Login
  • Bookmark
  • PDF
  • Share
  • CaseIQ

Shiv Dayal v. Puttu Lal

Allahabad High Court
Dec 15, 1931
Important Paras
Please sign up to view Important Paras.
Smart Summary (Beta)

Case Summary (Opinion by Sen, J.)

Factual and Procedural Background

On 2 August 1902 Bhola Chamar (husband of Mst. Amri, defendant No. 2) executed a usufructuary mortgage deed in favour of Maharaj Baldeo Prasad (father of plaintiffs Nos. 1 and 2) for Rs. 400. The mortgaged property comprised 18 mango trees and one jamun tree. The mortgage bond purported to be attested by four witnesses (one of them Baldeo Prasad). The mortgagor, the mortgagee and the four attesting witnesses are all dead at the time of this opinion.

On 26 April 1929 Puttu Lal and Banwari Lal (sons of the mortgagee) and Rustam Kisan (to whom the mango crops had been sold for one year) instituted a suit in the Court of the Munsif of Farrukhabad against Shib Dayal (the zamindar) seeking a perpetual injunction restraining interference with the plaintiffs' possession, alternatively possession, and Rs. 35 as damages. The suit was resisted on several grounds, including that Bhola was not the owner of the trees and that the mortgage bond was not executed with the necessary formalities. Eight issues were framed at trial. The Munsif dismissed the suit on the grounds that Bhola was not the owner of the trees and the plaintiffs' possession was not proved.

On appeal the lower appellate court held that Bhola was the owner of the trees, that he and the plaintiffs were in possession under the mortgage, but remanded the case under Order XLI, rule 23 of the Code of Civil Procedure, for trial of remaining issues. The defendant appealed to the court delivering this opinion.

Legal Issues Presented

  1. Whether the instrument dated 2 August 1902 (a usufructuary mortgage of fruit-bearing trees) constituted a mortgage of immovable property or an interest in immovable property under section 3 of the Transfer of Property Act and section 3(25) of the General Clauses Act.
  2. Whether, if the trees were immovable property or an interest in immovable property, the mortgage effected without compliance with the formalities of section 59 of the Transfer of Property Act conveyed title to the mortgagee.
  3. Relatedly, whether the intention of the contracting parties (as evidenced by the terms of the mortgage bond) required the transaction to be treated as a transfer of an interest in immovable property rather than a transfer of movable property.

Arguments of the Parties

Defendant-Appellant's Arguments

  • The defendant-appellant contended that no valid mortgage had been executed by Bhola and that, therefore, a suit founded upon the alleged mortgage must fail.
  • He also relied upon authorities (for example, a decision of the Judicial Commissioner of Oudh in Chandi v. Sat Narain) to argue that a fruit-bearing or timber grove may fall within the general definition of immovable property and that trees firmly rooted could be treated as immovable property under relevant definitions.

Plaintiffs' (Respondents') Arguments

  • The plaintiffs contended that the property mortgaged (mango and jamun trees) constituted "standing timber" within the negative definition in section 3 of the Transfer of Property Act, and therefore were not immovable property as defined by that Act; consequently, the formalities required by section 59 of the Transfer of Property Act were not necessary for the validity of the mortgage.
  • They relied upon authorities such as Krishnarao v. Bahaji to show that a mango tree might be classed as standing timber in some circumstances (for example, by local usage), and thus not always be immovable property for the purposes of the Transfer of Property Act.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Chandi v. Sat Narain (Judicial Commissioner of Oudh) Held that mortgage of a grove of mahua trees was a mortgage of immovable property; mahua grove not "timber". The defendant relied on it; the court observed the law was stated too broadly in that case and did not accept it as decisive for the present facts.
Ruttonji Edulji Shet v. Collector of Tanna (Privy Council) Statement that trees upon the land were part of the land and that the right to cut and sell was incident to proprietorship (case concerned construction of an 1845 lease). The court distinguished it as predating the Transfer of Property and General Clauses Acts and as addressing rights under a specific lease; therefore it was not helpful to the present issue.
Mathura Das v. Jadubir Thapa Where trees were sold with a view to their being cut down and removed, the sale was not of an interest in immovable property. Used to contrast the present case: Mathura Das involved sale to remove trees (movable), whereas the present mortgage restricted cutting and allowed enjoyment of fruits (indicative of interest in immovable property).
Katwaru Chamar v. Ram Adhin Upadhia Certain fruit-bearing trees hypothecated with other immovable property were held to fall within the definition of immovable property under the Transfer of Property Act. Cited as authority that fruit-bearing trees can constitute immovable property depending on context and terms of the transfer.
Seeni Chettiar v. Santhanathan Chettiar Assignment to cut and enjoy trees for a period conveyed an interest in immovable property where the contract was not made with a view to immediate severance and removal. Quoted to support the principle that contracts contemplating continued enjoyment from growth or produce indicate an interest in land (immovable property).
Ashloke Singh v. Bodha Ganderi (Ross, J.) The question whether a tree was standing timber or an interest in immovable property is one of intention; if the intention was enjoyment of fruits and not cutting, the property is immovable and requires a registered instrument. Relied upon as stating the settled legal principle that intention governs whether trees are treated as immovable property; the court applied this principle to the mortgage bond's terms.
Bodha Ganderi v. Ashloke Singh Affirmation of the principle in Ashloke Singh regarding intention and classification of trees as immovable property. Noted as an affirmation of Ross, J.'s view; supports the court's approach that intention is determinative.
Marshall v. Green (English authority) Principle: where at the time of contract the purchaser is to derive benefit from further growth or vegetation, the contract is for an interest in land; where the thing is to be immediately severed, the contract is for goods. Cited as authoritative statement underpinning the intention-based rule; the court invoked this to explain the line between movable and immovable treatment.
Krishnarao v. Bahaji Held that a mango tree, though primarily a fruit tree, may be classed as "timber" where local custom uses its wood for building; trees may not always be "standing timber" as per the Registration Act definition. The respondents relied on it; the court accepted it as showing context matters but reiterated that the decisive test is the parties' intention in each case.
Alisaheb Baba Diwakar v. Mohidin Sadik Patil Decision turned on the peculiar terms of the agreement (dated 13 Feb 1905) and followed Mathura Das; emphasises that terms of contract determine classification. Cited to illustrate that specific contractual terms can change characterization; court observed that the facts and terms in that case differed from the present mortgage bond.

Court's Reasoning and Analysis

The court began by analysing statutory definitions. Section 3 of the Transfer of Property Act excludes standing timber, growing crops and grass from the definition of "immovable property" (a negative definition). Section 3(25) of the General Clauses Act defines "immovable property" to include land, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth.

The court rejected any rigid rule classifying all fruit-bearing trees as either movable or immovable. Instead, it adopted the established principle (supported by the authorities cited) that classification depends upon the intention of the contracting parties as evidenced by the transaction's terms: where the contract contemplates continued enjoyment of produce and not immediate severance, the transaction should be treated as a transfer of an interest in immovable property; where immediate severance is contemplated, the transaction is for goods/movables.

The court examined the terms of the mortgage bond dated 2 August 1902. The bond authorised the mortgagee to remain in continued possession for the whole term, to appropriate the fruits and to appropriate branches when dry. The court interpreted these provisions as indicating that the parties did not intend the mortgagee to cut down the trees and convert them into timber or firewood. The continued enjoyment of fruits presupposed the continued existence of the trees in situ, firmly embedded in and deriving nourishment from the soil.

Applying the intention-based test (as articulated in the cited decisions such as Ashloke Singh, Seeni Chettiar and through Marshall v. Green), the court concluded that Bhola intended to mortgage the trees as immovable property (or as an interest in immovable property) under section 3 of the Transfer of Property Act and section 3(25) of the General Clauses Act.

Having reached that conclusion, the court proceeded to the legal consequence: the instrument purported to create an interest in immovable property but was effected without compliance with section 59 of the Transfer of Property Act (the formalities required for transfer of certain immovable property interests). Because the formalities prescribed by section 59 were not followed, no title passed to the mortgagee under the instrument.

The court also considered and distinguished several authorities relied upon by the parties (for example, Chandi v. Sat Narain and Ruttonji Edulji Shet v. Collector of Tanna), explaining why those decisions were not controlling in the present circumstances.

Holding and Implications

Core Holding: The court held that under the instrument dated 2 August 1902 Bhola intended to mortgage the trees as immovable property within the meaning of section 3 of the Transfer of Property Act and section 3(25) of the General Clauses Act, and that because the mortgage was effected without complying with the formalities prescribed by section 59 of the Transfer of Property Act, no title passed to the mortgagee.

Disposition and Direct Consequences:

  • The appeal is allowed.
  • The order of the Additional Sub-ordinate Judge dated 23 August 1930 is set aside.
  • The decree passed by the Munsif dated 23 January 1930 is restored.
  • The appellants are entitled to their costs of this Court and of the lower appellate court.

Broader Implications: The decision applies the established rule that classification of standing trees (as movable or immovable, or as an interest in immovable property) turns on the parties' intention as evidenced by the contract. The opinion applies existing authorities to the facts rather than announcing a novel rule; its consequence is the invalidation (for want of required formalities) of the mortgage as a transfer of an interest in immovable property in this case.

Show all summary ...

Sen, J.:— The facts of the case which have given rise to this appeal are briefly these. On the 2nd of August, 1902, one Bhola chamar, husband of Mst. Amri defendant No. 2, executed a usufructuary mortgage deed in favour of Maharaj Baldeo Prasad, father of plaintiffs Nos. 1 and 2, for Rs. 400. The mortgaged property consisted of 18 mango trees and one jamun tree. The mortgage bond purported to be attested by four witnesses, including one Baldeo Prasad. The mortgagor, the mortgagee and the four attesting witnesses are all dead. On the 26th of April, 1929, a suit was instituted by Puttu Lal and Banwari Lal, sons of the mortgagee, and by one Rustam kisan to whom the mango crops were sold for one year. They brought a suit in the court of the Munsif of Farrukhabad against Shib Dayal, the zamindar, for a perpetual injunction restraining the latter from interfering with the plaintiffs' possession, for possession in the alternative, and for recovery of Rs. 35 as damages. The suit was resisted inter alia upon the grounds that Bhola was not the owner of the trees and that the mortgage bond had not been executed with the necessary formalities. Eight issues were framed by the trial court. The suit was dismissed on the ground that Bhola was not the owner of the trees alleged to have been mortgaged by him and that the plaintiffs' possession was not proved. * * * *

The lower appellate court on appeal held that Bhola was the owner of the trees in dispute, that he was in possession of the property and that the plaintiffs were also in possession of the property under the mortgage in suit. As the lower appellate court was of opinion that the remaining issues had not been properly tried, it remanded the case under order XLI, rule 23, of the Code of Civil Procedure; hence the appeal.

[A portion of the judgment, not material for the purpose of this report, is here omitted.]

Upon these findings, the defendant appellant pleads that there was no valid mortgage executed by Bhola and that the suit in enforcement of a title founded upon the mortgage must fail. The plaintiffs however contend that the property mortgaged under the instrument dated the 2nd of August, 1902, was “standing limber” within the definition of section 3 of the Transfer of Property Act and was therefore not immovable property as defined in the Act. They therefore argue that for the validity of the mortgage it was not necessary to comply with the formalities imposed by section 59 of the Transfer of Property Act.

In section 3 of the Transfer of Property Act the definition of “immovable property” is neither comprehensive nor exhaustive. All that it says is that immovable property does not include standing timber, growing crops or grass. Here we have a negative definition but it is apparent that standing timber was intended to be ejusdem generis with “growing crops” or “grass”, and the latter articles not only do not connote the idea of permanence but their use and enjoyment can be secured by the operation of the sickle. In the General Clauses Act (Act X of 1897), section 3(25), “immovable property” has been defined to include land, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth. It has been urged by the defendant appellant that this definition is sufficiently comprehensive to include a fruit-bearing tree so long as it is firmly rooted in the soil. He relies as part of his argument upon a decision of the Judicial Commissioner of Oudh in Chandi v. Sat Narain (1), in which it has been held that the mortgage of a grove of mahua trees was a mortgage of an immovable property and that a mahua grove was not “timber”. “Trees attached to the earth, so long as they are not timber, must fall within the general definition of immovable property.” It appears to me that the law in this respect has been stated a little too broadly in this case. Reliance has also been placed upon a dictum of the Privy Council in Ruttonji Edulji Shet v. Collector of Tanna (2). Which runs as follows: “The trees upon the land were part of the land, and the right to cut down and sell those trees was incident to the proprietorship of the land.” This pronouncement was made not with reference to the definition of immovable property as contained in either the Transfer of Property Act or in the General Clauses Act, but long before either of these two Acts was placed upon the Statute Book. In this case their Lordships had to construe a lease or cowl dated the 31st of December, 1845, and all that they held was that, on the construction of this document, the lessee had the right to cut trees growing on the lands demised for the purpose of clearance and cultivation or for repairs and that he had no right to fell and carry away for sale unassessed timber growing on the demised lands. This decision cannot be of any assistance in the present case.

Whether or not a mortgage of fruit-bearing trees is a mortgage of immovable property is a question dependent in each case upon the intention of the contracting parties and cannot be settled by an inflexible rule. Where there is a mortgage with possession of fruit-bearing trees, with the intention that the mortgagee is to remain in possession during the years of the mortgage and enjoy the fruits and should not cut down the trees so as to convert them to either timber or firewood, it must be held that the trees so mortgaged were either immovable property or at least an interest in immovable property.

According to the terms of the mortgage bond in suit, the mortgagee is authorised to remain in continued possession during the whole term of the mortgage. He is authorised to appropriate the fruits. He is also authorised to appropriate the branches when dry. This clearly indicates that the parties never intended that the mortgagee in the exercise of his rights should cut down the trees and convert them into timber. The enjoyment of the fruits during the subsistence of the mortgage could be secured by the continued existence of the trees and would be rendered impossible by the severance of the trees from their native soil. For the continuance of such enjoyment these trees must exist firmly embedded in the earth and inseparable from the soil from which they are to derive continuous nourishment. In Mathura Das v. Jadubir Thapa certain trees standing in a certain area of land were sold and the question was whether an interest in immovable property was conveyed by this sale. Aikman, J., observed: “In my opinion it is nothing but an agreement by the opposite party whereby he sold the trees standing in a certain area of land. These trees were sold, not that the produce thereof might be enjoyed, but simply with a view to their being cut down and removed.” The present case however is essentially different, because the rights of the mortgagee, were restricted to mere enjoyment of the fruits and he was not competent to cut down and remove the trees. In Katwaru Chamar v. Ram Adhin Upadhia certain fruit-bearing trees were hypothecated along with other immovable property and it was held by Rafique, J., that they fell within the definition of immovable property as given in the Transfer of Property Act. In Seeni Chettiar v. Santhanathan Chettiar the principal point in dispute was whether the assignment of a right to cut and enjoy the trees for a period of four years dating from the 1st of January, 1891, purported to convey an interest in immovable property. Collins, C.J, observed: “It appears to me that there can be no doubt but that the yadast does convey an interest in immovable property; the contrary proposition is not arguable. It has long been settled that an agreement for the sale and purchase of growing grass, growing timber or underwood, or growing fruit, not made with a view to their immediate severance and removal from the soil and delivery as chattels to the purchaser, is a contract for the sale of an interest in land.” Subramania Ayyar, J., observed: “It is scarcely necessary to observe that though standing timber is, under the Registration Act III of 1877, movable property only, still parties entering into a contract with reference to such timber may expressly or by implication agree that the transferee of the timber shall enjoy, for a long or short period, some distinct benefit to arise out of the land on which the timber grows. In a case like that, the contract would undoubtedly be not, one in respect of mere movables, but would operate as a transfer of an interest in immovable property.” The general law in this respect has been exhaustively dealt with by Ross, J., in Ashloke Singh v. Bodha Ganderi , in which he held that the question whether a tree given to the plaintiff by one of the proprietors of the village by an unregistered and unstamped chitthi dated the 12th Kartik, 1315, was merely a standing timber or was an interest in immovable property, was a question of intention and that if the intention was that the plaintiffs should enjoy the fruits of the tree and not cut it down as timber, then the property demised was immovable property which could only be conveyed by a registered instrument. He supports his view by a reference to Marshall v. Green in which is to be found the following statement of law: “The principle of these decisions appears to be this, that wherever at the time of the contract it is contemplated that the purchaser should derive a benefit from the further growth of the thing sold from further vegetation and from the nutriment to be afforded by the land, the contract is to be considered as for an interest in land; but where the process of vegetation is over or the parties agree that the thing sold shall be immediately withdrawn from the land, the land is to be considered as a mere warehouse of the thing sold, and the contract is for goods.” The aforesaid principle has the high authority of Sir Edward Vaughan Williams and has a classic flavour about it. This statement of law has been accepted in case after case and is the settled law in English Courts. The decision of Ross, J., was affirmed in Bodha Ganderi v. Ashloke Singh (3).

The learned counsel for the respondents relies upon the decision in Krishnarao v. Bahaji (4) in which it has been held that a mango tree, which is primarily a fruit tree, might not always come within the term “standing timber” used in the definition of immovable property in section 3 of the Registration Act (XX of 1866), but it may be classed as a timber tree where according to the custom of a locality its wood is used in building houses. In my view whether or not a fruit-bearing tree is movable or immovable property is to be determined having reference to the intention of the contracting parties. The view of Parsons, J., appears to me to be very guarded and is not necessarily opposed to my view, Alisaheb Baba Diwakar v. Mohidin Sadik Patil was decided with reference to the peculiar terms of the agreement, dated the 13th of February, 1905, and the decision of Aikman, J., in Mathura Das v. Jadubir Thapa was followed. The terms of this contract were essentially different from the terms of the mortgage bond in suit. It was held by Scott, C.J, that a contract for cutting of all kinds of trees to be converted into charcoal upon the ground, excepting such trees as produce fruit or other forest produce, was not a contract for the sale of an interest in land but was an agreement relating to movable property and that trees answering the above description were standing timber within the meaning of the Transfer of Property Act, 1882, and as such were not immovable property.

I hold that under the instrument of 2nd of August, 1902, Ebola intended to mortgage the trees as immovable property within the meaning of section 3 of the Transfer of Property Act and section 3(25) of the General Clauses Act, and that the mortgage having been effected without the formalities as prescribed by section 59 of the Transfer of Property Act, no title passed to the mortgagee. The suit, therefore, was bound to fail.

I allow the appeal, set aside the order of the Additional Sub-ordinate Judge dated the 23rd of August, 1930, and restore the decree passed by the Munsif dated the 23rd of January, 1930. The appellants are entitled to have their costs of this Court and of the lower appellate court.