Table of Contents
INTRODUCTION
We know that the transfer of any property against consideration is called a “Sale”, and a transfer without consideration is called a “Gift”. Now, when a property has been exchanged with another, it is called an EXCHANGE under the Transfer of Property Act, of 1882
SECTION – 118 EXCHANGE
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
A transfer of property in completion of an exchange can be made only in the manner provided for the transfer of such property by sale.
SECTION – 119 Right of party deprived of the thing received in exchange
Suppose any party to an exchange or any person claiming through or under such party is by reason of any defect in the title of the other party deprived of the thing or any part of the thing received by him in exchange. In that case, unless a contrary intention appears from the terms of the exchange, such other party is liable to him or any person claiming through or under him for loss caused thereby, or at the option of the person so deprived, for the return of the thing transferred, if still in possession of such other party or his legal representative or a transferee from him without consideration.
SECTION – 120 Rights and liabilities of parties
Save as otherwise provided in this Chapter, each party has the rights and is subject to the liabilities of a seller as to that which he gives, and has the rights and is subject to the penalties of a buyer as to that which he takes.
SECTION – 121 Exchange of money
In an exchange of money, each party thereby warrants the genuineness of the money given by him.
Oral exchange is not permissible in view of the amendment of Section 49 of the Registration Act, 1908 brought about by Act No. 21 of 1929 , which by inserting in Section 49 of the Registration Act, 1908 the words” or by any provision of the Transfer of Property Act, 1882” , has made it clear that the documents of which registration is necessary under the Transfer of Property Act, 1882 but not under the Registration Act, 1908 fall within scope of Section 49 of the Registration Act, 1949. And if not registered they are not admissible as an evidence of any transaction affecting any immovable property comprised therein and do not affect any such immovable property.
FEATURES OF EXCHANGE
Transfer of ownership
The exchange involves the transfer of ownership of some existing property. In the transfer of ownership, the absolute interest of the owner is transferred. A partition of immovable property is not considered an exchange.
Property need not be immovable property
In Exchange, properties may be immovable or movable. An immovable property can be transferred against a movable property and vice versa
Exchange includes “Barter”
The exchange of one immovable property with another immovable property is known as “Barter” and the same in the case of the transfer of one movable property against another moveable property.
Mode of Transfer
Section 118 provides that a transfer of property in completion of an exchange can be made only in a manner prescribed for the transfer of such property by “Sale”. The formalities of Section 54 (dealing with the sale of properties) will be complied with
Where both properties are of movable, then an exchange may be affected by the delivery of properties and registration is not essential.
Where properties are immovable, but the value is less than Rs. 100, then registration is optional
Where the properties exchanged are immovable properties and their value are more than Rs. 100/- then registration of exchange of ownership through an instrument is necessary.
LET’S CONSIDER THE DIFFERENCE BETWEEN EXCHANGE AND PARTITION
Exchange is the mutual transfer of ownership by two persons of different two properties
A partition is merely an arrangement by which the several co-owners hold property separately, which they previously held in a common pool.
Exchange is brought about by a contract between the parties.
The right of partition is a natural right and there is no need to enter into a contract
In an Exchange, the parties exchanging their properties have no interest prior to the exchange in each other properties
In a partition, each party has as much interest in the entire property as the other. There is no exclusive ownership under the partition.
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LEASE OF IMMOVABLE PROPERTY-PART 2