Case Analysis: Bamadev Panigrahi V. Monorama Raj

FACTS:

The material facts of the case are following:

1. The plaintiff’s husband (late Profulla Kumar Raj) and the defendant were friends.
2. According to plaint allegations, the plaintiff’s husband had obtained a possessory mortgage on 1-9-1957 with a view to run a touring cinema in that place.
3. The plaintiff’s husband built a temporary cinema structure and erected a temporary pandal in a portion of the plaint schedule site.
4. For the purpose of cinema, plaintiff’s husband bought a cinema projector and the oil engine and their accessories. The aforesaid cinema projector and the oil engine and their accessories have been imbedded and installed in the earth by constructing foundations for the purpose of running the cinema concern known as “kumar touring talkies”.
5. Finding no time to manage the cinema concern he entrusted the management of the cinema concern to the defendant out of trust and confidence in him. The defendant taking advantage of his position, as being the person in the management, colluded with mortgager and got an endorsement of discharge made on the mortgage bond dated 1-9-57 and subsequently obtained the mortgage in his name on 6-3-1961.
6. The plaintiff’s husband filed a suit which decreed ex parte in Trial court. He died later. Now this suit is in appeal.
7. The suit claim was resisted by the defendant contending inter alia that it was he, but not the plaintiff’s husband, who is real owner of the Kumar Touring Talkies, that he had obtained the mortgage deed from the Raja Saheb though he got the deed executed benami in the name of plaintiff’s husband, and he had paid installments as per the agreement, that he did not borrow any amount from the plaintiff’s husband and suit pertains to the recovery of movable property and is, therefore, barred by limitation.

ISSUES:

Upon the respective contentions of the parties, the following issues arises:-

1. Main contention was that what is the nature of property in issue, whether it is immovable property or movable property. If, it is movable property, it will be barred by limitation period as suit is filed after 3 years as contended by defendant, but if it is immovable property, it will be under limitation period as suit is filed before period of 12 years as contented by plaintiff.
2. Whether the plaintiff’s husband and after his death, the plaintiff is entitled to the cinema equipment and the diesel oil engine and their accessories?

LAW POINTS:

It is well settled law that a suit for declaration of title to or for recovery of possession of immovable property can be filed within 12 years from the refusal or denial of the plaintiff’s right by the opposing party. However, in the case of movable property, such a suit must be filed within 3 years from the date of refusal or denial of the plaintiff’s right.

The definitions in the Transfer of Property Act, 1882 are most important here, Section 3 of the Act defines ‘immovable property’ as following:

“Immovable property does not include standing timber, growing crop or grass”.

The expression “attached to the earth” means

“(a) rooted in the earth, as in the case of trees and shrubs;

(b) embedded in the earth, as in the case of walls or buildings, or

(c) attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached”.

A simple reading of the statutory definitions of the terms ‘movable property’ and ‘immovable property’ above mentioned acts, it suggests that things attached to the earth or permanently fastened to anything attached to the earth are not movable but immovable property. The machinery in question, i.e., the cinema projector, diesel oil engine and their accessories does not fall within any of the categories of immovable property. Though it is really movable property, it may become immovable property if it is attached to the earth or  permanently fastened to anything which is attached to the earth.

The question here arises given the facts and circumstances is not  whether the attachment is direct or indirect, but what is the nature and character of the  attachment and the intendment and object of such attachment are.

RATIO:

Though English law of fixtures has no strict application to the law in India, Court may, however, notice some English decisions wherein certain tests or guidelines for determining whether any machinery is movable or immovable property, have been laid down. Some of the important discussions and decisions are following:

In Holland v. Hodgson [(1872) 7 CP 328] at p. 334 it was observed by J. as follows:

“…the general maxim of the law is, that what is annexed to the land becomes part of the land; but it is very difficult, if not impossible, to say with precision what constitutes an annexation sufficient for this purpose. It is a question which must depend on the circumstances of each case, and mainly on two circumstances, as indicating the intention viz. The degree of annexation and the object of the annexation”

In Leigh v. Taylor [(1902) AC 157, 161], the House of Lords held that certain valuable tapestries affixed by a tenant to the walls of a house for the purpose of ornament and for the better enjoyment of them as chattels, had not become part of the house, but formed part of the personal estate of the tenant for life

The broad principle is that, unless it has become part of the house in any intelligible sense, is not a thing which passes to the heir”.

These two guidelines evolved by the English Courts have been accepted by the Courts in India for being followed while considering the question “whether any machinery imbedded in the earth or fastened to anything attached to the earth is movable or immovable property”.

In Subrahmaniam Firm v. Chindambaram, [AIR 1940 Mad 527] at p. 529 the machinery installed by a tenant for running a cinema in the premises, taken by him on lease for his own profit, was held to be movable property within the meaning of Section 3 of the Transfer of Property Act, as it was not a permanent improvement to the premises. We may notice the following passage in the judgment of the learned Judge, Wadsworth. J.:

“If a thing is imbedded in the earth or attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached, then it is part of the immovable property. If the attachment is merely for the beneficial enjoyment of the chattel itself, then it remains a chattel, even though fixed for the time being so that it may be enjoyed. The question must in each case be decided according to the circumstances”.

The Division Bench of the Madras High Court in Perumal Naicker v. Ramaswami Kone [AIR 1969 Mad 346], held wherein a Petter engine mounted and fastened to a cement base was found to be immovable property on the ground that it was fixed to the earth for the beneficial enjoyment of the property during its lease.

From the foregoing discussion following principles emerge:-

1. The question whether any machinery such as an oil engine imbedded in earth or permanently fastened to anything attached to the earth is mixed question of fact and law depending upon the facts and circumstances of each case. There is no statutory test or guideline having universal application, for the determination of the nature and character of the property, whether movable or immovable.
2. Each factor or circumstance by itself may not be conclusive or decisive, but the cumulative effect or the totality of the material facts and circumstances must be taken as a fair and reasonable guide to determine the nature of the property in a given case.

The decided cases discussed above enunciate two test to determine the character and nature of the property are:-

1. What is the intendment, object and purpose of installing the machinery – Whether it is the beneficial enjoyment of the building, land or structure, or the enjoyment of the very machinery?
2. The degree and manner of attachment or annexation of the machinery to the earth.

Where the machinery and the building or land on which it is installed are owned by one and the same person, normally it should be inferred unless the contrary is proved, that the object and purpose of installing the machinery is to have beneficial enjoyment of the entire building or land, but not the sole enjoyment of the very machinery iself. However, where the machinery imbedded or installed and the building or land belong to two different persons, the intendment and object of the person who is in possession and enjoyment of the property in installing or annexing the machinery must normally be presumed, until the contrary is proved, to be to exploit the benefit of the machinery alone, as he is not interested in the building or the land. Where the building or land or factory is taken on lease for a term by a lease and he installs certain machinery on the property during the lease period, it has to be held that his object and purpose of installing the machinery was the beneficial enjoyment of the very machinery during the period of his lease. In such a case, the fixture on the land cannot be termed to be a permanent one so as to bring it within the meaning of immovable property. The nature of the property on which the machinery was installed is also taken into consideration in determining the character of the machinery.

FINDINGS/CONCLUSION:

The cinema concern in a touring talkies. It is not a pucca cinema hall, but it is only a temporary shed built partly with zinc sheets and partly with oil cloth. The cabin portion is built with zinc sheets and the remaining tent is covered with oil cloth. The cinema concern is a temporary concern. The management of the concern obtained permission to exhibit shows temporarily during the period for which a temporary license has been granted by the concerned authorities. It admits of no doubt that a touring talkies would not be generally at one and the same place permanently but it will be moved freely from place depending upon the demand and the convenience of the proprietor.

The claimant of the touring talkies be it the appellant or the respondent‘s husband must be held to be a usufructuary mortgagee of the land belonging to the Raja of Mandasa. The lease obtained for running the Kumar Touring Talkies was only for a period of one year after the expiry of which there was no guarantee or assurance that the management of the concern would automatically get extension of period for running the shows. The management may or may not obtain such extension.

The person, be he the appellant or the plaintiff husband, who installed the cinema equipment on the land owned by the Raja of Mandasa, during the lease period for the specific and limited purpose of exhibiting cinema shows, being the usufructuary mortgagee of the land but not the owner thereof must have intended to have only the beneficial enjoyment of the cinema equipment but would not have intended to benefit the very land which was not owned by him. The lessee or the usufructuary mortgage of the land, in installing the diesel oil engine, cinema projector etc., must invariably have intended to make use of the said equipment during the limited lease period and thereafter, separate the same from the land, as he was not interested in the improvement of the land belonging to 35 another.

On a careful consideration of the entire facts and circumstances, it is crystal clear that the intendment, object and purpose of installing the cinema equipment in question, was only to have the beneficial enjoyment of the very equipment during the period of the lease or mortgage. The equipment or machinery must be held to have not been attached to the earth within the meaning of the expression “attached to the earth” under Section 3 of the Transfer of Property Act.

Hence, it is the intention, object and purpose of installing the machinery or movable property to immovable property along with the facts and circumstances of each case, creating a cumulative effect having no conclusive factor in particular which will determine the nature of and character of property in controversy.

JUDGEMENT:

For the first issue which arose in the suit, court is of the view that the equipment or machinery must be held to have not been attached to the earth within the meaning of the expression ‘attached to the earth under Section 3 of the Transfer of Property Act. The machinery is not only not attached to the earth, but also not permanently fastened to anything attached to the earth. Hence, the machinery in question must be held to be movable property but not immovable property. On that premise, it must be held that the suit for the recovery of possession, or in the alternative, for recovery of the value of such movable property, beyond the period of three years after the denial by the defendant of the plaintiff‘s right, is barred by limitation.

For the second issue which arose in the suit, court is of the view, in respect of our finding that the suit is barred by limitation, hence, we do not find it necessary to advert to question No. 2 relating to the ownership of the property.

This article is authored by Madhu Bhati, student of LL.B. at  University of Delhi, New Delhi.

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