CONCEPT AND MEANING

OF PROPERTY

BY-
ROOHIKA SEHGAL
A11911114023
B.A.LLB(H)
SECTION D
CONCEPT OF PROPERTY:

Personal property is anything you own other than land and buildings. Land and
buildings are called real property or real estate. You can own tangible personal
property and intangible personal property. Both types of property have
economic value expressed in dollars. Both types of property can be used,
bought, sold, given away, taxed and bequeathed to heirs even though their
nature is very different.

Tangible Property

Tangible personal property is anything with physical existence -- things that can
be felt or touched. Examples of tangible physical property include automobiles,
furniture, jewelry, computers, machinery, art objects, rugs, dishes, curtains,
household appliances and tools. Tangible personal property includes fixtures
attached to real estate if those fixtures can be removed without damaging or
changing land and buildings.

Intangible Property

Intangible personal property consists of nonmaterial things such as copyrights,

patents, computer software, franchises, bank accounts, stocks, bonds,
trademarks, brand names, accounts receivable, customer lists, trade secrets or
business licenses. Intangible property exists only as an intellectual concept.
Much intangible property consists of the right to do something such as copy or
perform someone's music, or the right to use something such as a restaurant
chain's secret recipes. Although intangible property isn't something you can
touch or pick up, it still has a quantifiable dollar value.
MEANING OF PROPERTY:

Definition in Section 3 is not exhaustive. It says only that ‘immovable property’

does not include standing timber growing crops or grass. Definition of
immovable property in Section 3(26) of General Clauses Act, 1897, is also not
exhaustive. It defines immovable property as it shall include land, benefits to
arise out of land, and things attached to earth. Thus we find that while Transfer
of property excludes certain things. General Clauses Act, includes certain things
under the head ‘immovable property’. By combing both definitions, we may say
that, the term includes land, benefits to arise out of lands, and things attached to
the earth, except standing timber, growing crops and grass.

(A)Land: It means a determinate portion of the earth’s surface, which may

be covered by water, the column of surface above the surface, the ground
beneath the surface. All the objects which are on or under the surface in its
natural State are included in the term land. Also all objects placed by human
agency on or under the surface with the intention of permanent annexation are
immovable property, e.g., Building, wall, fences.

(B) Benefits to arise out of land: 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.

(C)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 is immovable
property. 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.

(2)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:

the degree or mode of annexation, e.g. tie-up seats fastened to the floor of
cinema halls are immovable property on brick-work and timber and tapestries;

the object of annexation, for, e.g., Blocks of stone placed one on the top of other
without any mater or cement for the purpose of forming a dry wall, will become
part of land, so immovable property, but not the stones deposited in the
builder’s yard.

(3) Things attached to what is so embedded must be for the permanent

beneficial enjoyment of the 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.
(4)Chattel attached to earth or building if a chattel, i.e., movable property is
attached to earth or building, if 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, such standing timber,
growing crops or grasses will pass to purchases.

(d) 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 utilising 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).

(e) Growing crops: Growing crops includes creepers like pan, angoor, etc.,
millets (Wheat, Sugarcane, etc.), Veg like Lauki, Kaddo, etc. These crops don’t
have any own independent existence beyond their final produce.

(f) Grasses: 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 recognised 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 terry.

(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.

Movable Property

Transfer of property does not define movable property. In General Clauses Act,
it is defined as “Property of every description except immovable property”.
Some examples are right of worship, royalty, machinery not attached to earth
which can be shifted, a decree for arrear of rent.
DOCTRINE OF FIXTURES:

The doctrine of fixtures determines when and in which circumstances an item of

personal property
which is attached to land loses its identity as a chattel and merges with the land.
Doctrine of fixtures might be relevant when:
 Land is sold: fixtures are passed to the buyer under the contract of sale
(chattels will only
pass if specifically identified)
 Land is mortgaged (or charged): a mortgagee’s security interest will
generally include
fixtures (but not chattels)
 Land is leased to a tenant: special rules apply to fixtures installed by a
tenant (common law
vs statute)
 A land owner dies: fixtures automatically pass to those entitled to the real
estate not to those entitled to personal property
 Land is given by gift: only fixtures will be passed to the new owner (not
chattels)

The attachment of a chattel to land results in the chattel becoming part of the
land and the landownder acquiring title to the attached chattel

 Something that was once personal property (goods or chattels) is

transferred to real property(fixture)
 Forced divestiture of your personal property right to someone else with a
real property right

Tests: Doctrine of Fixtures:

 Annexation is a question of circumstances indicating intention, viz, the

degree and object of annexation (Holland v Hodgson per Blackburn J)

Deciding whether an item is a chattel or a fixture is a question of fact,

determined objectively at the time the item was annexed (or not) to the land.
This requires consideration of both:

 Degree of annexation: how is the item attached to the land?

 Object of annexation: what is the item attached to the land and why was it
attached?
Burden of Proof:

 Item fixed to land ONLY by its own weight: presumed to be a chattel –

party claiming it is a fixture has the burden of proof (rebuttable).
 Item fixed to the land OTHER than by its own weight: presumed to be a
fixture – party claiming it is a chattel has the burden of proof (rebuttable).

1. Presumptions
• If the chattel is attached there is a prima facie presumption that it is a fixture,
and vice versa
(NAB; Belgrave).
• The stronger the annexation the higher the burden of proof (NAB)

2. Degree of Annexation
The Degree of annexation test looks to the manner in which the chattel is
attached to the land. There appears to be two relevant legal presumptions:
1. If a chattel is attached to the land other than by its own weight (for example,
by screws or
bolts), prima facie it is a fixture.
• This presumption applies even if the degree of attachment is very slight
(Holland v
Hodgson (1872))
• The greater the degree of attachment, the stronger the presumption appears to
be (Spyer v
Phillipson [1931])), party asserting that item isn’t a fixture has burden of proof
2. Secondly, if a chattel is only attached by its own weight, prima facie the
chattel is not a
fixture even if it has become embedded in the soil. The party asserting item is a
fixture has burden

3. Object of Annexation
Pursuant to the Object of annexation test, the courts will examine whether the
object was affixed to
the land, on the one hand, as a temporary measure or for the purpose of
displaying it as a chattel, or,on the other hand, in order to benefit the real estate.
• Test is traditionally an objective test.- what the reasonable person would
consider the reason
for attaching the object to the land (Hobson v Gorringe).
• Whether the attachment was for the better enjoyment of the chattel generally
or for the better
enjoyment of the land and/or buildings to which it was attached (NAB)
• The nature of the property the subject of affixation - Is this article typical of
something that
would serve the land? (NAB; Belgrave)
• Whether the item was to be in position permanently or temporarily (NAB)
• The purpose of annexing it in the first place (NAB; Belgrave; Attorney-
General (Cth) v R T
Co Pty Ltd)
• Relation and situation of the party making the annexation vis-à-vis the owner
of the freehold
or the person in possession (Belgrave)
PROFIT A PRENDRE:

A profit a prendre is a right to take from another person’s land something that is
part of the soil or is on the soil and is the property of the landowner. The most
common examples are sporting rights such as shooting and fishing, but
important rights also exist in relation to minerals, crops or animals.

The phrase ‘benefits to arise out of land’ means profits derived from land
without having any substantial control over the land. Benefit arising out of land
is also known as ‘profit a prendre’.

Section 2(6) of Registration Act says that: “immovable property includes land,
buildings, 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.”

Section 3(26) of General Clauses Act says that: “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.”

The courts have recognised a very limited number of ‘profits a prendre’. There
is a numerus clausus of property entitlements and ‘profits’ are one of the classes
of this closed list of proprietary entitlements. Courts are reluctant to include
more rights in this list because property rights are very durable and creation of a
number of entitlements as profits would make it difficult for the subsequent
transferees to keep a check on the prior property entitlements.
CASE LAWS-

1. Shantabai v. State of Bombay

FACTS: Shantabai’s husband had granted her the right to take and appropriate
all kinds of wood from certain forests in his Zamindary through an unregistered
document. With the passing of the Madhya Pradesh Abolition of Proprietary
Rights (Estates, Mahals, Alienated Lands) Act, 1950, all proprietary rights in
land vested in the State U/S 3 of this Act and the petitioner could no longer cut
any wood. She obtained an order U/S 6(2) of the Act from the Deputy
Commissioner and started cutting 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 this Court under
Art. 32 of the Constitution and contended that the order of Forest Officer
infringed her fundamental rights under Arts. 19(i)(f) and 19(1)(g).

LEGAL PRINCIPLE UPHELD: This case basically relates as to what

constitutes ‘standing timber’. However, the SC has in its judgement also 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 land.

2. State of Orissa v. Titagarh Paper Mills Company Limited

FACTS: 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. The respondent (group of
petitioners who had entered into agreement with the State for the felling, cutting
obtaining and removing bamboos from forest areas ‘for the purpose of
converting the bamboo into paper pulp or for purposes connected with the
manufacture of paper or in any connection incidental therewith’, i.e., bamboo
contracts) contended before the High 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 exigible to either sales tax or purchase tax.
LEGAL PRINCIPLE UPHELD: The SC after referring to the terms and
conditions of the bamboo held that “felling, cutting, obtaining and removing
bamboos from forest areas for the manufacture of paper” is a benefit to arise out
of land and it would thus be an interest in immovable property.
BIBLIOGRAPHY:

1. www.lawctopus.com
2. www.jstor.org
3. www.lawteacher.net
4. en.wikipedia.org