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Analysis of Movable and immovable property as per the Transfer of Property Act, 1882

Research question: What is property and different kinds as analysed in various Indian statutes?

Property means not only the physical objects but includes rights and interests existing in or derived out of the actual physical object as well. According to Section 8 of the Transfer of Property Act[1], the different components of property that can be transferred include all the interest which the transferor is then capable of passing in the property, the legal incidents, the easements annexed to land or building, the rents and profits accruing after the transfer, and all things attached to the Earth; all things provided for permanent use with the house; securities, the interest or income etc. A property entails three main types of rights:

• a right of ownership, of having the title to the property,
• an exclusive right to possess and enjoy the property
• an exclusive right to alienate the property in any manner that he likes.

The bundle of all the rights are called ‘interests’ in the property. Where only some rights in property are transferred, it is a transfer of an interest in the property, like lease, mortgage. Where all the interests in the property are transferred, it is called an absolute transfer of property, like sale, gift, exchange etc.[2] Property can be categorised into: moveable and immoveable.

1. Immoveable property: Immoveable property has been defined in three Statutes. Section 2(6) of the Registration Act, 1908[3] defines immovable property to include land, the benefits that arise out of land, such as building, hereditary allowances, right to ways, lights, ferries, fisheries, or any benefits to arise out of land or things attached to the earth or permanently fastened to anything which is attached to the Earth but not standing timber, growing crop like vegetable crops or grass, more precisely the right to cut grass. Section 3(26) of the General Clauses Act, 1897[4] defines Immovable property to include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth. Section 3 of Transfer of Property Act[5] defines “immovable property” to not include standing timber, growing crops, or grass. By taking into consideration other provisions in the Transfer of Property Act, immovable property can be said to include land, benefits arising out of land, things rooted in earth, things embedded in earth, and attached to what is embedded in the earth for its permanent beneficial enjoyment, but does not include standing timber, growing crops and grass. The procedure for transfer for immovable property requires that it be properly executed and attested in a written agreement and be registered. The limitation period is 12 years.

In Shantabai v State of Bombay[6], the issue before the court was whether the right to enter upon a land was movable or immovable property. The court held that a right to enter upon the land of another and carry a part of the produce is an instance of profits à prendre, i.e., benefit arising out of land, and therefore a grant in immovable property. Similar stance was taken in the case of Anand Behera v State of Odisha[7], where the right and license to catch and carry away fish in specific sections of the lake over a specified future period was sold. Here, profit a prendre was held as an immovable property by the Supreme Court. In Jagdish v Mangal Pandey[8], the issue was whether the trees in a land were movable or immovable property. The court held that to determine if the trees were movable or immovable, one had to determine whether the intention was to cut the tree or to let it remain attached to the earth. Similarly in Banaras v Ghuhi Rai[9], the court said that the real test for judging whether a tree is immovable or movable property is not the nature of the tree alone, but the way in which it is intended to be dealt with. If the intention of the parties in respect of a particular transaction is that tree, is to be cut by the purchaser and removed, it will become timber (moveable property), but if the intention is that it continue to grow and to yield fruit or shade, it may not be timber.[10]

As per Section 3 of the Transfer of Property Act, immoveable property would include:

(a) Things Rooted in the earth.—Things which are rooted in the earth include trees and shrubs, except standing timber. Trees which are fruit-bearing and the intention is to use them for fruits they are generally considered as immovable property.

(b) Things embedded in the earth.—Things embedded in the earth means those things which rest by their own weight on earth. The test for immovability is whether or not the thing rests by its own weight on earth and whether it can or cannot change place and be removed from one place to another place without causing structural damage. This can be determined using the test of annexation.

• Degree and Mode of Annexation: If a thing is so annexed to land that it cannot be removed from its place without great damage to the land, it should be regarded as annexed in perpetuity and should be considered as immovable property.
• Object of Annexation: If the intention is the permanent improvement of the premises, the chattels or movables fixed or annexed become fixtures. The object of annexation can be inferred from the interest the person has in the property to which the annexation is made.
• By whom: If the person is the owner of the land, the inference would be that attachment or annexation is meant to be permanent and immovable. Whereas if the person has temporary possession, it will be inferred that annexation is also temporary.

(c) Attached to what is so embedded.—Where a thing is attached to something embedded in the earth for its permanent beneficial enjoyment, the thing attached becomes immovable property too. Examples are doors, windows, ceiling fans etc. which are fastened to the walls or ceilings of a house for their beneficial enjoyment. Hence there are two requirements:

• It must be a permanent attachment, i.e., intended to be used in perpetuity or till the life of the attachment.
• Its attachment constitutes a permanent improvement and beneficial enjoyment to the thing to which it is attached.

2. Moveable property: Section 2 (9) Registration Act, 1908[11] defines “Movable Property” to include standing timber, growing crops and grass, fruit upon and juice in trees, and property of every other description, except immovable property. Section 22 of the Indian Penal Code, 1960[12] defines the term movable property to include corporeal property which excludes land and any other things attached to the earth permanently. Section 2(7) in The Sale of Goods Act, 1930[13] defines “goods” as every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale; In Sukry Kurdepa v. Goondakull[14], the court described immoveable as something that cannot change its place without causing injury to the quality by virtue. However, when the severance has been affected they become movable. In the matter of Raj Balamgir[15], the court had held the standing timber in the forest to be moveable property since the intention was the trees would be cut and removed within a year. In Nanhe Lal v Ram Bharosey[16], it was held that a grove consisting of shisham and neem trees will be covered under the expression ‘standing timber’ and does not constitute immovable property. Examples of moveable property include, aright of ferry, right of way, right to collect rent of an immovable property, right to collect lac from trees, standing timber, grass, growing crops etc.[17] The procedure for transfer in case of movable property is the simple delivery of possession of the property, with an intention to convey the title by the owner to the recipient. The limitation period is 3 years. In Holland v Hodgson[18], Lord Blackburn observed that an article which is affixed to the land even slightly is to be considered as part of the land unless it is shown that it was intended to continue as chattel, the onus lying on those who contend that it is a chattel.

There are three tests to ascertain whether a chattel, (movable property), after attachment has become a fixture (immovable property) or not:

• Mode of attachment and consequences of its detachment: if a thing or machinery because of its sheer weight goes down in earth; the presumption will be that it is still movable. On the other hand, if in attaching it some external aid is required such as construction of foundation, it has become part of earth. If the attachment can be removed easily without causing sufficient damage to which it was attached, the presumption will be that it is movable, but if in trying to remove it, the attachment is destroyed or loses its value or the support is sufficiently damaged, it is immovable property.
• Object or intention of attachment: where the object is to fix the attachment permanently or for a sufficiently long time period, the presumption will be that it has become a fixture, but if the intention was to enjoy the attachment for a specific short duration and then to remove it, the presumption will be that it is still a chattel.
• By whom attached: if the attachment is by the owner of the land, the presumption would be that the attachment has become a fixture, but if it is attached by somebody else other than the owner, such as a tenant, a licensee or a mortgagee, the presumption would be that it is still a chattel.[19]

In Spyer v. Phillipson[20], court held that determining the mode of annexation, and what the object and purpose of annexation is imperative to decide the nature of the article in question with respect to its movability or immovability. In Leigh v Taylor[21], the House of Lords held that certain valuable tapestries affixed by a tenant to the walls of a house for the purpose of ornament and for better enjoyment of them as chattels had not become part of the house, because they were not installed for permanent use, hence they were considered movable property. In Bamdev Panigrahi v Monorama Raj[22], a person was conducting a business under the name of ‘Kumar Touring Talkies’. The issue before the court was to decide whether the two items, cinema projector and diesel oil engine, were movable or immovable. The court observed that the license to exhibit the shows was only for a period of one year, and there was no guarantee that the owner would have applied for its renewal or the authorities would have renewed it. Also, the person who fixed them to the land was not the owner of the land. These items were in fact removed from the land subsequently. Taking the intention and the person who fixed them into consideration, the court held that these were movable properties and the suit being time barred was dismissed.

In the case of Triveni Engineering & Industries Limited v. Comm. of Central Excise[23], the issue before the court was to determine whether turbo alternators which has two components – steam turbine and Generator are movable or immovable. The court found two ingredients to evaluate the nature of the turbo alternators, namely mobility and marketability. If the article exhibits characteristics of both mobility and marketability, then the article in question can be held as a movable property. Mobility can be determined by checking whether an article is permanently fastened to anything attached to the earth and whether there was intention to fasten the article to anything attached to the earth. The marketability test requires that the goods as such should be in a position to be taken to the market and sold. Here it was seen that when the turbo alternator is separated into its components, turbine, and generator, then it would not remain turbo alternator and it will not function by virtue of being not fixed to the ground. Hence the turbo alternators were held to be immovable property. In Municipal Corporation of Greater Bombay and Ors. v. Indian Oil Corporation Ltd[24], the issue before the Court was whether a petrol tank, resting on earth on its own weight without being fixed with nuts and bolts, had been erected permanently without being shifted from place to place. The court considered the Test of permanency to evaluate. The test considers two situations: if the chattel was movable to another place of use in the same position or if it was liable to be dismantled and retracted at the later place. If the chattel was movable to another place of use in the same position, then it must be a movable property but if was liable to be dismantled and retracted at the later place then it would be treated as permanently attached to the earth. In the case of Suresh Chand v Kundan[25], the issue that arose was whether the transfer of land entailed transfer of trees planted on the land. The court held that a perusal of Section 3 of the Act shows that all things attached to the earth are included in the land. There was no mention in the agreement that the saplings were not being sold along with the land. In the absence of any expressed or implied intention in the agreement, it would be taken that the land along with the saplings standing on the land were sold. The Rule of construction will be applied. The rule entails avoiding speculation as to the particular interest which was in the mind of the transferor. The presumption of transfer of all interest can be rebutted by express words or necessary implication.

In Duncan Industries Ltd v State of Uttar Pradesh[26], the issue before the court was to decide if the plant and machinery related to the fertilizer business are moveable or immovable. The High Court concluded that the machinery which formed the fertilizer plant, were permanently embedded in the earth with an intention of running the fertilizer factory and while embedding these machineries the intention of the party was not to remove them. The Supreme Court upheld this decision of the High Court and said that plant was not embedded to be dismantled or removed for the purpose of sale as machinery at any point of time. This falls in line with the test of permanency[27].

We can also apply the Doctrine of fixtures to determine the ownership issues of the attachment. The two maxims are:

• quicquid plantatur solo, solo credit, which means whatever is planted in the earth, becomes part of the earth, and consequently whosoever owns that piece of earth will also own the thing planted.
• quicquid inaedificatur solo, solo credit which means whatsoever is built into or embedded into or attached to soil becomes part of the earth and consequently, whosoever is the owner of that piece of land will also become the owner of the thing attached/built in or embedded.[28]

 

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Written by Reema Nayak

[1] Section 8 of the Transfer of Property Act, 1882.

[2] Poonam Pradhan Saxena, Property law (2017).

[3] Section 2(6) of Registration Act, 1908.

[4] Section 3(26) of the General Clauses Act, 1897.

[5] Section 3 of the Transfer of Property Act, 1882.

[6] Shantabai v State of Bombay, AIR 1958 SC 532.

[7] Anand Behera v State of Orissa, [1955] 2 SCR 919.

[8] Jagdish v Mangal Pandey, AIR 1986 All 182.

[9] Banaras v Ghuhi Rai, AIR 1956 All 680.

[10] Avtar Singh & Harpreet Kaur, Textbook on the Transfer of Property Act (2009).

[11] Section 2(9) of Registration Act, 1908.

[12] The Indian Penal Code, 1860 Act No. 45 Of 1860.

[13] The Sale of Goods Act, 1930.

[14] Sukry v Goondakull, (1872) 6 Mad HCR 71.

[15] Raj Balamgir, AIR 1931 All 392.

[16] Nanhe Lal v Ram Bharose, (1938) ILR All 115.

[17] Avtar Singh & Harpreet Kaur, Textbook on the Transfer of Property Act (2009).

[18] Holland v Hodgson, (1872) LR 7 CP 328.

[19] Supra note at 2.

[20] Spyer v Phillipson, (1931) 2 ChD 183.

[21] Leigh v Taylor, (1902) AC 157.

[22] Bamdev Panigrahi v Manormaraj, AIR 1974 AP 226.

[23] Triveni Engineering & Industries Ltd v Comm. of Central Excise, (2000) 7 SCC 29.

[24] Municipal Corporation of Greater Bombay and Ors. v. Indian Oil Corporation Ltd, 1991 AIR 686.

[25] Suresh Chand v. Kundan, 2000 (7) SCALE 620.

[26] Duncan Industries v State of Andhra Pradesh, (2000) 1 SCC 633.

[27] Supra note at 17.

[28] Poonam Pradhan Saxena, Property law (2017).