The Transfer of Property Act, 1882 does not clearly defines the term ‘immovable property’, but it is an inevitable task to distinguish, which though not possible practically, between the two, so as to ascertain the liability of the parties under a particular statute. The primary reason as to why the study of the character of property, i.e., whether it is movable and immovable, is relevant, is due to the difference in procedural formalities in the transfer, and the different time stipulated in the law of limitation in having recourse to the litigative system in case of disputes.
This paper analyzes the concept of the ‘immovable property’, with respect to Section 3 of the Transfer of Property Act, and endeavors to draw a virtual line of demarcation between ‘movable’ and ‘immovable’ property.
REASONS FOR ASCERTAINING THE DISTINCTION BETWEEN MOVABLE AND IMMOVABLE PROPERTY
· Though the TP Act lays down general rules relating to the transfer of both movable and immovable property, it governs and lays down rules for the specific transfer of immovable property only.
· The TP Act provides a specific procedure for the transfer of immovable property that is distinct from the one followed in case of movable property. The transfer of immovable property must take place with the help of a written document that is properly executed by the transferor and the execution should be properly attested and registered. Unless the transfer complies with all the three requirements, it will not convey any right from the transferor to the transferee. In contrast, the transfer of movable property in several cases will be complete by single delivery of possession of the property, coupled with an intention to convey the title by the owner to the recipient. For conferment of rights in the property through a transfer, the knowledge of the character of the property and the correct procedure for its transfer is a must.
· The law of limitation specifies different time periods within which a civil suit can be filed with respect to movable and immovable property. In case of immovable property it is generally 12 years from the date the cause of action arises, but in case of movable property, the suit must ordinarily be filed within a period of three years from the date of the cause of action, otherwise it will be dismissed as time-barred. Thus it is extremely relevant to know the character of the property that is the subject matter of dispute, before a suit can be filed with respect to it in a court of law. In a suit relating to movable property, where it is filed after the expiration of three years from the date the cause of action arises, the first question that the court will decide, will be the character of the property. If the court comes to the conclusion that it is immovable property, it will decide the case on merits, but if the court concludes that the character of property is movable, the case will not be heard on merits, but would be held barred by limitation and will be thus dismissed.
THE CONCEPT OF IMMOVABLE PROPERTY UNDER SECTION 3 OF THE TRNASFER OF PROPERTY ACT, 1988
The provision of Section 3 of the Transfer of Property Act, 1882 does not provide for a comprehensive definition of ‘immovable property’, however, it only mentions that ‘immovable property’ does not include standing timber, growing crops, or grass. Thus the definition only points out certain kinds of property to be not considered as an immovable property, and further classifies certain kind of properties which can be considered to be immovable property. As per the provision of Section 3, the immovable property includes the things attached to the earth, which has been sub-divided into three categories:
a) Things rooted in the earth, as in the case of trees and shrubs
The term ‘things attached to earth’ include things rooted in earth such as trees and shrubs, but excludes standing timber, growing crops and grass. These three specific items that have been excluded are rooted in earth, yet are covered under the term ‘movable’ property. It signifies that standing timber, growing crops and grass are distinct from ‘things rooted in earth as in case of trees and shrubs’. The Act simply excludes standing timber, which signifies that those trees that do not fall in the category of standing timber would invariably be covered under immovable property. An agreement to sell standing and fallen mango and jackfruit trees on the estate is an agreement to sell immovable property. A mortgage with possession of a fruit-bearing tree with the intention that the mortgagee is to enjoy the fruit of the tree, would be a mortgage of immovable property.
Timber is wood that is or can be used as construction material, as distinguished from wood that is used for other purposes such as firewood, etc. Timber is associated with and used for making tools, utensils, furniture, carriages, fences, and the like, or for other structural purposes. Since, the standing timber is specifically excluded being a movable property, a document relating to transfer of standing timber does not require registration. Since the main purpose for growing timber trees is to use their wood for construction or building purposes, standing timber must be a timber tree that is in a state fit for these purposes, and further, a tree that is meant to be converted into timber so shortly that it can already be looked upon as timber for all practical purposes even though it is still rooted in earth. If not, it is still to be categorized as an ordinary tree covered under the expression, ‘things rooted in earth’ because unlike timber, it continues to draw sustenance from the soil for its further growth. Thus before a tree can be regarded as standing timber, it must be in such a state that if cut, it could be used as timber, and when in the state, it must be cut reasonable early. The test is whether the intention is to take the benefit from the further growth of the plant i.e., whether the tree/plant is drawing nourishment from the land for its sustenance, or uses the earth merely as a warehouse or a godown for their convenience’s sake.
In case of Shantabai v. State of Bombay, the question arose as to when the appellant has been granted a right to cut trees, spread over a period of 12 years, it would be a right with respect to 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 a pendre, i.e., benefit arising out of land, and therefore a grant in immovable property. The court further said that ‘the duration of the grant is 12 years. It is evident that tress that will be fit for cutting 12 years hence will not be fit for felling now. Therefore it is not a mere sale of the tree as wood. It is more. It is not just a right to cut a tree, but also to derive a profit from the soil itself, in the shape of nourishment in the soil that goes into the tree and make it grow till it is of a size and age fit for felling as timber and if already of that size in order to enable it to continue to live till the petitioner choose to fell it.’
On a question whether a contract to cut standing timber would require registration or not, the court in State of Himachal Pradesh v. Motilal Pratap Singh & Co., held that where deodar trees that are used for building purposes are earmarked after ascertaining the required growth, silviculturally and some of them were felled and other to be cut within a short period of time, the contract is for standing timber and not timber trees and therefore of movable property. Hence, the document for sale of these trees does not require registration. Further, in case of Banaras v. Ghuhi Rai, 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.
Grass again is movable property. However, the term grass alone is not the determining criteria. It would be movable property, but only when the intention is to sever it within a short time period and an agreement for the sale and purchase of growing grass, not made with a view to their immediate severance and removal from the soil and delivery as chattels to the purchaser is an agreement for the sale of an interest in immovable property i.e. land.
Thus it has been observed that benefits arising out of land or profits a pendre is immovable property. Thus where a person using his land makes a profit, the right will be a right in immovable property.
b) Imbedded in the earth, as in the case of walls or buildings
It implies that things attached to earth are immovable property, therefore, machineries fixed to earth by being set into the soil is immovable property, but the expression ‘immovable property’ does not include things retaining their own position merely by their own weight unless the intention is apparent to make the articles part of the land.
In India, there are three tests to ascertain whether a chattel after attachment has become a fixture or not:
1) 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, or it is fixed to the floor with the help of nuts and bolts, the presumption will be that it has become part of earth.
2) 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.
3) By whom attached
The basic presumption is that nobody would want to make a permanent improvement of the land belonging to some other person. Thus if the attachment is by the owner of the land, the presumption would be very strong that the attachment has become a fixture, but if it is attached by somebody else other than the owner, the presumption would be that it is still a chattel.
c) Attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached
The question whether any attachment embedded in the earth or permanently fastened to anything attached to earth is movable or immovable, is a mixed question of law and fact, depending upon the facts and circumstances of each case. If the mode of attachment is that it is imbedding in the earth as in the case of walls and buildings, or if the object of the attachment is for the permanent beneficial enjoyment of the land to which it is attached, the property would be an immovable property.
In case of Holland v. Hodgson, Blackburn J. held that whether an attachment is considered to be movable or immovable property, is a question which must depend on the circumstances of each case and mainly on two circumstances indicating the intention viz the degree of annexation and the object of the annexation.
It can be concluded from the above discussion, for a property ‘attached to the earth’ to be considered as an ‘immovable property’ or ‘movable property’, is a question of fact to be established in the particular circumstances of individual cases. There cannot be any comprehensive and water-tight criterion for anything attached to the earth as movable or immovable, rather it is inferred from the intention behind the attachment, i.e., if the intention of the attachment is for the permanent beneficial enjoyment of the land, it amounts to ‘immovable property’, and if the intention is merely of benefitting from the thing which is temporarily attached, it amounts to movable property.