claim to any debt or to any beneficial interest in moveable property not in the possession of the claimant, which the Civil Courts recognize as affording grounds for relief. However, it does not mean the following debts:

a debt secured by mortgage of immoveable property, or
a debt secured by hypothecation or pledge of moveable property, or
any beneficial interest in moveable property not in the possession of the claimant.

In view of the above definition, actionable claim means-

any unsecured debt (i.e. simple debt for which there is no security of property), or
any beneficial interest in moveable property not in the possession of the claimant.

Mode of transfer/assignment

As per section 130(1) of the Transfer of Property Act, 1882, the transfer of an actionable claim can be effected only by the execution of an instrument in writing signed by the transferor or his duly authorised agent.

Notice of transfer/assignment

As per section 131 of the Transfer of Property Act, 1882, every notice of transfer of an actionable claim shall be made in writing, signed by the transferor or his agent duly authorised in this behalf.

Giving notice to the debtor is not mandatory for a valid assignment/transfer of actionable claim. However, if no notice is served, the debtor may pay to his original creditor and in that case the transferee will not be protected by law. Therefore, for his own interest, the transferee should serve notice of assignment to the debtor as early as possible.

Illustration

Abdur Rahim gave loan of Tk. 50,000/= to Abdus Salam. Thereafter, Abdur Rahim transfers the debt to Mahfuz. Despite making such transfer, Abdur Rahim demands the debt from Abdus Salam and Abdus Salam pays the money to Abdur Rahim.

In the above case, if Abdus Salam did not receive notice of the transfer as prescribed in section 131, the payment made by Abdus Salam to his original creditor Abdur Rahim would be valid, and the assignee Mahfuz cannot sue Abdus Salam for the debt. On the other hand, if Abdus Salam received notice of the transfer as prescribed in section 131, then the payment made by Abdus Salam to his original creditor Abdur Rahim would not be valid, and the assignee Mahfuz can sue Abdus Salam for the debt.

Effect of transfer/assignment

As per section 130(1) read with 130(2) of the Transfer of Property Act, 1882, upon completion of the transfer by execution of the instrument, all the rights and remedies of the transferor shall vest in the transferee.

The transferee of an actionable claim may institute proceedings for recovery of the claim in his own name without obtaining the transferor’s consent to such proceedings and without making him a party thereto.

As per section 132 of the Transfer of Property Act, 1882, the transferee of an actionable claim shall take it subject to all the liabilities and equities to which the transferor was subject in respect thereof at the date of the transfer.

Illustration

Abdullah effects a policy on his own life with the Delta Life Insurance Company Limited. Thereafter, he assigns it to a Dhaka Bank for securing the payment of an existing debt. If Abdullah dies, the Bank is entitled to receive the amount of the policy and to sue on it.

Legal Resource

Reliable online legal resource is very important for every law student. Here is some important online links for academic materials:

https://epgp.inflibnet.ac.in/Home/ViewSubject?catid=20
https://chilot.wpcomstaging.com/teaching-materials/

Anchor Law House, Bangladesh

Anchor Law House, Bangladesh

School of Law

School of Law

1. Fundamental Legal Concept

3. Land and Property Law

Legal Resource

Phone: +8801712710496