What is movable and immovable property?
Following are the commonly stated difference between movable and immovable property: –
- The movable property can easily be transported from one place to another, without changing its shape, capacity, quantity or quality. Personal property is generally considered to be the movable property.
- Immovable property 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.).
- In a civil law system, personal property is a movable property. It includes any property which can be moved from one place to another.
What is movable property?
Meaning of Movable Property: – A movable property can be easily moved from one place to another, without changing its size, shape, quantity or quality. Movable property is one, which can be transferred from one place to another place with the human efforts. Example: – Books, utensils, vehicles, etc.
- Banyan tree; if it is cut or sold for wood, then it will be considered as movable property.
- A contract done for cutting the bamboo and for the collection of leaves comes under the movable property.
- There is no need for the movable property to be registered under the Indian Registration Act, 1908. It is completely voluntary.
- Movable property is subject to sales tax and central sales tax and it is also subject to certain restrictions and conditions under tax act and the central sales tax act, 1956.
- A mere delivery just to transfer that particular movable property completes the transfer.
- A movable property does not bring an increase to an ancestral impartible estate.
- Movable property includes: – Right of worship, Royalty, Decree for sale of immovable property, Decree for areas of rent, maintenance allowance, standing timber, growing crops, grass, government promissory notes, etc.
What is immovable property?
Meaning of Immovable Property According to the Section 3(26) of General Clauses Act, 1897: – “Immovable property includes land, benefits arising out of land and things attached to the earth or permanently fastened or anything attached to the earth.”
Meaning of Immovable Property According to the Indian Regulation Act: – Immovable property includes land, building, hereditary allowance, rights of way, lights, Ferries, Fisheries or any other benefit to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth but not standing Timber, growing crops or grass.
Meaning of Immovable Property: – Section 3 Para 2 of the Transfer of Property Act 1882 defines immovable property as “immovable property does not include standing Timber, growing crops or grass. It is not an exhaustive definition, so we have to read the definition by combining the definitions of General Clauses Act and Transfer of Property Act which is; Immovable property includes land, benefits arise out of land and things attached to earth except for standing timber, growing crops or grass.
According to Salmond immovable property (i.e., land) has the following elements: –
- a determinate portion of the surface of the earth.
- The ground beneath the surface down to the centre of the earth
- The column of space above the surface ad infinitum.
- All objects which are on or under the surface in its natural state for example-minerals natural vegetation, or stones lying loose upon the surface.
- An object placed by human agency on or under the surface of the land with the intention of permanent an annexation, for example, House walls, Doors, Fences, etc.
- Immovable Property includes: – Right to ferries, Right to fisheries, Right to collect rent, Hereditary office, Equity of redemption, Interest of mortgage in immovable property, Factory, etc.
- Land: – Land includes earth’s surface, column of space above the surface, the ground beneath the surface, all objects which are on or under the surface in its natural state e.g. minerals, land covered by water e.g. lakes, river and ponds, object placed by human agency with the intention of permanent annexation e.g. buildings, walls and fences. Any natural thing which is inside or above the land will be considered as part of the land. For example, River, lake, pond, any construction on the land, etc.
- Benefits Arising Out of the land: – It means profits derived from the land without having any adequate land. For example, rent, right to way, right to collect profit, rights of fisheries, rights of light, etc. The benefits arising out of land are also known as ‘profit a prendre’. All benefits arising out of immovable property and every interest in such property are also regarded as immovable property as such benefits cannot be severed from the land e.g. hereditary allowances, rights of ways, right to collect fish from ponds etc. If Ram sells a forest to Shyam, the trees, rivers, minerals etc. all forming part of land or ‘profit a prendre’ or benefits arising out of land will go with it.
- Things Attached to the Earth: – Section 3 of the Transfer of Property Act defines the expression ‘attached to earth’ as it includes: –
- Things rooted in the earth: – include trees and shrubs, except for standing timber, growing crops and grasses. Now whether the trees are considered as movable or immovable depends on the circumstances of the case. For instance, if the intention for the plantation of trees is for the enjoyment of their fruits, then such a tree is an immovable property. But if the intention is to cut the tree sooner or later to use its wood for building or another industrial purpose, then they will be treated as movable property. For example, sheesham, babool, neem, etc.
- Things embedded in the earth: – This includes things like houses, buildings, etc. but it is not necessary that everything which is embedded to the earth, is immovable. For example, Ship anchor, it is embedded in the land to hold the ship or shovel as it is not an immovable property because it is inserted into the mud for a short period but if the anchor is stopping something to move then it would be considered as immovable property.
- Things attached to what is so embedded: – For the permanent beneficial enjoyment of that to which it is attached thus the doors and windows of a house are attached to the house for the permanent benificial enjoyment of the house but if the attachment is not intended to be permanent the things attached are not immovable. It must be for the permanent beneficial enjoyment of the things to which it is attached. For example, Doors and windows of the house are immovable property, but electric fans and window blinds, they are movable property.
- Chattel attached to earth or building: – Movable property, attached to the earth or building it is immovable property. For example, furniture or clothes hanging in the closet. The main features to determine whether the chattel is movable or immovable property are degree, manner, extent and strength of attachment.
But standing timber, growing crops and grass are regarded as movable property
- Standing Timber: – It includes babool, shisham, neem, peepal, banyan tree, etc. but trees like mango, mahira, jack fruit, jamun, etc can be both movable and immovable property depends upon if the intention is to cut them sooner or later to utilize them as timber and not to use them to enjoy their fruits are movable property.
- Growing Crops: – Growing crops like creepers including pan, angoor, etc, these crops do not have their independent existence beyond their final product.
- Grasses: – It can be only used as fodder and no other use is possible. Therefore it is considered to be as movable property. But if there is a contract to cut grass will be an interest in chattel, so is immovable property.
There are two main conditions to indicate the intention
- Degree of Annexation: –
- It means that when the removal of any property annexed or embedded will not cause any harm to the land. It is the extent to which the item has been attached or annexed to the property.
- If it does cause harm to the land then it will fall under the ambit of immovable property, if it does not cause any harm to the land then it falls under the ambit of movable property.
- For example: – An anchor which is embedded in the earth to hold the ship and it can be easily detached without harming the land. So, it will be regarded as movable property.
- Seats in the garden are immovable property, as during their removal it will cause harm to the land.
- The object of Annexation: –
- If the object of annexing the property is for the usage of a long period. The purpose of annexation is for which the item was attached to the property.
- For example: – Bolts used to tighten any object in the house; it will be considered being as immovable property because here the intention is to use it for a long period.
Difference between Movable and Immovable Property
In a leading case Justice Holloway explained the difference between movable and immovable property: –
- The movable property can easily be transported from one place to another, without changing its shape, capacity, quantity or quality. The immovable property cannot easily be transported from one place to another. If transported, It will lose its original shape, capacity, quantity or quality. If however, a thing cannot change its place without injury to the quality by virtue of which it is immovable.
- It includes land, benefits to arise out of land, and things attached to the earth (sec. 3 of General Clauses Act). It includes stocks and shares, growing crops, grass, and things attached to or forming part of the land, and which are agreed to be severed before sale, or under the contract of sale (section 2 of Sale of Good Act).
- If the thing is fixed to the land even slightly of it is caused to go deeper in the earth by external agency, then it is deemed to be immovable property. If the thing is resting on the land merely on its won weight, the presumption is that it is movable property, unless contrary is proved.
- If the propose of annexation of a thing is to confer a permanent benefit to the land to which it is attached, then it is immovable property. If the purpose was only to enjoy the thing itself, then it is movable property even though it is fixed in the land.
- Examples: – Benefits to arise out of land such as hereditary allowances, right of way, ferries and fisheries, right to collect rent and profits of immovable property; a mortgage-debt; right to cut grass of one year, a factory; etc. Examples Right of worship; royalty; a decree of sale of immovable property; a decree for arrears of rent; Government promissory notes; standing timber, growing corps and grass.
- Transfer of immovable property requires registration of the document. No registration is required to transfer a movable property.
Judicially recognized as immovable property and movable property
|S.NO.||Movable Property||Immovable Property|
|1.||Right of worship||Right to collect the rent of an immovable property|
|2.||Decree of sale of a mortgaged property||Right of ferry|
|3.||Government promissory notes||Right of way|
|4.||Standing timber, growing crops and grass||Right of fishery|
|5.||Royalty||Right to receive future rents and profits of the land|
|6.||A piece of machinery which is not permanent not attached to the earth and cannot be shifted from one place to another.||A factory|
|7.||A right to recover maintenance allowance even if such allowance is not charged on immovable property.||Right to collect lace from the trees|
|8.||Right of purchase of property to have it registered in his name.||Reversion in property leased, etc.|
This case was decided by Allahabad High Court. This case has been referred to the larger bench because of conflict among the decisions on the question arise in this case.
The Question arises: – Whether standing shisham or neem trees are standing timber within the meaning of section 2(6) of the act?
Judgment: – In this case, the court held that the prime importance is given to the intention. That the tree in question was meant to be dealt with the parties just to cut off or to use it as standing timber and not merely as a tree.
In this case, the court held that real intention will be considered, as to for what purpose was the tree planted. Entering into the land and cutting trees will fall under the category of benefits arising out of the land.
- Kapoor construction vs. Leela Nagaraj & Ors. AIR 2005
In this case, the court held that there are some important factors to determine whether the property is movable or immovable. The factors are: –
- Mode of annexation
- Degree of annexation