The Transfer of Property Act, 1882 is a civil legislation of immense significance owing to the vast number of properties related transactions taking place throughout the country. A uniform legislation was the need of the hour considering this factor, and this Act was drafted to serve the selfsame purpose. The Act came into existence on 1st July, 1882 which gives for the regulations of transmission of property inter vivos i.e., among living things. Therefore, the Act does not cover the dimension of transfer of property in totality. Erstwhile, the transfer of immovable property was governed by the English laws. The Act of 1882, sets out the objectives and governs only the transfer which is made by the parties and not by the operation of law. However, the Act contains the provisions of transfer of both moveable and immoveable property but the major portion of the Act talks about the transfer of immovable property which is visible from the below mentioned paper. [1]
It is crucial to understand the meaning of the term “property” as applied in the Act. Property has been given a wider aspect covering both tangible material things, e.g., land and houses as well as rights which are not exercised over any material, e.g., a right to repayment of a debt. The word ‘transfer’ in the Act has also been used in a wider sense. It may mean either transfer of all the rights and interests in the property or transfer of one or more of subordinate rights in the property. [2]
Table of Contents
Property
Property in its wider sense may include anything which has some value and over which the right of ownership may be exercised. In general terms, the property can be defined as the virtual or physical entity which is owned by a person jointly or severally. The definition of the property can be seen under the Benami Transactions (Prohibition) Act, 1988 which says:
“Property of any kind, moveable or immoveable, tangible or intangible and is inclusive of any right or interest in such property”.[3]
The very concept of property plays a crucial role in a human’s life, because a human cannot live without the use of material objects which are covered under the purview of property. The 1882 Act plays a crucial role in the statute book with the ultimate objective to render the system of transfer of immovable property a system of public transfer legislation. It is one of the legislation made in the 19th century to govern the property rights of individuals. [4]
The concept of moveable and immoveable property under the Indian laws is parallel to the concept of English law under which property is divided into two categories, real property and personal property. The real property means the property pertaining to specific recovery and freehold interests in land whereas the personal property means the property which involves a personal action and includes everything other than real property. Therefore, ‘property’ in its most comprehensive sense includes all legal rights of a person except his personal rights, which constitute his status or personal condition. [5]
Immoveable Property
The transfer under the TPA, 1882 deals with specific transfer pertaining to immoveable and moveable property. However, it is said that anything which excludes immoveable property is regarded as moveable property. Section 3 (2) of the Act states:-
“Immoveable property does not include standing timber, growing crops or grass’. [6]
Therefore, the Act does not have a comprehensive definition of immovable property and hence it can be concluded that it’s an unsatisfactory definition. Therefore, for the purpose of definition of immovable property we will refer to various other Acts where such definitions are defined.
The General Clauses Act of 1897 under Section 3(26) states that: “immoveable property shall include land any benefits arising out of land and also the things attached to the earth, or permanently attached to the earth”. Thus, the definition of immovable property is also not exhaustive. However, the definition has clarified on things “attached to earth” which includes: [7]
a) “anything rooted in earth, it can be trees and shrubs”;
b) “imbedded in earth, things like walls or buildings”; or
c) “attached to what is so imbedded for the permanent beneficial enjoyment of that to which is attached”
This very definition of the General Clauses Act is applicable to the Transfer of Property Act as well and same was held in Babul Lal v. Bhawani [8]. Therefore, together they give a wider ambit to the definition of the term “immoveable property”. The benefit arising out of land would mean ‘right to catch fish, right to collect rent, any interest thereof, any income derived from that land will be considered as a part of immovable property.
Things rooted to the earth
Things rooted to the earth, means standing timber, growing crops or grass are not immoveable property, meaning that trees are excluded from the definition of immovable property. The main reason of the exclusion is that they are useful as timber only after their severance from land. The main thing is to determine the intention to cut down the tree from the middle and remove the tree permanently which is firmly attached to earth. In such case the latter one will be treated as ‘immoveable property’ and former as ‘moveable property’. [9]
Things imbedded in earth
Things embedded in earth herein, this would essentially include things made up by man or any non-natural objects embedded to earth. The property is treated as fixtures when it is firmly attached to the land. Buildings are the most appropriate example of the things imbedded to the earth.[10]
Further, the Registration Act, 1908 under Section 2(6) defines “Immovable Property” as the property which includes “land, building, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit arising out of land, and things attached to the earth or permanently fastened to anything which is attached to the earth but not standing timber, growing crops nor grass”. Therefore, it is implied that buildings are also covered under the definition of immovable property. [11]
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Moveable Property
The term moveable property has not been defined under the Act, in general parlance, it means anything which is easily moveable from one place to another without changing its structure or anything and without giving any harm to its surroundings can be said as moveable property. It is noted that moveable properties do not mandatorily require registration under the Act for the purpose of transfer. [12]
The definition stipulated under the Transfer of Property Act, 1882 for immovable property under Section 3 by excluding standing timber, growing crops and grass implies that these all are considered as moveable property, no specific definition of moveable property has been written under the act.[13] However, the General Clauses Act of 1897 under Section 3 clause 36 defines moveable property as “property of every description, except immoveable property”. [14]
Further adding to the definition under the Sale of Goods Act, which has defined moveable property as “moveable property includes every kind of property excluding actionable claims and money, it includes stock, shares, growing crops, grass, things attached to or forming a part of the land which are agreed to sale or under contract pertaining to sale.” [15]
The definitions together give a strong meaning to what is moveable property. Therefore, the framework of what constitutes a moveable property was necessary to determine the rights and duties in respect of transactions and also the tax liability of the individual under the tax provisions whenever the transactions is made in relation to property.
Stocks and Shares
Stocks and shares are considered as moveable property, they are the part of the company which is held by the person known as shareholder. The shareholder will have certain rights over the company which includes the right to vote in a general meeting of a company. These are transferable and come under the purview of moveable property. [16]
Further, standing timber, growing crops and grass are the exception to immovable property and are moveable property. These are segregated because of the benefits which arise when they are cut down and can be used for building material, for food and grass. Therefore, the property which is cut down the intention cutting down of that property has to be seen. Because, if such standing timber, tree or grass is fixed firmly and not removed then this property will be treated as immovable property and is removed (not from the grass root) then this property will be considered as moveable property. [17]
Actionable Claims and money
Actionable claims are excluded from the ambit of moveable property. The Transfer of Property Act, 1882 recognizes actionable claims as “claim to any debt, which is recognized by the Civil Court as a ground of relief to the aggrieved party in the court of law.” Other than debts which include mortgage or hypothecation or pledge of such property or any beneficial interest a person has to such property or any beneficial interest of the claimant into the respective property. Actionable claim can never be a moveable property because it’s a claim ascertainable in the court of law for the right to recover and not for the enjoyment purpose. The claimant can have the right to recover in the court of law by suit or through an action. [18]
For the purpose of money, money is not considered as good but a legal tender and it is understood that a legal tender cannot be exchanged for any other legal goods and that’s why it lacks transferability and hence cannot be covered under the Transfer of Property Act. [19]
Conclusion
The Transfer of Property Act, 1882 intended to amend the existing laws not to introduce new principles. It only transfers voluntarily. Transfer of property means transfer inter vivos i.e., transfer among living things, a property whether moveable or immoveable is transferred between two persons in different facts and circumstances and at different values. There are different laws and ways to determine it for the purpose of moveable property. The Sales of Goods Act is applicable for the purpose of immovable property, the Transfer of Property Act is applicable. The paper has provided the categorization of movable and immovable, the with the intention judiciary and the provisions enshrined in the statutes have clarified on what is considered to be moveable property and immovable property.
REFERNCES
[1] N Pradhan, “Transfer of Property Act (TPA)”, Legal Service India, available at: http://www.legalserviceindia.com/legal/article-2117-transfer-of-property-act-topa-tpa-.html (last visited on Dec 1, 2020).
[2] Dhruvi Dharia, “Rules relating to transfer of property”, Law Times Journal, March 29, 2020.
[3] The Benami Transactions (Prohibition) Act, 1988, s.2(c).
[4] Jaya V.S (ed.), Property Law 594-595, available at: http://14.139.60.114:8080/jspui/bitstream/123456789/738/21/Property%20Law.pdf (last visited on Dec, 1, 2020).
[5] Raichand vs. Dattatrya, AIR 1964 Bom. 344.
[6] The Transfer of property Act, 1882, s.3(2).
[7] The General Clauses Act of 1897, s.3(26).
[8] ALL 1912 LJ 776.
[9] Jagdish vs. Mangal Pandey, AIR 1986 All. 182.
[10] Punnayya vs. Venkatappa, AIR 1926 Mad. 343.
[11] The Registration Act, 1908, s.2(6).
[12] Lexforti, “Categorization of Immovable and Moveable Property”, June 27, 2020 available at: https://lexforti.com/legal-news/categorization-of-immovable-and-moveable-property/ (last visited on 2 Dec, 2020).
[13] The Transfer of property Act, 1882, s.3.
[14] The General Clauses Act of 1897, s. 3(36).
[15] The Sale of Goods Act, s. 2(7).
[16] Supra note 12.
[17] Shantabai vs. State of Bombay, 1959 1 SCR 265.
[18] Supra note 12.
[19] Re Mathur Lalbhai, 1901 25 Bom. 702.
BY SURABHI SHARMA | UPES, DEHRADUN