TRANSFER OF PROPERTY ACT 1882

ASSIGNMENT - III
PROF. ARUNDHATI KUMBHARIKAR,
BY- RUBAB IQBAL
PRN NO - 21219001626
LLB 2ND YEAR 2020-21

Q1 – Explain Section 3 of the Transfer of Property Act 1882.

Q2 - Prepare a list of Movable property and Immovable Property under

transfer of property act.

Q3 – Write a short Note on Immovable Property under Transfer of

Property Act, 1882

Q1 – Explain Section 3 of the Transfer of Property Act 1882.

INTRODUCTION –
The Transfer of Property Act was enacted in 1882. Prior to this, Common law principles
have governed the dealings and transfers of property.

This act was formulated to govern the transfers of property. This act however only
governs transfers between two living parties commonly known as an intervivous
transaction. Also, the major focus of this act has been on the transfer of immovable
property though it is not exhaustive.

Section 3 of The Transfer of Property Act, 1882 has been called ‘interpretation
clause’. It lays down the statutory definitions of seven terms which have been frequently
used in the act. Through this article, the reader will be able to understand these terms in a
simple manner with different illustrations and some judicial pronouncements that will
further clarify the statute.

DEFINITION-

"TRANSFER" means a process or an act by which something is made over to

another. It does not however, mean that the making over of the thing should always
be absolute. I may transfer my book to you for a day. I may also transfer it to you
absolutely either by sale, gift or in exchange of your book. In either case, what is
primarily essential is that I have to handover the book to you, and that act of
handing over the book to you is the transfer of the book.

DEFINITION.
1. Transfer of Property has special technical meaning in Transfer of Property Act.
Only 5 conveyances are transfer of property for the Act. Three modes convey
absolute title e.g. sale, gift, exchange. Two convey limited interest e.g. mortgage and
lease.

2. Transfer inter vivos alone are included as Transfer in Transfer of Property Act,
e.g. transfer from living person or persons to living person or persons.

3. Transfer can be present or future but transferor and transferee must be living
person. The only exception is Section 13 of Transfer of Property Act.

4. Living person is wider term than natural human beings. It includes juristic
persons like company and other like associations or body of individuals whether
registered or not registered.

5. Other laws governing transfer to juristic persons etc. are not affected by Transfer
of Property Act.

SECTION 3 IN THE TRANSFER OF PROPERTY ACT, 1882

Interpretation of the clause

In this Act, unless there is something repugnant in the subject or context

“immoveable property” does not include standing timber, growing crops or grass;

‘‘instrument” means a non-testamentary instrument;

“attested”, in relation to an instrument, means and shall be deemed always to have meant
attested by two or more witnesses each of whom has seen the executant sign or affix his
mark to the instrument, or has seen some other person sign the instrument in the presence
and by the direction of the executant, or has received from the executant a personal
acknowledgement of his signature or mark, or of the signature of such other person, and
each of whom has signed the instrument in the presence of the executant; but it shall not
be necessary that more than one of such witnesses shall have been present at the same
time, and no particular form of attestation shall be necessary;

“registered” means registered in 2[3[any part of the territories] to which this Act
extends] under the law for the time being in force regulating the registration of
documents;

“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 imbedded for the permanent beneficial enjoyment of that to
which it is attached;

“actionable claim”-

means a claim to any debt, other than a debt secured by mortgage of immoveable
property or by hypothecation or pledge of moveable property, or to any beneficial interest
in moveable property not in the possession, either actual or constructive, of the claimant,
which the Civil Courts recognise as affording grounds for relief, whether such debt or
beneficial interest be existent, accruing, conditional or contingent;]

“a person is said to have notice” of a fact when he actually knows that fact, or when, but
for wilful abstention from an enquiry or search which he ought to have made, or gross
negligence, he would have known it.

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 or, where the property is not all
situated in one sub-district, or where the registered instrument has been registered under
sub-section (2) of section 30 of the Indian Registration Act, 1908 (16 of 1908), from the
earliest date on which any memorandum of such registered instrument has been filed by
any Sub-Registrar within whose sub-district any part of the property which is being
acquired, or of the property wherein a share or interest is being acquired, is situated:]
Provided that—
(1) the instrument has been registered and its registration completed in the manner
prescribed by the Indian Registration Act, 1908 (16 of 1908), and the rules made
thereunder,

(2) the instrument or memorandum has been duly entered or filed, as the case may be, in
books kept under section 51 of that Act, and

(3) the particulars regarding the transaction to which the instrument relates have been
correctly entered in the indexes kept under section 55 of that Act. 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. 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.

CONCLUSION
In the Transfer of Property Act 1882 it merely deals properties i.e. is movable or
immovable.

It has a large scope for expansion due to the enormous globalisation and
advancements in Technologies as property items can vary accordingly.
Q2 - Prepare a list of Movable property and Immovable Property under TPAct.

A2–
INTRODUCTION
For Indian legislation, it is necessary to determine which property is movable and which
is immovable. It is important because both of these properties are guided by different
laws such as limitation period, registration, transfer of property. All mankind is divided
into three classes: those that are immovable, those that are movable, and those that move.
Movable and immovable, the basic division of things subject to ownership. Immovable
property, in the sense used, commonly refers to real estate (such as your house, factory,
manufacturing plant, etc.) while movable property refers to movable assets (such as your
computer, jewellery, vehicles, etc.)

Goods

The constitution of India defines ‘Goods’ in Article 366(12) to include all materials,
commodities, and articles. Therefore on a plain reading of the aforesaid definition, it
would go to show that only movables that can be traded or marketed are items that
would fall within the definition of term ‘Goods’.

3) MOVABLE PROPERTY
The property which can be transferred from one place to another is movable property.

S. 12(36) of the General Clause Act, 1847 defines “movable property” as “Movable
property shall mean the property of every description except immovable property”.

As per the TP Act 1882, movable Property is those properties that are not immovable.

S. 22 of the Indian Penal Code 1860, defines movable property as,

‘The words “movable property” are 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’.

In the case of State of A.P vs. National Thermal Power Corporation Ltd. AIR 2002
SC 1895 held that the definition of “Goods” in Article 366(12) of the Constitution of
India was very wide and included all kinds of movable properties. It was held that the
term “movable property”, when considered with reference to “goods” as defined for the
purpose of sales tax, cannot be taken in a narrow sense.
4) IMMOVABLE PROPERTY
Section 2(26) of the General Clause Act, 1847 defines immovable property as
“Immovable property shall include land, benefits to arise out of the land, and things
attached to the earth, or permanently fastened to anything attached to the earth”.

The meaning of “attached to the earth” is found in Section 3 of the Transfer of

Property Act, 1882 where it is defined to mean (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 (c) attached
to what is imbedded for the permanent beneficial enjoyment of that to which it is
attached.

In the case of Quality Steel Tubes Ltd. Vs. Collector 1995 (75) ELT 17 (SC) wherein
the supreme court was called upon to decide whether a tube mill and welding head
which were erected and installed by the appellant to form part of a tube mill were
excisable. It was held that the goods which are attached to the earth & thus become
immovable do not call as goods as per the meaning under the act.

However the supreme court in Sirpur Paper Mills Ltd. Vs. CCE 1998 (97) ELT 3
(SC), held that assembly of a paper making machine and its erection at site mainly from
bought out components and by fabricating the rest of the parts at site amounts to
manufacture. This decision caused a considerable amount of re-thinking as to what
constitutes immovable property.

The Bombay high court in Shapoorji Pallonji & Co. Vs. UOI 2005 (192) ELT 92
(Bom), held that trusses, columns, and purlins made by cutting/drilling/welding steel
channels, angles, plates, and erecting them on concrete columns with nuts and bolts
whereby they became part of structure embedded to earth being immovable property
would not excisable.

5) Taxability of services of immovable property

Before GST

Service tax was applicable to taxable services provided in relation to immovable

property.

After GST

GST is now applicable in place of service tax. The type of GST to be charged will depend
if the supply is intra-state or inter-state. This will be ascertained by determining the place
of supply of the service.

CONCLUSION
As I conclude my topic that immovable property cannot count as goods. In as much all
the aforesaid definitions of the expression “goods” say that it includes all kinds of
movable property. In Commissioner of Central Excise vs. Correct Egg. Works 2010
(252) ELT 481 (SC) the Apex court while deciding whether setting up of an Asphalt
Drum Mix Plant were immovable property or whether the assessee was engaged in
making of components of such plant. Some of the components of such plants were
embedded in the earth on a foundation of 1.5 digs deep. It was held that the plants were
not per se immovable and they become immovable when embedded in the earth. The
attachment of the plant with nuts and bolts intended to provide stability and prevent
vibration is not covered as attached to the earth. The attachment can be easily detachable
from the foundation and is not permanent. The plant moved after the road construction or
repair project is completed. The plants are not immovable property. Apex court also
states that the machines which are permanently fixed to the structures which are
embedded in the earth, the machine thus becoming a part of the structure and were no
longer be movable goods. It was in those peculiar circumstances that the installation and
erection of machines at the site were held to be by this Court, to be the immovable
property that ceased to remain moveable as they were at the time of their purchase. Once
such a machine is fixed, embedded in a permanent structure, the movable character of the
machine becomes extinct.

Land- considers in its legal aspect, land includes the following elements:

1. A determinate portion of the earth’s surface.

2. Possibly the column of space above the surface.
3. The ground beneath the surface.
4. All objects which are on or under the surface in its natural state- minerals, lakes,
ponds, rivers.
5. All objects placed by human agency on or under the surface, with the intention of
permanent annexation. These become part of the land, and lose their identity as
separate movable – building, walls, fences.

Benefits to arise out of land-

Apart from property being immovable from the physical point of view, every benefit
arising out of it and every interest in such property is also regarded as immovable
property.- hereditary allowances, rights of way, lights, ferries and fisheries. A debt
secured by a mortgage of immovable property is an interest inland. A right to collect lac
from jungle, flash from pond, right to take minerals, rent from hat or market place.

Things attached to earth-

S.3 – defines the expression –attached to the earth- as including-

 1. Things rooted in the earth,
2. Things imbedded in the earth,
3. Things attached to what is so imbedded,
4. Chattel attached to earth or building.

Things rooted in the earth-

Includes like trees and shrubs, but when such trees constitute standing timber they are not
immovable property.

Shantabai v/s State of Bombay- if the intention is to use them for enjoying their fruits,
they will be regarded as immovable property. But if the intention is to cut them down
sooner or later for the purpose of utilizing the wood they would be timber and regarded
as movable property.

Similarly, growing crops, and grass are regarded as movable property.

Things imbedded in the earth-

Includes such things as houses and buildings, there are certain thing which are imbedded
in the land but not a immovable property like anchor imbedded in the land to hold a
ship.

When the article in question is no further attached to the land by its own weight, it is
generally to be considered as movable property. But when in such a case if the
intention is to make the articles as part of the land

The rule is- if the article stands on the earth up to its own weight, it will not be part of
the land but if it is caused to go deeper in the earth by external agency, then it is part of
a land.

Things attached to what is so imbedded-

Includes like door, window of a house are attached to the house for the permanent
enjoyment of the house, when the intention Is not permanent enjoyment then it
becomes the movable property like fans, blinds.

Chattel attached to earth or building-

If a chattel, i.e., movable property is attached to earth or building, it is immovable

property.

Perumal naicker v/s Ramaswami Kone- A property is a movable property and for its
beneficial use of enjoyment it is necessary to imbed it or fix it on earth, through
permanently, that is , when it is in use it should not be regarded as immovable property
for that reason.

For example – sugar cane machine or oil engine.

Recognized as Immovable properties-

1. Right to collect rent of immovable property.

2. Right to collect dues from a fair on a piece of land.
3. Right of ferry.
4. Right of way.
5. A right of fishery.
6. A debt secured by mortgage and interest of a mortgage of immovable
property.
7. Hereditary offices.
8. Right to receive future rents and profits of land.
9. The equity of redemption.
10. Reversion of property of leased.
11. Right to collect lac from trees.
12. A factory.

Recognized as movable properties-

1. Right to worship.
2. A royalty.
3. A decree for sale of immovable property.
4. A decree for arrears of rent.
5. A right to recover maintenance allowance.
6. A machinery which is not permanently attached to the earth.
7. Government promissory notes.
8. Standing timber, growing crops, and grass.

CONCLUSION
As I conclude immoveable property cannot count as goods in as much as the foresaid
definition of the expression “GOODS” says that it includes all kinds of moveable
property.
Q3 – Write short Note on Immovable Property under TP Act, 1882

A3 – INTRODUCTION
A transfer refers to a conversion of a thing from one person to another person. Property
may be defined as anything physical or a virtual entity owned by an individual or a group
of people. A property can be transferred from one person to another person by
transferring rights, or interest, or ownership, or possession the party can satisfy either or
all the ingredients.

The transfer of property can be made in the two following ways:

1 - act of the parties; 2 - by law.

DEFINITION

Transfer of property is defined under Section 5 of the Transfer of Property Act, 1882. It
refers to an act done by a living person conveying property to one or more person or by
himself or by one or more living persons in the present or the future. Living people
include a company, an association, or body of individuals whether incorporated or not.

Illustration

A is the grandson of G and A owns three estates of which he wanted to transfer one estate
to his grandpa D but he died two years ago the transfer won’t be held valid because the
transfer of property should happen between two living persons.

 Immovable property: According to the general clauses Act, 1897 immovable

property includes land, benefits arising out of the land, things that are attached to
the land. Under transfer of property, the immovable property can be defined as all
property are immovable property other than standing timber, growing crops, or
grass.

Narayana Sa vs. Balaguruswami (1923)

In this case, large artillery was fixed for blowing liquor. The Court held that it would be
considered as movable property if it was fixed in the land, not with an intention for
beneficial enjoyment.
The definition of Immovable property given in the S.3 of Transfer of Property Act 1882,
is not exhaustive, it is the negative definition which exclude the things and says
immovable property does not include standing timber, growing crops or grass. The
definition in the General clauses Act also not exhaustive but it is some what positive
definition which includes land, benefits to arise out of land , and things attached to
the earth.

Things attached to earth, or permanently fastened to anything attached to earth?

a. Things rooted in the earth- trees and shrubs.

b. Imbedded in the earth- wall or building.
c. Attached to what is so imbedded for permanent beneficial enjoyment of that
which it is attached-

Perumal v/s Ramaswami – held- oil engine attached to earth and the attachment to
lasts only so long as the engine is used. When it is not used, it can be detached and
shifted to some other place. The attachment in such case immovable property.

Narayan Sa v/s Balagure Swami AIR 1924 Madras 187 Vassal used for destilation of
liquor not immovable property.

The degree, manner, extent and strength of attachment of the chattel to the earth or
building, are main features to be regarded. Further test is whether, such an attachment is
for the permanent beneficial enjoyment of the immovable property to which it is attached.

Land- considers in its legal aspect, land includes the following elements:

6. A determinate portion of the earth’s surface.

7. Possibly the column of space above the surface.
8. The ground beneath the surface.
 9. All objects which are on or under the surface in its natural state- minerals,
lakes, ponds, rivers.
10. All objects placed by human agency on or under the surface, with the
intention of permanent annexation. These become part of the land, and lose
their identity as separate movable – building, walls, fences.

Benefits to arise out of land-

Apart from property being immovable from the physical point of view, every benefit
arising out of it and every interest in such property is also regarded as immovable
property.- hereditary allowances, rights of way, lights, ferries and fisheries. A debt
secured by a mortgage of immovable property is an interest inland. A right to collect lac
from jungle, flash from pond, right to take minerals, rent from hat or market place.

Things attached to earth-

S.3 – defines the expression –attached to the earth- as including-

5. Things rooted in the earth,

6. Things imbedded in the earth,
7. Things attached to what is so imbedded,
8. Chattel attached to earth or building.

Things rooted in the earth-

Includes like trees and shrubs, but when such trees constitute standing timber they are not
immovable property.

Shantabai v/s State of Bombay- if the intention is to use them for enjoying their fruits,
they will be regarded as immovable property. But if the intention is to cut them down
sooner or later for the purpose of utilizing the wood they would be timber and regarded
as movable property.

Similarly, growing crops, and grass are regarded as movable property.

Things imbedded in the earth-

Includes such things as houses and buildings, there are certain thing which are imbedded
in the land but not a immovable property like anchor imbedded in the land to hold a
ship.

When the article in question is no further attached to the land by its own weight, it is
generally to be considered as movable property. But when in such a case if the
intention is to make the articles as part of the land

The rule is- if the article stands on the earth up to its own weight, it will not be part of
the land but if it is caused to go deeper in the earth by external agency, then it is part of
a land.

Things attached to what is so imbedded-

Includes like door, window of a house are attached to the house for the permanent
enjoyment of the house, when the intention Is not permanent enjoyment then it
becomes the movable property like fans, blinds.

Chattel attached to earth or building-

If a chattel, i.e., movable property is attached to earth or building, it is immovable

property.

Perumal naicker v/s Ramaswami Kone- A property is a movable property and for its
beneficial use of enjoyment it is necessary to imbed it or fix it on earth, through
permanently, that is , when it is in use it should not be regarded as immovable property
for that reason.

For example – sugar cane machine or oil engine.

 Recognized as Immovable properties-

1. Right to collect rent of immovable property.

2. Right to collect dues from a fair on a piece of land.

 3. Right of ferry.

4. Right of way.

5. A right of fishery.

6. debt secured by mortgage and interest of a mortgage of immovable

property.

7. Hereditary offices.

8. Right to receive future rents and profits of land.

9. The equity of redemption.

10. Reversion of property of leased.

11. Right to collect lac from trees.

12. A factory.

Recognized as movable properties-

1. Right to worship.
2. A royalty.
3. A decree for sale of immovable property.
4. A decree for arrears of rent.
5. A right to recover maintenance allowance.
6. A machinery which is not permanently attached to the earth.
7. Government promissory notes.
8. Standing timber, growing crops, and grass.

KINDS OF TRANSFER UNDER THE TP ACT, 1882

 1. Sale of immovable property: There is a transfer of ownership from the buyer
to the seller in exchange for the price. Delivery of tangible property from the
seller to the buyer.
2. Mortgage of immovable property: The property gets transferred from the
buyer to the seller in the form of a mortgage where the immovable property is
mortgaged to secure a loan. The mortgagor has to pay the principal loan along
with the interest to release the immovable property from the mortgage.
3. Leases of immovable property: The possession of the property is being
transferred from one person to another person for a fixed price in this scenario
there is no transfer of ownership.
4. Exchange of immovable property: When two persons mutually decide to
transfer immovable property it would be referred to as an exchange of
property.
5. Gift of immovable property: According to the transfer of property Act,
1882, gift refers to a transfer of movable or immovable property violently or
without the consideration, by one person that is donee, to donor transfer is
accepted by and on behalf of the donee.

CONCLUSION

The Act was introduced with an intention to create a comprehensive act which provides
information about the transfer in a very simple language during the time of introduction it
was not complete and had various uncertainties. It has gone through various amendment
processes and the act has proved it time and again about its effectiveness. In India, many
more such acts like transfer of property Act, 1882 are still in need to be implemented.