Meaning and Concept of Property: Kinds of Property

Rule

Property in its widest legal sense means every right, interest or estate that has economic value and is recognised by law. The TPA does not define "property" itself. It uses the word in S.5, where "transfer of property" means an act by which a living person conveys property to another.

S.3 defines "immoveable property" by exclusion: it does not include standing timber, growing crops or grass. Everything else that is land, attached to land, or a benefit arising out of land is immoveable.

Requirements

To decide whether a thing is immoveable property, ask three questions in order.

Two tests decide question 2: the degree of annexation (how firmly it is fixed) and the object of annexation (why it was fixed: for the permanent benefit of the land, or only for its own better use).

Concept of property

Jurisprudential approaches

Indian law follows the positive law approach: property rights exist because the State recognises and enforces them. The 44th Amendment (1978) removed the fundamental right to property (Art. 19(1)(f) and Art. 31) and made it a constitutional right under Art. 300A.

Property in Indian law: three senses

The TPA deals mainly with the second sense: the transfer of rights in or over property, not the physical movement of things.

Kinds of property

The flowchart shows the main classes.

flowchart TD
    A(["Property"]) --> B["Immoveable Property"]
    A --> C["Moveable Property"]
    B --> D["Corporeal: Land, buildings, things embedded in earth"]
    B --> E["Incorporeal: Right of way, right to fish, hereditary office"]
    C --> F["Corporeal: Goods, money, animals"]
    C --> G["Incorporeal: Shares, debts, IP rights"]
    A --> H["Tangible"]
    A --> I["Intangible"]

Illustrations

1. Rooted mango trees or timber

• Facts: Ramu has 20 mango trees on his farm in Nalgonda. He agrees to sell them to a timber merchant who will cut and remove them.
• Result: The trees are sold as goods. A delivery order is enough and no registration is needed.
• Why: Things attached to land that are agreed to be severed before sale are goods (S.2(7), Sale of Goods Act). If Ramu sold the trees as part of the land, a registered sale deed would be needed.

2. Orchard or timber plantation

• Facts: Arun owns a mango orchard kept for its fruit and a teak plantation grown only to be felled for wood.
• Result: The orchard is immoveable property. The teak is standing timber, which is moveable.
• Why: Trees valued for what they produce while standing are part of the land. Trees valued for their wood once cut are timber.

3. Right to collect rent

• Facts: Lakshmi owns a building in Hyderabad let at Rs.25,000 a month. She assigns her right to collect the rent to Kavitha.
• Result: The right is immoveable property, so the assignment must be in writing and registered if its value is Rs.100 or more.
• Why: A right to rent is a benefit arising out of land.

4. Growing crops

• Facts: Suresh, a farmer in Warangal, sells his standing rice crop on 5 acres to a middleman for Rs.2 lakhs.
• Result: This is a sale of goods. No registration is needed.
• Why: Growing crops are excluded from immoveable property by S.3. A sale of the 5 acres themselves would need a registered deed.

5. Machinery in a factory

• Facts: Sharma's looms are bolted to concrete foundations in his mill and wired into it. A portable generator stands on the floor for occasional use.
• Result: The looms are immoveable. The generator is moveable.
• Why: The looms are fixed firmly and for the permanent use of the mill (degree and object of annexation). The generator rests by its own weight and can be removed without damage.

6. Right to catch fish

• Facts: A zamindar grants a person the right to catch and carry away fish from a lake for some years.
• Result: The right is immoveable property and needs a registered document.
• Why: A right to take fish from another's water is a profit a prendre, a benefit arising out of land (Ananda Behera v State of Orissa).

Key Cases

Jilubhai Nanbhai Khachar v State of Gujarat (1995) Supp 1 SCC 596 (decided 1994)

• Facts: Landholders challenged a Gujarat amendment that vested mines and minerals in their land in the State without full compensation.
• Held: After the 44th Amendment the right to property is a constitutional right under Art. 300A, not a fundamental right. Deprivation by valid law is allowed.
• Principle: Property can be taken only by authority of law, but the law need not pay market value as compensation.

Ananda Behera v State of Orissa AIR 1956 SC 17 (decided 1955)

• Facts: The petitioners had bought from the Raja of Parikud licences to catch fish in parts of the Chilka lake. After the estate vested in the State, the State refused to recognise them.
• Held: The right to catch and carry away fish is a profit a prendre, which is immoveable property. Without a registered document the petitioners got no title.
• Principle: A right to take something from another's land or water is a benefit arising out of land.

Official Assignee of Bombay v KRP Shroff (1932) 34 Bom LR 1178, [1932] UKPC 35 (Privy Council)

• Facts: A broker who had been declared a defaulter was adjudged insolvent. The Official Assignee claimed his stock exchange membership card or its sale price.
• Held: The member lost his interest in the card when he was declared a defaulter, so nothing passed to the Official Assignee.
• Principle: "Property" is a term of the widest import and covers every interest a person can hold and enjoy, subject to the limits the context and the rules impose.

Shantabai v State of Bombay AIR 1958 SC 532

• Facts: A proprietor gave his wife, by an unregistered document, the right to enter his forests and cut and remove timber for some years. After the estate was abolished, the State stopped her.
• Held: The right was a profit a prendre, an interest in immoveable property, and the unregistered document could not convey it. Her right was only contractual.
• Principle: A long-term right to enter land and take trees is a benefit arising out of land, not a sale of standing timber as goods.

Distinctions

Recall Check

1. Why does S.3 of the TPA define immoveable property by exclusion rather than by a positive definition?
2. What three things are specifically excluded from "immoveable property" under S.3?
3. What is the constitutional status of the right to property in India after the 44th Amendment?
4. Which two tests decide whether a thing attached to land is immoveable?

Flashcards