A.R Lakshmanan, J.:— The auction purchasers are the petitioners in the above Original Petitions. The contesting respondents in these Writ Petitions are the Grama Panchayats of different areas.
2. The right to collect river sand from the ear-marked portion of the rivers in the Panchayats in question is the subject matter of these Writ Petitions. For giving the said right, the Panchayats used to sell the right to collect river sand from the portions of the rivers in the respective Panchayats. Auction was conducted by the Panchayat for giving the right. In all these cases, the auction notice published by the Panchayats were produced and marked as Exhibits. As per the notification, the auction was conducted at the office of the different Panchayats on the dates mentioned. The petitioners offered the highest amount for purchasing the right. The auction was confirmed by the Panchayat Committee at its meeting. Thereupon the Secretary of the Grama Panchayat concerned informed the respective petitioners to execute the necessary agreement in a stamp paper worth of 5% of the total bid amount. The petitioners gave a reply that they may be permitted to execute the necessary agreement in a stamp paper worth of Rs. 50/-. In support of their contention, the petitioners placed reliance on an order passed by this Court in C.M.P No. 21137/1998 in O.P No. 12137/1998 allowing the petitioners therein to execute the agreement in a stamp paper worth Rs. 50/- instead off 5% of the bid amount. The Panchayat did not give any reply with regard to the execution of the agreement and, therefore, the petitioners could not remove the sand. It is the contention of the petitioners that as per the terms of the auction, they are liable to execute an agreement in favour of the Panchayat and that the conditions contained in the agreement are mostly the condition for collection of river sand without affecting ecology and environment, payment of the auction amount in three instalments etc. and that the main purpose of executing an agreement is to give an undertaking before the Panchayat that the sand will be removed without committing any default; that the amount shall be remitted in time; that in case of any default, for cancellation of the licence, etc.
3. It is submitted by Mr. K.P Satheesan, learned counsel for the petitioners, that what the petitioners have purchased is only a permit and that it is not an immovable property and will not come within the categories prescribed under S. 206 of the Kerala Panchayat Raj Act. The relevant portion of S. 206 reads as follows:—
“206. Duty on transfer of property.— (1) The duty on transfer of property shall be levied (a) in the form of a surcharge on the duly imposed by the Kerala Stamp Act, 1959, on every instrument of the description specified below, which relates to the immovable property situated in the area under the jurisdiction of village panchayat; and
(b) at such rates as may be fixed by the Government not exceeding five per cent on the amount specified below against such instruments:
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4. According to the learned counsel, the right purchased by the petitioners does not attract the description of the instrument as provided in S. 206 and that the petitioners have purchased only the right to remove river sand and there is no incidence of purchase of immovable property involved and, therefore, the petitioners' liability is only to execute an agreement on stamp paper worth Rs. 50/- as provided under the Stamp Act. He also placed reliance on S. 218(4) of the Act, which reads thus:—
“218(4)— It shall not be lawful for any person to remove or appropriate for himself, any tree, earth, sand, metal, laterite, limeshell or such other articles of value as may be notified by the village panchayat from any land which is transferred to or vested in the village panchayat, under this Act, whether a poramboke or not, except under and in accordance with the terms and conditions of a permit issued by the village panchayat in this behalf and on payment of such fees and compensation at the rate determined, by the village panchayat.”
5. The Deputy Director of Panchayats filed counter affidavit.
6. The Grama Panchayat filed its counter affidavit. According to Mr. Siby Mathew, as per the notification, the auction was conducted at the office of the Panchayat and that the amount offered by the petitioners being the highest amount for purchasing the right, the auction was confirmed by the Panchayat Committee at its meeting and thereupon the Panchayat informed the petitioners to execute the necessary agreement in a stamp paper worth of 5% of the total bid amount. As per the terms of the auction, the petitioners are liable to execute an agreement in favour of the Panchayat and liable to pay the auction amount in three instalments. However, before being allowed to remove sand, the petitioners have to execute agreement in the stamp paper of the value of 5% of the auction amount. He also placed reliance on Ss. 218(4) and 206 of the Kerala Panchayat Raj Act, S. 3(26) of the General Clauses Act and S. 54 of the Transfer of Property Act. According to Mr. Siby Mathew, the term “profit a prendre” includes the right to take soil, gravel, minerals and the like from another's land and hence the provisions under S. 206 of the Kerala Panchayat Raj Act are attracted and the agreement has to be executed on a stamp paper of the value of 5% of the auction amount and not Rs. 50/-. Arguing further, he would submit that “profit a prendre” is a right to take something of another person's land and it may be fully defined as a right to enter another's land and take some profit of the soil, or a portion of the soil, itself, for the use of the owner of the right.
7. The auction notice and the agreement executed between parties were also placed before us. The terms of auction also provides that after the approval of the auction by the Panchayat an agreement on stamp paper worth 5% of the total bid amount shall be executed within the date as directed from the Panchayat Office and those who are unable to produce solvency certificate while executing the agreement shall remit the auction amount in full. In support of the contentions, the learned counsel for the Panchayat cited the following decisions: Kanji and Moolji Brothers v. T. Shanmugam Pillai, 1932 MLJ (Vol. 63) 537 : (1933) (Vol. LVI) ILR Madras 169, Bageshwari Charan v. Jagarnath Kauri, AIR 1932 PC 55, Udaya Pratapa v. Gourachendra Dyano, AIR 1937 Madras 656, Venugopala v. Thiruvavukkarasu, AIR (36) 1949 Madras 148, Udayanarayan v. Badia Dasu, AIR (39) 1952 Orissa 116, Ananda Behera v. State of Orissa, AIR 1956 SC 17, Mohammed Khan v. Ramnarayan, AIR 1956 Orissa 156, Perumal v. Ramaswami, AIR 1969 Madras 346, State of W.B v. Saradiya Thakurani, (1972) 4 SCC 158 : AIR 1971 SC 2097, Venkatakrishna Reddiar v. Swamikannu, AIR 1972 Madras 129, Dropadi Devi v. Ram Das, AIR 1974 Allahabad 473, Bihar E.G.F Co-op. Society v. Sipahi Singh, (1977) 4 SCC 145 : AIR 1977 SC 2149, Hali Sukhan v. Board of Revenue, AIR 1979 Allahabad 310, Tarkeshwar Sio Thakur Jiu v. B.D Dev & Co., (1979) 3 SCC 106 : AIR 1979 SC 1669 and R. Saravanan v. Sri. Vedaranyaswara swami Devasthanam, AIR 1982 Madras 396.
8. We have carefully considered the rival submissions made by both parties. As per the terms of the auction, the petitioners are liable to execute an agreement in favour of the Panchayat and that the petitioners have to execute agreements in the stamp paper of the value of 5% of the auction amount. The submission made by the learned counsel for the petitioners Mr. K.P Satheesan and the interpretation given by him to S. 218(4) of the Kerala Panchayat Raj Act are not correct and are based on a misinterpretation of the said Section. Even under the terms of the auction notice and the agreement and in accordance with the provisions of S. 206, the auction purchasers have to execute the agreement on a stamp paper of the value of 5% of the bid amount. Execution of the agreement under S. 206 and obtaining a permit under S. 218(4) are different and they act in different contingencies. As pointed out by the learned counsel for the Panchayat even after the execution of the agreement, the auction purchasers have to take out permission under S. 218(4). S. 206 of the Kerala Panchayat Raj Act provides that a duty on transfer of property shall be levied at the rate prescribed therein not exceeding 5% on the specified instruments. The right, in the instant case, purchased by the petitioners, in our opinion, attracts the description of the instrument as provided in the said Section and it is not right to say that the petitioners purchased only a right to remove the river sand and that there is no incidence of purchase of immovable property and that the petitioners' liability is only to execute document in a stamp paper worth Rs. 50/- as provided under the Stamp Act. As already seen, the right to collect and remove sand being a “profit a prendre”, i.e a profit or benefit arising out of the land, it has to be regarded as immovable property within the meaning of the Transfer of Property Act read in the light of S. 3(26) of the General Clauses Act. If a “profit a prendre” is tangible immovable property, its sale has to be by means of a registered instrument in case its value exceeds Rs. 100/- in view of S. 54 of the Transfer of Property Act. Therefore, the grant of the “profit a prendre” has to be done by means of a registered instrument. By virtue of the combined operation of the Transfer of Property Act and the provisions of the General Clauses Act, “immovable property” includes land, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth except timber, growing crops or grass. The benefit to arise out of land is an interest in land and, therefore, immovable property. Hence the right to collect sand, to catch fish and carry fishing in specific portion of a pond or lake or river arises out of the use of the land. A lease, being a transfer of immovable property, the benefit to arise, in such a case, is an interest in immovable property and, therefore, immovable property.
9. The right to collect and remove sand being a “profit a prendre”, it has to be regarded as immovable property within the meaning of the Transfer of Property Act read in conjunction with S. 3(26) of the General Clauses Act.
10. S. 3(26) of the General Clauses Act defines “immovable property”, which reads as follows:—
“(26) “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”.
11. The expression “immovable property” comprehends all that would be real property according to English law and possibly more. The term “immovable property” is defined at least in three Indian enactments (1) The General Clauses Act, (2) The Registration Act and (3) The Transfer of Property Act. The first two are not of much assistance, for they merely say that immovable property includes things attached to the earth, or permanently fastened to anything attached to the earth. They give no guidance as to what is meant by “attached” or “permanently fastened”. The third enactment, by S. 3, describes what is meant by “attached to the earth”. To say, (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c)attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. Courts have held that a “coal land” does possess all the attributes of immovable property. The High Courts of Madras and Kerala have held in several cases that for a chattel to become part of immovable property and to be regarded as such property, it must become attached to the immovable property as permanently as a building or a tree is attached to the earth.
12. The Bombay High Court held that transfer of benefit to arise out of land amounts to transfer of interest in immovable property. Similarly, the transfer of rights under a lease of immovable property amounts to transfer of immovable property within the purview of S. 105 of the Transfer of Property Act. The phrase “any person interested in the land” appearing in S. 10(3) of the Petroleum Pipelines (Acquisition of Right of User in Land) Act, 1962 includes personal interest in the sub-soil and hence, compensation is payable for the sub-soil rights. In regard to the right to collect market dues, Court have held that “bazaar” constitutes a benefit arising out of land and is immovable property within the meaning of S. 3(26) of the General Clauses Act. The High Court of Allahabad in Dropadi Devi v. Ram Das, AIR 1974 Allahabad 473 : 1974 All. LJ 521, also held that even the right to collect market dues in respect of a market held on that piece of land is also an immovable property. The standing crops on the land on the date of delivery of possession are also immovable property as held by various Courts. Right of ferry is also immovable property as held in Krishna v. Akilanda, ILR 13 Madras 54.
13. S. 3 of Transfer of Property Act defines “immovable property”, which is as follows:—
“immovable property does not include standing timber, growing crops, or grass”
14. This Act defines the phrase “attached to the earth”, but, it gives no definition to “immovable property” beyond excluding standing timber, growing crops and grass. In Morgan v. Russell, (1909) 1 F.B 357, the Court held that an agreement to sell all the slag and cinder forming part of the soil on certain premises was held to be a contract to grant an interest in land. This was followed in a Madras case, Kanjee and Mooljee Bros. v. Shanmugam, (1933) 56 Madras 169 : 63 MLJ 587, where an agreement under which the plaintiff was given the right to remove soil and earth from the defendant's land and was to level the plots after removal was held to be an agreement for sale of an interest in land. S. 2(6) of the Registration Act defines “immovable property” as follows:—
“S. 2(6)— “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;”
15. We shall now consider some of the case laws on the subject:
1932 MLJ (Vol. 63) 587 : (1933) (Vol. LVI) ILR Madras 169 - It is a case directly on point. In that case, a written agreement was entered into between parties, who were respectively styled as ‘lessor’ and ‘lessee’ in the said document. The agreement, inter-alia, provided as follows:—
“(1) that the lessor has received from the lessee a certain amount as compensation, (2) that the lessee shall be at liberty to remove sand or earth from the plots above-mentioned (to a specific depth) and level the plots after removal, (3) that the land should be vacated on or before 1st October 1928 after the removal of sand. The agreement was not registered. A suit was filed by S against K for damages for breach of the covenant to level the land after removing sand or earth therefrom as provided in the agreement.”
16. The Division Bench held that the agreement was for transfer of an interest in immovable property.
17. AIR 1937 Madras 656 - A lease for a period of three years of the right to collect the rents due by the tenants or ryots to the zamindar must be registered as the rent is certainly a benefit arising in future out of land and it is an interest in land.
18. AIR (36) 1949 Madras 148 - In that case by an agreement of rent in respect of the toddy yield of cocoanut trees, the defendant obtained the right to enjoy the toddy yield from the trees and the right to enter upon the land for that purpose and did not obtain any right in and to land. He was not entitled to the exclusive possession of the land as such but the owner was entitled to make such use of the vacant land as he wanted to and was also expected at his own cost to water the trees, keep them in good condition and engage men to do all the acts of bettering the garden. Rajamannar, Offg. C.J, held that the defendant was not a lessee of the garden as such. So far as the land was concerned, he was only a licensee and his right to enter upon the land and to use the land was only so long as he had the right to enjoy the toddy yield from the trees and that the right to tap the cocoanut trees and obtain toddy was in the nature of immovable property because it was a benefit which arose out of land. Consequently this right to which the defendant was entitled was in the nature of a leasehold right.
19. AIR (39) 1952 Orissa 116 - A Division Bench of the Orissa High Court held that the right to collect rent from tenants who pay it for use and occupation of lands is a right to the benefits arising out of those lands and hence a lease of such a right to collect rent is a lease of immovable property within the meaning of S. 107, T.P Act, as well as Specific Relief Act and, therefore, the document was compulsorily registrable.
20. AIR 1957 SC 17 - In this case, the Supreme Court held that the sale of a right to catch and carry away fish in specific portions of the takeover a specified future period amounts to a license to enter on the land coupled with a grant to catch and carry away the fish, that is to say, it is a profit a prendre, which is regarded in India as a benefit that arises out of the land and as such is immovable property.
21. AIR 1969 Madras 346 - In that case, a Division Bench of the Madras High Court held as follows:—
“The question whether when a chattel is attached to the earth or a building, it is immovable property, is a mixed question of law and fact, and has to be decided in the light of particular facts in each case. Obvious cases may not call for tests. Where doubt arises, certain tests have been formulated in particular contexts, which, if literally applied, may not yield always a proper and correct result. While general tests pointed out by judicial decisions, in the light of specific facts, may be borne in mind, eventually the decision on the question should depend upon how the Court, looking at the facts as a whole, feels on the matter. English law relating to fixtures cannot be bodily applied to conditions in this country.
22. Broadly speaking, the degree, manner, extent and strength of attachment of the chattel to the earth or building, are the main features to be regarded. All the three aspects, in the description, show that the attachment should be such as to partake of the character of the attachment of the trees or shrubs rooted to the earth, or walls or buildings imbedded in that sense, the further test is whether such an attachment is for the permanent beneficial enjoyment of the immovable property to which it is attached. For a chattel to become part of immovable property and to be regarded as such property, it must become attached to the immovable property as permanently as a building or a tree is attached to the earth. If, in the nature of things, the property is a movable property and for its beneficial use or enjoyment, it is necessary to imbed it or fix it on earth, though permanently, that is, when it is in use, it should not be regarded as immovable property for that reason.”
23. AIR 1974 Allahabad 473 - In that case, the plaintiff obtained a licence for collecting market dues. The question for consideration was as to the right to collect market dues, an immovable property. The lease was for a period of three years and validity created by a registered instrument executed by the lessor and the lessee. The Court held that the right to collect market dues in respect of a market held on that piece of land is also an “immovable property”, which can be subject to transfer by lease or otherwise.
24. (1977) 4 SCC 145 : AIR 1977 SC 2149 - In this case, the Supreme Court followed the decision reported in Ananda Behera v. State of Orissa, AIR 1956 SC 17, and held:—
“The right to catch and carry away the fish being a “profit a prendre” i.e a profit or benefit arising out of the land, it has to be regarded as immovable property within the meaning of the Transfer of Property Act read in the light of S. 3(26) of the General Clauses Act”.
25. AIR 1979 Allahabad 310 - A Full Bench of the Allahabad High Court held that by an agreement for three years granting right to take out by digging of mature and rubbish accumulated in trenches and drains within municipal area and selling it amounts to a benefit arising out of land and as such it is immovable property.
26. (1979) 3 SCC 106 : AIR 1979 SC 1669 - In this case, the Supreme Court was considering a case of land with large deposit of sand and escavation and removal of land at the date of vesting. The Supreme Court was also considering the expression “land comprised in or appertained to a mine”. The Court held that the expression comprehends all that would be real property according to English law and possibly more and the benefit arising out of land is immovable property. The Court also held that the right to carry on mining operations is a right to enjoy immovable property. It is useful to extract paragraphs 34 and 35:—
“The definition of “immovable property” given in S. 3, para 2 of the Act is in the negative, and is not exhaustive. Therefore, the definition given in S. 3(26) of the General Clauses Act (X of 1897) will apply to the expression used in this Act, except as modified by the definition in the first clause of S. 3. According to the definition given in S. 3(26) of the General Clauses Act, “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”. In short, the expression “immovable property” comprehends all that would be real property according to English Law and possibly more (See (1893) 1 Ind App. 34 (PC). Thus, every interest in ‘immovable property’ or a benefit arising out of land, will be “immovable property” for the purpose of S. 105, Transfer of Property Act.
A right to carry on mining operations in land to extract a specified mineral and to remove and appropriate that mineral, is a ‘right to enjoy immovable property’ within the meaning of S. 105; more so, when - as in the instant case - it is coupled with a right to be in its exclusive khas possession for a specified period. The ‘right to enjoy immovable property’ spoken of in S. 105, means the right to enjoy the property in the manner in which that property can be enjoyed. If the subject-matter of the lease is mineral land or a sand-mine, as in the case before us, it can only be enjoyed and occupied by the lessee by working it, as indicated in S. 108, Transfer of Property Act, which regulates the rights and liabilities of lessors and lessees of immovable property”.
27. A close scrutiny of the above judgments and the rulings rendered by the various Courts would clearly reveal that the petitioners have purchased a right to remove the river sand and there is incidence of purchase of immovable property and that their liability is to execute agreements in stamp paper of the value of 5% of the total bid amount. In this case, the right to collect and remove sand being a “profit a prendre”, it has to be regarded as immovable property within the meaning of the Transfer of Property Act read in the light of S. 3(26) of the General Clauses Act. In this case, a right to enter Panchayats' land and to take some profit of the soil or a portion of the soil itself was granted to the petitioners. The right given is to take the soil from the land. Hence, the provisions of S. 206 of the Kerala Panchayat Raj Act are attracted and the agreement has to executed by all the petitioners on a stamp paper of the value of 5% of the total bid amount. The contention raised by the petitioners are not tenable and all the Writ Petitions fails and they are accordingly dismissed. However, we make no order as to costs.