Legal Instruments and Market Value

Instruments: Definition and Components

• Instruments: Legal documents that formally record certain transactions or agreements, specifically those related to property.
• Exclusions from Instrument Definition: Promissory notes are excluded from the definition of an "Instrument."
• Instruments of Gift: An oral gift of immovable property becomes an instrument of gift when recorded in writing, not just verbally announced, recorded or registered.

Determining Market Value

• Market Value Calculation: The market value of property is established as the higher of the market price or the stated consideration within the instrument.
• Factors Considered Market value is calculated taking into account the highest value, not just the government rates, the seller's asking price, or buyer's offered price.

Instruments of Partition

• Instrument of Partition: A final order issued by revenue authorities, not verbal agreements, unrecorded divisions, or informal settlements.
• Co-owner Execution: Documents for property division are executed by co-owners, not an arbitrator or court alone. Documents can be executed by co-owners.

Electronic Records and Immovable Property

• Electronic Records: Electronic documents are included in the definition of instruments, as per the IT Act.
• Immovable Property Definition: Immovable property encompasses land and permanently affixed structures (e.g., buildings).
• Excluded: Neither only land, nor only buildings, but land and permanently affixed structures are included. Agricultural land is often included.

Additional Instrument Details

• Excluded Documents: Bill of exchange, property sale deed, insurance policy and share transfer are considered instruments.
• Instrument Calculation: When valuing property, authorities consider the higher of market value or registered value.
• Instrument of Partition Components: Documents may include court orders, arbitrator awards and co-owner agreements.

This quiz explores the definition and components of legal instruments, including their role in property transactions. It also covers the calculation of market value and factors affecting it, alongside the concept of instruments of partition. Test your understanding of these key legal concepts!