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Theories And Modes Of Acquisition Of Property

Ever since man started on his road to civilization, wealth has been the primary fuel to boost the road. From the very beginning, man has strived to fulfill the thirst for power. In primitive, ancient, and medieval times, power would mean physical power, i.e., the strength, army, kingdom, and many more.

But the wheels have turned now. In the modern days, there seems to be a paradigm shift in the equations of power. Today, power in all means is money or wealth. Every endeavour that human beings have took up were solely for acquisition of wealth. Well, wealth could be of different types here. These days the term property is used rather in a more generalized form. If a person looks around in the surroundings, everything that is been seen may be categorized as property.

With the growing importance of each thing, wealth might consist of things like money, assets, industries, machinery, infrastructure, intellectual wealth, etc. The most primary one of it is the property. Property is where the real wealth in this developing world is lying at.

But, the reason as to how the concept of so-called property and ownership have emerged is still a vague area filled with many theories.

Definition
The term property is said to have been derived from the Latin word - 'Properietate', which means something that is/can be owned. Asset is nothing but a basis of expectation; the expectation of obtaining certain advantages from something which we are said to own, in consequence of the relation in which we stand towards it. Some of the definitions of property are as follows:

The word 'property' is often used to refer to something that belongs to another. But 'property' does not refer to a thing; it is a description of a legal relationship with a thing. It refers to a degree of power that is recognised in law as power permissibly exercised over the thing. The concept of 'property' may be elusive. Usually it is treated as a 'bundle of rights.[1]
Salmond while defining the term property, observed that the term might be understood in one of the three senses mentioned below:
  1. The word property consist of all the legal rights of a person. That is to say that it includes comprehensive ownership of a man on material as well as incorporeal things.
  2. The term includes not a man's personal rights, but only his proprietary rights.
  3. The term includes the rights of ownership in material things such as building etc.

According to Bentham "property is nothing more than the basis of certain expectation of deriving thereafter certain advantages by a thing the reason of the relation in which we stand towards it. There is no image, no visible lineament which can property the relation that constitutes property. It belongs not to physics, but to metaphysics. It is altogether a conception of Mind. To it, all or any of these physical circumstances failed to assist in conveying the idea of property."[2]

Theories of Property

The concepts of property and ownership goes hand-in-hand. There is no ownership without property and there is no property without ownership. Ownership is that feeling of the rightful possession of a property which Is now legally recognised. A pe rson who is said to have had the ownership of a particular property is entitled to enjoy the property in all means possible. The reason/rationale behind the emergence of the concept of property is unknown. But nevertheless, there are many theories regarding the same.

Theories of Property Some of them are as follows:

  1. Natural Theory

    The natural theory of emergence of concept of property is based on natural reason and logic. Property is a part and parcel of nature. Hence, one who possesses the property is said to be its owner according to this theory. Otherwise, the individual who has taken control of something an ownerless object is, by the very act becomes its owner. This is like first come fist serve basis. The person who puts toil (labour) into and make better use of the object remained in nature, for example land, becomes its possessor or the owner.

    According to the German philosopher Samuel Von Pufendorf, things were originally been owned by the society or social group as a whole and thus, deriving benefit out of it for collective god. But later on, the concept of individual ownership has arisen and he argued that the one who occupied the property first would be its owner by default. This Natural Theory is also supported by others like Blackstone, Grotius, etc.
     
  2. Metaphysical Theory

    The Metaphysical Theory was advocated by German philosophers Immanuel Kant and Georg Wilhelm Friedrich Hegel.

    Kant has argued that a person rightfully becomes the owner of a particular thing when he is connected with such thing, and if that thing is used without the consent of its owner, it hurts/damages/injures the owner. The theory of Kant has to be perceived with realities where it manifests a truism that any person who relies on the property of others like a parasite will/may not be able to live a free & happy life.

    According to Hegel, "property is the objective manifestation of the personality of an individual. In other words, property in an object on which person has liberty to direct his will." For Hegel, property is the minimal condition for individuals to know themselves as free.[3]

    Kant said that the law of property does not merely seek to defend possession where there is an actual physical relation among the possessor and the object, but it goes beyond and contemplates the personal will of the individual more important in the concept of the property.
     
  3. Labour Theory or Positive Theory

    The labour theory was developed by famous and prominent thinker, John Locke. According to Locke, an individual precisely man own literally everything that he produces.[4] In this theory, according to him, man will put employ all the possible natural resources that were unused along with his labour i.e., hard work to produce something out of it. In that way, he deserves the output that he has produced using struggle and toil.

    Herbert Spencer, the architect of positive theory also have argued that the person who produces a thing or brings it into existence is the owner of it.
     
  4. Historical Theory

    According to this theory, the concept of private property has rooted out from the existing concept of joint property held by the whole society or members of ta particular social group for collective good/enjoyment of everyone in it. Such development have said to be taken place in different stages over a period of time.
    1. First Stage: In this stage, people tend to take natural possession of the property and also exercise control over it (without any law or existence of state).
    2. Second Stage: In this particular stage, the conception of juristic possession has developed i.e., possession in fact & law.
    3. Third Stage: The present form of legal ownership has taken its shape in this stage. Therefore, the concept of protection of individual's property rights by state has developed.
    Sir Henry Maine was the ardent supporter of this theory about concept of property.
     
  5. Psychological Theory

    According to Bentham, the profounder of this theory "property is nothing more than the basis of certain expectation of obtaining thereafter certain advantages by a thing the reason of the relation in which we stand towards it. It is altogether a conception of Mind. Hence, property is a connection of mind.
     
  6. Sociological Theory

    As per this theory, property should not be well-thought-out in terms of private rights but should be considered in terms of social purposes. It is an institution which secures extreme interest. The principal profonde's of this theory are believed to be Karl Marx, Harold Laski and etc.
     
  7. State Theory

    This theory propagates that the concept of state is something that was created by the state. The vocalists of this theory states that law and property have born together and die together. They argues that the existence of the concept of property without law is impossible. In other words, the property came into existence when the laws were framed by the state. The primary supporter of this theory was the renowned Genevan philosopher and writer Jean Jacques Rousseau.

Now that the concept of property is established and property has come into existence, states have enacted numerous legislations to protect, safeguard and control the property. Property/assets being worth of exchange, people started exchanging one kind of property to the other. And slowly after the development of money, nowadays, properties are being exchanged among different individuals through different means.

Hence, such transfer of the property would simply mean the legal transfer of the possession and ownership of such property to such person hence depriving this person every right over such property or several rights according to the type of transfer and contract made. So, hereunder are the methods/ways in which property is acquired by individuals.

Modes of Acquisition of Property

According to Salmond, there are at large five different modes/ways through which property can be acquired. They are as follows:
  1. Possession
    Possession in general terms mean taking of the physical custody of the property. It is to have property under one's direct control. This is considered to be prima facie evidence pertaining to ownership of such property. Although a thin line lies between ownership and possession, the person who is said have the possession of a good or asset or property is generally considered to be the owner of such good or asset or property unless there is any contract to the contrary. It is to have both de jure and de facto rights over the property.

    The property which belongs to no one i.e., Res nullius, belongs to the first possessor of it and he acquires a valid title to it against the world.[5]

    The property that is already under someone's possession or custody or ownership, when some other person acquires the possession of such property also accrues to him the title of such property which names him as the possessor of that property against every other third party in the world.

    The ownership and possession of the property can lie with two different individuals. This is by way of contract where only a part or partial possession of the property is transferred to the other party.

    Example:
    1. A a landlord let his house to a tenant. The tenant is said to have had the possession of such property.
    2. Rakesh made a contract of bailment of his machinery to Kashyap. Once the goods were properly delevired to Kashyap, he is said to be the possessor of such goods.

     
  2. Prescription
    Other way of accruing a property is through the mode of prescription. Prescription, according to Salmond is - the effect of lapse of time in creating and destroying rights. Prescription is of two types: i) positive acquisitive prescription, ii) negative or extinctive prescription.
    1. Positive Prescription means the formation of a right by the lapse of time.
      For example, right of way is attained by continued de facto use of it, inarguably and openly for a period prescribed by law.
    2. Negative prescription is the obliteration of a right by the lapse of time.
      For Example, the right to sue for default of a debt within a prescribed period is doused after the lapse of that Period.
       
  3. Agreement
    The other and most prominent mode of acquisition of property is through agreement. It is a formal consensus between two individuals i.e., the buyer and seller for exchange of property in consideration of something of equivalent value. Through such agreement, the possession i.e., title deed of the property i.e., ownership is transferred partly or fully obliging to the terms of that agreement to the other person. Any such transfer if done without any consideration in return will be called as a gift.
    Example:
    • A has agreed to sell his property worth ₹50,00,000 to Z in consideration of money. This is said to be an agreement for sale and transfer of property.
       
  4. Inheritance
    The long followed method of acquiring of the property is through inheritance. Inheritance is the succession of property among members of a family. Such inheritance may be made while the possessor of such property by himself or after his or her death, the property of such deceased person will automatically devolve to his or her heirs accordingly (testamentary or intestate).
    Example:
    • Manish upon the death of his father Paresh have inherited to his property as legal heir. This is called as transer of property through inheritance.
       
  5. Gift
    The last but one of the most important mode of aquiring property is through gift. Gift is an instrument through which property of a person is transferred through an agreement to another person without any consideration in return. In this method, there are several essentials that are to be fulfilled for a gift to be valid. They are:
    1. Real property
    2. True ownership
    3. Free consent
    4. Made without any consideration.
    Any gift made in contrast to the above essentials is void. The matters relating to the gift of property is dealt in sections 122-129 of the Transfer of Property Act, 1882. Any gift of property made without free consent or gift of future property or made with consideration is said to be void.
    Example:
    • Sai has registered a gift deed for 10 acres and a house in the name of Joshi. An agreement for transfer of property through gift deed was made.

Case law:
In Ajemer Singh v. Atma Singh,[6] the donor was an old man. He the depended on Charan Singh due to old age. The donor gave the power of attorney onto Charan Singh who took advantage of the situation and got a gift deed executed in favour of his son. Using his position, Charan Singh with undue influence and misrepresentation made the donor sign the gift deed document under the impression that it was a power of attorney. The above transaction was nullified.

Conclusion
The actual reason for the origin of the concept of property is still shrouded in misery. Although many have come up with distinctively differentiative therories, none were free of criticism. Nevertheless, the matter of transaction/transfer of property is gaining importance day-by-day due to growing complexities of life in modern economic world.

Table of Abbreviations:
i.e., That is
& And
Etc Et Cetera
V Versus
Ors Others
AIR All India Record
P & H Punjab & Haryana High Court
End-Notes:
  1. 7.12. Traditional Rights and Freedoms Encroachments by Commonwealth Laws (Australian Law Reform Commission Interim Report 127), < https://www.alrc.gov.au/publication/traditional-rights-and-freedoms-encroachments-by-commonwealth-laws-alrc-interim-report-127/7-property-rights/definitions-of-property-2/> accessed on 25 April 2022.
  2. Definition of Property, The Concept of Property (Apr. 25, 2022, 3:30 PM), https://www.srdlawnotes.com/2018/03/property-meaning-definitions-and-modes.html .
  3. Jacob Blumenfeld, Property and Freedom in Kant, Hegel, and Marx, Bundles of Property Theory, https://www.academia.edu/43687371/Property_and_Freedom_in_Kant_Hegel_and_Marx .
  4. John Locke, Two Treatises of Government 464 (Cambridge University Press, 1988).
  5. supra note 2
  6. A.I.R. 1985 P. & H. 315.

Written By: Joshi Kumar P

Certificate of Orginality
I hereby declare that this article/write-up, entitiled "Theories & Modes of Acquisition of Property" is my orginal work and does not contain anything that is being copied. The matter embodied in this article has not been submitted to any other website or journal. This article is my original work and it has not been presented earlier in any manner. The Legal Service India.com shall have the exclusive copyright in the article after publication in Legal Service India.com e-journal. Date: 09-05-2022 Signature: Joshi Kumar Pinninti\\

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