Immovable Property in India is governed and impacted by a combination of Federal (Central) and State-specific laws. Immovable property is commonly referred to as real estate – a residential house, a warehouse, a manufacturing unit or a factory. The plants or trees that are attached to the earth are referred to as immovable property. In reality, they remain liable to legal statutes and taxation.
In contrast, movable property refers to certain valuable things that can be moved, like jewelry, computers, watches, money etc. The term ‘movable property has been mentioned in the General Clause Act, 1847 and the Transfer
of Property Act. India is a country with diverse sects, laws relating to various aspects such as devolution, inheritance, etc., are often based on various customary principles and practices applicable to different sects, in addition to codified laws. Over the years, the higher judiciary in India has also made various judicial pronouncements on matters relating to real estate law, which act as judicial precedents and govern the interpretation of applicable laws. The Indian legal system encompasses elements of both civil and common law. Whilst most laws in India are codified, principles of common law including that of equity and natural justice are instrumental in the interpretation of legislation, judicial precedents and customs, including from a real estate perspective, as these have emerged to have both persuasive as well as authoritative value.
In India the right to property is not a fundamental right but a constitutional right. Article 300-A of the Constitution of India mandates that no person shall be deprived of his property save by authority of law, thus embodying the doctrine of ‘eminent domain’, which provides for acquisition of private property by the Government in public interest.
Further, States are duly empowered to legislate and impose legal restrictions on ownership of lands by certain classes of people (landowners with transferable rights, non-transferable rights, leasehold rights, cultivation rights, mortgagees, landowners belonging to Scheduled Caste/Scheduled Tribe categories, etc.) or on ownership of land beyond the land ceiling limits. Further, in most States, ownership of real estate has been restricted such that non-agriculturalists are not permitted to purchase agricultural lands in such States.
In addition to the above, under the existing foreign exchange norms, no person residing outside India can acquire any immovable property in India, except as permitted under the law. Non-residents may be classified into three categories for the purposes of determining their eligibility to purchase immovable property in India:
- a person residing outside India who is a citizen of India;
- a person of Indian origin residing outside India; and
- a person not being an Indian citizen or a person of Indian origin (such as foreign nationals and foreign entities).
As per Section 54 of the Transfer of Property Act, 1882 a ‘sale’ is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Such transfer, in the case of tangible immovable property, of the value of Rs.100 and upwards or in case of a reversion or other intangible thing, can be made only by a registered instrument, whereas tangible immovable property below Rs.100 can be transferred either by registered instrument or by delivery of possession.
Where the transfer takes place by delivery of possession, the transfer will then take effect when the transferee is put in possession of the land/property, but in cases where registration is compulsorily required, transfer will take effect only upon registration of the instrument of transfer.
Several Non-Resident Indians living abroad face various issues related to immovable properties owned by them through inheritance/ purchase/gift etc. In order to protect their immovable property they either lease out the same or leave the property with a caretaker. Subsequently they face problems while getting the same vacated. Due to lack of time they are unable to put in their best efforts and ultimately, in various cases the immovable property gets encroached by land grabbers. Despite the fact that there are stringent laws which can be enforced in order to get the properties vacated, the said persons (NRI) give up their hopes and suffer the ignominy of loosing the immovable property owned by them.