[Kerala Registration Act] Rubber Trees Are Immovable Property, Agreement To Tap Rubber Is A Compulsorily Registrable Document: High Court

The Court rejected the trial court's finding that the agreement constituted only a license, not a lease and no interest was created over an immovable property. Section 2(9) of the Registration Act considers juice in trees as moveable property. The trial court held that latex is the juice of a rubber tree and the agreement creates an interest on the movable property.

The High Court however held that the agreement was to take yield from the yielding rubber trees and hence the interest is created on rubber trees. The Court held that simply because the yield is extracted in juice form, it cannot be considered to be a movable property.

Justice Kauser Edappagath observed:

“The interest is created on the said rubber tree which is an immovable property, as I have already indicated. For the simple reason that what is extracted from the yielding rubber trees is in the form of juice, it cannot be said that the interest is created with respect to moveable property.”

The petitioner in this case claimed that the respondent through his power of attorney entered into an agreement with him giving him the right to tap 750 yielding rubber trees in his property for 15 years for a price of Rs. 10,00,000.

The defendant claimed that this was a forged document. He further argued that the execution of the agreement is not complete. They also argued that since the agreement was not registered, it cannot be accepted in the court as evidence.

As per Section 17(1)(c) of the Kerala Registration Act the non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any right, title or interest in immovable property is a compulsorily registrable document. As per Section 49(c) of the Act, that no document which is required to be registered shall be received as evidence of any transaction affecting such property or conferring such power unless it has been registered.

The Court considered whether yielding rubber trees can be considered as 'standing timber' so as not to come within the ambit of 'immovable property. It held that they cannot be considered as standing timber as they continue to draw sustenance from the soil and they have not attained stoppage of vegetation and nourishment for further growth. It said:

“Thus, growing and yielding rubber trees which continue to draw sustenance from the soil, and which have not attained stoppage of vegetation and nourishment for further growth cannot be regarded as standing timber. They must be regarded as trees.”

The Court held that the agreement cannot be accepted as evidence of any transaction with regard to the rubber trees. It observed that even though the court can exercise its discretion before rejecting an inadmissible document, the court should exercise it to reject documents inadmissible on the face of it. This way, the court can avoid the parties leading any inadmissible or irrelevant evidence at the time of trial.

Counsel for Petitioners: Advocate Rajeev V. Kurup

Counsel for Respondents: Advocates Liji J. Vadakedom, V. Rajendran, N. Rajesh, Gopakumar P.

Case No: OP(C) No. 3120 of 2018

Case Title: Thomas Baby v Jojo V. Varghese and Others

Citation: 2024 LiveLaw (Ker) 410