CONCEPT OF MOVABLE AND IMMOVABLE PROPERTY PDF

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CONCEPT OF MOVABLE AND IMMOVABLE PROPERTY

CONTENTS Introduction Movable & Immovable Property- As defined in the statutes Elaboration- Land, benefits to arise out of land, things attached to the earth SPKN Subramanian case and the issues borne of ‘things attached to the earth’ Comparison- Movable and Immovable Property Examples of Movable and Immovable Property Conclusion References

INTRODUCTION Anything which has an economic content is basically a property. The content can also include rights as well. Property, classified into two- (1) Tangible Properties: those properties which can be touched or which have physical existence, (2) Intangible Properties: those properties having no physical existence and exist in the form of rights, is fundamental for survival for every living being in this world. After human beings became civilized and are governed by certain sets of rules, properties; having fundamental importance, have been transferred from time to time and the transfer of any sort of property have remained indispensable for the survival and progress of the society. Since the terminology of ‘property’ is very vast, in India, it is divided into two concepts- Movable and Immovable Property. In India, the transfer of property is governed by The Transfer of Property Act, 1882. Section 6 of this Act says that property of any kind may be transferred; but does not imply all types of property in its purview. Since this Act talks only about Immovable Property and indicates how a property may be transferred by way of- sale, mortgage, charge, lease, exchange and gift, it is expedient to grasp the concept of movable and immovable properties in order to comprehend their differences and acknowledge when and where the provisions of the Transfer of Property Act, 1882 is to be attracted.

MOVABLE & IMMOVABLE PROPERTY- AS DEFINED IN THE STATUTES It is essential to classify property, as in the case of India- as Movable and Immovable because the central law that concerns transactions of a property is Transfer of Property Act and this act has different rules of procedures for movable and immovable property. For instance, transfer of a movable property may be completed by mere giving of possession, but for immovable property, it is necessary to have it registered if the value of the tangible property exceeds Rs 100 (Section 54, Transfer of Property Act, 1882). 1) Immovable Property(a) Transfer of Property Act, 1882: Section 3 of this Act says that immovable property does not include – standing timber, growing crops and grasses. The definition is not comprehensive. (b) The Registration Act, 1908: Section 2 (6) of this Act says that immovable property includes land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently fastened to

anything which is attached to the earth and excluded- standing timber, growing crops and grass in its purview. (c) The General Clauses Act, 1897: Section 3 (26) says that immovable property shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth. Taking into consideration all the three Acts, immovable property basically implies: a) Land b) Benefits arising out of land c) Things attached to the earthi) Things embedded in the earth ii) Things attached to what is so embedded in the earth iii) Things rooted in the earth; except- standing timber, growing crops and grass 2) Movable Property(a) Transfer of Property Act, 1882: Section 3 of this Act says that immovable property does not include – standing timber, growing crops and grasses. Hence, it is evident that movable properties are standing timber, growing crops and grasses. (b) The General Clauses Act, 1897: Section 3 (36) implies that movable property shall mean property of every description, except immovable property (c) The Sale of Goods Act, 1930: The provisions of Section 2 (7) of this Act gives us an idea of what an immovable property is. It says that “goods” means 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;

ELABORATION- LAND, BENEFITS TO ARISE OUT OF LAND, THINGS ATTACHED TO THE EARTH As mentioned before, it is evident that the following properties are immovable propertiesa) Land: Land, in its natural state, is an immovable property. The land includes everything on the surface, below the surface and above the surface of the land. b) Benefits to arise out of the land: Since property is consisted of two characteristicsTangible and Intangible, benefits arising out of a land is regarded as an immovable property. In the case of Anand Behra v. State of Orissa , the court held that the right to catch a fish from a lake for five years is equivalent to Profit a Prende- a right to enter another person’s property and to make some benefit from his land which is in India, is a benefit to arise out of land and is thus an immovable property. Also in Smt. Shantabai v. State of Bombay it was also held that a right to enter land, to cut and carry away wood for over a period of 12 years is a benefit arising out of land, and hence is an immovable property. c) Things attached to the earth: (i) Things rooted in the earth- Generally, all things which are rooted in the earth are considered things attached to the earth. Thus, plants and trees permanently attached to the surface of the earth are considered immovable properties. However, there is an exception that the following- growing crops, grass and standing timber even though rooted in the earth will not be considered as immovable properties but rather movable properties. The reason for growing crops, grass and standing timber being regarded as movable properties would be because of the fact that movable properties can easily be moved from one place to another, without changing its shape, size, quantity or quality. Crops, grass and

standing timber can be easily moved from one place to another without changing its shape, size, quantity or quality. (ii) Things embedded in the earth: Things which are fixed below the level of the earth, so that the thing annexed on such earth can stand on its own weight. To determine whether the object annexed is a movable or an immovable property, the following factors have to be considered:- (1) Degree and mode of annexation- if a thing cannot be removed without causing severe damage to the land, then it is considered that the object has been embedded in perpetuity and to be treated as an immovable property (2) Object of annexation- this factor relies on the intention of the parties when annexing the property on the land. If a property had been annexed on a land for use on a permanent basis, it is treated as an immovable property. (iii) Things attached to what is so embedded- the thing must be attached permanently, it must be attached for the permanent beneficial enjoyment of the property in which it is attached.

SPKN SUBRAMANIAN CASE AND THE ISSUES BORNE OF ‘THINGS ATTACHED TO THE EARTH’ The decision made in SPKN Subramanian Firm v. M Chidambaram highlights the importance of ‘intention’ when determining a property whether it is an immovable property or a movable property. In this case, an oil engine was attached to the ground with nuts and bolts on the landlord’s (defendant) property by the tenants. Even though the oil engine was attached to the ground, it cannot be regarded as an immovable property because it was not the intention of the tenants to attach the oil engine as part of the landlord’s property and also during its fixation, the tenants never intended to fix it for permanent usage as they were on a leased property and were in daily expectation of being evicted from the premises.

COMPARISON- MOVABLE AND IMMOVABLE PROPERTY 1. MOVABLE Consists of- growing crops, grass, standing timber, things attached to the earth or forming part of the land which are agreed to be severed before sale or under the contract of sale, stock, shares IMMOVABLE Consists of- Land, benefits to arise out of land and things attached to the earth 2. MOVABLE If the thing is resting on the land merely on its own weight, the presumption is that it is a movable property unless contrary is proved IMMOVABLE If the thing 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 be an immovable property 3. MOVABLE If the purpose was only to enjoy the thing itself, then it is a movable property even though it is fixed to the land IMMOVABLE If the purpose of annexation of a thing is to confer a permanent benefit to the land to which it is attached, then it is an immovable property

4. MOVABLE It is generally used to enjoy the thing IMMOVABLE It is generally used to enjoy the land/right/thing 5. MOVABLE No registration is required to transfer a movable property IMMOVABLE Transfer of an immovable property can be made only by a registered instrument if the value of the property is Rs 100 and upwards 6. MOVABLE Movable property is subject to sales tax, and Central sales tax, subject to certain restrictions and conditions under the (concerned state) General Sales Tax Act and the Central Sales Tax Act, 1956. IMMOVABLE Immovable property is subject to the Transfer of Property Act, 1882 7. MOVABLE Mere delivery with an aim to transfer the movable property completes the transfer. IMMOVABLE Mere delivery is not enough to consider the transfer a valid transfer. The registration of property is compulsory in name of the transferee.

EXAMPLES OF MOVABLE AND IMMOVABLE PROPERTY 1) A mango tree: Trees and shrubs are generally considered immovable properties because they are ‘things rooted in the earth’ as according to Section 2 of The Registration Act, 1908 and Section 3 of The General Clauses Act, 1897. 2) Right to cut teak tree for a period of two years: Since the said right is a ‘benefit to arise out of a land’, the property is deemed an immovable property. 3) Sale of growing wheat crops which could be ready for harvest after three months: Since the wheat is a growing crop, it is a movable property. 4) Ceiling fans fixed by an owner of the house: While fixing the fan on an immovable property such as the house, the intention of the owner of the house is to annex the fan in order to confer a permanent benefit to the land. Therefore, it is an immovable property. 5) Oil engine attached to land by mortgaging of land: When anything is annexed on a mortgaged/leased property; when anything is fixated on land by a person who does not own that property, even though the property is attached to the ground, his intention is not to confer a permanent benefit to the land. Hence, such property is a movable property, clarified in the case of SPKN Subramanian Firm v. M Chidambaram. 6) Blocks of stone placed on top of each other: Since the blocks of stone seems to be placed to go deeper in the earth by an external agency and that they are ‘things attached to the earth’ not resting in the land merely by its own weight, it is an immovable property. However, if such annexation is not to make it a part of the land, then it is a movable property. 7) A right to graze cattle over the land for one year: The right to graze over a land will imminently give the cattle a sustenance, and also if sustained, it will produce milk and meat

for the owner. The owner will subsequently have an ancillary rights and such will be deemed as a benefit to arise out of a land. Thus, such right is an immovable property. 8) Right of way: Having a right to use a way will benefit the user in going where he wants to go, it is a benefit arising out of a land. Therefore, it is an immovable property. 9) Right to collect dues from fairs: It is an immovable property as such right will benefit the collector of the dues where the fair was conducted. 10) Government Promissory notes: A promissory note, being a financial instrument that contains a written promise by one party to pay another party which involves a definite sum of money is an immovable property 11) A right to worship: Having a right to worship benefits the user in having freedom to express and propagate on his faith and religion thus, is an immovable property. 12) Growing crops: A growing crop is definitely a movable property as interpreted in the Transfer of Property Act, 1882 and The Sale of Goods Act, 1930 13) Lakes, rivers and ponds: If lakes, rivers and ponds are removed from the land, the land would lose its quality. Even though not strictly applied in India, under English law, by virtue of attachment, a thing becomes a part of the land and property of the owner of the soil. This is called Doctrine of Fixture. Under this fixture, whatever is built into or embedded into or attached to soil becomes part of the land. Lakes, rivers and ponds are embedded into lands, naturally and sometimes artificially. They are ‘things attached to the earth’, thus are immovable properties. 14) Doors, windows, ceiling fans: Things that are embedded and attached to the land are commonly known as fixtures. When buildings are concerned, fixtures could be of two kinds, civic fixtures and trade fixtures. While items such as doors and windows are civic fixtures, machinery and other equipment are trade fixtures. Removing civic fixtures would amount to causing damages to the immovable property. Hence, doors, windows and ceiling fans are part of immovable property. Technically speaking, they are ‘things embedded in the earth’ included in the purview of an immovable property. 15) Standing Timber: This is specifically excluded as an immovable property under Section 3 of the Transfer of Property Act, 1882. 16) Water pump installed by tenant: If it is the intention of embedding a water pump on a land not belonging to his, by a tenant for permanent enjoyment of the land, then it is an immovable property. However, it is unlikely that a tenant will do such, therefore it would generally be a movable property. Intention is the determinant factor of considering what kind a property is. 17) Right of fishery: A right which is for ‘beneficial enjoyment’ is an immovable property and thus, right to fishery is an immovable property.

CONCLUSION Since assets are taxed based on being a movable property or an immovable property, it is expedient to grasp the concept of their terms and is an utmost importance to comprehend their differences.

REFERENCES 1) Shukla SN, Transfer of Property (29th edn, Allahabad Law Agency 2015) 2) ‘Movable and Immovable Property’ (Property Law, 15 July 2018) < https://www.lawyerssafari.com/.../movable-and-immovable.../> 3) Gagan K, ‘Introduction to Transfer of Property Act’ (Slideshare, 18 January 2014) < https://www.slideshare.net/gagan555/tp-0002introduction> 4) Sunita Mishra, ‘Your House is Immovable Property, but what about the doors?’ (Property Guide, 5 October 2017) < https://www.proptiger.com/.../your-house-is-immovable...>...