CONCEPT OF PROPERTY

MOVABLE & IMMOVABLE PROPERTY

INRODUCTION-TRANSFER OF PROPERTY ACT
Under the Indian legal system, properties are divided into two categories –
movable and immovable.
The Transfer of Property Act (ToPA), 1882, which came into force on July 1,
1882, deals with the aspects of transfer of properties between living beings. One
of the oldest laws in the Indian legal system, the Transfer of Property Act is an
extension of the law of contracts and runs parallel to the succession laws. For
those planning to transfer their immovable property, knowing the key aspects of
the Transfer of Property Act is quite important.
SCOPE OF THE TRANSFER OF PROPERTY ACT
Parties: Under the Transfer of Property Act, a transfer of property can be effectuated by
an act of two or more parties or an act by the operation of the law.
Type of property: The Transfer of Property Act is applicable primarily on transfer of
immovable property from one living being (inter vivos) to another. Also, the Act is
applicable on property transfer by individuals, as well as by companies. However, the
Transfer of Property Act is applicable to acts of parties and not on transfers applicable by
the law.
The term transfer includes transfer through sale, mortgage, lease, actionable claim,
gift or exchange. The Act does not cover transfers by the operation of law, in the form
of inheritance, forfeiture, insolvency, or sale through the execution of a decree. The Act
is also not applicable on the disposal of properties through wills and does not deal with
cases of succession of property.
FEATURES OF TRANSFER OF PROPERTY ACT, 1882
•The Preamble of the Transfer Of Property Act lays down that it is related to the transfer
of property by the act of the properties.
•The Transfer Of Property Act, 1882 provides a uniform and a clear law concerning the
transfer of immovable property from one living person to another living person by the
act of parties.
•The Transfer of Property Act, 1882 is an extension of the Indian Contract
Act,1872 because the contract act was recognized as an inexhaustive code.
•The Transfer Of Property Law is not a copy of the English transfer of property laws that
was enacted based on socio-economic conditions of the country.
•The Transfer Of Property Act, 1882 cannot be considered as totally exhaustive; it covers
the transfer of immovable property from the act of parties.
CONTD.
•Transfer of property is subject to the concurrent list that provides power to both the state
legislature and the parliament to pass laws related to the matter of transfer of property.
•The Act covers five types of transfer of immovable property they are as follows: a)
Mortgage b) gift c) sale d) actionable claims e) lease.
•The Transfer Of Property Act, 1882 is a law that applies lex-loci to all people living in
that jurisdiction, not like personal laws that differ from person to person.
•The Transfer Of Property Act, 1882 is governed by various principles like justice, equity,
and good conscience.
•Initially, at the time of implementation, the act didn’t apply to the State of Bombay,
Punjab, and Delhi as because they had their own acts related to property matters.
Currently, the transfer of property act doesn’t apply in Punjab; it complies with the rule
of good conscience, equity, and justice.
CONTD.
•Transfer of Property Act, 1882 highlights the provision of inter-vivos parallel to the
existing laws relating to the testamentary and interstate transfer.
•The Transfer Of Property Act, 1882 is a general law and therefore it cannot prevail over
the special laws passed by the parliament.
•Under the Transfer of Property Act, 1882 it mentions that absolute conditional restraint
is void and partial conditional restraint on the transfer of property is valid.
CONCEPT OF PROPERTY
The word “property” is derived from the Latin word proprietary and the French
equivalent properties, which means a thing owned. The concept of property and
ownership are very similar to each other. However, there is a fine line that distinguishes
the two terms. It will not be incorrect to state that humans have been aware of their
rights to possess what they rightfully own for long. The term property has been widely
interpreted by various jurists such as Salmond, Bentham and Austin.
In general sense, property is any physical or virtual entity that is owned by an individual
or jointly by a group of individuals. An owner of the property has the right. Human life
is not possible without property. It has economic, socio-political, sometimes religious
and legal implications. It is the legal domain, which institutes the idea of ownership. The
basic postulate of the idea is the exclusive control of an individual over some ‘thing’.
Here the most important aspect of the concept of ownership and property is the word
‘thing’, on which a person has control for use.
THEORIES BEHIND THE CONCEPT OF PROPERTY
There are many theories which have been evolved for the purpose of understanding the
concept of property properly-

1. Historical Theory of Property

2. Labour Theory

3. Psychological Theory

4. Functional Theory

5. Philosophical Theories–

(i) Property as a means to Ethnical Ends

(ii) Property as an End in itself

HISTORICAL THEORY OF PROPERTY
According to the Historical theory, the concept of private property had grown out of collective
group or joint property. In the words of Henry Maine, “Private property was chiefly formed by the
gradual disentanglement of the separate rights of individual from the blended rights of the
community. Roscoe Pound also pointed out that the earliest form of property was group property. It
was later on that families were partitioned and individual property came into being.

LABOUR THEORY
The theory is also known as ‘positive theory’. This theory insists on the fact that labour of the
individual is a foundation of property. This theory says that, a thing is the property of a person, who
produces it or brings it into existence. The main supporter of this theory is Spencer, who developed
it on the principle of equal freedom. He says that property is the result of individual labour.
Therefore, no person has a moral right to property which he has not acquired by his personal effort.
PSYCHOLOGICAL THEORY
According to this theory, property came into existence on account of acquisitive instinct
of man. Every individual desires to own things and that brings into being property.

According to Bentham, Property is altogether a conception of mind. It is nothing more

than an expectation to derive certain advantages from the object according to one’s
capacity.

FUNCTIONAL THEORY
The theory is sometimes also known as ‘sociological theory of property’. It implies that
the concept of property should not only be confined to private rights but it should be
considered as a social institution securing maximum interests of society. Property is
situated in the society, has to be used in the society.
 PHILOSOPHICAL THEORIES
Property as a means to Ethnical Ends- In the opinion of Aristotle, Hegel and Green, Property has never
been treated as an end, but always as a means to some other end. According to Aristotle, it may be a
means to the end of good life of the citizens, further in the opinion of Hegel and Green, it may be a means
to the fulfilment of the will without which individuals are not full human. According to Rousseau,
Jefferson, Friedman, it may be a means as a pre-requisite of individual freedom seen as a human essence.

Property as an End in itself- The supporters of liberal Utilitarian model, from Locke to Bentham,
recognize property as an end. It is maximization of utilities. According to Bentham, the command of
utilities is measured by the material wealth. The maximization of material wealth is indistinguishable
from the ethical end; property is virtually an end in itself. In the words of Locke, the unlimited
accumulation is a natural right of the individual that is an end in itself. Aristotle and Aquinas have
considered, ‘’property as a means, concluded for a limited property right. Hegel and Green, treats
property, as a means, concluded for an unlimited right’. The supporters of utilitarian tradition treat,
accumulation of property, as an end, always meant a right of unlimited accumulation.
KINDS OF PROPERTY
Property is basically of two categories : Corporeal Property and Incorporeal Property.
Corporeal Property is visible and tangible, whereas incorporeal Property is not. Moreover,
corporeal Property is the right of ownership in material things, whereas incorporeal Property is an
incorporeal right in rem. Corporeal Property is further categorized into Movable and Immovable
Property. Incorporeal Property is classified into two categories : in re propria and rights in re aliena
or encumbrances.

Corporeal and Incorporeal Property

These are the two categories of properties that exist.

(i) Corporeal Property has a tangible existence in the world and is related to material things such as
land, house, ornaments, silver, etc.

(ii) Incorporeal Property is intangible because it’s existence is neither visible nor tangible. Right of
easement and copyrights are incorporeal Property.
MOVABLE AND IMMOVABLE PROPERTY
All corporeal Property may either be movable or immovable in nature. There are different
definitions are given in different act as per there uses and needs. But in the most important
act which exclusively talks about the property and rights related to property Transfer Of
Property Act 1882 has no definite definition of the term property. But it is defined in some
other act as per their use and need. Those definitions are as follows:
Section 2(c) of the Benami Transactions (Prohibition) Act, 1988 defines property as: “Property”
means property of any kind, whether movable or immovable, tangible or intangible, and includes
any right or interest in such property.

Section 2 (11) of the Sale of Good Act, 1930 defines property as: “Property” means the general
property in goods, and not merely a special property.

Section 3 of the general clauses act, 1897; Section 2(6) of the Indian Registration Act, 1908
defines the term immovable Property. It includes land, things attached and embedded in the land.
MOVABLE PROPERTY
On the other, movable Property includes any corporeal property which is not
immovable property. It may include furniture, stationery items, etc. The concept
of immovable Property holds greater importance and has elaborately been dealt
with under Indian statutes. The following are not immovable property :
(1) Right to worship.
(2) Right of purchaser to have lands registered in his name.
(3) A machinery which is not permanently attached to the earth and which can be
shifted from one place to another.
(4) A decree for sale of immovable property.
(5) Royalty.
CONTD.
(6) Right to recover maintenance allowance even though charged on immovable
property.
(7) Government promissory notes.
(8) Standing timber, i.e., trees which are to be used in building and repairing
houses and which have not been severed from the ground or which are not
intended to be severed from the soil.
(9) Growing crops.
(10) Grassy
The definition of movable property is given differently in many Acts. Some of the
definitions are as follows:

Section 3 (36) of the General Clauses Act defines movable property as: 'Movable property shall
mean property of every description, except immovable property."

Section 2 (9) of the Registration Act, 1908 defines property as: 'Moveable property' includes
standing timber, growing crops and grass, fruit upon and juice in trees, and property of every
other description, except immovable property."

Section 22 of IPC defines property as: The words “moveable property” is intended to include
corporeal property of every description, except land and things attached to the earth or
permanently fastened to anything, which is attached to the earth.

Things attached to the land may become moveable property by severance from the earth. for
example Cart–loaded of earth, or stones quarried and carried away from the land become
movable property.
IMMOVABLE PROPERTY
According to section 3 of Transfer of Property Act, "immovable property" does not include
standing timber, growing crops or grass. Thus, the term is defined in the act by excluding certain
things. "Buildings" constitute immovable property and machinery, if embedded in the building for the
beneficial use thereof, must be deemed to be a part of the building and the land on which the building
is situated.

As per section 3(26) of 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". This definition of immovable property is also not exhaustive;

Section 2(6) of the Registration Act,1908 defines "immovable property" as: "Immovable property
includes land, building, 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 but not standing timber, growing crops nor grass".
 CONTD.
As per Section 269UA(d) of the Income Tax Act, 1961, Immovable Property is defined as
under :

(i) Any land or any building or part of a building, and includes, where any land or any building
or part of a building is to be transferred together with any machinery, plant, furniture, fittings or
other things, such machinery, plant, furniture, fittings and other things also.
(ii) Any rights in or with respect to any land or any building or part of building (whether or not
including any machinery, plant, furniture, fittings or other things therein) which has been
constructed or which is to be constructed, accruing or arising from any transaction (whether by
way of becoming a member of, or acquiring shares in, a co-operative society, or other
association of persons or by way of any agreement or any arrangement of whatever nature, not
being a transaction by way of sale, exchange or lease of such land, building or part of a
building.
CONTD.
Indian law has adopted the division of property into movable and immovable, and not
the technical division into real and personal property recognized by the English Law. In
Futtehsang v. Kulliaraiji , their Lordships of the Privy Council observed : "The term
immovable property' comprehends certainly all that would be real property according to
English law and possibly more." Thus, a leasehold land would be personal property in
England but would be immovable property in this country.
Under T.P. Act.
The definition of immovable property is in two parts. Part I defines "immovable
property". Part II is in definition of "attached to earth". Both have to be read together for
knowing "immovable property". The definition of immovable property includes three
things namely—Land, benefits to arise out of land, and things attached to the earth. It
excludes three things, namely—standing timber, growing crops and grass.
CONTD.
Complete meaning of immovable property read all three acts together. The term
"immovable property" includes three things which are described as under-
(i) "Land" —This does not include only the upper surface of the earth but is extensive
enough to cover things below it, for example, minerals and sea, ocean and properties
below in their bottom. These are all immovable property. Any interest in these or in
respect of these or any other property in it are all immovable property. Besides, well,
tube-well, rivers, ponds, tanks, stream, canal dug on surface whether natural or artificial
and all interests in these would fall in enumeration of the term "land". As such all are
immovable property.
(ii) "Benefits arising out of land" —These benefits are immovables. The examples of
benefits are rent from the house, shops and jagir, revenue from agriculture, right to
collect lac , leaf or other things from forest, trees, etc. Similarly,, right to collect tax on
ghats and bridges are all examples of benefits arising out of the land.
CONTD.
Apart from physical point of view, every benefits arise out of land is also regarded as immovable
property. Registration Act also includes as immovable property benefits to arise out of land,
hereditary allowances, right of way, lights, ferries and fisheries. In Anand Behera v. State of
Orissa, AIR 1956 SC 17, the right to catch away fish from Chilka Lake, over a number of years,
was held to be an equivalent of profits a pendre in England and a benfits to arise out of land in
India. Similarly, a right to collect a rent and profits of immovable property, right to collect dues
from a fair or heat or market on a land are immovable property.
(iii) Things attached to earth: Section 3 of transfer of property defines the expression ‘attached
to earth’ as including (1) things rooted in the earth, (2) things embedded in the earth, (3) things
attached to what is so embedded, and (4) chattel attached to earth or building. (1) Things rooted
in earth include trees and shrubs, except standing timber, growing crops and grasses (Section 3,
TPA). Whether tress regarded as movable or immovable depends upon the circumstances of the
case. If the intention is that trees should continue to have the benefit of further sustenance or
nutriment by the soil (land), e.g., enjoining their fruits, then such tree isimmovable property.
CONTD.
But if the intention is to oust them down sooner or later for the purpose utilizing the
wood for building or other industrial purpose, they would be timber and of accordingly
be regarded as movable property (Shantabai v. State of Bombay, AIR 1958 SC 532)
determining whether the tree is movable or immovable, the intention if party is
important if the parties intend that the tree should continue to have the benefit of further
nutriment to be afforded by soil, the tree is immovable property. But if intention is to
withdraw the tree from land, and the land is providing it only as a warehouse, it is to be
treated as movable property.
Things embedded in earth: It includes such things as house, buildings, etc., however
certain things like an anchor imbedded in the land to hold a ship is not an immovable
property’ to determine whether such things are movable or immovable property, depends
upon circumstances of each case and there are two main conditions to indicate intention.
CONTD.
Things attached to what is so embedded must be for the permanent beneficial
enjoyment of the thing to which it is attached, as section says for, e.g., door and
windows of a house are immovable property to be permanent, like electric fans or
window blinds, they are movable property.
Chattel attached to earth or building if a chattel, i.e., movable property is attached to
earth or building, it is immovable property. The degree, manner, extent and strength of
attachment are the main features to be regarded in determining the question. Standing
timber, growing crops and grasses are regarded as severable from land and they are
regarded as movable property. However if they and the land on which they stand is sold.
EXCEPTIONS
•Standing Timber- The word standing timber includes Babool Tree, Shisham, Nimb, Papal
Banyan, Teak, Bamboo, etc. The fruit berating tree like Mango, Mahua, Jackfruit, Jamun, etc.,
are not standing timber, and they are immovable properties (Fatimabibi v. Arrfana Begum, AIR
1980 All 394). But if intention is to cut them down sooner or later for the purpose utilizing them
as timber, and not to use them for the purpose of enjoying their fruits, they are regarded as
movable property. (T.A. Sankunni v. B.J. Philips, AIR 1972 Mad 272).
•Growing Crops: Growing crops includes creepers like paan, angoor, etc., millets (Wheat,
Sugarcane, etc.), Veg like Lauki, Kaddo, etc. These crops don’t have any own independent
existence beyond their final produce.
•In Seeni Chettiar v. Santhanathan, the Madras High Court held that it has long been settled that
an agreement for the sale and purchase of uncut grass, growing timber plant or wood, or growing
fruit bearing tree, not made with a view to their immediate severance and removal from the soil
and delivery as chattels to the purchaser, plants in nurseries is a contract for the sale of an interest
in land. It is not movable property.
CONTD.
• Grass: It can only be used as fodder, and no other use is possible. Therefore it is movable.
But a contract to cut grass will be an interest in chattel, so is immovable property.
The following has been judicially recognized as immovable property:
•(1) Right to collect rent of immovable property.
•(2) Right to dues from a fair on a piece of land.
•(3) A right of fisheries.
•(4) A right of ferry.
•(5) A right of way. (6) Hereditary offices. (7) The interest of a mortgagee in immovable
property.
•Minerals: Upon transfer of immovable property, things not only rooted to it, but also
anything found deep down below the property goes along with the transfer. All minerals
below the land sole are immovable property.
 DIFFERENCE BETWEEN
MOVABLE PROPERTY
1. According to section 2 of Sales Of Goods
Act it includes stocks, growing crops, grass and
things attaching to or forming part of the land
and which are agreed too be severed before sale
or under contract of sale.
2. If the things is resting on the land merely on
its own weight, the presumption is that it is
movable property unless contrary is proved.
3.If the purpose was only to enjoy the things
itself, then it is movable property even though
it is fixed in the land.
IMMOVABLE PROPERTY
1. According to section 3 of General Clauses
Act, it includes lands, benefits arising out of
land and things attached to earth.
2. If the things is fixed to the land even slightly
or it is caused to go deeper into the earth by
external agency, then it is deemed to be
immovable property.
3. If the purpose of annexation of a thing is to
confer a permanent benefit to land to which it
is attached then it is immovable property.
CONTD.
MOVABLE PROPERTY IMMOVABLE PROPERTY
4. No registration is required to transfer 4. Registration is mandatory.
a movable property.
5. Benefits to arise out of kind of such
5. Right to worship, royalty, a decree as hereditary allowances, rights of way,
for sale of immovable property, a ferries and fisheries, right to collect
decree for assessment of rent, Govt. rent and profits of immovable property,
promissory notes, standing timber, a mortgage debt, right to cut grass for
growing crops and grass. one year, a factory, etc.
CASE LAWS
In Anand Behera v. State of Orissa, AIR 1956 SC 17, case, the petitioner had obtained
a license to catch and appropriate all fish in specific sections of the Chilka lake from its
proprietor (Raja of Parikud). The Orissa Estates Abolition Act, 1951 was passed and the
ownership of the estate vested in the State of Orissa. The State of Orissa refused to
recognize the license of the petitioner. Petitioner contended that their fundamental rights
under Art 19(1)(f) and Art 31(1) are violated and also contended that “catching and
appropriating fish’ is a transaction relating to sale of future goods (which is the fish) and
hence the “Act which is applicable only to immovable property would not be applicable
to him. The court held that the lake is an immovable property and therefore the
petitioner’s right to enter in that estate (which he did not own) and carry away fish from
the lake is equivalent to a ‘Profit a Prendre’ in England and in India it is regarded as a
benefit that arises out of the land and as such is immovable property.
CONTD.
In Shantabai v. State of Bombay, AIR 1958 SC 532 case, Shantabai’s husband had
granted her the right to take and appropriate all kinds of wood from certain forests in his
Zamindari through an unregistered document. With the passing of the Madhya Pradesh
Abolition of Proprietary Rights Act, 1950, all proprietary rights in land vested in the
State of Madhya Pradesh and the petitioner was prohibited to cut any wood. She applied
to the Deputy Commissioner and obtained from him an order under Sec. 6(2) of the Act
permitting her to work the forest and started cutting the trees. The Divisional Forest
Officer took action against her and passed an ‘order directing that her name might be
cancelled and the cut materials forfeited. She moved the State Government against this
order but to no effect, Thereafter she applied to the Supreme Court under Art. 32 of the
Constitution and contended that the order of Forest Officer infringed her fundamental
rights under “Art, 19(1)(f) and 19(1)(g), The Court talked about the phrase ‘benefit
arising out of land’ and held that right to enter upon land and cut trees is a benefit arising
out of the land, This judgment was based on Anand Behera case.
CONTD.
In State of Orissa v. Titagarh Paper Mills Company Limited, AIR 1985 SC 12953
case, Section 3B of Orissa Sales Tax Act, 1917 empowered the State Government to
declare goods or class of goods liable to be taxed. The government issued a notification
through which standing trees and bamboos agreed to be severed were liable to be taxed
on the turnover of purchase. Writ petitions were filed by a group of those people who
had entered into bamboo contracts and timber contracts with the State. They contended
before the Court that the subject matter of the bamboo contract was not a sale or
purchase of goods but was a lease of immovable property or was a creation of an interest
in immovable property by way of grant of ‘Profit a Prendre’ and due to this the royalty
payable ‘under the bamboo contracts could not be made eligible to either sales tax or
purchase tax. The Court held that “felling, cutting, obtaining and removing bamboos
from forest areas for the manufacture of paper” is a benefit to arise out of the land and it
would thus be an interest in immovable property.
CONTD.
In Mosammat Bibi Sayeeda v. State of Bihar, (1996) 9 SCC 516 case, certain
municipal plots were transferred to S. Sayed Haider Imam father of Sayed Abid Imam
by his predecessor Zamindar. He constructed 132 shops and let them out to diverse
tenants on monthly rentals. ‘The Collection of ‘shops was known as Patna Market in
Patna. ‘The state wanted to acquire these shops ‘under the Bihar Land Reforms Act. The
question raised in this case was about the ‘meaning of the word Bazar’ within Section
4(a) of the Bihar Land Reforms Act 30 of 1950. The appellants claimed in the writ
petition ‘that the shops are one ‘homestead’ within the meaning ‘of Section 2 (j) of the
Bihar Land Reforms Act and these shops axe not bazars. Hence ‘they do not vest in the
State and, therefore, they remain to be the property of the appellants. The High Court
held ‘that the - constitutionally of the provisions of the Act has not been challenged and
also held that ‘hats’ or ‘bazars’ are vested in the State. A congregation of buyers and
sellers is enough to constitute a bazaar and the right to hold a bazar is an - interest in the
land. The Supreme Court affirming the decision of the High Court held that right to hold
a bazaar is a benefit arising out of the immovabhle property.
PUBLIC PROPERTY AND PRIVATE PROPERTY
Public Property is owned by the public as such in some governmental capacity. In other words, it is owned
by the government and used for the beneficial use of the public in general. A park or a government hospital
is a public property.

Private Property is that property which is owned by a particular individual or some other private person. A
residential house of a citizen may be his private property.

TANGIBLE AND INTANGIBLE PROPERTY

Tangible property-Tangible property refers to any type of property that can generally be moved (i.e., it is
not attached to real property or land), touched or felt. These generally include items such as furniture,
clothing, jewellery, art, writings, or household goods.

Intangible property- Intangible property refers to personal property that cannot actually be moved, touched
or felt, but instead represents something of value such as negotiable instruments, securities, service
(economics), and intangible assets including chose in action
REAL AND PERSONAL PROPERTY
(i) Real Property means all rights over land recognized by law.

(ii) Personal Property means all other proprietary rights, whether they are right in rem or
in personam.

Right in re aliena and Right in re propria -Right in re aliena are also sometimes
referred to as encumbrances. These are the rights of a specific user. These prevent the
owner from exercising some definite right in reference to his Property. Lease, security
and trust may be included under this category. Right in re propria are immaterial forms
of Property. These are a product of human skill and labour. Patents, copyrights and
commercial goodwill may be included under this category.
INTELLECTUAL PROPERTY
Intellectual property is a term referring to a number of distinct types of creations of the
mind for which property rights are recognized—and the corresponding fields of law.

Property does not just comprise of tangible things like houses, cars, furniture, currency,
investments etc and such assets are not the only kind that can be protected by law. There
are many other forms of intangible property known as intellectual property that have
been recognized under the law and granted protection against infringement

Under intellectual property law, owners are granted certain exclusive rights to a variety
of intangible assets, such as musical, literary, and artistic works; discoveries and
inventions; and words, phrases, symbols, and designs. Patents, trademarks and
copyrights, designs are the four main categories of intellectual property.