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Movable Property under TPA


Movable Property

Content:-



Meaning


The Transfer or Property Act (T.P.A) does not-define movable property which has been defined in the General Clauses Act as meaning “property of every description except immovable property”. Some of the examples of movable property are: Right of worship,


Royalty, A machinery which is not attached to the earth and which can be shifted from one place to another, A decree for sale of immovable property, A decree for arrears of rent, A right to recover maintenance allowance (even though charged on immovable property), Government promissory notes, Standing timber, Growing crops and Grass. 



Leading Case Laws


In S.P.K.N. Subramanian Firm v M. Chidambara (AIR. 1940 Mad 825), the issue arose regarding the classification of an oil engine installed by tenants in a cinema for generating electricity. The court considered not only how the engine was attached but also the purpose and intention behind its installation. If the attachment serves the permanent benefit of the immovable property, it's deemed immovable.


Conversely, if it's for short-term use and primarily benefits the movable property itself, it's considered movable. In this case, the tenants' clear intention was not to treat the engine as part of the premises, anticipating eviction. Hence, they couldn't grant the plaintiff any valuable right in the immovable property.


In Perumal v Ramaswami (AIR 1969 Mad 346), the court reiterated that attaching an oil engine to the earth, though fixed, does not make it immovable property. The attachment serves the engine's benefit, and it can be detached when not in use, indicating its movable nature.


Similarly, in Md. Ibrahim v Northern C.F. Trading Co. (AIR 1945 Mad 304), machinery installed on a concrete floor was deemed immovable property because it was attached to the earth for permanent beneficial use. The owner's intent to use the machinery for business indicated its immovable nature.


In Janam Chand v Jugal Kishore, the court examined machinery fixed with nuts and bolts on the concrete floor of a factory. It concluded that the purpose of this attachment was to stabilise the machinery, preventing vibration and ensuring its proper function.


Notably, the land was mortgaged on a monthly rent basis, indicating that the mortgagee's interest was not in the permanent enjoyment of the land itself.


In the case of BAMADEV PANIGRAHI v MONORAMA RAJ (AIR 1974 A.P. 226), cinema equipment, including a projector and a diesel engine, was installed temporarily on a tenanted land.


The court determined these items to be movable property as they were not attached to the earth and were installed for the enjoyment of the machinery itself, not the land. The temporary nature of the installation, as indicated by the name "touring talkies," further supported this conclusion.


The court referenced several cases to establish principles regarding the classification of machinery as movable or immovable property. These principles emphasised factors such as the purpose of installation, the manner of attachment, and the ownership of the land and machinery.



When machinery is installed for temporary use or is not permanently affixed to the land, it is generally considered movable property.


In Mohammed Ibrahim v Northern Circars Fibre Trading Co. (AIR 1944 Mad. 492), it was established that machinery affixed to a cement platform and held in place by iron pillars rooted in the ground constitutes immovable property.


This conclusion was drawn due to the annexation being carried out by the owner of both the building and the machinery. The intention behind this annexation was evidently to gain ownership of both assets for business purposes and personal benefit. The law does not mandate any elaborate procedure to discern the intention of the purchaser; instead, it relies on the totality of circumstances.


From this discussion, several principles emerge:


Firstly, whether machinery embedded in earth or permanently attached to the ground is movable or immovable hinges upon the specific facts of each case. There exists no universal test or guideline, with the determination relying on a holistic assessment of material facts.


Secondly, key factors include the intent behind installing the machinery—whether it serves the benefit of the structure or solely the machinery itself—and the degree and manner of attachment to the earth.


Thirdly, when the machinery and the property on which it is installed belong to the same person, it's presumed that the intent is to benefit from the entire property, not just the machinery. Conversely, when the machinery and the property belong to different individuals, the presumption shifts to the exploitation of the machinery alone.


Additionally, the nature of the property itself is considered; for instance, machinery installed in a temporary structure suggests the intent to benefit solely from the machinery, whereas installation in a permanent structure indicates an intent to benefit from the entire property.


In this specific case, the touring talkies was a temporary structure on land belonging to another party. The lease for the talkies was short-term, indicating that the intent was for temporary enjoyment of the machinery, not the land itself. Additionally, the equipment was not firmly attached to the earth, further supporting its classification as movable property.



In the case of DUNCANS INDUSTRIES LTD. v STATE OF U.P. [(2000) 1 SCO 633], the issue revolved around whether machinery embedded in the earth could be considered movable or immovable property, contingent upon the intentions of the parties involved in embedding and transferring the machinery.


The factual backdrop involved ICI India Ltd. agreeing to transfer its fertiliser business to M/s Duncans Industries Ltd. on an "as is where is" basis.


This encompassed the transfer of various properties, including demised land, buildings, residential structures, and plant and machinery associated with the fertiliser business.


The appellant contended that the plant and machinery were incorrectly classified as immovable property by the High Court, arguing that the agreement between the parties treated them as moveables and delivered possession accordingly. Conversely, the State argued that the intent of the vendor was to transfer all properties integral to the fertiliser business.


The key question was whether the conveyance deed transferred the plant and machinery. The Supreme Court concurred with the High Court's finding that the machinery, forming the fertiliser plant, was permanently embedded in the earth with the intention of running the factory, rendering them immovable property.

The Court emphasised that the classification of machinery as movable or immovable depended on the circumstances of each case, particularly the intentions behind embedding the machinery. In this instance, the machinery was permanently fixed to operate the fertiliser plant and was not intended for removal or sale as scrap. Thus, it constituted immovable property.


Despite the appellant's reliance on a previous case involving paper-making machines, the Court held that the intention of the parties and the nature of the machinery in question were decisive factors. In this case, the conveyance deed clearly indicated the transfer of the entire fertiliser business, including the plant and machinery.


Ultimately, the Court affirmed that the conveyance deed conveyed the title to both the land and the entire fertiliser business, including the plant and machinery.



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