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What is Immovable Property? – Legal Desire

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The term “Immovable property” forms important constituent in numerous Central Acts. Yet, none of those Acts define this term conclusively. The Transfer of Property Act is the key act dealing with immovable property.

“In accordance to Section 3 of the Act, “Immovable Property” omits standing timber, growing crops, and grass, consequent to the same; the Act outlines the term by eliminating particular things. “Buildings” are immovable property however machinery integrated in the structure for valuable use must be considered as an essential part of the structure and the ground on which it is positioned.

Immovable property emphasizes that, according to Section 3(26) of the General Clauses Act 1897, it “must comprise land, benefits arising from land, and objects fixed to the earth, or permanently fastened to anything attached to the earth.”

Section 2(6) of the Registration Act of 1908 further defines “immovable property” as “land, building, hereditary allowances, rights to ways, lights, ferries, fisheries, or any other benefit arising from land, and things attached to the earth or permanently fastened to anything attached to the earth, but not standing timber, growing crops, or grass.”

The following items have been classified as immovable property.

  • A right to collect rent,
  • a life interest in the immovable property’s income,
  • a right of way,
  • a ferry,
  • a fishery,
  • or a land lease.

The term “Immovable Property” for the purpose of definition of purpose under Section 269UA(d) of the Income Tax Act of 1961 is defined as “ Any land, building, or part of a building, and includes, where such land, building, or part of a building is to be transferred in conjunction with any machinery, plant, furniture, fittings, or other items, such machinery, plant, furniture, fittings, or other things”.

Section 3 of the General Clauses Act 1897 states that “immovable property does not include standing timber, growing crops, or grass. Standing timber includes Babool Tree, Shisham, Nimb, Papal Banyan, Teak, Bamboo, and other species. Fruit bearing trees such as Mango, Mahua, Jackfruit, Jamun, and others are not standing timber and are immovable properties[1].”

“Essentials components of immovable property:

  • Immovable properties must be registered, If the value exceeds of such property value of Rs.100, according to the registration Act, 1908.
  • Consequent to the requirement of the registration, the transfer of such property is not comparable to movable property. The transfer can be completed after the registration of such property.
  • Immovable property can be supplemented as ancestral joint property.
  • Registration fees and stamp duty can be applied at the time of the registration of that property.”
  • The immovable property cannot be moved from one location to another consequent to which it will lose its original shape, capacity, amount, or quality.
  • In a legitimate transfer the property must be registered in the transferee’s name.
  • Registration of immovable property is mandatory under the Indian Registration Act, 1908, subject to the condition that its worth exceeds Rs.100.

In Hussiaa Banu v. Shivanarayan,[2] it was stated that a transfer occurs when one of the parties to a settlement gives up a claim to receive a particular quantity of money from the other in exchange for the latter giving up the right to certain property claimed by him.”

Doctrine of Priority /Priority of Rights (Section 48)

The Courts have fought to establish the equivalence to the relative rights and priorities of successive assignees or overlapping rights. In case where in two or more equitable interests compete, the equitable maxim qui prior est tempore potior est jure (he who is earlier in time is stronger in law) applies.  As per section 48 of the Transfer of Property Act, first in line has a benefit over the others. The Section is based on the crucial principle that no one can communicate a title greater than what he owns.

Transfer via Ostensible Owner

 The basic rule is that “a person cannot transfer a better title than he himself holds,” however property may also be transferred in the following ways: – the transfer of immovable property by the ostensible owner is legitimate, but only if the following conditions are met.

  1. The ostensible owner is the transferor.
  2. The consent of the genuine owner has been obtained (Express or Implied).
  3. The transfer is made sincerely.

An ostensible owner is someone who is not the genuine owner of the property.

Estoppels Doctrine (Section 43)

When a person deceitfully or wrongly epitomizes that he is lawful to transfer certain immovable property and acknowledges to transfer such property for consideration, such transfer shall operate, at the option of the transferee, on any interest which the transferor may acquire in such property during the term of the contract of transfer. (Section 43) This means that if a person falsely transfers a property while claiming to be the genuine owner, that person will be required to surrender the property if a future interest arises and the contract is not resigned.

 

Conditions Required

  1. A fraudulent representation was made.
  2. Property was transferred as a result of such representation.
  3. The transferor thereafter acquired a stake in the property.
  4. Property transfer was under discussion.
  5. The transferee did not cancel the contract.
  6. The transferee acted honestly.

Les Pendens Doctrine (Section 52)

Term Les Pendens is French for “pending suit, litigation, or the like.” This Doctrine states that “when a suit is pending before a court of law between two or more parties for immovable property, the property cannot be transferred or otherwise dealt with by any party, except under the authority of the court.”

If the court offers explicit permission, the property may be transferred, but only subject to the court’s final decision. As an example: – A and B are litigating in a court of law over property P, and while the action is pending, C transfers the property Q to D with the court’s authorization. The case is resolved in C’s favour. In this case, D cannot claim the property because he gained it during the course of the litigation. He is obligated by the Court’s decree, which grants C the property.

Doctrine Fundamentals

  1. A lawsuit or procedure must be pending.
  2. The suit or procedure must be pending in a court of competent jurisdiction.
  3. There must be no collusion in the complaint or proceeding.
  4. The suit or procedure must directly and expressly address a right to immovable property.
  5. Any party to the action must transfer or otherwise deal with the property under question.
  6. The alienation must have an impact on the other party’s rights.

Doctrine of Fraudulent Transfer (Section 53)

If a person transfers his immovable property in such a way that he may defraud creditors, this is referred to as a fraudulent transfer. “Any transfer of immovable property made with the goal of defeating or delaying the transferor’s creditors shall be voidable at the option of any creditor so defeated or delayed.” Creditors have the option to cancel fraudulent transactions. It means that if creditors do not object, the transfer is legitimate, but if creditors object, the transfer is invalid. The transfer is valid as long as the creditor does not file a legal challenge and get a ruling that the transfer is invalid.

Part Performance Doctrine (Section 53A)

If a contract for the transfer of immovable property has been partially performed and the transferee has fulfilled his portion of the duties, the contract cannot be dissolved on the basis of non-registration of the document, essential conditions of the doctrine are as:-

  1. A contract is required to transfer the immovable property.
  2. It must be for supposed.
  3. The contract must be written and signed by both parties.
  4. The contract’s terms are explicit and unambiguous.
  5. The item must be in the ownership of the transferee.
  6. The transferee must have completed his portion of the duties.

For example, P and Q have entered into a land sale contract. Section 53A, which contains the notion of part-performance, provides some relief to transferee, where the transferee has remunerated the fee for taking ownership and is ready to fulfil his contractual responsibilities. P, the transferor, seeks to evict Q from the land since registration has not been completed, since because the registration formalities have not been completed.

Actionable Claim:

An actionable claim is defined as a claim (a) to any debt, other than a debt secured by a mortgage of immoveable property or a hypothecation or pledge of moveable property, or (b) to any beneficial interest in moveable property not in the claimant’s possession, either actual or constructive, that the Civil Courts recognise as providing grounds for relief, whether such debt or beneficial interest is existent, accruing, conditional, or contingent.

Actionable claims are those that have been recognised by the courts as having the ability to offer relief for either a) unsecured debts or b) beneficial interests in movable property not in possession (actual or constructive), whether present or future, conditional or contingent. This concept has resolved numerous problems that existed prior to 1900. [3]

In brief, an actionable claim is defined as

  1. a claim to an unsecured debt or
  2. a claim to any beneficial interest in movable property not in the claimant’s possession.

Every claim is not legally actionable. It must be a debt claim or a benefit interest in movable goods.

The following are legal claims:

  1. Share in a company
  2. Mortgage debt
  3. Copyright claim
  4. Mesne profits claim
  5. Mere right to sue

[1] Fatimabibi v. Arrfana Begum, AIR 1980 All 394

[2] AIR 1968 MP 307

[3] Whinney v. Colonial Bank; Muchiram v. Ishan Chandar

Author: Nayeisha Puri (Intern, Legal Desire)





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