Transfer of Property

Topic 1.Movable and Immovable property

We are here …

1. Movable and immovable property2. Attestation and notice3. Actionable claim4. Transfer of property5. Restraints on transfer6. Rule against perpetuities7. Vested and contingent interest8. Doctrine of election9. Sale of immovable property

Relevance

• Like I told in the introduction, TP Act governs only the transfer of IMMOVABLE properties.

• MOVABLE properties are governed by Sale of Goods Act.

• Hence, there is a need to understand what is movable and what is immovable property and the ways to distinguish them.

• Relevance to exam - I really do not know!• Wherever the word “Act” or “TP Act” has been

used, it is to be understood as Transfer of Property Act, 1882

Property

• Not defined in TP Act• When we examine the Act, we realise that the

word has been used in the most widest and generic sense.

• Property denotes– Every kind of interest or right– That has an economic content

• Property broadly classified into – 1. Movable property– 2. Immovable property

Immovable property(TP Act deals only with this)

• TP Act doesn’t define immovable property• Sec. 3 lays down “immovable property”

does not include– Standing timber– Growing crops or– Grass

• Sadly, what is “included” as immovable property is not defined!

• So, what do we do now? :/

Indian Registration Act

• Immovable property includes:– Land– Building– Hereditary allowances– Right to ways– Lights– Ferries– Fisheries– Any benefits to arise out of land and things attached

to earth, but not standing timber, growing crops or grass (here, they meant the normal grass!)

General Clauses Act, 1897

• According to Sec. 3 (26) of General Clauses Act, “immovable property” shall include:– 1. Land– 2. Benefits to arise out of land– 3. Things attached to the earth or permanently

fastened to anything attached to the earth

• These above three elements will be expanded and studied. Definition of Registration Act also will be used to give completeness.

1. Land• Land includes

– 1. Earth’s surface– 2. Earth’s surface covered by water– 3. Column of space above the surface– 4. Ground beneath the surface

Land also includes

• Above the surface:– Objects placed by human agency with the

intention of permanent annexation• Eg: buildings, fences, walls

• below the surface:– In its natural state

• Eg: Minerals

2. Benefits to arise out of landprofits a pendre

• Every benefit arising out of immovable property• Every interest in such property

As per registration Act, benefits to arise out of land: • Hereditary allowances• Rights of ways• Lights• Ferries• Fisheries

Cases

Ananda Behera v. State of Orissa (AIR 1956 SC 17)

– right to catch fish from Chilka lake, over a number of years, was held to be an equivalent of a benefit to arise out of land

Shanta Bai v. State of Bombay(AIR 1959 SC 532)

– right to enter land, cut and carry away wood over a period of twelve years was held to be immovable property. The right to collect lac from trees is also immovable property.

3. Things attached to earth(Doctrine of fixtures)

• Sec. 3 of TP Act defines “attached to earth” as including:– Things rooted in the earth– Things imbedded in the earth– Things attached to what is so imbedded– Chattel attached to earth or building

(Chattel - movable property)

Making it clear

• Things imbedded in the earth– Eg: a building

• Things attached to what is so imbedded. – Eg: a fan. It is not directly attached to earth. It is

attached to the building. And the building is imbedded in the earth. Since the fan is attached to the building that it attached to the earth, fan is also an immovable property.

– Similar to the joke where the student tells the teacher that the teacher’s daughter loves the teacher, the teacher loves the student and hence it is to be inferred that the teacher’s daughter loves the student!

Test

• How to determine whether any movable property attached to the earth has become immovable property?

• Two well established tests in English law:– Degree / mode of annexation– Object / purpose of annexation

Degree / mode of annexation

This was the rule laid down in Holland v. Hoggson• If the movable property is resting on the land

merely on its own weight, the presumption is that it is movable property, unless contrary is proved.– Eg. A brick resting on the land

• If it is fixed to the land even slightly or it is caused to go deeper in the earth by external agency, then it is deemed to the immovable property, unless contrary is proved– Eg. A machine fixed to the land by using screws (like

in industries)

Object / purpose of annexation

Test:• Whether the purpose was to enjoy the chattel (movable

property) ?– Some crushed stones are deposited on a land, so that it can be

transported elsewhere in a few days. Here, the intention / object is not to keep the stones permanently. They are to be enjoyed independently of the land on which they are deposited.

• Or to permanently benefit the immovable property ?– Some blocks of stones are placed one above the other without

using cement, but in a manner that it stays strong and acts as a wall and prevents cattles entering the land. Here, the intention is to make a wall out of the stones. It becomes a part of the property. It benefits the property by protecting to the property.

Intention is important

• One more rule:– House owner fixing a fan is permanent. It is deemed

that when the owner of a land does some fixture, he intends to retain the fixture indefinitely.

– Tenant fixing a fan is temporary. He will surely remove the fan whenever he vacates the house. It is deemed that when the tenant of a land does some fixture, he doesn’t have the intention to have the fixture forever.

Some leading cases

• Shanta Bai v. State of Bombay (AIR 1958 SC 532)

• State of Orissa v. Titaghur Paper Mills Co. Ltd. (AIR 1985 SC 1291)

• Ananda Behera v. State of Orissa

• Firm Chhotabai Jethabai Patel & Co. v. State of MP

We have just finished immovable property part (recap)

1. Land– Earth, below, above etc

2. Benefits to arise out of land (profits a pendre)– Benefits and interest

3. Things attached to the earth or permanently fastened to anything attached to the earth

– Test to determine (doctrine of fixture)• Degree / mode of fixation• Object / purpose of fixation

Movable Property

• TP Act doesn’t define “movable property”. • General Clauses Act: “property of every description

except movable property”

• Examples:– royalty, – machinery not attached to earth, – a decree for arrears of rent, – government promissory notes, – standing timber, – growing crop, – grass

Cases

• SPKN Subramanian Firm v. M. Chidambaram (AIR 1940 MAD 825)– “oil engine” (generator) was fixed by defendants using

nuts and bolts in a cinema hall for generating electricity. The machine was pledged by way of security bond. Whether the machine is a “movable” or “immovable” property?

– Defendants had taken the premises on lease. Hence, they never had the intention of making the machine a part of the immovable property. The machine (oil engine) was held to be an immovable property.

– Principle: intention of the party fixing it. Whether permanent or temporary.

Case

• Bamadev Panigrahi v. Monorama Raj (AIR 1973 AP 226)– Cinema equipments like projector, diesel

engine etc, installed on the tenanted land temporarily, are movable properties.

– Even if the equipments were fixed strongly, the land was taken on mortgage. Hence, we can infer that the equipments will be fixed only till the terms of mortgage lasted.

Case

• Duncans Industries Ltd. v. State of UP (2000 1 SCC 633)– Again, the court held that the intention of the

party fixing the equipment should be considered. Whether the intention was to have the equipment permanently or temporarily. This depends on – whether the immovable property is his own or is taken on rent or lease.

Distinguish between movable and immovable property

Movable Immovable

1. Includes land, benefits to arise out of land, things attached to earth (Sec. 3 of General Clauses Act)

2. If the thing is fixed to the land even slightly or it is caused to go deeper in the earth by external agency, then deemed to be immovable

1. Includes stocks, shares, growing crops, grass, things attached to or forming part of land, and which are agreed to be severed before sale, or under the Contract of sale (Sec. 2 of Sale of Goods Act)

2. If the thing is resting on the land merely on its own weight, presumption is that it is movable property, unless contrary is proved.

Movable immovable

3. If purpose of annexation of a thing is to confer permanent benefit to land, then immovable property

4. Eg. Hereditary allowances, right of way, ferries, fisheries, right to collect rent and profits out of immovable property, right to cut grass for one year.

3. If purpose is to only enjoy the thing itself, then it is movable property, even though it is fixed in the land

4. Eg: right to worship, royalty, decree of sale of immovable property, decree for arrears of rent, standing timber, growing crops, grass.

Clarifications

• ‘Standing timber’ is different from a ‘timber tree’. • Standing timber – tree in such a state that of cut,

it could be used as timber. Movable property.• Timber tree – tree drawing sustenance from soil.

Immovable property

• Growing Grass – movable property• Right to cut the grass – immovable property (it is

a right arising out of immovable property)

The contents of this file have been compiled from various reliable sources. Due care has been taken to avoid

errors. The author of this work takes no responsibility for the consequences arising out of error. The reader is

advised to cross check with the text books and the Act in case of confusion. You are allowed to share this file with your friends without making changes to the contents of

this file. However, you are not allowed to exploit this work commercially.

- Gagan K.University of Mysore

gagan555@gmail.com