BOMBAY HIGH COURT
S.B. Shukre, J.
Balkrishna & Ors. —Appellants
versus
Prakash & Ors. —Respondents
Second Appeal No. 74 of 1996
Decided on 10.1.2014

Headnote:(i) Transfer of Property Act, 1882—Sections 54 and 118—Oral family arrangement for transfer of interests in properties held jointly or in common—It does not require registration—However, exchange of these properties would be valid in law if it is effected by a registered instrument—Exchange of immovable properties is required to be compulsorily registered unless followed by possession—Ancestral properties which had come into the hands of two brothers S and B were amicably partitioned by them in year 1951—After the partition, S (father of plaintiff) become the exclusive owner of the suit house and he continued to be in its undisturbed and peaceful possession till his death on 21.11.1984—After his death, plaintiffs being legal heirs of deceased S became the absolute owners of the suit house—According to defendants appellants suit house was given to them in exchange of another house given to father of plaintiffs—Plaintiffs filed suit for recovery of possession when notice was issued to them for vacating the suit house—Trial Court dismissed the suit—Suit appeal was allowed by the District Judge—Exchange of properties had taken place after partition of properties in the year 1951—Exchange of properties was effected on basis of an oral transaction—It was necessary to fulfill requirement of Section 118 of the TP Act.

       Held: The concept of oral family arrangement for transfer of interests in properties held jointly or in common not requiring any registration is valid in law. The Hon’ble Apex Court has laid down in the aforestated cases of Kale & Ors. and Roshan Singh that the transfer of properties held jointly or in common by oral family arrangement does not require any registration. This principle applies to only those properties which are joint family properties or where the properties are held in common and there is no separation of individual interests in the properties. As long as co-owners or coparceners have common undivided interests in the properties, oral family arrangement for division or distribution of interests or even relinquishment of interest in favour of person not having antecedent title without registration is good in law. But, once the partition is effected, whether by way of family arrangement or deed of a partition, there occurs severance in jointness of the properties and the properties allotted to the parties in partition become separate properties of the coparceners or co-owners, or the persons in whose favour interests have been relinquished, and thereafter if any mutual transfer of properties takes place, it would fall within the scope of Section 118 of T.P. Act and would qualify itself to be called an exchange as defined under said Section. The reason being that the term ‘ownership’ used in the said section means, in its ordinary and natural sense, ownership to the exclusion of ownership of another. If it were not so, the section would not have employed the expression “when two persons mutually transfer the ownership of one thing for the ownership of another” to define exchange. The words “transfer of ownership of one thing for the ownership of another” themselves indicate that what is contemplated by the section is mutual transfer of two separate and mutually exclusive properties. In case of joint family property or property held in joint tenancy, each coparcener or co-owner has some interest in the entire property and which is undivided with and not exclusive of the interests of the other coparceners or co-owners. In partition, there occurs giving away of some undivided interest by one for that of another’s some undivided interest and, therefore, it cannot be called an exchange under Section 118 of T.P. Act, although it is a transfer of property within the meaning of Section 5 of that Act.

       I have already held that when the properties are held separately and there has been severance in their unity and jointness, there cannot be mutual transfer of such properties by way of oral transaction of family settlement for, it would amount to an exchange within the meaning of the term defined under Section 118 of T.P. Act. In the instant case, there is clear evidence available on record showing that partition of the ancestral properties took place in the year 1951 wherein the properties to the partition by way of family arrangement were put in separate possession of the parties to the partition. In this partition, the suit house was allotted to Sheshrao and Mainabai’s house was allotted to defendant No.1 Balkrishna. The defendants do not dispute these facts. Therefore, after the partition there was separation of interests in the ancestral properties and these properties became separate properties of parties to the partition, and their ownership of these properties was in exclusion to the ownership of each other. So, for exchanging such properties, it would be necessary to fulfill requirements of Section 118 of T.P. Act or in other words exchange of these properties would be valid in law if it is effected by a registered instrument. In the instant case, admittedly the exchange of properties was on the basis of an oral transaction and, therefore, it must be held that there was no exchange of suit house for Mainabai’s house, effective and valid in law.

       Consequently. I do not find any illegality in the finding recorded by the first appellate Court that the defendants failed to prove that they became owner of the suit house by way of exchange of Mainabai’s house for that of the suit house in a family arrangement between Sheshrao and defendant No.1. It is seen that the trial Court has not at all considered the fact that since there had been change in character of the properties following partition, with Sheshrao and defendant No.1, holding them to the exclusion of another, there could not have been oral exchange by way of family arrangement of these properties. Therefore, the finding recorded by the trial Court in this regard cannot be sustained in law.

       In view of above discussion, I have no hesitation to hold that the exchange of immoveable properties is required to be compulsorily registered unless followed by possession and since the alleged exchange in the instant case was admittedly by way of an oral transaction, and not by a registered instrument, without being accompanied or followed by possession, the defendants failed to prove their case of ownership of suit house on the basis of exchange. The first substantial question of law is answered accordingly. No interference with the finding of the first appellate Court on this count is warranted. (Paras 18, 21, 22 & 25)

       (ii) Limitation Act, 1963—Articles 64 and 65—Plea of adverse possession—Requirements for perfecting title by adverse possession—It must be established that the possession is open, continuous, uninterrupted and adverse to the real owner for such a period as is prescribed under Articles 64 and 654 of the Limitation Act—Prescription for such a nature of possession is of 12 years—However, long and continuous possession for more than 12 years by itself does no0t constitute adverse possession.

       Held: In the instant case, there is absolutely no evidence led by the defendants showing that their possession with animus possidendi began from a particular date. There is no evidence showing that on a particular date they gave up the plea of exchange and started denouncing the title of the plaintiffs to the suit house. Plea of ownership by exchange essentially denotes acceptance of ownership of another and, therefore, unless it is given up, any intention or animus to possess would not start. No date or year has been stated by defendants to be the point of time from which they started occupying the property with requisite animus possidendi to the knowledge of the plaintiffs. Therefore, it cannot be said that the defendants have proved their title on the basis of plea of adverse possession. In the circumstances, I find that the defendants could not claim to retain their possession by taking plea of adverse possession alternatively to the plea of exchange of properties. I find no error of law having been committed by the first appellate Court in this regard also. The second substantial question of law is, therefore, answered accordingly. (Para 29)

       Result: Appeal dismissed.