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Critical Analysis: Movable And Immovable Property

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:
  1. 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.
     
  2. 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:
  1. 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.
     
  2. 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.
     
  3. 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.
     
  4. 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:
  1. 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.
     
  2. 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:
  1. The Registration Act, 1908, Section 2(9), No. 16, Acts of Parliament, 1908 (India)
  2. The General Clauses Act, 1897, Section 3(36), No. 10, Acts of Parliament, 1897 (India)
  3. The Indian Penal Code, 1860, Section 22, No. 45, Acts of Parliament, 1860 (India)
  4. The Sale of Goods Act, 1930, Section 2(7), No. 3, Acts of Parliament, 1930 (India)
  5. Transfer of Property Act, 1882, Section 3, No. 4, Acts of Parliament, 1882 (India)
  6. Sunrise Associates v Govt of NCT Delhi, AIR (2006) SC 1908
  7. Re Mathur Lalbhai, (1901) 25 Bom 702
  8. The General Clause Act, 1847, Section 3 (26), No. 10, Acts of Parliament, 1897 (India)
  9. The Registration Act, 1908, Section 2 (6), No. 16, Acts of Parliament, 1908 (India)
  10. The Income Tax Act, 1961, Section 269UA (d), No. 43, Acts of Parliament, 1961 (India)
  11. Joseph Annamma, (1979) Ker LT 322
  12. Halsbury's Laws of England, 3rd Edn vol 17, p 624
  13. Baijnath v Ramdhar, AIR (1963) All 214
  14. Kunhikoya v Ahmed Kutty, AIR 1952 Mad. 39
  15. Shantabai v State of Bombay, AIR 1958 SC 532
  16. Wake v Halt, (1883) 8 App Cas 195, p 204
  17. Spyer v Phillipson, (1931) 2 ChD 183
  18. Amritalal v Keshavlal, (1926) AIR 1926 Bom 495
  19. Smt. Shantabai v. State of Bombay, AIR 1958 SC 532
  20. Anand Bahera v. Province of Orissa; 1955 SCR (2) 919
  21. Bamdev v. Manorma, AIR 1974 AP 226
  22. Duncans Industries Ltd. v. State of UP, (2000) 1 SCC 633

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