Transfer of Property Law

1. Marshall v Green – (1875-76) L. R. 1 C. P. D. 35 In the case, the defendant purchased some growing trees, by word of mouth, on the terms that he would remove them as soon as possible. Later, when the defendant cut down some trees, the plaintiff countermanded the sale and prohibited the defendant from cutting the remaining. However, the defendant still cut them and carried them away. It was not denied by either party that there was a verbal contract.

However, the question here was whether the contract was required to be in writing under the Statute of Frauds. The issue was whether there has been a transfer of interest in land (in which registration is compulsory) or whether it was a mere sale of timber. The Court held that it was a contract of sale and there had been acceptance of the agreement. It was not required to be in writing. Transfer of interest in land- when sale is of something which is to derive benefit from the land and to become altered by virtue of what it draws from the land.

“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in land; but where the process of vegetation is over, or the parties agree that the thing sold shall be immediately withdrawn from the land, the land is to be considered as a mere warehouse of the thing sold, and the contract is for goods. ” 2. Shantabai v. State of Bombay – AIR 1958 SC 532.

This case was a landmark case that laid down the test to determine when timber trees are standing timber and when they are immovable property. In this case, the petitioner filed a writ petition under Article 32 of the Constitution of India claiming that her fundamental right to cut and collect timber in the forest in question has been infringed. The petitioner’s husband, owner of the forests in question, had executed an unregistered deed, called a lease in her favour. According to the deed, she had the right to enter upon certain restricted areas in the forests and cut and take out bamboos, fuel wood and teak.

There was a prohibition on the felling of certain trees and a few other restrictions are also put on the cutting. The question was whether any proprietary interests or rights were conferred on the petitioner. In this case, the court held that although the document repeatedly calls itself a lease, it confers no rights of enjoyment in the land. There is merely a right to enter the land and cut and carry away the wood. There was no transfer of a right to enjoy the land itself, it is conferment of right to enter the land and take away a part of the forest produce.

In case of a lease, a person has a right to enjoy the land but not take it away. However, profit a prendre is in contrast to this. In the latter case, a person has the license to enter the lands only to take away a part of the produce of the soil and not for the purpose of enjoying it. If a tree draws sustenance from the soil it is immovable property. Bose J. further explains that, “a tree will continue to draw sustenance from the soil so long as it continues to stand and live and that physical fact of life cannot be altered by giving it another name and calling it “standing timber “.

But the amount of nourishment it takes, if it is felled at a reasonably early date, is so negligible that it can be ignored for all practical purposes The test here was whether it draws nourishment from the soil. 3. State of Orissa v. Titaghur Paper Milss Co. Ltd. In this case, the Orissa government and its sales tax department tried to tax transactions of severed bamboo. The State contended that the subject matter was goods, so it had legislative competency. However, the respondents’ contention was that the law tries to create a new class of goods not known to the law.

This was beyond the legislative competence of the state and hence, unconstitutional. The court held that the right to fell, cut, obtain, remove bamboos from forest areas for the purpose of converting it into paper was profit a prendre taking into consideration the duration of the contracts and the ancillary rights granted (like right to collect timber, fuel & other forest produce) . Also, the court held that it cannot be viewed as a composite agreement, one which relates to standing bamboos and is movable property and the other related to bamboos that will come into existence in future . The right is integral and indivisible.