The term property in common parlance indicates the economic status of a person. Any property is held by an individual to draw out benefit from it. Transfers are made by owners themselves, ostensible owners and the co-owners and the co-owners or we can say joint owners. When two or more persons enjoy common ownership of a property, for example say in a coparcenary the male members and now even daughters have a common and equal interest in the ancestral property, any co-owner can transfer his own share in the property to a stranger or another co-owner. And that transferee steps in the shoes of the co-owner (transferor) and gets clothed with all his assets and liabilities. We can say that the transferee becomes the co-owner.
Section 44 Says
Transfer by one Co-owner- Where one of two or more co-owners of immovable property legally competent in that behalf transfers his share of such property or any interest therein, the transferee acquires, as to such share or interest, so far as is necessary to give effect to the transfer, the transferor's right to joint possession or other common or part enjoyment of the property, and to enforce a partition of the same, but subject to the conditions and liabilities affecting , at the date of the transfer, the share of interest so transferred.
Where the transferee of a share of a dwelling house belonging to an undivided family is not a member of the family, nothing in this section shall be deemed to entitle him to joint possession or other common or part enjoyment of the house.
Who is a Co-owner?
Ownership consists of innumerable number of claims, liberties, powers with regard to the thing owned. Ownership is of different kinds. There are absolute and limited, sole ownership, co-ownership, vested ownership, contingent ownership and corporeal. When a person owns a property in one time it is called sole ownership, but if the property is owned by more than one person then it is called joint ownership. By means of partition one can have co-ownership changed into sole ownership.
The expression co-owner is wide enough to include all kinds of ownerships such as joint tenancy, Tenancy in common, Coparcenary, membership of undivided Hindu family, Joint purchase of property etc. The very fact of the reference to the property that the parties have certain shares, indicates that they are co-owners.
In Indian Law, a co-owner is entitled to three essentials of ownership-
1) Right to possession,
2) Right to enjoy,
3) Right to dispose
Therefore, if a co-owner is deprived of his property, he has a right to be put back in possession. Such a co-owner has an interest in every portion of the property and has a right irrespective of his quantity of share, to be in possession jointly with others. This is also called joint-ownership.
The following are the types of co-ownerships:
Tenants in Common
When the type of co-ownership is not specifically stated, by default a tenancy in common is likely to exist. Each tenant in common has a separate fractional interest in the entire property. Although each tenant in common has a separate interest in the property, each may possess and use the whole property. Tenants in common may hold unequal interest in the property, but the interests held by each tenant in common is a fractional interest in the entire property. For e.g. B owns a 25% interest in the property and A owns a 75% interest. Each tenant in common may freely transfer his/her interest in the property. Tenants in common do not have the right to survivorship. Therefore, upon the death of one tenant in common, his/her interest passes via Will or through the laws of intestacy to another person who will then become a tenant in common with the surviving co-owners.
Joint Tenancy
The most attractive feature of joint tenancy is the right of survivorship. Upon the death of one joint tenant, his/her interest immediately passes to the surviving joint tenants and not to the decedents estate. Joint tenants hold a single unified interest in the entire property. Each joint tenant must have equal shares in the property. For e.g. B and A hold a 50% interest. Each joint tenant may occupy the entire property subject only to the rights of the other joint tenants.
Unlike tenants in common, joint tenancy has several requirements that must be met in order to be properly created. Massachusetts law requires that in order for a joint tenancy to be created specific language must be included in the conveyance or devise. Such language includes that the grantees take the land: “jointly”, “as joint tenants”, “in joint tenancy”, “to them and the survivor of them”, or using other language in the instrument that it was clearly intended to create an estate in joint tenancy. However, even if such language is contained in the conveying instrument, a joint tenancy may not exist. There are four additional common law requirements necessary in order to create a joint tenancy.
The four unities are,
1) Unity of Time
The interests of the joint tenants must vest at the same time.
2) Unity of Possession
The joint tenants must have undivided interests in the whole property, not divided interests in separate parts.
3) Unity of Title
The joint tenants must derive their interest by the same instrument (e.g. a Deed or Will)
4) Unity of Interest
Each joint tenant must have estates of the same type and same duration. All four unities must exist. If one unity is missing at any time during the joint tenancy, the type of co-ownership automatically changes to a tenancy in common. A joint tenancy may be created by a Will or Deed but may never be created by intestacy because there has to be an instrument expressing joint tenancy. A joint tenancy is freely transferable.
Tenancy by the Entirety
This type of co-ownership is exclusively for husband and wife. Similar to joint tenancy, tenancy by the entirety provides the right of survivorship. To exist, tenancy by the entirety requires that the four unities of joint tenancy exist plus a fifth unity of marriage between the two co-owners. However, even if all five unities exist, the type of co-ownership may still be joint tenancy if the conveying instrument indicates such. Unlike joint tenancy, tenancy by the entirety does not allow one spouse to convey his interest to a third party. However, one spouse may convey his/her interest to the other spouse. A tenancy by the entirety may only be terminated by divorce, death, or mutual agreement by both spouses. A terminated tenancy by the entirety becomes a tenancy in common.
In Konchunju Nair v. Koshy Alexander it was held that if a co-owner wants to erect a dwelling house on the land he is free to do so. If division of co-ownership of property takes place, the co-owner can claim, that the said property be allotted to his share. The Court would ordinarily grant such an equitable right.
Section 7 of the Transfer of Property Act, 1882 provides that every person competent to contract i.e. a major and of sound mind or is not disqualified by law for contracting. Therefore even the interest of a co-owner or co-sharer can be sold, mortgaged, leased to another co-sharer or to a stranger. The fact that the partition has not taken place by metes and bounds, does not stand in the way of the interest of a co-owner.
According to the law prevailing in some areas, a coparcener of a Hindu Joint Family can alienate his share in the Joint Family Property for consideration. Such a coparcener is a legally competent person. But in some cases of Mitakshara coparcenary, the consent of other coparceners is required before any such transfer. Also where one co-owner is in exclusive possession of a plot of a joint land and lets it out to a tenant without the consent of other co-sharer landlords, such a tenancy will not bind the latter. The lease in such a case will only be confined to the interest and share of the lessor.
In Baldev Singh v. Darshani Devi it was held by the Court that a co-owner who is not in actual physical possession over a parcel of land cannot transfer a valid title of that portion of the property. The remedy available to the transferee would be to get a share out from the property allotted after the partition or to get a decree for joint possession or can claim compensation from the co-owner.
In Rukmini and others v. H.N.T.Chettiar it was held by the High Court of Madras that a co-sharer cannot be allowed to cause prejudice to the other co-sharers by putting up a substantial construction during the pendency of a suit for partition filed by the other co-sharers.
The High court of Punjab and Haryana in a case of Hazara Singh v. Faqiria where a co-owner contended that he had, by adverse possession, a peaceful undisturbed possession by the other co-owners had become the sole owner of a land, held that the possession of a co-owner is possession of all the co-owners. It cannot be adverse to them unless there is a denial of their right to knowledge by the person in possession. If a co-sharer is in possession of the entire property, his possession cannot be deemed to be adverse he possesses the property on behalf of all others.
What are the rights of a transferee in such a transaction?
Basically this section deals with the rights of a transferee and also safeguards their rights. The transferee steps into the shoes of his transferor i.e. the co-owner, and is clothed with all the rights and becomes subject to all the liabilities of his transferor. In short, we can say that he becomes as much a co-owner as his transferor was before the transfer.
Following are his rights after the transfer-Right to Joint Possession
Every joint owner or co-owner of property has a proprietary right in the whole estate. After the transfer, the transferee becomes the co-owner and gets all his rights. He also has the right to joint possession in property except a dwelling house. If a co-owner or his transferee ousted from joint possession, he is entitled to joint possession by a suit, and is not necessary forced to sue for partition. A co-sharer can sue for possession either for the benefit of the entire body of co-sharers or for the partition and possession of the plaintiffs share.
Every joint owner or co-owner of property has a proprietary right in the whole estate. After the transfer, the transferee becomes the co-owner and gets all his rights. He also has the right to joint possession in property except a dwelling house. If a co-owner or his transferee ousted from joint possession, he is entitled to joint possession by a suit, and is not necessary forced to sue for partition. A co-sharer can sue for possession either for the benefit of the entire body of co-sharers or for the partition and possession of the plaintiffs share.
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