Section 118 & 119 of Topa, 1882- section 118/119

Section 118 & 119 of Topa, 1882- section 118/119

1. Section 118 & 119 of Topa , 1882 Dharmendra Chawla SYLLB Roll No. 08

2. Exchange 2

3. When two person 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” Definition 3

4. Essentials ingredients 4

5. Example 5 A B A B

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7. FEATURES OF EXCHANGE Transfer of ownership - Exchange involves transfer of ownership in some existing property. In transfer of ownership, absolute interest of the owner is transferred 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” - Exchange of one immovable property with another immovable property is known as “Barter” and same in case of transfer of one movable property against another moveable property. 7

8. cASE LAWS Srihari Jena Vs. Khetramohan Jena, AIR (2002) Orissa 195 (4) Civ LJ 279 Facts – Persons were exchanging ownership of their properties to hide act of crime or financial crime or benami properties Court Held – Hon’ble court held that as It was Deed of Exchange which is not valid contract and void under Contract Act. The instrument of exchange became void and invalid Balakrishnan Bhagwanji Lodi Vs. Prakash Sheshrao Lodi, AIR 2005 NOC 89(Bombay) Facts – Two brothers exchanged properties which were held by them separately. The properties being worth more than Rs. 100/- in value. They could exchange them only through registered instruments. Court Held – Hon’ble court held that in case of partition of joint family property, once partition is affected, whether by way of family arrangement or deed of partition, there is severance of jointness of properties. 8

9. RIGHT OF A PARTY DEPRIVED OF THING RECEIVED IN EXCHANGE 9

10. If a party has deprived from the thing, whose ownership has been transferred in exchanged due to defective title of other party, He has two remedies under Section 119 meaning 10

11. Re remedies under Section 119 11

12. case LAWS Hari Shankar Mishra Vs. Vice Chairman, Kanpur Development Authority, AIR 2001 All 139 ;2001(42) ALL LR 839 Facts – Persons exchanged properties which were held by them and one party did not fulfil the said exchange Court Held – When in an exchange of properties one party did not get possession of the property he was entitled to receive in exchange He was held entitled to return property transferred by him 12

13. case LAW Jattu Ram Vs. Hakama Singh, AIR 1994 SC 1653; 1994 Facts – There was defect in title of land received by one party to exchange due to false entries made by patwari and party was deprived from some portion of land as per Deed of Exchange Court Held – It was held by Supreme Court that entries made by patwari in the official records do not create title, therefore the opposite party was liable to return land(property) 13

14. Difference between Exchange and Sale 14 Exchange Section 118 - “when two persons mutually transfer the ownership of one thing for the ownership of another, neither things or both things being money only, the transaction is called ‘an exchange’. Essential elements - There must be two different persons who mutually agree and two different things. The property may be movable or immovable, both movable, both immovable or one movable and another immovable. Each party is a seller and buyer in such type of transaction. The persons must be owner of things so transferred. No price is paid in exchange, the consideration is property and not money. An exchange of immovable property of Rs. 100/- or more can be affected only by registered deed. Sale Section 54 - ‘sale is a transfer of ownership in exchange for price paid or promised or part-paid and part promised. Essential elements - The seller and buyer (parties to the sale) must be competent to transfer: Both the seller and buyer must be competent to contract under section 10 of contract act, i.e., the parties to transfer should not be; A minor, A person of unsound mind and A person disqualified by law. Subject matter of sale: The subject matter of sale must be transferable immovable property. Consideration of price: A transfer of ownership will be sale only when the consideration for it is paid or promised or partly paid or partly promised Sale refers to immovable property only, whereas exchange refers to both movable and immovable properties. The consideration in sale is price paid or promised and partly paid or partly promised, exchange on the other hand has the consideration for transfer of one property in exchange for another property.  The seller has the charge from unpaid purchase-money in the case of sale and in exchange there can be no seller’s charge for unpaid purchase money. 

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