movable property
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This article is written by Sarabjit Singh, pursuing Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting from Lawsikho.com. Here he discusses “Recover Possession of a Movable Property”.

Introduction

What constitutes movable property? As per ‘The Transfer of Property Act, 1882’ & ‘The General Clauses Act’, 1897 anything that is not immovable is movable property.  However, under section 2 (9) of THE REGISTRATION ACT, 1908; movable property is defined as under: –  

“Movable Property” includes standing timber, growing crops and grass, fruit upon and juice in trees, and property of every other description, except immovable property;”

Judicial analysis of the issue was made in Sukrey Kurdeppa vs. Nagireddi, wherein Mr. Justice Holloway said: “Movability may be defined to be a capacity in a thing of suffering alteration in the relation to a place; immovability incapacity for such alteration.”

However, the above may require modification when one watches on ‘Discovery Channel’ houses suffering alteration from one street address to another.  

Whenever any person is dispossessed of movable property without his consent or otherwise than by due process of law, cause shall arise for filing a suit for possession.  Since, this is with respect to a specific property so sections 7 & 8 of The Specific Relief Act, 1963, (SRA); shall be invoked to gain back possession.  

Suit for Possession 

Under Section 7 of The Specific Relief Act, 1963, (SRA) a suit for possession can be filed under any the following conditions. 

  1. The property in question must be a specific movable property and not any property.
  2. Person entitled to possess should have a special or temporary right over the said property.
  3. Procedure to be followed shall be as per Civil Procedure Code, 1908.

Similarly, under section 8 of SRA, case for possession shall arise, when the person in possession or control is not the owner of the property.

  1. But is holding the property as an agent or trustee of the owner. 
  2. When it is not possible to ascertain the monetary value of the property in possession. 
  3. Similarly, when it is not possible to calculate the damage to be awarded upon loss of such specific property.
  4. Property is being wrongfully held. 

There is a slight difference between bringing a suit for possession u/s 7 and u/s 8 of SRA.  Under section 8 no suit can be brought about against the owner of the property, and the suit is confined only to the return of the specific property.  While u/s 7 person enjoying temporary or special possession can sue the owner. Secondly, recovery sought is for the specific movable property or equal monetary value of the property.     

Under any of the above-mentioned circumstances a suit for possession of the specific property shall lie under SRA, and the procedure to initiate such action shall be as per CPC.  

Limitation period

The limitation period for filing suit for possession is 3 years. It shall commence as per narration is given in the extract taken from Apex Court Judgment in Sankar Dastidar vs Shrimati Banjula Dastidar & Anr dated 5 December 2006.

“6. Articles 68, and 69 of the Limitation Act govern suits in respect of the movable property. For specific movable property lost or acquired by theft, or dishonest misappropriation or conversion; knowledge as regards possession of the party shall be the starting point of limitation in terms of Article 68. For any other specific movable property, the time from which the period begins to run would be when the property is wrongfully taken, in terms of Article 69.  

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Similarly, limitation period to recover movable property deposited or pawned with depositary or pawnee shall be three years, under article 70, from the date of refusal after demand.   And if such movable property is sold then 3 years from the date the sale is known to the owner of the movable property, article 71. 

Common circumstances giving rise to suit for possession 

Perhaps most common instances are when financed motor vehicles, private and commercial are repossessed by the agents of the financers.  This is done without following the due process of law. The most frequent reason being that the owner has failed to deposit the payments due on time.  

A trustee or beneficiary can also seek possession of the movable property as per the instrument executed in this regard.  

Due process of law

 

  • File a suit for possession, within the limitation period of 3 years u/s 7 or 8 of SRA.  Except for specific movable property which is lost, or acquired by theft, dishonest misappropriation or conversion.  
  • Provide proof of entitlement/possession of the suit property. 
  • Praying for possession of the suit property.
  • In case of loss of pecuniary benefits, that would have arisen from a commercial property claim loss of income until recovery. 
  • If the value of the suit property and damage to be awarded cannot be ascertained request appropriate interim and ad-interim injunction to protect the suit property.  
  • Pray for protection from alienation, disposal, encumbering, parting with possession, wasting, damaging, or creating third party interest of any nature whatsoever etc. 
  • Request appointment of a court commissioner if necessary, depending upon the circumstances. 
  • Declaration for entitlement to the suit property. 

 

Is recovery valid if the agreement is contrary to law?

It is common practice that finance companies providing financial assistance prepare agreements that are one-sided.  Clauses included in various agreements be it hire & purchase, hypothecation or others show blatant abuse of dominance.  They give themselves unbridled powers to repossess financed goods, vehicles etc. contrary to due process of law. Additionally, clause is included in the agreement to resolve all disputes under the Arbitration and Conciliation Act, 1996.  Thus, restraining the borrower from approaching the civil courts, irrespective of the kind of illegal activity committed by the financer. 

The Kerala High Court in its judgment in Sundaram Finance Ltd. Vs. Biju Scaria, 2014; observed as follows

 “9.  According to section 10 of the Indian Contract Act, the object of agreement must be lawful to constitute a valid contract.  As per section 23 of The Indian Contract Act, the object of the agreement is lawful unless it is forbidden by law. An agreement preventing the borrower, from obstructing the lender from trespassing into the property or premises of the borrower after breaking open his premises where the vehicle is kept and taking away the vehicle by force is an act constituting criminal trespass, forbidden and punishable under law.  An offence or illegal activity cannot be done under an agreement, as it involves and implies injury to a person and property of another, the borrower, and it is immoral and opposed to public policy. It restrains the legal proceedings available under law to the borrower and makes a clause void under Section 28 and unenforceable under section 10 and 23 of The Indian Contract Act. This analysis gets support from Section 7 of the Specific Relief Act also.  According to section 7 of the Specific Relief Act, a person entitled to the possession of the specific movable property may recover it in the manner provided by the Code of Civil Procedure, 1908.  Even if, an illegal clause is incorporated in the agreement contrary to public policy or contrary to any provision of law under any statute or contrary to constitutional provision, and as a result whereof valuable rights of the parties are taken away, such clause is invalid, unlawful and unenforceable in the eye of law and would be null and void.”   

Therefore, in such circumstances, the court is empowered to pass an order of injunction restraining the defendant from committing any illegal activity, forbidden and punishable under law.  Recovery is possible only after following the due course of law. The honorable court concluded as follows: –

“12.  In this analysis, I hold that, in a suit for injunction alleging and apprehending illegal recovery of possession of the vehicle by force, the lender cannot put forward the defense of arbitration clause, which prevents the borrower from seeking due course of law, before the civil court, to oust jurisdiction of the Civil Court.  The suit for injunction with interim prayer for the prevention of illegal activity, on apprehension, is an equitable remedy, available to the aggrieved party, falling under Section 38 of the Specific Relief Act and Order 39, Rule1 & 2 of Code of Civil Procedure Act and jurisdiction is vested with the civil court under section 9 of CPC.  Such suit for injunction is well maintainable under section 9 of the Arbitration and Conciliation Act, 1996 also….”  

The court is well within its rights to order the seizure of movable property under order 21 rule 31 in the execution of a decree.  The court can also issue process under section 62 CPC for the seizure of movable property from a dwelling house. 

What if possession obtained on execution is reversed or varied on appeal?

It may so happen that in some cases possession of the movable property is decreed by due process of law, by a court of first instance.  And the decree-holder has gained possession fully or limited on execution of such decree. However, if later on appeal; the decree has been reversed or varied.  Then in such circumstances, the party entitled to benefit shall file an application of restitution under section 144 CPC. This shall be submitted to the court of first instance praying that the parties shall be so placed as if no decree had ever been passed. Or in case of variance, to be placed accordingly.  A separate suit shall not lie to obtain the relief specified.


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