1. This appeal is directed against the judgment and preliminary decree passed by the learned Joint Civil Judge. Senior Division, Nadiad, in Special Suit No.50 of 1964, dated 28th July 1966.
2. The appellants are original defendants Nos. 1 to 12. Respondent No.2 Ramanlal Narandas is original defendant No.13, whose name has been deleted at the request of the appellants' Advocate. Respondent No.1 Dolatram Chauharmal is original plaintiff, (parties will be hereinafter referred to as 'the plaintiff' and 'the defendants' as the case may be).
3. The plaintiff filed the aforesaid suit for recovery of his mortgage dues to the tune of Rs.1,22,980/- by sale of the mortgaged properties, described in Schedule 'A' attached to the plaint. A said suit was based on the mortgage deed, Ex.108, dated 29-9-1952, passed by defendant No.1 Narayanbhat Mahijibhai and one Ranchhodhai Bakorbhai, whose heirs and legal representatives are defendants Nos.2 to 12.
4-7. x x x x x
8. Mr. A.N.Surti, appearing for defendants Nos. 1 to 12 raised only two contentions before us. The main contention raised by him is that the suit is barred by limitation. The second contention raised by him is that in respect of pipe-lines, the Court should not have passed an order regarding sale in the terms as has been done. It should have been confined to pipe-lines situated in the lands in respect of which leases, Exs.122 and 132 had been executed. Pipe-lines situated in the fields of other persons should not have been made the subject-matter of sale for realisation of the dues as those persons were not before the Court.
9. x x x x x
10. In Section 3 of the Transfer of Property Act, 1882, 'immovable property' has been defined as under:
'In this Act, unless there is something repugnant in the subject or context--
'immovable property' does not include standing timber, growing crops or grass.'
It is further stated therein:
'attached to earth' means--
(a) rooted in the earth, 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.'
11. In the General Clauses Act, 1897, in Section 3, clause 26 'immoveable property' has been defined as under:
''Immoveable 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.'
12. In Section 2(6) of the Indian Registration Act, 1908. 'Immoveable property'' has been defined as under:
''Immoveable 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.'
13-14. x x x x x.
15. Keeping these facts in mind brought on the record, we will examine the rival contentions urged at the Bar.
16. Mr. Surti invited our attention to the decision of a single Judge of the Madras High Court in Thangammal v. Murugammal : AIR1970Mad325 . It is observed therein:
'Although a superstructure on land, being a thing attached to earth, would be immoveable property both under Transfer of Property Act and the General Clauses Act, by fiction created by Section 28 of the Presidency Small Cause Courts Act it shall be deemed as moveable property in the circumstances mentioned in that section.'
It was only because of a deeming fiction introduced by Section 28 of the Presidency Small Cause Court Act, such properties were treated as moveable properties for the purposes of execution. That position has been made quite clear by the learned Judge at page 327 observing:
'Section 28 of the Act enacts that, for the purpose of the execution of a decree of the Small Cause Court and for the purpose of deciding all questions arising in the execution of the decree, anything attached to the immoveable property shall be deemed to be moveable property'.
That decision has, therefore, no application.
17. In J.H. Subhiah v. Govindrao, AIR 1953 Nag 224 a Division Bench of the Nagpur High Court has made the following pertinent observations:
'In order to determine what is and what is not immoveable property as a result of attachment or annexation to land, two tests have been laid down, viz., (1) the degree of mode of annexation, and (2) the object of annexation. Of the two test the latter is the more important, and it is a question which depends upon the particular circumstances of each case.'
Mr. Surti has learned heavily on the second test referred to therein, viz., 'the object of annexation'. In support of his contention. It is further observed in this decision:
'Where the land, on which the machinery belonging to 'A' was erected, belonged to 'B' it must be assumed that the machinery was erected by 'A' either as a license or as a temporary tenant and that he did not intend the machinery to form part and parcel of the immoveable property to which it was attached for the time being.'
It is significant to note that there, a question arose between a judgment-debtor and a judgment-creditor in respect of the procedure to be followed in attachment of such properties. If the property was immoveable property, the procedure adopted was not the procedure that has to be adopted for the purposes of attaching immoveable properties. Furthermore, in para 5, at page 225, evidence brought on the record in respect of the property, has been referred to as under:
'The boiler attached in this case has four wheels. These wheels are not actually embedded in the earth but some earth has been raised over the wheels with the object that the wheels may not move. There is not a masonry foundation for the working of the shaft. The various saws were not to be seen but the places where they were fixed were shown to me.'
After referring to the definition of 'immoveable property' in General Clauses Act as well as Transfer of Property Act, and referring to certain decisions the relevant observations made at page 225 are:
'The English law of 'fixtures' does not strictly apply to India, but the classification as immoveable property of things attached to the earth bears some analogy to the English law of 'fixture'. Under the English law, generally speaking, whatever is annexed to the freehold becomes part of the realty. But certain principles of English law which distinguish between what is and what is not immoveable properties a result of attachment or annexation to land may be referred to with advantage in this connection. In the leading case of 'Holland v. Hodgson'. (1872) 7 CP 328 at p 334 Blackburn, J. made the following observations:
'There is no doubt that 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. When the article in question is no further attached to the land, them (sic) by its own weight it is generally to be considered a mere chattel; see-- 'Writ-shear v. Cottrell', (1853) 1 E1 & B1 674, and the case there cited. But even in such a case if the intention is apparent to make the articles part of the land, they do become part of the land.'
It is thus evident that even in this decision, intention is considered to be one of the important factors. It is further observed therein:
'An anchor similarly fixed in the soil for the purpose of bearing the strain of the chain of a suspension bridge would be part of the land. Perhaps the true rule is, that articles not otherwise attached to the land than by their own weight are not to be considered as part of the land, unless the circumstances are such as to shew that they were intended to be part of the land, the onus of shewing that they were so intended lying on those assert that they have ceased to be chattels, and that, on the contrary an article which is affixed to the land even slightly is to be considered as part of the land, unless the circumstances are such as to shew that it was intends all along to continue a chattel, the onus lying on those who contend that it is a chattel.'
In our opinion, these observations lay down a correct ratio as regards the burden of proof and this ratio has to be kept in mind in the present case. It is further observed therein in para 12:
'But where, as in the present case, the machinery is attached to land which is the property of somebody else which is only in the temporary occupation of the owner of the machinery the presumption is all the other way.'
Reliance has been placed by Mr. Surti on these observations. In para 13, it has been observed:
'Another circumstances which may be referred to in this connection is the fact that there was no registered instrument evidencing the purchase by the appellant of the machinery in question from the decree-holders themselves. It has been admitted by the decree-holders that in 1943 they sold the machinery in question to the judgment-debtor for Rs.30,000/-. The parties treated the transaction as one relating to moveable property and therefore did not think it necessary to have a registered document to support the transaction.'
In the instant case, position is quite to the contrary. Document of mortgage has been registered and the stamp has been paid as if the property mortgaged was the immoveable property. It is further observed in this decision:
'Apparently, the transaction in 1943, even as the sale in question in the present instance, related only to the machinery as detached from the land to which it had been temporarily attached. On both the occasions the owners of the land did not intend to deal with the land itself. As already indicated, in the present instance the decree-holders themselves have been it clear during the execution proceedings that the machinery to be sold as detached from the land to which it is attached.' In our opinion, on close scrutiny of this decision, it clearly appears that there is no such inflexible rule laid down as has been suggested on behalf of defendants Nos.1 to 12 by Mr. Surti. On the contrary this decision supports the submissions made by Mr. Daru.
18. Another decision relied upon by Mr. Surti was the decision of a single Judge of the Madras High Court in S.P.K.N. Subramanian Firm v. Chidambaram. : AIR1940Mad527 . It is observed therein also after referring to the position of law in England, at page 528, after referring to the decision in Reynolds v. Ashby and Sons (1904) AC 406, to which we will make reference at an appropriate stage, as it lays down the position of law very succinctly in this behalf:
'But I do not read those cases as laying down an absolute rule that wherever there is an oil engine fixed with nuts to a concrete platform, it is necessarily and for all purposes immoveable property. As Lord Lindley has observed in the last quoted case, in deciding whether that which has once been a chattel has become annexed to the reaity, attention should be paid to the nature of the thing itself, the mode of its attachment and the circumstances in which it came to be attached, the object for which it has been introduced and also the relative positions of the rival claimants.'
Mr. Daru has laid considerable emphasis on one of the import factors to be borne in mind. v.z. relative positions of the rival claimants. At page 529, it is further observed:
'Now, in deciding whether or not a transaction relating to an engine is a transaction relating to immoveable property, one is entitled, I think, to have regard not merely to the nature of the attachment by which the engine is fixed on the ground but also to the circumstances in which it came to be fixed, the title of the person fixing it in the immoveable property and the object of the transaction by which the engine is transferred or bound.'
Mr. Daru, has in our opinion, rightly laid emphasis on this last factor referred to therein viz. 'Object of the transaction by which the engine is transferred or bound. Which is also an important factor. It is further observed therein:
'When defendants 1 and 2 introduced this engine into defendant 5's premises, they could not have intended to make a permanent improvement to the immoveable property. Their object must from the very circumstances in which the installation was made be deemed to have been to utilise the machinery for their own profit so long as they had the use of the premises and to sell it if and when their lease terminated.'
At page 530, the relevant observations made are:
'When we come to consider the circumstances of the actual security bond, then quite clearly it cannot have been the intention of the parties to bring about a transaction relating to immoveable property, for defendants 1 and 2 were in daily expectation of being evicted from the premises and they could not give to the plaintiff any rights of a valuable nature in the immoveable property as such. All that they could give would be a right to the plaintiff to hold as security for their debt a chattel over which they had a power of disposal which implied its severance from the base to which it was for the time being attached.'
It was a case of a lease for a short period. This decision also, in our opinion, does not lay down any rule of law which really supports the contention urged by Mr. Surti.
19. In Jnam Chand v. Jugal Kishore : AIR1960Cal331 , it is observed by a single Judge of the Calcutta High Court:
'In order to decide whether machinery fastened to the earth is immoveable property, the relevant period to be taken into consideration is when the machinery is brought on the land and fixed up for the purpose of running. The test is the object with which the machinery is affixed to ht land and the manner in which it is affixed. If the mode of attachment is imbedding in the earth as in the case of walls and buildings or if the object of attachment is for the permanent beneficial enjoyment of the land to which it is attached then the property will be immoveable property within the meaning of Section 3 of the Transfer of Property Act but not otherwise.
In deciding the question regard must be had not merely to the nature of the attachment by which the machinery in which it was fixed on the ground, but also to the circumstances in which it came to be fixed, the title of the person fixing it in the immoveable property and the object of the transaction'.
It will be significant to note that in that decision also it has been stated taking all the documents into consideration that the idea of 'A' was to create a charge on the machinery unconnected with his interest in the land. In the instant case, as said earlier by us, leasehold interest in the lands along with the aforesaid units of machinery and plant have been the subject-matter of the transaction in question. This decision also, therefore, does not lay down any ratio which really supports the contention urged by Mr. Surti.
20. In Perumal Naicker v. T. Ramaswami Kone. : AIR1969Mad346 . Veeraswami. J., speaking for the Division Bench has observed:
'He was impleaded as the second defendant in the suit, which was to set aside the sale on the ground, among others, that the engine being a permanent fixture to the land, it was an immoveable property, and that in the recovery proceedings the procedure applicable to such property having applicable to such property having not been applied, the sale itself was invalid.'
It is thus evident that the question which the Division Bench of the Madras High Court had to decide was whether the sale became invalid in not following the procedure applicable to such property, as an argument was advanced that such property was immoveable property. In that context, the observations made are:
'The question whether when a chattel is attached to the earth or a building, it is immoveable 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.
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 tress 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 immoveable 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 moveable 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.
The attachment of the oil engine to earth though it is undoubtedly a fixture, is for the beneficial enjoyment of the engine itself and in order to use the engine, it has to be attached to the earth and the attachment lasts only so long as the engine is used. When it is not used, it can be detached and shifted to some other place. The attachment in such a case, does not make the engine part of the land and as immovable property. The mere fact that the engine stood affixed to the earth for a long period does not make the fixture a permanent one for the fixture was necessary for use of the engine during that period.'
It is significant to note that in the instant case. We are not merely concerned with the oil engines and the pumps. We are concerned with such unit embedded in a particular manner coupled with the interest in the lands, no doubt a lease hold interest in the lands themselves.
21. Another decision relied upon by Mr. Surti is the decision of a Division Bench of Hyderabad High Court in Addu Achair v. The Custodian Evacues Property. AIR 1953 Hyd 14. Same tests are laid down as in the aforesaid cases. The question that arose for decision was as regards stamp duty payable on the conveyance.
22. In Khan Chand v. Nur Muhammad, AIR 1936 Lah 242. it is observed:
'Flour miss, as such, can change hands and be removed from one place to another and so it is not immoveable property within the meaning of section 2(6) of the Registration Act.'
A decision of the Bombay High Court in N. C. Macleod v. Kikabhoy Khushal, (1901) ILR 25 Bom 659, was followed. It is significant to note that it was a case between a lessor and a lessee, where the, lessee was a tenant for a limited period.
23. In Lokashan Jain Udyog Mandir Ltd. v. Kalooram. AIR 1965 Raj 15. a Division Bench of the Rajasthan High Court has observed:
'By an agreement the defendant obtained a lease from the plaintiff of the right to run a printing press for a period of three years together with the entire machinery, types, furniture, etc., which was part and parcel of the press. The building in which the press was situated did not belong to the plaintiff but belonged to a third party , the plaintiff being in possession of the building merely as a tenant. The was not permanent or a long term tenancy but it was a monthly or a yearly one or a tenancy for a period of three years certain from the date the agreement was executed. It was specifically provided in the agreement that not only the defendant would be at liberty to obtain alternative accommodation for the running of the press but it was left open to him to remove the machinery if and when he liked to do so. It was clearly within the machinery of the press need not remain fastened to or in the premises where the press was situate at the time of the agreement.
It was held that considering the terms of the tenancy between the plaintiff and the third party, there could be no question of the machinery in the case being permanently fastened to anything which is attached to the earth. Further, the machinery was not fixed by the plaintiff for any such object as the permanent beneficial enjoyment of the building in which the press was located and therefore it did not fulfil the essential requirements of the clause 'attached to the earth' in Section 3, Transfer of Property Act. Therefore the machinery in this case did not fall within the definition of immoveable property in law, and consequently the agreement even if accepted as a lease was not and would not be a leased with respect to immoveable property requiring compulsory registration within the meaning of Section 17(1)(d) of the Registration Act.'
24. As said by us earlier, in the Calcutta decision : AIR1960Cal331 there was a monthly tenancy. In the Madras decision : AIR1940Mad527 leased was for a period of three years. We have to bear in mind that in the position where a plant equipped with the necessary machinery to draw water from the well and to supply water to other fields, connected with the leasehold interest in the lands whereon some super-matter of the mortgage transaction. We have to find out whether this subject-matter constitutes immoveable property when we have to decide that question in the context of the period of limitation. Further more, we have to decide that question not between a lessor and a lessee, but between a mortgagor and a mortgage. Possession of the rival claimants is an important factor to be borne in mind. Furthermore, leases in the instant case were no for a short duration, viz, three years or for a shorter duration. The leases were also for a period of 21 years. Furthermore, the mortgagor under this deed, undertook an obligation not to stop this business during the subsistence of the mortgage. It therefore. Means that this mortgage. It therefore, means that this unit was to be kept intact. The terms of the lease, therefore, that on the expiry of the lease period, the lessee had to return the land in the same condition in which it was received, and if there were any holes created, they had to be repaired, will not affect the possession. The lessee had installed the unit and installed in the manner referred to by us earlier. It was the lessee who had thereafter executed the mortgage-deed, evidenced by Ex. 108, and we have to decided this question, keeping in mind the position of the mortgagor and the mortgagee and not the lessor and the lessee.
25. In Hemendra Lal Roy v. Indo- Swiss Trading Co., Ltd., AIR 1935 Pat 375. A Division Bench of the Patn? High Court had to deal with the question in the context of the period of limitation. It has been observed:
'Until the power house is dismantled, the machineries,, etc., which are fixed to the earth are uprooted and until the buildings are demolished the materials with which they were constructed cannot be called, 'moveable property'. The undertaking is akin to 'immoveable property' rather than to 'moveable property' and any suit for its possession would not be governed by Article 49 but by Article 144.'
At page 379, in the relevant para 21 the observations made are:
'Well, until the power house is dismantled, the machineries, etc., which are fixed to the earth are uprooted and until the buildings are demolished the material with which they were constructed cannot be called 'moveable property'. Even up to this date the undertaking which consists of the power house and other connected buildings, plants and machineries, supply mains and lines etc, which are really fixtures, is functions as one unit.'
These observations are useful for the purposes of taking into account that one has not to look to different items viz, pumps, pipe-lines, etc. One has to take the entire unit as one.
26. In our opinion, the decision of the Privy Council in (1904) AC 466 throws a flood of light on the question in issue. Lord Lindley, in his speech observes:
'The purpose for which the machines were obtained and fixed seems to me unmistakable ; it was to complete and use the buildings a factory. It is true the machines could be removed if necessary, but the concrete beds and bolts prepared for them negative any idea of treating the machines when fixed as moveable chattels.
The question as whether they passed by the mortgage. But for the fact that Holdway had not paid for them the question would not, in my opinion, be open to the slightest doubt. There is a long series of decisions of the highest authority showing conclusively that as between a mortgagor and a mortgagee machines, fixed as these were to land mortgaged, pass to the mortgagee as part of the land.'
It is further observed therein:
'Others were referred to in the argument but I need only mention Southport and West Lancashire Banking Co. v. Thompson. (1887) 37 Ch. D. 64, where it was held that whether the mortgagor is an owner in fee or is only a lease-holder (as in this case) is immaterial with reference to the question now under consideration.'
At pages 473 and 474, it is further observed:
'My Lords, I do not profess to be able to reconcile all the cases on fixtures, still less all that has been said about them. In dealing with them attention must be paid not only to the nature of the thing and to the mode of attachment, but to the circumstances under which it was attached, the purpose to be served, and last but not least to the position of the rival claimants to the things in dispute.'
In our opinion, all these factors referred to therein are important factors to be borne in mind. It is not only the mode of annexation and object of annexation that would be decisive of the position. Having regard to all the aforesaid factors and circumstances, one has to determine this question.
27. Having regard to all these factors and especially the factor that we have to decide this question as regards the mortgagor vis-a-vis the mortgagee and that too for the purpose of determining the period of limitation that would govern the present suit, we are of the opinion that this property, if taken as a whole, as said earlier, is the immoveable property. It is a mortgage of an immoveable property. Parties' intention very clearly appears from the document itself. Furthermore, defendant has been examined at Ex. 232 has not state anything that this property was intended to be moveable property and the document did not evidence a mortgage transaction of immoveable property. In our opinion, this document is a mortgage document. It is a simple mortgage of immovable property. At any rate, there is no escape from the conclusion that it was a charge created upon the immoveable property and the present suit is for the recovery of the mortgage dues on the basis of the mortgage document or a suit relating to charge upon the immoveable property to enforce that charge. Taking any view of the matter, it is evident that the period of limitation would be governed by Article 62 of the Limitation Act, 1963. The suit having been filed within 12 years from the date the mortgage amount became due, it is evident that the suit is not time-barred.
28. The argument advanced by Mr. Surti that as the lease-hold right under the lease-deed. Ex. 132, was not transferable, the security in respect of that Mahelav property could be said to have been lost on the date of the mortgage and the suit should have been filed within six years from that date, as Article 120 of the Old Limitation Act corresponding to Article 113 of the New Limitation Act, would govern the period of limitation, is devoid of any merits.
29. This is not a suit filed by the mortgagee for compensation on account of loss of security or being deprived of security.
30. Similarly, his argument that on 1.4.1957 in view of the Bombay Tenancy and Agricultural Lands Act, the tenant would be deemed to be the owner from 1.4.1957 and consequently, security would be lost, is devoid of any merits. He has not been able to point out any provision from that Act which indicates that on the tenant being deemed to be an owner the property will become free from encumbrances which existed over that property.
31. Another fact to be borne in mind is that this is a mortgage created by the lessee, i.e. the tenant himself. Mr. Surti invited our attention to the decision of the Supreme Court in Monimala Devi v. Indu Bala Debya : 5SCR635 . It is observed therein:
'A suit to enforce a mortgage is governed by Article 132 and has to be filed within twelve years from the date on which the money sued for became due, unless the period of limitation so prescribed is extended in the manner provided by Part III of the Limitation Act. Dispossession of the mortgagee is not one of the grounds prescribed by the Act for extension of the time prescribed for filing a suit. Section 68., Transfer of Property Act does not deal with the period of Limitation for filing a suit or extension of the period prescribed by the Limitation Act for filing a suit. The right conferred by Section 68 is again not a right to enforce the mortgage but a right to sue for the mortgage money on the personal covenant or to claim compensation when the mortgagee is deprived of his security.'
That decision has no application. There the suit was filed after the 12 years had already expired. It was sought to he urged that the time was extended and that contention was repelled. In the instant case, the suit has been filed within a period of twelve years before the mortgage deed became due. Furthermore, there is no question of deprivation of any security. Both these leases were subsisting on the date the suit was filed. This argument advanced by Mr. Surti is, in our opinion, devoid of any merits. The first submission made by Mr. Surti, therefore, fails. We hold that the learned trial Judge has rightly come to the conclusion that the suit is not barred by limitation.
32. X X X X X.
33. Appeal dismissed.