From eras, oral contracts were legal and word of mouth was based to
property transfers. Our society has evolved as a concept of law and rights over
time. Since the time of mankind, man has been trying to impose their ownership
over certain things or his authority on the earth.
Many laws such as the
'Transfer of Property Act, 1882' are enshrined in our Constitution where the Zamindars and Subedars of the villages organized the transfer of property until
the British colonized our lands. Changes were made to the legal system after the
'law of inheritance' was enacted. However, there is confusion and, in some
cases, legal inconsistencies.
The paper tries to bring a clarity in difference between movable and
immovable property.
Introduction
The basic difference between immovable and movable property is with respect
to ownership according to the guidelines laid down in Indian law. Property is
defined in S. 2 (9) of the Registration Act 1908 and S. 3 (36) of the General
Subsections Act, 1897. The law divides the term 'property' into different
kinds: incorporeal & corporeal, real & personal, intangible & tangible,
immovable & movable property.
In law, a variety of things are termed property. It includes not only
objects and land but also intangible rights as a source of income. The common
good of the sea and the air is free for all and satisfies all without giving any
exclusive right. The ownership does extend to the dispose of things or right to
enjoy in an absolute manner under the law. However, immovable or movable
property is the property of an individual or group and to the exclusion of
others.
Movable and immovable property is governed by different laws, and our
rights and obligations with respect to the legal differences between them are
equally important. In order to determine legal rights, obligations and
inheritance laws, the relevant property must fall into one of the
above-mentioned categories.
The specific classification of property is very important and necessary due
to the differences in laws, substantive and procedural, applicable to the
transfers of different properties.
Misinterpretation and confusion of these terms often lead to problems with selling or litigation.
Contracts, laws, valuations, and other legal factors differ for each type of
property. In confusing situations, you should consult a legal expert to avoid
legal action.
Transfer of Property Act deals with the property, that can be classified as
movable and immovable properties.
The property has a wide meaning and there is no precise definition. In Raichand v. Dattarya1,
the court held that property incorporates all rights of a person except his
personal rights which constitutes his status in the society. The significance of
the property is not static, as it differs with the reason, idea of the act and
new laws.
Objectives of the study
The objective of the study is to analyze how movable & immovable property
is defined in different Indian Legislations.
Research Problem
There is no clarity about what is immovable and movable property under
Transfer of Property Act, 1882. Is it possible to get an idea of what is
immovable and movable property?
Research Methodology
My study is based on
Doctrinal Method. The resource materials are
secondary. I have used secondary assets like books, articles, and journals, and
Internet-based research.
The question now arises:
what is a movable and immovable property?
Analysis
The question now arises: what is a movable and immovable property?
What is Movable Property
The movable property includes anything that is not attached to the ground,
regardless of quantity, shape, quality, or size. This class of goods is subject
to the Central Sales Tax, Sales Tax, certain restrictions and conditions under
the General Sales Tax Act of the state and the Central Sales Tax Act 1956.
However, there is no obligation to register movable property as per the Indian
Registration Act, 1908. Movable properties are either consumable or
non-consumable and is not subject to inheritance.
S. 2 (9) of the Registration Act, 1908 states that Movable property
includes standing timber, crops and grass, fruits on trees and juice in its
trunk, roots and leaf, and property of every other description, except immovable
property.[1]
S. 3 (36) of the General clauses Act, 1897 states that Movable property
shall mean the property of every description, except immovable property.[2]
S. 22 of the Indian Penal Code 1860 includes The words 'movable
property' is meant to include corporeal property under all descriptions, with
exceptions such as land and things attached to the earth or permanently fastened
to anything which is attached to the earth."[3]
S. 2(7) of the Sale of Goods Act, 1930 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[4]
Exceptions:
Certain items are beyond the purview of Movable Property or Goods
- Actionable Claims:
Transfer of Property Act, 1882 defines
actionable claim as a claim to any debt which the Civil Courts recognize as
affording grounds for relief, whether such debt or beneficial interest be
existent, accruing, conditional or contingent.[5] These don't include debts
secured by mortgage of immoveable property or by hypothecation or pledge of
moveable property, or to any beneficial interest in moveable property not in the
possession, either actual or constructive, of the claimant. An actionable claim
allows a person not to enjoy the benefit of something but to have a right to
recover it by a suit or action.[6]
- Money:
"Money" refers to the current money. It is not considered as
"goods", but rather a legal tender. Legal tender cannot be exchanged for any
other legal tender because it is not included in the definition of "goods". The
only exceptions are rare or antique coins, which are currently not considered
money or legal tender.[7]
- Immovable Property
As the name implies, the definition of immovable property defines as any
property with rights of ownership attached to it that cannot be moved. If the
immovable property is to be transferred, it must be registered under the Indian
Registration Act, 1908 must be subjected to its value if it exceeds the amount
of Rs 100 and is not subjected to sales tax. However, it is subject to stamp
duty under the Indian Stamp Act, 1899 and registration fee under the Indian
Registration Act, 1908.
Section 3 (26) of the General Clause Act, 1847 states immovable property
as Immovable property will include land, advantages to come out of the land,
and objects attached to the earth, or permanently fastened to anything attached
to the earth.[8]
Section 2 (6) of The Registration Act, 1908 states that Immovable Property
includes land, building, inherited allowances, rights to ways, lights, ferries,
fisheries or any other advantages to arise out of the land, and things attached
to the earth or permanently fastened to anything which is attached to the earth
but not standing timber, growing crops or grass.[9]
Section 269UA(d) of the Income Tax Act, 1961, states that immovable
property can be defined as:
- Any land or any building or section of a building, including, where any
land or any building or part of a building is to be transferred together
with any machine equipment, plant, furniture, fittings or other things, such
as machinery, plant, furniture, fittings or other things.
- Any rights that are associated with any land, building, or a section of
a building (whether or not inclusive of any machine equipment, plant,
furniture, fittings, or some other items therein) which is already
constructed or will be constructed in future, being collected or ensued from
any transaction (whether by the method of becoming a member of, or
collecting shares in, a co-operative society, company or other groups of
persons or by way of any agreement or any arrangement of whatever nature),
not being a transaction by the method of a sale, exchange or lease of such
land, building or section of a building.[10]
Under Section 3 of the Transfer of the Property Act, Things attached to the
earth can be classified into the following categories:
- Things rooted in the earth:
this includes trees and bushes, except
standing timber, growing crops or grasses. If a tree is used for shade or
nourishment, it will act as an immovable material, and if the tree is used for
commercial purposes, it will act as movable property.
- Things embedded in the earth:
Homes, buildings, factories, and any
natural water bodies that fall on the marked real estate are examples of things
embedded in the earth. However, because the ship's anchor is temporarily
embedded in the mud, it is not considered an immovable object.
- Things that are attached to the things embedded in the earth:
This
category include permanent items attached or installed for useful purposes.
These materials do not detach easily and are often deteriorate or damage the
materials. For example - a door or window is installed in the building. However,
a tube lamp, fan, bookcase, or wall clock can be removed at any time, so they
are not considered immovable.
- Chattel attached to Earth or building:
This type of material is
attached to the house or building but is movable. For example - furniture. The
main factors that classify chattel as movable or immovable property are the
extent, degree and manner of the attachment.
Exceptions
Some of the items which have been categorically been decided not to
constitute immovable property by legislation are standing timber, crops and
grass.
Standing Timber:
All trees are not considered standing timber. Standing timber
refer to those trees which are to be used for industrial purposes such as
repairing or building houses.[11] This would include trees such as ash, elm,
oak,[12] shesham, neem,[13] or teak trees.[14] The main point of distinction is
that the standing timber are those trees which are planted to be usually cut
down and used for other purposes and do not draw nutrition and sustenance out of
the soil as its main purpose.[15] For this reason, fruit bearing trees are not
considered standing timber and come within the ambit of immovable property.
Growing Crops:
Growing crops include millets like rice, wheat, etc., vegetables
like, pumpkin, bottle gourd and more such crops. The main element of
consideration is that these crops do not have any independent existence beyond
their final product, with use only as fodder or produce. It, therefore, is
movable property.
Grass:
While the right to cut grass would constitute an interest in land, making
such a right immovable property, but grass itself is considered movable
property.
Rights Affiliated with Immovable Property
- Right to collect rent:
All immovable property owned by an individual must
collect rent after leasing to a third party.
- Right to collect dues:
If the property is leased by a third party, the
owner is legally entitled to collect those dues earned by the third party.
- Right of way:
Land can be classified as public or private, and
trespassing them can lead to litigation.
- Right of fishery or factory:
If the immovable property has a fishing
factory or a water body that acts as a fishing spot, the owner may retain
ownership of the benefits.
To determine whether a property is movable or immovable, two tests are
divided into:
- Degree or method of binding:
this is an important factor to consider;
a chattel when so annexed that its removal will cause great damage to the land,
it contributes to a strong ground for the assumption that such a structure was
annexed to the land in perpetuity.[16] Other factors, such as the ease of
removing the anchors, may bother you for a while.
- The object of annexation:
The nature of the interest in the land
possessed by the person who initiates such annexation is also an important
consideration while determining whether a property is movable or
immovable.[17] This too is inferred from the circumstances of the cases. For
example, oil and flour mills and the machinery used in them, are considered
fixtures, intended to be there for a long time and therefore considered
immovable property.[18]
Difference Between Movable and Immovable Property
Factors |
Movable property |
Immovable property |
Registration |
Not needed |
Must be registered under the Registration Act, 1908, if
its value exceeds Rs 100. |
Taxation |
Subjected to value-added tax (VAT) |
Subjected to stamp duty according to the Indian Stamp
Act, 1899 |
Inheritance |
It can be easily partitioned |
Does not break or divide easily |
Transfer |
It is easily transferable |
Not transferable in absence of a will, gift deed or
partition and simultaneous registration of the property in the
beneficiary's name. |
When used as a security |
Pledge |
Mortgage/lien |
Important Case Laws
Because the definitions are imprecise and subject to interpretation, a
number of problems have arisen in recent years with regard to property types.
Ideas like making a profit are the right to have something of someone's
territory. There are many judicial references to support this view.
Some important landmark cases have been decided:
In the case of
Smt.Shantabai v. State of Bombay[19], the court held that
the right to enter the land, cut and carry away wood over a period of 12 years
is a benefit arising out of land and hence immovable property.
In the case of
Anand Bahera v. Province of Orissa[20], it was held that
profit emerging out of land is movable property. The option to stroll on the
land and to draw fish from the lake and remove it is immovable property as it is
the benefit emerging of the land. The grazing of cattle on the land is
additionally immovable property as it is profit emerging from the land.
The idea of annexation becomes a means of choosing a problem in cases
involving the characterization of a property when the property lies on the
ground by its own weight it is mobile, but in the case that a thing is not can
be evicted without causing extreme damage to the land, at that point the
property is deemed to be enshrined in interminability and should be treated as
real estate. The degree of annexation is known by intention and timing of use.
In this sense, being on a ship is personal property, but the use of nails
and jolts is considered real property as they are likely to be used for a long
time and, moreover, a cut could cause damage.
The above-mentioned concept is further elaborated in the case of
Bamdev v. Manorma[21] where it was held that the pieces of equipment are movable property
and they simply don't become immovable just because they are embedded in the
earth. They are embedded for the delight in the gear and not of the land. The
cinema built is a temporary cinema, and the supplies and other supporting
equipment's will be fixed only till the mortgage exist.
In the case of
Duncans Industries Ltd. v. State of UP[22], light was
thrown on the intention of fixing an equipment. It stated that a property is
movable, or immovable based on the intention whether the person wanted to have
the equipment permanently or temporarily. In this case, Company A decided to
sell its fertilizers business to company B. It included land and apparatus.
Hardware that is installed in the earth is implanted as having lasting
utilization of it. It is beyond the realm of imagination to expect to expel them
without making extreme harm the land. Subsequently it ought to be considered as
unflinching property.
Some of the immovable properties recognized by the judiciary based on
various court orders:
Right to collect rent for immovable property, hereditary
office, right to ferry, right of fishery, equity of redemption, factory,
building, walls, the interest of mortgage in immovable property etc.
movable properties:
Government promissory notes, royalty, right of warship, a
decree of sale of a mortgaged property, standing timber, grass, growing crops
etc.
In addition to the above, the bar and the bench approach has evolved over
time to combine different components and preclude the rundown of versatile and
steadfast things. Goods are classified by need and circumstances and the
purpose and regulated by law. Now, to characterize the idea becomes one that of
extreme significance as in the current times it is only property be it
proprietary, personal, intangible or tangible, immovable or movable that defines
a person and his status.
Conclusion
Regarding the Limitation Act, immovable property is technically less used
than real and included all that would be real property under English law and
possibly more, and that if the nature and quality of the property can only be
determined by Hindu law and usage, the Hindu law may properly be invoked for the
purpose.
There are many conflicting judgments about whether or not a mortgage is
debt is immovable property, but the definition of an actionable claim by Act 2
of 1900, excludes mortgage debt, mortgage debt is to all intents and purposes
immovable property, though for the purposes of attachment it is treated as
movable property.
On the other hand, worship is a movable property. Although considered
immovable property, yajman vritti is not immovable property in the true sense of
the word and assignment of a right to collect offerings from yajmans for a
period of years is not a lease. The vested remainder is immovable property.
Though there are many research and studies, there is still a scope for
interpretation as to what is movable and immovable properties. If, however, a
thing cannot change its place without injury to the quality by virtue of which
it is, what it is, it is immovable except for standing timber, growing crops,
Grass.
Bibliography:
- The Registration Act, 1908, Section 2(9), No. 16, Acts of Parliament,
1908 (India)
- The General Clauses Act, 1897, Section 3(36), No. 10, Acts of
Parliament, 1897 (India)
- The Indian Penal Code, 1860, Section 22, No. 45, Acts of Parliament,
1860 (India)
- The Sale of Goods Act, 1930, Section 2(7), No. 3, Acts of Parliament,
1930 (India)
- Transfer of Property Act, 1882, Section 3, No. 4, Acts of Parliament,
1882 (India)
- Sunrise Associates v Govt of NCT Delhi, AIR (2006) SC 1908
- Re Mathur Lalbhai, (1901) 25 Bom 702
- The General Clause Act, 1847, Section 3 (26), No. 10, Acts of
Parliament, 1897 (India)
- The Registration Act, 1908, Section 2 (6), No. 16, Acts of Parliament,
1908 (India)
- The Income Tax Act, 1961, Section 269UA (d), No. 43, Acts of Parliament,
1961 (India)
- Joseph Annamma, (1979) Ker LT 322
- Halsbury's Laws of England, 3rd Edn vol 17, p 624
- Baijnath v Ramdhar, AIR (1963) All 214
- Kunhikoya v Ahmed Kutty, AIR 1952 Mad. 39
- Shantabai v State of Bombay, AIR 1958 SC 532
- Wake v Halt, (1883) 8 App Cas 195, p 204
- Spyer v Phillipson, (1931) 2 ChD 183
- Amritalal v Keshavlal, (1926) AIR 1926 Bom 495
- Smt. Shantabai v. State of Bombay, AIR 1958 SC 532
- Anand Bahera v. Province of Orissa; 1955 SCR (2) 919
- Bamdev v. Manorma, AIR 1974 AP 226
- Duncans Industries Ltd. v. State of UP, (2000) 1 SCC 633
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