1

Introduction to TPA,
1882
IMMOVABLE & MOVABLE PROPERTY
Topics to Be Covered 2

 Introduction to the Act

 Types of Property: Definition of Movable and Immovable property.
 SECTIONS: S. 3 TPA, S. 3(26) General Clauses Act and the
Registration Act.
 CASES:
1. Ananda Behera v. State of Orissa (1955) 2 SCR 919
2. Shantabai v State of Bombay, AIR 1958 SC 532
3. Suresh Chand v. Kundan (2001) 10 SCC 221
4. Duncan Industries Ltd. v State of Uttar Pradesh, (2000) SCC 633
5. Triveni Engineering & Industries Limited v. Comm. of Central Excise
(2000) 7 SCC 29
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AMBIT OF THE LEGISLATION

• Preamble: Whereas it is expedient to define and amend certain parts of the law
relating to the transfer of property by act of parties.
• TPA only covers inter vivos transfers which is a transfer made during the lifetime of
a party.
• Transfer effected by operation of law are not governed by this Act
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Movable vs Immovable property

 Procedure for transfer

Immovable property: properly executed and attested written agreement +
registration requirement (as applicable);
Movable property: simple delivery of possession of the property + an intention to
convey the title by the owner to the recipient
 Limitation period:
Immovable property: 12 years;
Movable property: 3 years.
‘Immovable Property’ 5

 Sec.3, TPA: In this Act, unless there is something repugnant in the

subject or context,-
immovable property does not include standing timber, growing crops
or grass
‘Immovable Property’ 6

 Sec 3 (26), The General Clauses Act, 1897

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.

(Sec 3, TPA," attached to the earth" means-

(a) rooted in the earth, as in the case of trees and shrubs;
(b) imbedded in the earth, as in the case of walls or buildings; or
(c) attached to what is so embedded for the permanent beneficial enjoyment of that to which it is
attached; )
‘Immovable Property’ 7

 Sec 2 (6), The Registration Act, 1908

Immovable property includes land, buildings, hereditary allowances, right
to ways, lights, ferries, fisheries or any other benefit to arise out of land,
and things attached to earth, or permanently fastened to anything which is
attached to the earth, but not standing timber, growing crops, or grass.
 Land - Benefits arising out of land/Profits à prendre 8

Land: includes ground, soil or earth; houses and other buildings upon it;
and Profits-a-prendre
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 Benefits arising from land:

 Where a person using his land derives a profit, the right will be a right in
immovable property.
• Examples: right to receive future rent, right to pluck fruits in the future.
Ananda Behera vs. State of Orissa 10

• Allowed to catch and carry away fish – sale executed orally

• Orissa Estates Abolition Act, 1951
• Why did the petitioners claim that the property in question was
movable in nature?
• As per the Court - What was the nature of the lake? What was the
nature of the rights that had been transferred?
• Was the sale valid in the eyes of law?
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• Ratio:
“What was sold was the right to catch and carry away fish in specific
sections of the lake over a specified future period. That amounts to a
license to enter on the land coupled with a grant to catch and carry away
the fish, that is to say, it is a profit a prendre.”
If a profit a prendre is regarded as tangible Immovable property, then the
"property" in this case was over Rs. 100 in value. If it is intangible, then a
registered instrument would be necessary whatever the value. The "sales"
in this case were oral : there was neither writing nor registration. That
being the case, the transactions passed no title or interest and accordingly
the petitioners have no fundamental right that they can enforce.
Things Attached to Earth 12

 Different categories:
• ‘rooted in earth’: except standing timber, growing crops or grass
• ‘embedded in the earth’
• ‘attached to what is so embedded in the earth for the permanent beneficial
enjoyment of that to which it is attached’
Rooted in Earth: Difference b/w Trees; 13
Timber Trees & Standing Timber
• Trees: ‘rooted in earth’ - immovable property
• Timber tree:
tree suitable for construction material - building houses, bridges, ships
etc.
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• Standing timber: a tree that is

a) A timber tree
b) in a state fit for these purposes and, further,
c) 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 standing..
• If not, it is still a tree because, unlike timber, it will continue
to draw sustenance from the soil.
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For it to be ‘standing timber’:

- It must be a timber tree,
- At a stage where its wood is ready to be used as timber,
- It must be intended to be cut reasonably early
Shantabai v State of Bombay 16

• Madhya Pradesh Abolition of Proprietary Rights (Estates,

Mahals, Alienated lands) Act, 1950
• Shantabai - Right to enter the estate for cutting and taking
out bamboo, fuel wood and teak – from 1948 to 1960 -
unregistered document – Restriction on cutting trees with a
girth lesser than 1.5 ft
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If the document is construed as conveying to her any part or

share in the proprietary right of the grantor, then, not being
registered under the Indian Registration Act, the document
does not affect the Immovable property or give her any right to
any share or interest in the Immovable property. (para 5)
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If the document is construed as purely a license granted to her

to enter upon the land, then that license must be taken to have
become extinguished as soon as the grantor's proprietary rights
in the land vested in the State under section 3 of the Act. If the
document is construed as a license coupled with a grant, then
the right acquired by her would be either in the nature of some
profits-a-prendre which, being an interest in land, is Immovable
property or a purely personal right under a contract.
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It is evident that trees that will be fit for cutting twelve years hence will
not be fit for felling now. Therefore, it is not a mere sale of the trees 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 the nourishment in the soil that
goes into the tree and makes 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 chooses to fell it.
As regards trees that could be cut at once, there is no obligation to
do so. They can be left standing till such time as the petitioner
chooses to fell them. That means that they are not to be converted into
timber at a reasonably early date and that the intention is that they should
continue to live and derive nourishment and benefit from the soil; in
other words, they are to be regarded as trees
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Ratio:
 The grant is not only of standing timber but also of trees that are not in a fit
state to be felled at once but which are to be felled gradually as they attain the
required girth in the course of the twelve years; and further, of trees that the
petitioner is not required to fell and convert into timber at once even though
they are of the required age and growth.
 The result is that, though such trees as can be regarded as standing timber at
the date of the document, both because of their size and girth and also
because of the intention to fell at an early date, would be moveable property
for the purposes of the Transfer of Property and Registration Acts, the
remaining trees that are also covered by the grant will be Immovable
property, and as the total value is Rs. 26,000, the deed requires registration.
Being unregistered, it passes no title or interest and, therefore, as in Ananda
Behera's case, the petitioner has no fundamental right which she can enforce.
Things attached to earth: Embedded 21

Chattel or Fixture? Tests:

 Mode of attachment and consequences of detachment:
Has the thing gone down because of its sheer weight? How
easily can that object be detached? Can removal cause
damage to the principal property?
 Intention: What’s the intention/ object? Was the intention
to fix the attachment permanently or for a sufficiently long
time?
 By whom attached: Owner or someone else?
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Identify the nature of property:

1) A make-shift wall by stacking bricks?
2) A well?
3) Oil Tank in a Petrol Pump?
4) Trampoline in a backyard?
5) Anchor of a ship?
Things attached to earth: Embedded 23

Things attached by someone other than the owner:

 Entitled to remove if he leaves the land in its previous state
 Entitled to compensation for the value of attachment if the
owner derives a benefit from it
Things attached to earth: Attached to 24

what is embedded
 Intention: It must be a permanent attachment, i.e., intended to be used in
perpetuity or till the life of the attachment.
 Purpose: Its attachment constitutes a permanent improvement to the thing
to which it is attached.
 Degree of annexation
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Examples
1) Fans, Electrical Fittings?
2) Fridge?
3) Doors & Windows?
4) Paintings, Curtains?
5) Pulley system on a well?
6) Wall Clock?
Duncan Industries v State of UP AIR 26
2000 SC 355
Facts
 Sale of fertilizer business (ICI to CCFCL/Duncan Ind)
 Definition Clause: ‘Fertilizer Business’ as including plant and
machinery
 Deed of conveyance – registration – alleged non-compliance
of Stamp Act – stamp duty (36cr) penalty (36 lakhs)
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 Had the plant and machinery also been sold? Was the plant
and machinery movable / immovable?
o Conveyance – as is where is basis
o Definition clause
o Affixed permanently – purpose & intention
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Ratio:
The question whether a machinery which is embedded in the
earth is movable property or an immovable property, depends
upon the facts and circumstances of each case. Primarily, the
court will have to take into consideration the intention of the
parties when it decided to embed the machinery whether such
embedment was intended to be temporary or permanent.
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The description of the machines as seen in the Schedule attached to

the deed of conveyance also shows without any doubt that they
were set up permanently in the land in question with a view to
operate a fertilizer plant and the same was not embedded to
dismantle and remove the same for the purpose of sale as
machinery at any point of time. The facts as could be found also
show that the purpose for which these machines were embedded
was to use the plant as a factory for the manufacture of fertiliser at
various stages of its production. Hence, the contention that these
machines should be treated as movables cannot be accepted.
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… We have noticed that as per the agreement it is clear what was

agreed to be sold is the-entire business of fertilizer on an "as is
where is" basis including the land, building thereon, plant and
machinery relating to fertilizer business- description of which is
found in the definition of the term "fertilizer business" in the
agreement itself which has been extracted by us hereinabove.

… It is obviously to reduce the market value of the property the

document in question is attempted to be drafted as a Conveyance
Deed regarding the land only.
Triveni Engineering v Comm. of Central 31
Excise AIR 2000 SC 2896

 Appellants deal in turbo alternators (steam turbine + complete

alternator/ generator) – fixed on site
 Excise authority sought to impose an excise duty on the turbo
alternator.
 Appellant’s Arguments: (i) no manufacturing process; (ii) immovable
property
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Manufactured?
…where an activity results in 'mergence of a new marketable
commodity with a distinctive name, character or use, it cannot
but be manufacturing process
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Subject to Excise?
The question then will be whether a 'turbo alternator' falls
within the meaning of 'electric generating set‘ (from the CET
Act). To bring a 'turbo alternator' under that heading it
must be shown to have the attributes of excisable 'goods'
as understood in the Excise Law. They are mobility and
marketability. The article in question should be capable of
being brought and sold in the market - a test which is too well
established by series of decisions of this Court to be elaborated
here.
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There can be no doubt that if an article is an immovable

property, it cannot be termed as 'excisable goods' for purposes
of the Act.
Whether an article is permanently fastened to anything
attached to the earth require determination of both the
intention as well as the factum of fastening to anything
attached to the earth and this has to be ascertained from the
facts and circumstances of each case.
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In our view, the findings recorded do not justify the conclusion

of the Tribunal inasmuch as on removal a turbo alternator gets
dismantled into its components - steam turbine and alternator.
It appears that the Tribunal did not keep in mind the
distinction between a turbo alternator and its components.
Thus, in our view, the test of permanency fails.
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The marketability test requires that the goods as such should be in a

position to be taken to the market and sold and from the above
findings it follows that to take it to the market the turbo
alternator has to be separated into its components--turbine
and the other alternator--but then it would not remain turbo
alternator, therefore, the test is incorrectly applied. Though, there
is no finding that without fixing to the platform such turbo
alternator would not be functional, it is obvious that when without
fixing, it does not come into being, it can hardly be functional.
Suresh Chand v Kundan, SC 2000 37

Facts – Kundan & Mohar – co-sharers of property which had

some plants and saplings - executed an agreement for sale – but
not a sale deed in favour of Suresh – decree of execution in
favour of Suresh.

 Did the transfer of land entail transfer of trees? Would

transfer of trees entail transfer of land?
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 Section 8, TPA:
Unless a different intention is expressed or necessarily implied,
a transfer of property passes forthwith to the transferee all the
interest which the transferor is then capable of passing in the
property and in the legal incidents thereof.
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Ratio:
A perusal of Section 3 of the Act shows that all things attached
with the earth are included in the land. Thus the standing trees
being imbedded in the earth is part of the land.
Section 8 of the Act provides that if there is any transfer of a
property and unless there is any expressed or implied different
intention appearing in the agreement, the interest in the property
would also include anything attached with the land which is agreed
to be sold. Thus when a vendor sells a property, he sells all his rights
imbedded in the property unless it specifically or impliedly excluded.
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In the present case, there was no mention in the agreement that

the saplings were not being sold along with the land. In the
absence of any expressed or implied intention in the
agreement, it would be taken that the land along with the
saplings standing on the land which subsequently grown into
trees were sold.
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Where a vendor sells his right, title and interest in the land unless
expressly or impliedly provided in the agreement, sale of the land would
also to include trees standing thereon. But where trees are sold for
being cut and removed it does not mean that the land is also
transferred along with the trees. It is open to the vendor while
transferring the land to exclude the trees from sale if he wants to
appropriate it by cutting and removing them. In the present case,
there was no mention in the agreement that the saplings were not being
sold along with the land. In the absence of any expressed or implied
intention in the agreement, it would be taken that the land along with the
saplings standing on the land which subsequently grown into trees were
sold. The view taken by the High Court that unless the trees are sold
separately, trees would not go with the land is erroneous.
‘NOTICE’ 42

Sec 3, TPA
“A person is said to have notice of a fact when he actually knows that
fact, or when, but for willful abstention from an enquiry or search which
ought to have made, or gross negligence, he would have known it.”
• Notice – knowledge
• Unconscionable transaction – Doctrine of Notice
• Bona fide purchaser without notice
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Hypothetical – Unconscionable Transaction

Amitabh Bacchan bequeaths his property to his son, Abhishek.
Provision: Rs. 50,000 pm from proceeds of the property to
Shweta (Amitabh’s daughter)

Two years post Amitabh’s death, Abhishek sells the property to

Karishma.

Shweta sues Karishma for her monthly Rs. 50,000.

Kinds of Notice 44

Kinds of notice: 1) Actual Notice; 2) Constructive Notice

1. Actual Notice
• Must be definite – not hearsay/rumours
• Knowledge of parties interested in the transaction
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2. Constructive / Implied Notice

Rule of caveat emptor/‘buyer beware’ – places a duty on
transferee to make inquiries, inspect documents in the
possession of transferor/statutory authorities to assesses
existence of a charge, competence of transferor, any other
claims to property.
Modes of Constructive Notice 46

Gross negligence
More than mere negligence

Example:
- Buyer is informed that the title deed is in the bank for safe
custody – fails to make enquiry from the bank.
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• Wilful abstention
- Such abstention as would show lack of bona fides
- Abstention should be designed – as an attempt to avoid
notice
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What are the duties that the law imposes on a transferee?

 he must verify competence of transferor (no one can pass a
title better than the one he has)
 he must inspect the documents
 he must satisfy himself of the absence of a charge on the
property
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Examples:
 Person refusing a registered letter.
 Sale deed referring to partition deed…Omits to
demand/inspect partition deed.
Gross negligence v. wilful abstention

 In willful negligence there is a presence of malice and mental

advertence to the consequences of the true state of things but in case
of gross negligence the party cannot be said to be having such a
state of mind so as to knowingly decide not to enquire. But the
negligence is so high that court assumes lack of bona fides.
 Suppose, A agrees to sell his property worth Rs. 1 crore to B for Rs. 20
lakhs. This requires further enquiry into true title of A. An omission to
do so will amount to willful abstention from making enquiry.
Registration as Constructive Notice, Sec 3, 51
Explanation I
Explanation I. -Where any transaction relating to immoveable
property is required by law to be and has been effected by a
registered instrument, any person acquiring such property or
any part of, or share or interest in, such property shall be
deemed to have notice of such instrument as from the date of
registration […]

- Only where registration mandatory

- Only for subsequent transferees
Actual Possession as Constructive 52
Notice, Sec 3, Expl II

Explanation II. -Any person acquiring any immovable property

or any share or interest in any such property shall be deemed to
have notice of the title, if any, of any person who is for the
time being in actual possession thereof.
Notice to the agent , Sec 3, Expl III 53

Explanation III. -A person shall be deemed to have had notice of

any fact if his agent acquires notice thereof whilst acting on his
behalf in the course of business to which that fact is material:
Provided that, if the agent fraudulently conceals the fact, the
principal shall not be charged with notice thereof as against any
person who was a party to or otherwise cognizant of the fraud.

- course of agency
- capacity
- not fraudulently concealed