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PROPERTY: MEANING AND TYPES

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MEANING

The layman’s interpretation of what property means is quite different from a legal perspective. The property simply means something which is owned by a person or jointly owned with another person or even by an entity. There are no clear definitions as to what a property is under The Transfer of Property Act, 1882. Therefore, in order to further understand the meaning of the term property, we need to depend on other acts. Such as The Prohibition of Benami Property Transaction Act, 1988 section 2(26), according to this act the term property consists of all kinds of assets regardless of the mobility or tangibility of the asset, it can even be a right in a property or the proceeds from the sale of an asset. The Sale of Goods Act section 2(11) also defines the property, according to this act property is a “general property in goods and not merely a special property” which means a person must have proper ownership of the asset and not just limited ownership over the asset to claim it as one’s own property. To sum it up, all kinds of assets over which one has proper ownership regardless of the nature of the asset falls under the preview of the property.

TYPES OF PROPERTIES

  1. Movable Property: According to General Clauses Act 3(36), 1977, the movable property includes all properties which can be perceived with our senses excluding immovable property, which means all properties except for the ones which are fastened to the ground. A common misconception in identifying movable property is in relation to the properties which are fastened to the ground for a temporary duration such as machinery placed in a plant, if such machinery is fixated only for a temporary purpose and may be removed after its use then it falls under the category of movable property. The purpose of the property also plays a vital role in determining whether a property is movable or immovable, as stated in the definition of movable property under Registration Act 2(9), 1908, standing timber, growing crops and fruits are to be treated as movable properties even though they are attached to the ground. For eg. in the case of trees they can be considered as movable property as well as immovable property, as the court stated in Jagdish v. Mangal Pandey [1], nature and intention need to be considered in order to determine whether it’s movable or immovable. If there is an intention to cut down the tree, then it will be treated as movable property, but if the intention was to let the tree remain then the tree will be considered as immovable property.
  2. Immovable Properties: As defined in General Clauses Act 2(26), 1977, land, benefits arising from land and all properties that are permanently attached to the ground falls under the category of immovable property. Here the term land includes everything that is found on the land and under the surface of the land such as water over the land, minerals, stones, etc.

All benefits arising from the land also form a part of immovable property. Anand Behra v. The State of Orissa [2] is a prime example of benefits arising from the land, the background of the case is as follows, the petitioner had obtained a license to capture fish from the Chilka lake and later The Orissa Estates Abolition Act, 1951 was passed. Thus the license of the petitioner was revoked, the petitioner stated that the law was only applicable to immovable property and does not apply to him, however, the court held that the lake is an immovable property and fishing from the lake amounts to obtaining benefits from the land making it an immovable property. Rent, profit, or dues received from any immovable property will also be treated as benefits arising from immovable property. 

Section 3(4) of the Transfer of Property Act, 1882 defines the term “attached to the earth” includes all properties.                                                                                                                 

  • That is rooted in the ground for e.g. trees, shrubs, etc.
  • Embedded in the ground for e.g. wall, buildings, etc. In order to find out whether the object embedded in the ground is a movable or immovable property the following tests are conducted:
    • Degree of Annexation: If the object or chattel that is embedded in the ground can be removed without damaging the property then it will be treated as movable property, however, if it damages the property it will be treated as immovable property. As stated by the court in Sukry Kurdepa v Goondakul[3] if an object cannot change its place without it degrading its quality then it will be treated as immovable property.
    • The object of Annexation: If an object or chattel is embedded in the ground for a permanent basis then it will be treated as immovable property. In case the chattel or object is embedded for a temporary period then it will be treated as movable property.
  • Attached to the embedded property permanently for eg doors, windows, etc.

Furthermore, The Supreme Court in Sunflag Iron ltd vs Collector of Central Excise [4], where the dispute that arose before the court was whether an object attached to the ground can be treated as a good. The court stated that the objects attached to the earth form a part of immovable property, thus all properties attached to the ground permanently form a part of immovable property.

  1. Corporeal Property: The ownership of intangible properties is called corporeal property which means properties that can be seen, felt, and touched upon. It refers to properties that have a physical presence or characteristics such as a car, house, furniture, etc.
  2. Incorporeal Property: Those properties that cannot be seen or felt are called incorporeal property, these properties exist in the legal realm. There two types of incorporeal properties  
    • Right in re aliena: It means the right of a person in the property that is owned by another person. These properties are of four types lease, servitude, securities, and trusts. These rights interferers in the exercise of the general rights a person has in a specific property.
    • Jus in re propria: This refers to the right a person has over intellectual properties such as trademarks, copyrights, patents, etc. Even though these properties are intangible and don’t have a physical presence they are still considered as property. Thus a person can exercise general right over these intangible properties just as in the case of tangible property.

Author(s) name: Tarul joseph Thottungal (Kristu Jayanti College of Law)

References

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  1. AIR 1986 All 182
  2. 1956 AIR 17, 1955 SCR (2) 919
  3. (1872)6 Mad. C.71
  4. 2006 (112) ECC 49, 2006 ECR 49 Bombay, 2008 (222) ELT 22 Bom
  5. Law of Property, S.R. Myneni,1st Edition (2012) Edition, reprint (2015)
  6. The Transfer of Property Act, Dr G.P Tripathi, 19th Edition 2016