Concept of property

The term ‘property’ has not been defined in the Act. When Section 6 of the Act says
‘property of any kind’ it implies every possible interest or right that can be possessed
and is a subject of ownership. It can be tangible or intangible. It can be a physical
object or something abstract. Property of different kinds is dealt with differently. The
movable property is dealt with under the Sales of Goods Act, 1930 while the major
chunk of the Transfer of Property Act, 1882 deals with immovable property. Section
3 of the Transfer of the Property Act, 1882 is called the Interpretation clause for it
explains the following terms.

Movable and Immovable property definitions

DEFINITION OF IMMOVABLE PROPERTY

Immovable property is a species of property. Whenever we speak about immovable

property, we always use the ready reference of ‘attached to the earth’. Whether a
thing is permanently attached to the earth, whether it is capable of separation or not
and what is the intention behind the construction or promoted growth of the property
are a few of the points that need to be looked into.

The definition of immovable property as per the Transfer of Property Act is a

negative definition. The Section 3 reads that “immovable property” does not include
standing timber, growing crops or grass”. Standing timber refers to trees that are fit
for usage in building or repairs. Growing crop includes all such vegetables, etc that
are solely grown only for their produce. Grass is referred to as fodder.

Section 3(26) of the GENERAL CLAUSES ACT, 1897 is not an exhaustive definition.
It says that “Immovable property shall include land, benefits arising out of land and
things attached to the earth, or permanently fastened to anything attached to the
earth.” It specifies the following as immovable property.

a) LAND. It encompasses the upper as well as the lower surface of the earth. Any
interest in the same will be treated as that of immovable property. It would include
wells, streams etc.
b) BENEFITS ARISING OUT OF LAND. This category includes everything dealing
with rights and interests in land as defined above. Right to collect rent or zamindari
rights are two examples.

c) THINGS ATTACHED TO EARTH. The nature of attachment is important.

This clause is explained with reference to the following three points:

a) Things rooted in the earth like trees, shrubs but not including standing timber,
growing crops and grass. Jamuna trees are treated as immovable properties.

b) Things embedded in the earth like buildings, minerals etc. By ‘embedded’ we refer
to things that have their foundations laid well below the surface of the earth. An
anchor of a ship is not immovable property in its normal usage.

c) Things that have been permanently fastened to anything embedded in the earth
for the purpose of permanent enjoyment. For example, ceiling fans, doors and
windows. If the objects that have been attached are merely transitory or not
permanent and do not contribute to the value and purpose of the thing attached to,
they are not immovable properties.

To determine whether a fixture is permanent or not, the following points need to be

considered:

a) Mode of Annexation: Temporary, standing on its own weight or dug in to the earth,
etc.

b) Purpose or Object of Annexation:

Trade fixtures are to be treated in association with the business and not the land as
the fixtures are attached in connection with the business. Such fixtures are to be
treated as accessory to the business and not as annexation. The position is different
if the person attaching the fixtures in a business place is the owner himself.

When it is a machinery in the factory, the court has to see the object and purpose of
such installation. The beneficial enjoyment of the machinery itself, the degree and
the manner of attachment or annexation on to the earth are other points for
consideration.
The Section 2(9) of the INDIAN REGISTRATION ACT, 1908 gives out the physical
aspects of property in the definition present in the said Act. The definition under the
Act is as follows, “Immovable Property includes land, buildings, hereditary
allowances, rights of ways, lights, ferries, fisheries or any other benefit arising out of
land and things attached to the earth but not standing timber, standing crops or
grass.”

Movable and Immovable property differences

MOVABLE PROPERTY  

It can be transferred from one place to another.

Registration is optional as per the Indian Registration Act, 1908.

The Sales and Central Sales taxes are applied,

IMMOVABLE PROPERTY

It cannot be transferred without causing extensive damage to the property. The

damage relates to the nature of the property Registration is compulsory under the
Indian Registration Act, 1908 if the value of the property is more than Rs. 100.The
property needs to be registered at the Sub-Registrar’s office.The appropriate stamp
duty and the registration fee have to be paid.

WHAT IS INCLUDED IN IMMOVABLE PROPERTY     WHAT IS NOT INCLUDED

IN IMMOVABLE PROPERTY

What is included

1) A right to collect rent from an immovable property;

2) A right to receive future rents and profits of land;

3) A tenancy right;

4) Coal mines;

5) A borewell that has been fastened in a permanent way to the earth;

6) Hereditary Offices; and

7) Right to use water of a perennial stream.     

What is not included

1) A right to worship;

2) A copyright;

3) The interest of a partner in a partnership firm;

4) A right to get maintenance;

5) A right to obtain the specific performance of an agreement to sell;

6) Government promissory notes; and

7) A machinery that is not permanently attached to the earth and can be shifted from
one place to another.

Meaning of "things attached to earth"

Concept of "Doctrine of fixtures"

A fixture is something fixed. In Transfer of Property Act, a fixture is a chattel which is

affixed to the soil or land. But a chattel by merely being affixed to the land will not
become an immovable property. There are two things which has to be considered for
arriving at the point whether a chattel is an immovable property. This can be called
the doctrine of fixtures.

(1) Mode of annexation

If the chattel remains on the land by its own weight and is not affixed to the land
there is a presumption that it is only a movable property. Here the criteria is the
intention to make whether it a fixture or not. If the intention was to make it part of the
land it is treated as a fixture.

If the chattel is fixed to the land by means of nails or such things the presumption is
that it is a fixture and become an immovable property.

(2) The Purpose for Annexing

The tenure of beneficial enjoyment of the land is a necessary criterion to hold
whether the chattel is an immovable property. If the purpose of annexation is the
permanent beneficial enjoyment of the land the presumption is that it is a fixture.
Shanthabai v State of Bombay, AIR 1958 SC 532: (1959) SCR 265

[ A right to enter upon the land of another & carry a part of the produce is an instance
of profits a pendre i.e. benefit arising out of land, & therefore a grant in immovable
property.]
Facts n Issue:-

Lease doc - 12n a 1/2 yrs executed by a Zamindar in the favor of his wife. 'right to
cut & appropriate wood from the Zamindar's forest(estate for a consideration of Rs
26,000. A right was conferred upon her to cut & take bamboo, fuel wood & teak but
there was prohibition for cutting teak plants under the height of one and a half feet -
the moment the teak trees reaches that girth they cud be felled but within 12 years -
when the MP abolition of proprietary rights (estate, Mahals, alienated lands) Act,
1950 was passed, all proprietary rights in the land became vested in the State & she
was stopped for cutting any more trees. She filed a petition in the court contending
that as the right granted to her was a right in standing timber (movable property), she
was entitled to compensation. - Issue was whether it is transfer of movable or
immovable property. Trees are regarded as immovable property because it is benefit
that arises out of the land & also because they are attached to the earth. But
standing timber is movable property

Observation & Decision - exclusion of TP Act is only for standing timber & not of
timber trees - standing timber must be a tree that is in a state fit for use for building
or industrial purposes, & looked upon as a timber even though it is still standing. If
not, it is still a tree because unlike timber, it will continue to draw sustenance from
the soil. But the amount of nourishment it takes, if felled at a reasonably early date, it
is so negligible & to be ignored. - Present case duration of the grant is 12 yrs, it is
evident that trees that will be fit for cutting 12 yrs hence will not be fit for felling new.
therefore it is not a mere sale of the trees as wood. it is more. it is not just a wish to
cut a tree but also to derive a profit from the soil itself, in the shape of the
nourishment in the soil that goes into the tree & makes it grow till it is of a size & age
fit for felling as timber & if already of that size, in order to enable it to continue to live
till the petitioner choose to fell it. - grant was not only for standing timber but also for
trees that were to fell gradually as they grow to attain regarded height ( & these trees
r immovable property ) . Moreover in case of standing timber, it is left to petitioner's
choice to fell them - that means they are not to be converted into timber at a
reasonably early date & that the intention is that they should continue to live, in other
words, they are to be regarded as trees & not as timber that is standing & is about to
be cut & used for purposes for which timber is meant. It is clear because the right
was spread for a period of 12 yrs & the intent was not to cut the trees at a
reasonably early time period - therefore lease doc is not a transfer of trees as
wood(movable) but a transfer of benefit arising out of immovable property - right to
fell trees for a term of years, so that the transferee derives a benefit from further
growth of trees. 

St of Orissa v Titaghur Paper Mills Company Ltd, AIR 1985 SC 1293: (1985) Supp
SCC 280

[ The contract should be examined as a whole with reference to all its terms & all the
rights conferred by it & not with reference to only a few terms or with just one of the
rights flowing there from - 'bamboo contract' (right to cut & remove bamboos with
several ancillary rights) is related to immovable property as a benefit to arise out of
land & did not relate to a contract of movable property. ]

Facts n Issue - In this case a contract of the petitioner company with State of Orissa
for the purpose of felling, cutting & removing bamboos from forest areas for the
purpose of converting the bamboos in paper pulp, or for the purposes connected
with the manufacture of paper, etc have been held to be profit a pendre or benefits
arising from land, & thus an immovable property.Court overruled in St of MP v
Orient paper mills
Other cases which court relied on:-

Ananda Behera vs St of Orissa - right to fish - right in immovable property

Bamdev Panigrahi vs Monorama Raj, AIR 1974 AP 226

[ Cinema equipments like projector, diesel engine etc, installed on the tenanted land
temporarily, and not attached to the earth, but also not permanently fastened to
anything to the earth, are movable properties. ] touring talkie installed on land - not
attached to earth but was on a temporary shed on the land - name 'touring talkies
shows that aim & intent of installation was for temporary period

Duncan Industries Lts V State of Uttar pradesh (2001) 1 SCC 633

Whether a machinery embedded in the earth can be treated as moveable or

immovable property depends on the intention of the parties which embedded the
machinery & also the intention of the parties who intend alienating that machinery]
Transfer of fertilizer plant - machinery transferred as movable property - escaped
stamp duty – HC observed & SC confirmed that machinery relating to manufacture of
fertilizer in a sale of fertilizer plant is immovable property

Analysis of Section 5 of Transfer of property, 1882

· Transfer of ‘inter vivos’ alone are included as transfer from living person/s to living
person/s.

· Transfer can be present or future but transferor must be living person. Shamsuddin
vs Abdul Hussain. ( Exception : Section 13 Transfer to an unborn Person)

· Living person include juristic persons like company and other like associations of
individuals whether registered or not.

· Other laws governing transfer are not affected by TPA.

· There must be an ‘act of conveyance’. Property must be handed over to the other
person. This can be expressed or implied.

· Act not exhaustive of all kinds of transfers. It deals with sale, gift, mortgage, lease
and exchange.