Archive

Adverse Possession.

 

Suit  on  adverse possession.

The right to property is now considered to be not only constitutional or statutory right but also a human right. Human rights have already been considered in realm of individual rights such as right to health, right to livelihood, right to shelter and employment etc. But now human rights are gaining a multi faceted dimension. Right to property is also considered very much a part of the new dimension. Therefore, even claim of adverse possession has to be read in that context.

 it appropriate to observe that the law of adverse possession which ousts an owner on the basis of inaction within limitation is irrational, illogical and wholly disproportionate. The law as it exists is extremely harsh for the true owner and a windfall for a dishonest person who had illegally taken possession of the property of the true owner. The law ought not to benefit a person who in a clandestine manner takes possession of the property of the owner in contravention of law. This in substance would mean that the law gives seal of approval to the illegal action or activities of a rank trespasser or who had wrongfully taken possession of the property of the true owner.

 

this law of adverse possession from the British. The Parliament may consider abolishing the law of adverse possession or at least amending and making substantial changes in law in the larger public interest. The Government instrumentalities – including the police – in the instant case have attempted to possess land adversely. This, in our opinion, a testament to the absurdity of the law and a black mark upon the justice system’s legitimacy. The Government should protect the property of a citizen – not steal it. And yet, as the law currently stands, they may do just that. If this law is to be retained, according to the wisdom of the Parliament, then at least the law must require those who adversely possess land to compensate title owners according to the prevalent market rate of the land or property in question. This alternative would provide some semblance of justice to those who have done nothing other than sitting on their rights for the statutory period, while allowing the adverse possessor to remain on property. 2

While it may be indefensible to require all adverse possessors – some of whom may be poor – to pay market rates for the land they possess, perhaps some lesser amount would be realistic in most of the cases. The Parliament may either fix a set range of rates or to leave it to the judiciary with the option of choosing from within a set range of rates so as to tailor the compensation to the equities of a given case.

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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

PETITION FOR SPECIAL LEAVE TO APPEAL (CIVIL) NO. 28034/2011

(Arising out of CC 9038/2010)

State of Haryana …Petitioner Versus

Mukesh Kumar & Ors. …Respondents J U D G M E N T

Dalveer Bhandari, J.

 

1. People are often astonished to learn that a trespasser may take the title of a building or land from the true owner in certain conditions and such theft is even authorized by law.

 

2. The theory of adverse possession is also perceived by the general public as a dishonest way to obtain title to property. Property right advocates argue that mistakes by landowners or negligence on their part should never transfer their property rights to a 2

wrongdoer, who never paid valuable consideration for such an interest.

 

3. The government itself may acquire land by adverse possession. Fairness dictates and commands that if the government can acquire title to private land through adverse possession, it should be able to lose title under the same circumstances.

 

4. We have heard the learned counsel for the State of Haryana. We do not deem it appropriate to financially burden the respondents by issuing notice in this Special Leave Petition. A very vital question which arises for consideration in this petition is whether the State, which is in charge of protection of life, liberty and property of the people can be permitted to grab the land and property of its own citizens under the banner of the plea of adverse possession?

 

5. Brief facts, relevant to dispose of this Special Leave Petition are recapitulated as under:

 

6. The State of Haryana had filed a Civil Suit through the Superintendent of Police, Gurgaon, seeking a relief of declaration to the effect that it has acquired the rights of 3

ownership by way of adverse possession over land measuring 8 biswas comprising khewat no. 34, khata no. 56, khasra no. 3673/452 situated in the revenue estate of Hidayatpur Chhavni, Haryana.

 

7. The other prayer in the suit was that the sale deed dated 26th March, 1990, mutation no. 3690 dated 22nd November, 1990 as well as judgment and decree dated 19th May, 1992, passed in Civil Suit No. 368 dated 9 th March, 1991 are liable to be set aside. As a consequential relief, it was also prayed that the defendants be perpetually restrained from interfering with the peaceful possession of the plaintiff (petitioner herein) over the suit land. For the sake of convenience we are referring the petitioner as the plaintiff and the respondents as defendants.

8. In the written statement, the defendants raised a number of preliminary objections pertaining to estoppel, cause of action and mis-joinder of necessary parties. It was specifically denied that the plaintiff ever remained in possession of the suit property for the last 55 years. It was submitted that the disputed property was still lying vacant. However, the plaintiff recently occupied it by using force and 4

thereafter have also raised a boundary wall of police line. It was denied in the written statement that the plaintiff acquired right of ownership by way of adverse possession qua property in question. The defendants prayed for dismissal of suit and by way of a counter claim also prayed for a decree for possession qua suit property be passed.

9. The Trial Court framed the following Issues in the suit.

1. Whether plaintiffs have become owner of disputed property by way of adverse possession? OPP

 

2. Whether sale deed 26.3.1990 and mutation no. 3690 dated 22.11.90 are null and void as alleged? OPP

 

3. Whether judgment and decree dated 19.05.92 passed in civil suit no. 368 dated 9.3.91 is liable to be set aside alleged? OPP

 

4. Whether the suit of the plaintiff is not maintainable in the present form? OPP

 

5. Whether the plaintiff has no locus-standi to file the present suit? OPP

 

6. Whether the plaintiff has no cause of action to file the present suit? OPP

 

7. Whether the suit of the plaintiff is bad for mis- joinder of necessary parties? OPP

 

8. Whether defendants no. 1 to 4 are rightful owners of disputed property on the basis of impugned sale deed dated 23.6.1990 registered on 3.7.1990? OPP 5

 

9. Whether defendants are entitled for possession of disputed property? OPP

 

10. Relief.

 

10. Issue No. 1 which relates to adverse possession and issue No. 4 pertaining to maintainability were decided together. According to the Trial Court, the plaintiff has failed to prove the possession over the disputed property because the plaintiff could not produce any documentary evidence to prove this. On the contrary, revenue records placed on the file shows that the defendants are the owners in possession of disputed property. The Trial Court observed that possession of State, as claimed in the plaint for a continuous period of 55 years, stood falsified by the documents issued by the officials of the State.

11. The Trial Court also observed that despite claiming adverse possession, there was no pleading qua denial of title of the defendants by the plaintiff, so much so that the specific day when the alleged possession of State allegedly became adverse against the defendants has not been mentioned in order to establish the starting point of limitation could be ascertained.

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12. The Trial Court relied on the judgment of this Court in S.M. Karim v. Mst. Bibi Sakina AIR 1964 SC 1254 wherein this Court has laid down that the adverse possession must be adequate in continuity, in publicity and extent and a plea is required at the least to show when possession becomes adverse. The Court also held that long possession is not necessarily adverse possession.

13. The Trial Court also relied on a decision of the High Court of Punjab and Haryana in the case of Bhim Singh & Ors. v. Zile Singh & Ors., AIR 2006 P and H 195, wherein it was stated that no declaration can be sought by a plaintiff with regard to the ownership on the basis of adverse possession.

 

14. The Trial Court came to specific conclusion that despite the fact that the possession of the plaintiff over the disputed land is admitted on behalf of defendants, Issue No. 1 stand decided against the plaintiff. It was held that the suit of the plaintiff claiming ownership by way of adverse possession is not maintainable. Consequently, Issue No. 1 was decided against the plaintiff and Trial No. 4 was decided in favour of the defendants.

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15. The Trial Court decided Issue Nos. 2, 3, 5 and 6 together and came to the definite conclusion that the plaintiff failed to prove its possession over the property in question. It was also held that the plaintiff had no locus standi to challenge the validity of the impugned sale deed, mutation as well as the judgment and decree because the plaintiff was neither the owner nor in possession of the property in dispute. Consequently, the plaintiff had no right to say that the impugned sale deed dated 26th March, 1990 was a sham transaction and the suit of mutation dated 22nd November, 1990 and, thereafter, the judgment and decree dated 19th May, 1992 passed in Civil Suit No. 386 dated 9th March, 1991 are liable to be set aside.

 

16. The Trial Court came to the conclusion that the plaintiff having no right or title in the suit property has neither locus standi nor cause of action to file the present suit. Issue Nos. 2 and 3 were decided against the plaintiff, whereas, Issue Nos. 5 and 6 were decided in favour of the defendants.

 

17. Regarding Issue Nos. 8 and 9, the Trial Court observed that once it is held that defendant Nos. 1 to 4 are owners of 8

the disputed property, which is presently in possession of the plaintiff without any right, they (defendants) are entitled to its possession. Hence, Issue Nos. 8 and 9 were also decided in favour of the defendants.

 

18. Issue No. 7 was not pressed and decided against the defendants.

 

19. Regarding Issue No. 10 (relief) the Trial Court observed as under:

"As a sequel to the findings of this court on the issues mentioned above, the suit of the plaintiff stands dismissed, however, counter claim filed by defendants is decreed with costs to the effect that they are entitled to possession of land measuring 8 biswas comprising of

khewat no. 34 khata no. 56 khasa no. 3673/452 situated in revenue estate of Hidayatpur Chhavni village now the part of known as Patel Nagar, Gurgaon.

Decree sheet be drawn accordingly. File be consigned to the record room after due

compliance."

 

20. The plaintiff, aggrieved by the judgment of the Trial Court filed an appeal (Civil Appeal No. 33) before the learned Additional District Judge, Gurgaon. Learned Additional District Judge while deciding the appeal, relied on the judgment of the Punjab & Haryana High Court delivered in 9

the case of Food Corporation of India and Another v. Dayal Singh 1991 PLJ 425, wherein it was observed that it does not behove the Government to take the plea of adverse possession against the citizens.

 

21. Learned Additional District Judge also relied on other judgments of Punjab & Haryana High Court in the cases of Bhim Singh & Ors. (supra) and Kanak Ram & Ors. v. Chanan Singh & Ors. (2007) 146 PLR 498 wherein it was held that a person in adverse possession of immovable property cannot file a suit for declaration claiming ownership and such a suit was not maintainable.

22. Before parting with the judgment the learned Additional District Judge observed regarding conduct of the plaintiff that the present suit was filed by State of Haryana by the then Superintendent of Police, Gurgaon on 11th May, 1996. It was also observed by the learned Additional District Judge that the Police department is for the protection of the people and property of the citizens and the police department had unnecessarily dragged the defendants in unnecessary litigation. The appeal was dismissed with exemplary cost of Rs.25,000/-. 1

 

23. Unfortunately, despite serious strictures passed by the Court, the State of Haryana did not learn a lesson and preferred a Second Appeal (RSA No. 3909 of 2008) before the High Court of Punjab and Haryana, Chandigarh against the judgments and decrees of the two courts below.

24. The High Court, relying on the earlier judgments, observed that the welfare State which was responsible for the protection of life and property of its citizens, was in the present case, itself trying to grab the land/property of the defendants under the garb of plea of adverse possession and hence the action of the plaintiff is deplorable and disgraceful.

 

25. Unfortunately, the State of Haryana, is still not satisfied with the three strong judgments by three different forums given against the State and is still quite anxious and keen to grab the property of the defendants in a clandestine manner on the plea of adverse possession.

 

26. In a democracy, governed by rule of law, the task of protecting life and property of the citizens is entrusted to the police department of the government. In the instant case, the suit has been filed through the Superintendent of 1

Police, Gurgaon, seeking right of ownership by adverse possession.

 

27. The revenue records of the State revealed that the disputed property stood in the name of the defendants. It is unfortunate that the Superintendent of Police, a senior official of the Indian Police Service, made repeated attempts to grab the property of the true owner by filing repeated appeals before different forums claiming right of ownership by way of adverse possession.

 

28. The citizens may lose faith in the entire police administration of the country that those responsible for the safety and security of their life and property are on a spree of grabing the properties from the true owners in a clandestine manner.

 

29. A very informative and erudite Article was published in Neveda Law Journal Spring 2007 with the title `Making Sense Out of Nonsense: A Response to Adverse Possession by Governmental Entities’. The Article was written by Andrew Dickal. Historical background of adverse possession was discussed in that article.

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Historical background

 

30. The concept of adverse possession was born in England around 1275 and was initially created to allow a person to claim right of "seisin" from his ancestry. Many felt that the original law that relied on "seisin" was difficult to establish, and around 1623 a statue of limitations was put into place that allowed for a person in possession of property for twenty years or more to acquire title to that property. This early English doctrine was designed to prevent legal disputes over property rights that were time consuming and costly. The doctrine was also created to prevent the waste of land by forcing owners to monitor their property or suffer the consequence of losing title.

 

31. The concept of adverse possession was subsequently adopted in the United States. The doctrine was especially important in early American periods to cure the growing number of title disputes. The American version mirrored the English law, which is illustrated by most States adopting a twenty-year 1

statue of limitations for adverse possession claims. As America has developed to the present date, property rights have become increasingly more important and land has become limited. As a result, the time period to acquire land by adverse possession has been reduced in some States to as little as five years, while in others, it has remained as long as forty years. The United States has also changed the traditional doctrine by preventing the use of adverse possession against property held by a governmental entity.

 

32. During the colonial period, prior to the enactment of the Bill of Rights, property was frequently taken by states from private land owners without compensation. Initially, undeveloped tracts of land were the most common type of property acquired by the government, as they were sought for the installation of public road. Under the colonial system it was thought that benefits from the road would, in a newly opened country, always exceed the value of unimproved land.

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33. The doctrine of adverse possession arose in an era where lands were vast particularly in the United States of America and documentation sparse in order to give quietus to the title of the possessor and prevent fanciful claims from erupting. The concept of adverse possession exits to cure potential or actual defects in real estate titles by putting a statute of limitation on possible litigation over ownership and possession. A landowner could be secure in title to his land; otherwise, long-lost heirs of any former owner, possessor or lien holder of centuries past could come forward with a legal claim on the property. Since independence of our country we have witnessed registered documents of title and more proper, if not perfect, entries of title in the government records. The situation having changed, the statute calls for a change.

 

34. In Hemaji Waghaji Jat v. Bhikhabhai Khengarbhai Harijan and Others (2009) 16 SCC 517 (one of us Bhandari, J.), this Court had an occasion to examine the English and American law on "adverse possession". The relevant paras of that judgment (Paras 24 and 26 to 29) are reproduced as under:

1

"24. In a relatively recent case in P.T. Munichikkanna Reddy v. Revamma (2007) 6 SCC

59, this Court again had an occasion to deal with the concept of adverse possession in detail. The Court also examined the legal position in various countries particularly in English and American systems. We deem it appropriate to reproduce relevant passages in extenso. The Court dealing with adverse possession in paras 5 and 6 observed as under: (SCC pp. 66-67)

"5. Adverse possession in one sense is based on the theory or presumption that the owner has abandoned the property to the adverse possessor on the acquiescence of the owner to the hostile acts and claims of the person in possession. It follows that sound qualities of a typical adverse possession lie in it being open, continuous and hostile. (See Downing v. Bird 100 So 2d 57 (Fla 1958), Arkansas Commemorative Commission v. City of Little Rock 227, Ark 1085 : 303 SW 2d 569 (1957); Monnot v. Murphy 207 NY 240 : 100 NE 742 (1913); City of Rock Springs v. Sturm 39 Wyo 494 : 273 P 908 : 97 ALR 1 (1929).)

 

6. Efficacy of adverse possession law in most jurisdictions depends on strong limitation statutes by operation of which right to access the court expires through efflux of time. As against rights of the paper-owner, in the context of adverse possession, there evolves a set of competing rights in favour of the adverse possessor who has, for a long period of time, cared for the land, developed it, as against the owner of the property who has ignored the property. Modern statutes of limitation operate, as a rule, not only to cut off one’s right to bring an action for the recovery of property that has been in the adverse possession of another for a specified time, but 1

also to vest the possessor with title. The intention of such statutes is not to punish one who neglects to assert rights, but to protect those who have maintained the possession of property for the time specified by the statute under claim of right or colour of title. (See American Jurisprudence, Vol. 3, 2d, p. 81. It is important to keep in mind while studying the American notion of adverse possession, especially in the backdrop of limitation statutes, that the intention to dispossess cannot be given a complete go-by. Simple application of limitation shall not be enough by itself for the success of an adverse possession claim."

35. A person pleading adverse possession has no equities in his favour since he is trying to defeat the rights of the true owner. It is for him to clearly plead and establish all facts necessary to establish adverse possession. Though we got this law of adverse possession from the British, it is important to note that these days English Courts are taking a very negative view towards the law of adverse possession. The English law was amended and changed substantially to reflect these changes, particularly in light of the view that property is a human right adopted by the European Commission. This Court in Revamma (supra) observed that to understand the true nature of adverse possession, Fairweather v. St Marylebone Property Co [1962] 2 WLR 1020 : [1962] 2 All ER 288 can be 1

considered where House of Lords referring to Taylor v. Twinberrow [1930] 2 K.B. 16 termed adverse possession as a negative and consequential right effected only because somebody else’s positive right to access the court is barred by operation of law. As against the rights of the paper-owner, in the context of adverse possession, there evolves a set of competing rights in favour of the adverse possessor who has, for a long period of time, cared for the land, developed it, as against the owner of the property who has ignored the property.

 

36. The right to property is now considered to be not only constitutional or statutory right but also a human right. Human rights have already been considered in realm of individual rights such as right to health, right to livelihood, right to shelter and employment etc. But now human rights are gaining a multi faceted dimension. Right to property is also considered very much a part of the new dimension. Therefore, even claim of adverse possession has to be read in that context.

 

37. The changing attitude of the English Courts is quite visible from the judgment of Beaulane Properties Ltd. v. 1

Palmer (2005) 3 WLR 554. The Court here tried to read the human rights position in the context of adverse possession. But what is commendable is that the dimension of human rights have widened so much that now property dispute issues are also being raised within the contours of human rights. With the expanding jurisprudence of the European Courts of Human Rights, the Court has taken an unkind view to the concept of adverse possession.

 

38. Paragraphs from 26 to 29 of Hemaji Waghaji Jat (supra) are set out as under:-

 

26. With the expanding jurisprudence of the European Court of Human Rights, the Court has taken an unkind view to the concept of adverse possession in the recent judgment of JA Pye (Oxford) Ltd. v. United Kingdom (2005) 49 ERG 90 which concerned the loss of ownership of land by virtue of adverse possession. In the said case, "the applicant company was the registered owner of a plot of 23 hectares of agricultural land. The owners of a property adjacent to the land, Mr and Mrs Graham (the Grahams) occupied the land under a grazing agreement. After a brief exchange of documents in December 1983 a chartered surveyor acting for the applicants wrote to the Grahams noting that the grazing agreement was about to expire and requiring them to vacate the land." The Grahams continued to use the whole of the disputed land for farming without the permission of the applicants from September 1998 till 1999. In 1997, Mr Graham moved the Local Land Registry against the applicant on the ground that he had obtained title by adverse possession. The Grahams 1

challenged the applicant company’s claims under the Limitation Act, 1980 (the 1980 Act) which provides that a person cannot bring an action to recover any land after the expiration of 12 years of adverse possession by another.

 

27. The judgment was pronounced in JA Pye

(Oxford) Ltd. v. Graham (2000) 3 WLR 242 : 2000 Ch 676. The Court held in favour of the Grahams but went on to observe the irony in law of adverse possession. The court observed that the law which provides to oust an owner on the basis of inaction of 12 years is "illogical and disproportionate". The effect of such law would "seem draconian to the owner" and "a windfall for the squatter". The court expressed its astonishment on the prevalent law that ousting an owner for not taking action within limitation is illogical. The applicant company aggrieved by the said judgment filed an appeal and the Court of Appeal reversed the High Court decision. The Grahams then appealed to the House of Lords, which, allowed their appeal and restored the order of the High Court.

 

28. The House of Lords in JA Pye (Oxford) Ltd. v. Graham (2003) 1 AC 419 : (2002) 3 WLR 221 : (2002) 3 All ER 865 (HL), observed that the Grahams had possession of the land in the ordinary sense of the word, and, therefore, the applicant company had been dispossessed of it within the meaning of the Limitation Act of 1980.

 

29. We deem it proper to reproduce the relevant portion of the judgment in P.T. Munichikkanna Reddy v. Revamma (2007) 6 SCC

59: (SCC p. 79, paras 51-52)

"51. Thereafter the applicants moved the European Commission of Human Rights

(ECHR) alleging that the United Kingdom law on adverse possession, by which they lost land 2

to a neighbour, operated in violation of Article 1 of Protocol 1 to the Convention for the Protection of Human Rights and Fundamental

Freedoms (`the Convention’).

 

52. It was contended by the applicants that

they had been deprived of their land by the operation of the domestic law on adverse possession which is in contravention with Article 1 of Protocol 1 to the Convention for the Protection of Human Rights and Fundamental

Freedoms (`the Convention’), which reads as under:

`Every natural or legal person is entitled

to the peaceful enjoyment of his

possession. No one shall be deprived of his

possession except in the public interest and subject to the conditions provided for

by law and by the general principles of international law.

The preceding provisions shall not,

however, in any way impair the right of a

State to enforce such laws as it deems necessary to control the use of property in

accordance with the general interest or to

secure the payment of taxes or other contributions or penalties.’ "

This Court in Revamma case also mentioned

that the European Council of Human Rights importantly laid down three-pronged test to judge the interference of the Government with the right of "peaceful enjoyment of property": (SCC p. 79, para 53)

"53. … [In] Beyeler v. Italy [GC] No. 33202 of 1996 ” 108-14 ECHR 2000-I, it was held that the `interference’ should comply with the principle of lawfulness and pursue a legitimate aim (public interest) by means reasonably proportionate to the aim sought to be realised." 2

The Court observed:(Revamma case 79-80, paras 54-56)

"54. … `The question nevertheless remains whether, even having regard to the lack of care and inadvertence on the part of the applicants and their advisers, the deprivation of their title to the registered land and the transfer of beneficial ownership to those in unauthorized possession struck a fair balance with any legitimate public interest served.

In these circumstances, the Court

concludes that the application of the provisions of the 1925 and 1980 Acts to deprive the applicant companies of their title to the registered land imposed on them an individual and excessive burden and upset the fair balance between the demands of the public interest on the one hand and the applicants’ right to the peaceful enjoyment of their possessions on the other.

There has therefore been a violation of Article 1 of Protocol 1.’

 

55. The question of the application of Article 41 was referred for the Grand Chamber Hearing of the ECHR. This case sets the field of adverse possession and its interface with the right to peaceful enjoyment in all its complexity.

 

56. Therefore it will have to be kept in mind the courts around the world are taking an unkind view towards statutes of limitation overriding property rights."

 

39. In Hemaji Waghaji Jat case, this Court ultimately observed as under:

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"32. Before parting with this case, we deem it appropriate to observe that the law of adverse possession which ousts an owner on the basis of inaction within limitation is irrational, illogical and wholly disproportionate. The law as it exists is extremely harsh for the true owner and a windfall for a dishonest person who had illegally taken possession of the property of the true owner. The law ought not to benefit a person who in a clandestine manner takes possession of the property of the owner in contravention of law. This in substance would mean that the law gives seal of approval to the illegal action or activities of a rank trespasser or who had wrongfully taken possession of the property of the true owner.

 

33. We fail to comprehend why the law should place premium on dishonesty by legitimising possession of a rank trespasser and compelling the owner to lose his possession only because of his inaction in taking back the possession within limitation."

Fifth Amendment of the U.S. Constitution – a principle of a civilized society

 

40. Another important development in the protection of property rights was the Fifth Amendment. James Madison was the drafter and key supporter for the Fifth Amendment. The Fifth Amendment states: "nor shall private property be taken for public use, without just compensation". The main issue is to pay just compensation for acquiring the property. There are primarily two situations when a landowner may obtain compensation for land officially transferred to or 2

depreciated by the government. First, an owner may be entitled to compensation when a governmental entity intentionally acquires private property through a formal condemnation proceeding and without the owner’s consent. The State’s power to take property is considered inherent through its eminent domain powers as a sovereign. Through the condemnation proceedings, the government obtains the necessary interest in the land, and the Fifth Amendment requires that the property owner be compensated for this loss.

41. The second situation requiring compensation under Fifth Amendment occurs when the government has not officially acquired private property through a formal condemnation proceeding, but "nonetheless takes property by physically invading or appropriating it". Under this scenario, the property owner, at the point in which a "taking" has occurred, has the option of filing a claim against the government actor to recover just compensation for the loss. When the landowner sues the government seeking compensation for a taking, 2

it is considered an inverse condemnation proceeding, because the landowner and not the government is bringing the cause of action.

 

42. We inherited this law of adverse possession from the British. The Parliament may consider abolishing the law of adverse possession or at least amending and making substantial changes in law in the larger public interest. The Government instrumentalities – including the police – in the instant case have attempted to possess land adversely. This, in our opinion, a testament to the absurdity of the law and a black mark upon the justice system’s legitimacy. The Government should protect the property of a citizen – not steal it. And yet, as the law currently stands, they may do just that. If this law is to be retained, according to the wisdom of the Parliament, then at least the law must require those who adversely possess land to compensate title owners according to the prevalent market rate of the land or property in question. This alternative would provide some semblance of justice to those who have done nothing other than sitting on their rights for the statutory period, while allowing the adverse possessor to remain on property. 2

While it may be indefensible to require all adverse possessors – some of whom may be poor – to pay market rates for the land they possess, perhaps some lesser amount would be realistic in most of the cases. The Parliament may either fix a set range of rates or to leave it to the judiciary with the option of choosing from within a set range of rates so as to tailor the compensation to the equities of a given case.

 

43. The Parliament must seriously consider at least to abolish "bad faith" adverse possession, i.e., adverse possession achieved through intentional trespassing. Actually believing it to be their own could receive title through adverse possession sends a wrong signal to the society at large. Such a change would ensure that only those who had established attachments to the land through honest means would be entitled to legal relief.

44. In case, the Parliament decides to retain the law of adverse possession, the Parliament might simply require adverse possession claimants to possess the property in question for a period of 30 to 50 years, rather than a mere

12. Such an extension would help to ensure that 2

successful claimants have lived on the land for generations, and are therefore less likely to be individually culpable for the trespass (although their forebears might). A longer statutory period would also decrease the frequency of adverse possession suits and ensure that only those claimants most intimately connected with the land acquire it, while only the most passive and unprotective owners lose title.

 

45. Reverting to the facts of this case, if the Police department of the State with all its might is bent upon taking possession of any land or building in a clandestine manner, then, perhaps no one would be able to effectively prevent them.

 

46. It is our bounden duty and obligation to ascertain the intention of the Parliament while interpreting the law. Law and Justice, more often than not, happily coincide only rarely we find serious conflict. The archaic law of adverse possession is one such. A serious re-look is absolutely imperative in the larger interest of the people.

47. Adverse possession allows a trespasser – a person guilty of a tort, or even a crime, in the eyes of law – to gain 2

legal title to land which he has illegally possessed for 12 years. How 12 years of illegality can suddenly be converted to legal title is, logically and morally speaking, baffling. This outmoded law essentially asks the judiciary to place its stamp of approval upon conduct that the ordinary Indian citizen would find reprehensible.

 

48. The doctrine of adverse possession has troubled a great many legal minds. We are clearly of the opinion that time has come for change.

 

49. If the protectors of law become the grabbers of the property (land and building), then, people will be left with no protection and there would be a total anarchy in the entire country.

 

50. It is indeed a very disturbing and dangerous trend. In our considered view, it must be arrested without further loss of time in the larger public interest. No Government Department, Public Undertaking, and much less the Police Department should be permitted to perfect the title of the land or building by invoking the provisions of adverse possession and grab the property of its own citizens in the manner that has been done in this case.

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51. In our considered view, there is an urgent need for a fresh look of the entire law on adverse possession. We recommend the Union of India to immediately consider and seriously deliberate either abolition of the law of adverse possession and in the alternate to make suitable amendments in the law of adverse possession. A copy of this judgment be sent to the Secretary, Ministry of Law and Justice, Department of Legal Affairs, Government of India for taking appropriate steps in accordance with law.

52. This Special Leave Petition is dismissed with costs of Rs.50,000/- (Rupees Fifty Thousand only) to be paid by the State of Haryana for filing a totally frivolous petition and unnecessarily wasting the time of the Court and demonstrating its evil design of grabbing the properties of lawful owners in a clandestine manner. The costs be deposited within four weeks from the date of pronouncement of this judgment. In this petition, we did not issue notice to the defendants, therefore, we direct that the costs be deposited with the National Legal Services Authority for utilizing the same to enable the poor litigants to contest their cases.

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53. This Special Leave Petition being devoid of any merit is accordingly dismissed.

…………………………….J.

(Dalveer Bhandari)

……………………………J.

(Deepak Verma)

 

Bastacolla Colliery Co. Ltd. vs Bandhu Beldar And Anr. on 23 March, 1960
Equivalent citations: AIR 1960 Pat 344
Author: Sahai
Bench: V Ramaswami, R Choudhary, K Sahai

JUDGMENT

Sahai, J.

1. These two appeals by the plaintiff, a company called Bastacolla Colliery Co”. Ltd., arise out of two suits for ejectment of the principal defendants from certain lands situated in village Bastacolla and for issue of directions to those defendants to remove all structures and materials from the lands in suits within the time fixed by the Court. The appeals have been placed for disposal before this Bench owing to a conflict of decisions in this Court on two of the points involved in them. They have been heard together, and both are being disposed of by this judgment.

2. It is not disputed that New Beerbhum Coal Company Limited previously held the underground coal-mining rights and surface rights in the lands of the whole of village Bastacolla, with the exception of some culturable lands, as permanent lessees, nor is it disputed that the plaintiff company has acquired them from the New Beerbhum Coal Co. Ltd. It further appears that Ganpat Beldar (deceased), the husband of defendant No. 1 in Title Suit No. 150/14 of 1950/52, who has also since died, and Bandhu Beldar, the only principal defendant in Title Suit No. 151/17 of 1950/52, executed kabuliyats in the year 1.920 in respect of the lands in dispute in the two suits in favour of the New Beerbhum Coal Co. Ltd.; but the company did not execute any patta in their favour.

3. Shortly stated, the plaintiff’s case in both the suits is that Ganpat and Bandhu verbally took lease of the lands in dispute for residential purposes in 1920, and that subsequent execution of kabuliyats by them did not legally create any permanent lease in their favour in the absence o pattas. Their names were later wrongly recorded in the survey khatian as raiyati kaimi tenants in respect of the lands in dispute in the two suits. The principal defendants (who will henceforth be referred to as the defendants) are, in fact, tenants” holding leases from month to month. The plaintiff gave them due notices to quit; but they have not vacated the lands.

4. The defence of the defendants in both the Suits may be briefly put. They allege that they took oral settlement of the lands in question for agricultural purposes, and have been in possession for about forty years, that they subsequently executed kabuliyats in favour of New Beerbhum Coal Co. Ltd., without reading and knowing their contents on account of fraud practised upon them and misrepresentations made to them by the employees of that company, that the survey entries were correctly made, that, in any case, they have acquired permanent tenancy rights by adverse possession, and that they have made permanent structures on the lands within the knowledge, and with the consent, of the plaintiff and its predecessor-in-interest. It is also alleged by them that they have been paying rent for the lands in dispute all along.

5. The Munsif, who heard the suits, decreed them. The appeals by the defendants, however, succeeded, and the Subordinate Judge of Dhanbad has dismissed the two suits. His findings are (1) that there was no oral settlement with the defendants about forty years ago, as alleged by them, (2) that no case of estoppel against the plaintiff had been made out by reason of the defendants having put up structures upon the lands in question, (3) that the kabuliyats executed by them in 1920 created valid and permanent leases in their favour, even though pattas were not executed by the lessor, (4) that the tenancies were created for residential purposes, (5) that, even if the kabuliyats did not create valid leases, the evidence on the record and the circumstances show that “the tenancies were permanent and heritable ones”, and (6) that, even if that was not so, the defendants had “acquired limited rights by virtue of adverse possession for the statutory period”. He has not indicated the nature of the limited rights which were, according to him, acquired by adverse possession.

6. Findings Nos. 1, 2 and 4, as I have numbered them, have not been challenged before us. No question has also been raised as to the due service of notice to quit, as alleged by the plaintiff. Mr. De, appearing for the plaintiff-appellant, has challenged findings Nos. 3, 5 and 6. The points which he has urged may be summarised as follows:

1. That a kabuliyat executed by a lessee cannot legally create a valid tenancy in the absence of a patta, and the defendants did not, therefore, acquire any right by executing the kabuliyats.

2. That a person, who enters into possession of land under an invalid lease, is a trespasser and, his possession being wrongful from the moment of entry, limitation begins to run against the landlord from that moment. If, however, the lessee pays rent and the lessor accepts it, a relationship of landlord and tenant comes into existence. The lessee’s possession cannot, in that case, be held to be adverse to the lessor, and, consequently, the lessee cannot prescribe even for a limited right. The nature and duration of the tenancy must be determined by reference to Section 106 of the Transfer of Property Act in any case to which that Act applies. As the tenancy has, in this case, teen held to be for residential purposes, it is the Transfer of Property Act which applies.

3. That finding No. 5, as given above, is not really a finding of fact, and it is vitiated because the Subordinate Judge has arrived at it on an erroneous view of the law.

7. Mr. Chatterji, who has appeared on behalf of the defendants-respondents, has not argued that the kabuliyats were executed by Ganpat and Bandhu as a result of fraud but has proceeded upon the assumption that they are genuine documents. He has, however, raised a further point, and has contended that the defendants are, at least, entitled to compensation for the structures which they have built upon the disputed lands. Mr. De has, on the other hand, argued that all that the defendants are entitled to is to remove their structures and materials within a time to be fixed by the Court.

8. I proceed to consider all the above four points in the order in which I have mentioned them. I must mention at the outset, however, that it is not disputed that the Transfer of Property Act applies to this case.

9. On the question whether a kabuliyat can create a valid lease in the absence of a patta, the Subordinate Judge has obviously misunderstood the argument advanced on behalf of the plaintiff. He appears to have thought that the argument was based upon the third paragraph of Section 107 which was inserted by Act XX of 1929 and which provides that each instrument which creates a lease of immoveable property must be executed by both the lessor and the lessee. As the kabuliyats ml question were executed in 1920, he rightly said that that provision had no application to them.

But the contention on behalf of the plaintiff, correctly understood, is that, before the amendment of 1929, a valid lease could be created by a patta executed by the lessor and not by a kabuliyat executed by the lessee, Mr. De has relied, in support of this contention, on a Full Bench decision of this Court in Ramkrishna Jha v. Jainandan Jha, ILR

14. Pat 672 : (AIR 1935 Pat 291). The defendants in that case had executed a registered kabuliyat, and the amlas of the plaintiff-landlord had executed an unregistered document called amalnama, which could be treated as a patta.

Their Lordships construed Sections 105 and 107 of the Transfer of Property Act, as it stood before the amendment of 1929, and came to the conclusion that the kabuliyat could not create a valid lease as the creation of such a lease required a registered instrument by the lessor, who alone could transfer a right to enjoy a property within the meaning of Section 105. They held the amalnama to be inadmissible as it was unregistered. It is manifest that the principle laid down in that case is fully applicable to this case, and, in fact, Mr. Chatterji has conceded that he cannot support the learned Subordinate Judge’s conclusion that the kabuliyats in question in this case created valid leases.

10. In view of the concession made by Mr. Chatterji, it is unnecessary for me to discuss the point any further. The learned Subordinate Judge has clearly erred, and I hold that the kabuliyats in question did not create valid leases in the absence of pattas.

11. In so far as the second point raised by Mr. De is concerned, two principles which are well-settled are (1) that the possession of a lessee, who enters into possession on the basis of an invalid lease, becomes wrongful, and he must be treated to be a trespasser from the time of his entry; and (2) that possession of a limited interest may be just as much adverse for the purpose of barring a suit relating to that interest as the possession of a complete interest may be adverse for the purpose of barring a suit for recovery of the property, or in other words, a person in possession of land may prescribe for a limited interest like that of permanent tenancy.

Both Mr. De and Mr. Chatterji accept these principles. Mr. De has, however argued that payment of rent by the lessee and its acceptance by the lessor make a difference, because the relation-ship of landlord and tenant comes into existence, and the lessee’s possession ceases to be adverse for any purpose. Mr. Chatterji has admitted that, if a person is found to be a tenant of some kind, he cannot seek to enlarge his rights by prescription; but he has argued that mere payment and acceptance of rent cannot prevent the acquisition of the right of permanent tenancy by adverse possession when it appears from the invalid document executed for the creation of the lease that the parties intended to create a permanent lease, or when it is clear that the lessee was all along claiming the right of permanent tenancy. It seems to me that the true principles are as follows :

12. The possession of a lessee becomes wrongful from the time of his entry on the basis of a void or invalid lease; but, if he pays rent, which is accepted by the lessor, his possession ceases to Be adverse to the lessor, and a relationship of land-lord and tenant comes into existence. In other words, he no longer remains a trespasser but be-comes a tenant. The question then arises what the duration of his tenancy would be.

13. The reason why a kabuliyat could not create a valid lease in the absence of a patta before the amendment of 1929 was that the lessor, who had the right to create the lease, did not execute a registered instrument, transferring a leasehold interest. Being a unilateral document, it could not be assumed to embody a contract between the parties (see observations of Wort, J. in Ramkrishna Jha’s case at pages 690 and 691 of the report (ILR 1.4 Pat) : (at p. 294 of AIR)). If it could be so construed, the lessor would have had to be held to be a party to it, and the lease would have had to be held to be valid.

Neither law nor equity can hold a lessor bound as if a contract existed where no contract is, in fact, established. It is, therefore, impossible to look into a kabuliyat for the purpose of ascertaining any contract or the intention of the lessor as” to the duration of the lease.

14. Section 106 of the Transfer of Property Act lays down that a lease of immoveable property for agricultural or manufacturing purposes is to be deemed to be a lease from year to year; and a lease for any other purposes is to be deemed to be a lease from month to month which can be terminated by the lessor or the lessee by fifteen days’ notice expiring with the end of the month of tenancy. The duration of a tenancy which comes into existence by payment and acceptance of rent must be determined on the basis of the provisions of that section where no contract, local law or usage to the contrary is proved.

In the case of Ram Kumar Das v. Jagdish Chandra Deo, ILR 31 Pat 21 : (AIR 1952 SC 23),the kabuliyat showed that the duration of the lease was to be ten years; but it was conceded that it did not create a valid lease. Referring to Section 106 of the Transfer of Property Act, Mukherjea, J., who delivered the judgment of the Supreme Court, said:

“The section lays down a rule of construction which is to be applied when there is no period agreed upon between the parties. In such cases the duration has to be determined by reference to the object or purpose for which the tenancy is created. The rule of construction embodied in this section applies not only to express leases of uncertain duration but also to leases implied by law which may be inferred from possession and acceptance of rent and, other circumstances.”

15. There are, however, some cases in which a lessee can acquire the right of a permanent tenant by prescription in spite of payment and acceptance of rent. Those are cases where the lessee pays rent on the basis of a notorious claim of permanent tenancy to the knowledge of the owner, The acceptance of rent by the owner on the basis of the lessee’s claim as a permanent tenant will not prevent the acquisition of such a right by the lessee. If the lessee tenders the rent on the basis of permanent tenancy and the owner refuses to accept it on that basis, the parties are at arm’s length, and no relationship of landlord and tenant can come into existence between them. Hence, the lessee’s possession is adverse to the lessor, and he may acquire a limited right of permanent tenancy by being in adverse possession for the statutory period.

16. I will now discuss the authorities cited at the Bar on the point of the effect of payment and acceptance of rent. The earliest case, which has been brought to our notice, is that of Attorney-General v. Davey, (1859) 45 ER 53. Mr. Chatterji has referred to that case for the purpose of showing that the Court of Appeal refused to accept an argument that entry under a void lease gave rise to a lease from year to year on account of acceptance of rent. There was, however, no discussion of the point in that case. Their Lordships did not accept the argument only because no authority was cited in support of it.

17. Mr. De has drawn our attention to a later decision (1879) of the House of Lords in (President and Governors) Magdalen Hospital v. (Alfred) Knotts, (1879) 4 AC 324. It was held in that case that the right of the lessor to recover the property from the lessee, who entered into possession on-the basis of a lease, which was absolutely void, was barred by limitation. The Lord Chancellor (Earl Cairns) has, however, stated in the course of his judgment at page 334 of the report, that, the respondents

“not having paid rent to the appellants, or in any other way entered into the relation of tenants, there is nothing to prevent the full operation of the 2nd section of the Statute of Limitations, and the right of the Appellants to recover the land is, in my opinion, effectually barred.”

Lord Selborne agreed with the Lord Chancellor in a short judgment, in the course of which he observed:

“If any rent had been reserved and received, however small, the legal relation of a tenancy from year to year would have been created, and the Statute of Limitation could not have run.”

Lord Gordon made a similar observation, and stated that the appellants’ right to recover was effectually barred because the respondents had “not paid rent to the Appellants, or in any other way entered into the relation of tenants.” It is manifest, therefore, that their Lordships were all of the opinion that the lessors’ right to recover would not have been barred by limitation if a relationship of landlord and tenant had come into existence between them and the lessees by acceptance of rent or otherwise.

18. The facts in the case of Beni Pershad Koeri v. Dudhnath Roy, ILR 27 Cal 156 (PC), are that Maharajah Jai Perkash of Dumraon granted a village to his nephew, Lal Barmeswar Baksh, for maintenance. It was only for his life; but he executed a patta, purporting to grant a permanent lease of the village to one Ram Golam who obtained possession. Ram Golam remained in possession even after the death of Barmeswar. The heirs of the Maharajah continued to receive and accept rent from Ram Golam at the rate stipulated between him and Barmeswar. Ram Golam stated in 1879 in the plaint of a rent suit against a tenant that he held the village in perpetual istemrari mokarrari. The then Maharajah of Dumraon was made a defendant in the suit on his own prayer. No evidence was given as to what happened later in that rent suit. Their Lordships of the Judicial Committee held that the acceptance of rent could not have the effect of confirming the patta executed by Barmeswar in its entirety. While repelling an argument that Ram Golam’s possession became adverse to the Maharajah from the moment that he took notice of the assertion made by Ram Golam in the rent suit of 1879 that he was a permanent lessee and got himself impleaded as a defendant, their Lordships said that the possession of a tenant for life could not become adverse by reason of a notice from him that he claimed to be holding a perpetual or hereditary tenure. This decision shows, firstly, that the duration of a lease as given in a document which is not binding upon the landlord cannot be held to be confirmed by acceptance of rent; and, secondly, that an assertion of permanent tenancy by a person when he is holding as a tenant of some kind does not make his possession adverse to the landlord.

19. In Narsya Udpa v. Venkataramana Bhatta, 16 Ind Cas 53 (Mad), a Bench of the Madras High Court held that the possession of the defendant was without any valid title at all and was, therefore, adverse to the idol of the temple in question.

They rejected an argument that a tenancy from year to year came into existence because the defendant paid rent during the continuance of his possession. With great respect, I am unable to accept this decision as correct. The point does not appear to me to have been fully considered. Their Lordships have expressed disagreement with the observations of Lord Selborne in (1879) 4 AC 324 about the effect of payment of rent and creation of the relationship of landlord and tenant upon limitation, and have stated that there is nothing in the judgments of the Lord Chancellor and Lord Gordon to show that they agreed with Lord Selborne. As I have already shown, however, the Lord Chancellor and Lord Gordon have also expressed views similar to those of Lord Selborne on this point.

20. The defendants in Ram Lochan Baid v. Kumar Kamakhya Narain Singh, 4 Pat LT 123: (AIR 1923 Pat 201) continued to be in possession upon payment of rent to the landlord after determination of the lease in favour of their predecessor.

A Bench of this Court held that, although a tenancy by sufferance would not make the possession of the holder rightful so as to prevent limitation from running, the tenancy by sufference would be converted into a tenancy from year to year it the person entitled to resume the tenancy does anything to indicate his assent to the continuance of the tenancy by acceptance of rent or otherwise. In that case, limitation would not run against the landlord. Their Lordships further held that subsequent non-payment of rent would make no difference. This case thus supports the view that payment and acceptance of rent will prevent limitation from running against the landlord.

21. The Judicial Committee has held in Naina-pillai Marakayar v. Ramanathan Chettair, 51 Ind App 83: (AIR 1924 PC 65) that the onus is upon a tenant to prove that he has acquired the permanent right of occupancy. This is not challenged by Mr. Chatterji. Following the decision in Madhavrao Waman v. Raghunath Venkatesh, 50 Ind App 255: (AIR 1923 PC 205), Sir John Edge has stated:

“No tenant of lands in India can obtain any right to a permanent tenancy by prescription in them against his landlord from whom he holds the lands.”

As pointed out in Dukhu Mahtha v. Nandlal Tewari, AIR 1952 Pat 293, however, the rule laid down in the decision will not apply to a case where the defendant is in possession as a trespasser. It may also be mentioned that the rule will not apply in a case where the tenant claims from the very inception to be in possession as a permanent tenant to the knowledge of the landlord. If once a tenancy of some kind comes into existence either under an express lease or under a lease implied by law, the tenant cannot convert his tenancy into a permanent one by doing any act adverse to the landlord.

22. A Bench of this Court held in Hari Gir v. Kamakhya Narayan, ILR 3 Pat 534: (AIR 1924 Pat 572) that, where the possession of a tenant on the expiry of the term of his lease becomes wrongful, limitation begins to run against the landlord from that time unless there is evidence from which a fresh tenancy can be inferred. If I may say so with respect, this principle is perfectly correct. The landlord’s action was held to be barred in that case as it was not proved that the defendant had paid rent to him or that a fresh tenancy had come into existence in any other way.

23. The case of Goberdhan Gorain v. Shibakali, AIR 1932 Pat 257, which Mr. Chatterji has relied upon, does not appear to me to be in point. The effect of payment and acceptance of rent in case of entry on the basis of an invalid lease was not considered in it.

24. In Rabindra Chandra Ghosh v. Gauri Singh. 18 Pat LT 518: (AIR 1937 Pat 554), Jobraj Khab, a life holder of a village, granted a mukarrari lease to the predecessor-in-interest of the defendants. After determination of the life interest of Jobraj Khan, the defendants continued to pay rent to the plaintiff, who was the proprietor of the estate to which the village reverted after the death of Jobraj Khan, About forty years later, the plaintiff instituted the suit for recovery of possession of the village. Limitation was pleaded on behalf of the defendants, but their Lordships negatived that plea. Following the Privy Council decision in ILR 27 Cal 156 (PC), their Loidships held that acceptance of rent by plaintiff did not have the effect of confirming all the terms of the mukarrari lease created in favour of the defendants’ predecessor. Fazl Ali, J., with whom Dhavle, J. agreed, pointed out that the defendants had never asserted that they had a permanent interest. He observed:

“Thus the effect in law of the payment of rent by the defendants to the plaintiff and its acceptance by the latter was that a new tenancy was creat-ed which was similar in all other respects to the original tenancy of the defendants under Jobraj Khan except as to the duration of time and the defendants became tenants from year to year under him.”

This decision has been followed by another Bench of this Court in Rama Bahadur Kamakshya Narain Singh v. Harkhu Singh, AIR 1949 Pat 265. Agar-wala, C. J,, with whom Meredith, J. agreed stated on the authority of Rabindra Chandra Ghosh’s case:

“It is now settled, however, that when a person, enters into possession of land under a void lease, he is not a trespasser, but a tenant-at-will under the terms of the lease in all other respects except the duration of time, and that when he pays or agrees to pay the rent therein expressed to be reserved, he becomes a tenant from year to year upon the terms of the void lease so far as they are applicable to, and not inconsistent with, the yearly tenancy.”

With great respect, I do not think that his Lordship is right in describing a person who enters into possession on the basis of a void lease as a tenant-at-will. It is well settled that such a person is a trespasser, and he becomes a tenant only if he pays rent which is accepted by the landlord or if the relationship of landlord and tenant is established in any other way. The duration of the lease must be determined, as I have already said, on reference to Section 106 of the Transfer of Property Act.

25. Another decision of a Bench of this Court, which has been brought to our notice, is that in Shiva Shankar Bharthi v. Beni Ram, 22 Pat LT

200. All that has been laid down in that case is that a person, who enters into possession on the basis of an invalid lease, is a trespasser, and, if he keeps asserting the rights of a tenant over the land for more than twelve years, he acquires a limited interest in the land by adverse possession. There is nothing in the report to show that there was any payment or acceptance, of rent, nor that the interest acquired was that of a permanent tenant. Hence, that case is not applicable to the facts of the present case.

26. Mr. Chatterji has relied upon Hari Prosad v. Abdul Haq, AIR 1951 Pat 160. This case is not helpful on the question of the effect of payment and acceptance of rent; but I may mention that, following (1879) 4 AC 324, Sinha, J. has observed that a person who enters into possession on the basis of a void lease is a trespasser, and, if the lessor, who has a right to enter on the land from the moment of the lessee’s entry, does not enforce his right within the period of limitation, his right to recover is barred.

27. Mr. De has strongly relied upon ILR 30 Pat 997: (AIR 1952 Pat 293), Ramaswami, J, (as he then was), who has delivered the judgment of the Bench, has stated:

“But a person coming into possession of land under a lease which is void or invalid as against the person seeking to eject him is really a trespasser, and there is no reason why he should not acquire by prescription the right of a permanent tenant after the expiration of the period prescribed by Art. 144 of the Limitation Act.”

It is important to note that his Lordship has pointed out that the defendants of that case “had been in continuous possession without paying any “khorf or rent to the plaintiff.” Indeed, he distinguished the Privy Council decisions in 50 Ind App 255: (AIR 1923 PC 205) and 51 Ind App 83: (AIR 1924 PC 65) on the ground that it was neither admitted nor established in the case before him that there was any relationship of landlord and tenant between the parties. This case thus supports the view that, unless the relationship of landlord and tenant is established between the parties, a person who comes into possession of the land as a trespasser under a void or invalid lease may acquire the limited right of a permanent tenant by being in possession for the statutory period.

28. Reference may now be made to the decisions in which the tenants were held to have acquired the right of permanent tenants by prescription. The first case which Mr. Chatterji has relied upon is the decision of a Bench of the Bombay High Court in Thakore Fatesingji Dipsangji v. Bamanji Ardeshir Dalai, ILR 27 Bom 515. There are some general observations in this decision to the effect that payment and acceptance of rent would not be a good answer to a claim of adverse possession by the lessee who enters on the basis of a void lease.

It may be pointed out, however, that Batty, J. has said at page 534 of the report that in (1879) 4 AC 324, Lord Selborne was alone in observing that limitation would not have run if rent, however, small, had been received. As I have already shown, I may say with respect that this statement is not correct. However, his decision that the right of the proprietor to recover the lands in suit was barred by limitation was rested in that case on the ground that the defendant’s claim as a permanent tenant was notorious. It was argued that the possession of a tenant would not become adverse merely because he thought that he had a permanent lease. Batty, J. accepted this argument and said:

“And I think a bare knowledge of the owner that a tenant proposes to rely on the assertion of a certain title would not in itself render the tenant’s possession adverse. The owner in such case might well await actual resistance to or infringement of the rights claimed by him and till then would be under no necessity of taking action. But I also think if the tenant not only openly asserts to the knowledge of the owner an adverse interest, but proceeds to enjoy benefits claimable only on the basis of that interest, his possession at once become adverse and limitation begins to run against the owner from that time.”

The view which is supported by this decision is that, if the tenant notoriously claims and asserts that he is a permanent tenant and enjoys benefits consistent only with such interest to the knowledge of the owner, mere payment and acceptance of rent will not prevent time running against the owner in so far as the limited right of permanent tenancy is concerned.

29. The same principle has been laid down in Parameswaram Mumbannoo v. Krishnan Tengal, ILR 26 Mad 535 which has also been relied upon by Mr. Chatterji. The plaintiffs’ devasom instituted a suit for ejectment of some of the defendants who pleaded that they were permanent tenants at a fixed rent. The lease on which the devasom based its claim was not found proved but a decree was granted in its favour for the rent admitted by the defendants to be due from them as permanent tenants. Rent at the same rate was paid in subsequent years also. Their Lordships held that the payments could only be construed as payments by the defendants of rent on the basis that they were permanent tenants, and, therefore, the plaintiffs’ suit was barred by limitation. This case thus shows that, if a tenant pays rent on the assertion that he is a permanent tenant and the landlord accepts it on thai basis, the tenant will in due course acquire the limited right of a permanent tenant by adverse possession.

30. Mr. Chatterji has next relied upon Ram Rachhya Singh v. Kamakhya Narayan Singh, ILR 4 Pat 139: (AIR 1925 Pat 216). Jwala Prasad, A. C. J. has observed in that case that the plaintiff claimed that the defendants were tenants from year to year, that the defendants claimed to be perpetual tenure-holders, that rent was thus payable to the landlord according to both sides, and that mere payment of rent could not, therefore, establish the case of either party. These observations have to be understood with reference to the facts of that case. It went up in appeal, and the decision of the Privy Council is reported in Kamakhya Narain Singh v. Ram Raksha Singh, ILR 7 Pat 649: (AIR 1928 PC 146). The relevant facts of that case were briefly as follows:

The plaintiffs predecessor, the then proprietor of Ramgarh Raj, gave two villages in “mukarrari istemarari” lease to Syed Mazaffar Hussain and Syed Mahmad Hossain in 1865. Syed Mahammad Hos-sein executed a deed in 1875, stating that he had no interest in the lease. Syed Muzaffar Hossain assigned his interest in the lease to one Sahai Singh in 1879. The interest was described in the deed of assignment as perpetual mukarrari istemrari tenure. Sahai Singh continued to be in possession & died in 1915. Since then, his successors-in-title, the defendants, were in possession. The usufructuary mortgagee of the villages had earlier sued Syed Muzaffar Hussein for rent and obtained decrees, which were paid by Sahai Singh.

A dispute arose in which the plaintiffs predecessor claimed that the lease conveyed a life interest only, and the defendants’ predecessors claimed that it conveyed a permanent interest. It was decided in 1903 that only a life interest was created by the “mukarrari istemarari” lease. Admittedly, Sahi Singh did not pay any rent to the plaintiff or his predecessors; but he offered in 1903 to pay rent to the plaintiff’s predecessors on condition that receipt was issued in his name and was not marfatdari receipt in the name of Syed Mazaffar Hossein through him. The plaintiff’s predecessors refused to accept the rent on that condition. The suit for recovery of possession was instituted in 1920. On these facts, Sir Lancelot Sanderson, who delivered the judgment of the Judicial Committee, stated:

“So far from being in agreement as to a tenancy, the parties were at arm’s length, and, in their Lordships’ opinion, after the termination of the lease for lives, there was no recognition by the plaintiff or his predecessor in title so as to constitute the defendants or their predecessors in title tenants, as alleged by the plaintiff. In fact, the evidence shows that the then proprietor of the Raj refused to recognise the defendants’ predecessors as his tenants.

“In these circumstances their Lordships are of opinion that the plaintiff failed to prove that the relationship of landlord and tenant, on which he relied was in existence within twelve years prior to the institution of his suit, and that, therefore, the plaintiffs suit for possession was barred by the Limitation Act, and this appeal should be dismissed”

This decision is a clear authority for the proposition that, unless the relationship of landlord and tenant is established, limitation will not be prevented from running against a landlord, who allows a person to be wrongfully in possession of his land. It is also manifest that such a relationship does not come into existence when a tenant is willing to pay rent only on the condition that he is recognised as a permanent tenant and the landlord refuses to accept it on that condition.

31. Another case, which Mr. Chatterji has relied upon, is that of Perianan Chetty v. Govinda Rao, AIR 1932 Mad 328. I must say with respect that their Lordships have rightly refused in that case to accept a general proposition that “it is impossible so long as any rent is paid or received for a title to a permanent lease to be acquired by adverse possession in India.” It is abundantly clear that, as I have shown above, the limited right of permanent tenancy can be acquired by adverse possession in certain circumstances even in spite of payment and acceptance of rent. The defendants in that case entered into possession on the basis of an invalid grant and openly asserted their right to a permanent tenancy. Knowing of such assertion, the other party allowed them to remain in possession for at least sixteen years. It was in these circumstances that their Lordships held that the defendants’ possession was adverse so far as the right of permanent tenancy was concerned.

32. The decision of a Bench of this Court in Rani Bhuneshwari Koer v. Secretary of State, AIR 1937 Pat 374, lays down a similar proposition. That was a case in which the Secretary of State came into possession of the land as a trespasser with an open claim to permanent possession, and the plaintiff and her predecessors accepted rent from him in spite of being aware for many years of his claim to hold in perpetuity. Their Lordships held that the plaintiff was estopped from denying the perpetual nature of the defendant’s tenancy; but, with respect, I may say that the decision could be properly rested on the ground of limitation rather than that of estoppel. This decision was followed in Kala Devi v. Khelu Rai, AIR 1949 Pat 124. In that case also, plaintiffs’ right to recover was held to be barred, even though rent was being paid and accepted, because there was an open assertion of a permanent tenancy right by the defendants. It is not clear from the report that the assertion was known to the plaintiffs; but the fact that it was open indicates that it must have been known to them.

33. Mr. Chatterji has relied upon Maharaj Singh v. Budhu Chamar, ILR 30 Pat 964 : (AIR 1952 Pat 46). In that case, the defendants’ predecessor came into possession of the disputed land under an invalid lease, and, therefore, his possession was that of a trespasser from the very beginning. They remained in possession for over twenty years before the suit was instituted for recovery of possession. They admitted in the written statement that they had always been paying rent to the plaintiffs for the suit land; but they asserted that they had Been in possession of that land as permanent tenants.

It was argued that the defendants’ possession was not adverse because they admittedly paid rent to the plaintiffs; but their Lordships did not accept that argument. They proceeded upon the basis that the admission had to be read as a whole, and, as the defendants stated in the written statement that they were in possession as permanent tenants, that had also to be accepted along with the admission of payment of rent. With great respect, I am un-able to agree. The admitted fact of payment and acceptance of rent brought a relationship of landlord and tenant into existence between the parties.

That being so, limitation could not run against the landlord, as the tenants’ possession was not adverse. The defendants’ allegation that they were in possession as permanent tenants availed them nothing because, in order to succeed, they had to allege and prove as a fact that they had been notoriously claiming to be permanent tenants and that the landlords, being aware of their claim, did not accept the rent or accepted it on that basis. I have, therefore, relunctantly come to the conclusion that, in so far as this point is concerned, this case has been wrongly decided and must be overruled.

34. I may now refer to the cases on which Mr. Chatterji has relied in support of his argument that the kabuliyat can be looked into for ascertaining the contract between the parties, though it does not create a valid lease. The first case is that of Verada Pillai v. Jeevarathnammal, 46 Ind App 285 : (AIR 1919 PC 44). I do not think that that decision is helpful in the present case. Some petitions were filed, stating that two villages had been gifted to one Duraisani alias Alamelu and praying to the Collector that those villages should be registered in her name. The Collector register- ed Duraisani’s name accordingly. She was found to be in possession of the villages afterwards.

Their Lordships held that the petitions were not admissible to prove a gift but they could “be referred to as explaining the nature and character of the possession thenceforth held by Duraisani”. Thus, the petitions were admitted in evidence in that case for a collateral purpose, and there is no reason why they should not have been admitted for that purpose. In the present case, the position is that the kabuliyats admittedly did not create valid leases because the alleged lessor did not execute them.

As I have already observed, the documents being unilateral, cannot even be used as embodying any contracts between the parties. Reference may be made in this connection to the observation of Sinha, J. in Hiralal Rewani v. Bastacolla Colliery Co. Ltd., AIR 1957 Pat 331 at p. 333, that a kabuliyat, in _the circumstances of the present case, does not contain a valid contract.

35. In Mohammad Liaqat Alikhan v. Ajudhia Prasad. AIR 1943 All 212, Hamilton, J., who has delivered the judgment of the Bench, has observed;

“It is settled law that a kabuliyat is not a lease at all. Being executed by the person who would be the lessee, not the lessor, if there was a lease, it is not executed by the person who can make the transfer so it is not even an invalid lease but it is no lease at all.”

His Lordship then said that the kabuliyat could “be looked into to ascertain the assertion of title made by Fakir Chand when he entered upon the land…”. With great respect, I am of opinion that the term mentioned in the kabuliyat that the lessor had agreed to grant a lease, permanent or for a fixed period, cannot be treated as a contract because “it is no lease at all”. The mere assertion in the kabuliyat by the alleged lessee is not of much consequence because the alleged lessor cannot be saddled with knowledge of such assertion.

The tenancy by payment and acceptance of rent comes into existence afterwards, and the assertion of a claim to hold as a permanent tenant must be made openly and to the knowledge of the landlord as a continuous course of conduct from the very time of his entry into possession before it can be held that the tenant has acquired the limited right of a permanent tenant by adverse possession or that the landlord’s right to recover is barred by limitation. While, therefore the statement made by the defendants in the kabuliyats in question, in the present case relating to the duration of the lease may be taken into consideration merely as their assertion, their subsequent conduct and assertions must be looked into in order to find out whether they have discharged the onus of proving that they prescribed for permanent tenancies.

36. This brings me to the question whether the finding of the learned Subordinate Judge that the tenancies in question were permanent and heritable is a finding of fact. He has first stated that Section 106 of the Transfer of Property Act is not applicable in the facts of this case because the kabuliyats evidence the contract between the parties. This is clearly erroneous because I have already slated that the kabuliyats cannot be treated as embodying any contract.

He has not referred to any evidence showing that the defendants asserted at any time that they were permanent tenants but has relied only upon two circumstances; (1) that the defendants have made permanent structures upon the lands in suits, and (2) that, in one case, the original lessee transferred a portion of the land in his possession to others who also put up structures upon their portion. These two circumstances, standing by themselves, could not enable him to come to the conclusion that the defendants were notoriously claiming the right of permanent tenancy because a person may put up a building on land which he does not hold permanently and a person may also sell an interest which is not permanent.

In fact, it appears to me that he has arrived at his conclusion because of the error of law committed by him in supposing that Section 106 of the Transfer of Property Act is not applicable in this case. This finding is, therefore, vitiated and cannot be held to be binding in second appeal.

37. It is manifest in the present case that, owing to the admitted payment and acceptance of rent, the relationship of landlord and tenant came into existence between the plaintiff and the defendant of both the suits. The defendants cannot be held to have prescribed for or acquired the limited right of permanent tenants because they have not proved that they have been in possession with a notorious claim of permanent tenancy to the knowledge of the plaintiff or its predecessor, nor have they proved that they have enjoyed benefits consistent only with a permanent interest.

38. The only point which now remains for me to consider is whether the defendants are entitled to compensation for their structures which stand upon the lands in suits. Section 51 of the Transfer of Property Act provides for payment of compensation in case of eviction of a person who makes improvements on a property while believing in good faith that he is absolutely entitled to it but is subsequently evicted from it by a person who has a better title. A lessee can never believe in good faith that he is absolutely entitled to the leasehold property. Hence, Section 51 has no application to the facts of this case.

This is well settled by a long line of authorities, and Mr. Chatterji has conceded that this is so. There is no other provision for payment of compensation; but Mr. Chatterji has contended that the claim of the defendants of these two cases can be founded on the doctrine of estoppel. In my judgment, this argument can be disposed of very shortly.

The extent of application of this doctrine in India has been laid down in Section 115 of the Evidence Act. The essential requirement as laid down in that section is that, before a person can be bound by the doctrine, he must, by his declaration, act or omission, intentionally cause Or permit the other party to believe a thing to be true and to act upon such belief.

It is quite well settled that equity cannot over-ride the provisions of a statute, and so said Lord Russell of Killowen while delivering the judgment of the Judicial Committee in G.H.C. Ariff v. Jadu-nath Majumdar, 58 Ind App 91 : (AIR 1931 PC 79). In that case, the defendant entered into possession under a verbal agreement with the plaintiff for the grant of a permanent lease tp him, to build costly structures upon, it within the knowledge of the plaintiff. The question of estoppel was raised; but it was shortly disposed of as follows:–

“….. and as to estoppel there is no trace of any statement by him (referring to the plaintiff) upon which any estoppel can be grounded.”

It can similarly be said in the present case that there is ho statement of any kind by the plaintiff or its predecessor on which estoppel can be based.

39. It is perfectly clear that no compensation is payable in this country in a case of the present kind, Before the enactment of the Transfer of Property Act, 1882, the question arose in 1866 before a Full Bench of the Calcutta High Court in Thakoor Churder Paramanick v. Ramdhone Bhutta-charjee, 6 Suth WR 228 : Beng LR Supp. Vol., FB 595. After taking into consideration the Hindu and Muhammadan laws and the usages and customs prevailing in this country, Sir Barnes Peacock, C. J., who delivered the judgment of the Bench, said:

“…..We think it should be laid down as a general rule that, if he who makes the improvement is not a mere trespasser, but is in possession under any bona fide title or claim of title he is entitled either to remove the materials ….. or to obtain compensation for the value of the building if it is allowed to remain for the benefit of the owner of the soil, the option of taking the building, or allowing the removal of the material remaining with the owner of the land in those cases in which the building is not taken down from the builder during the continuance of any estate he may possess.”

When the Transfer of Property Act was enacted in 1882, clause (h) of Section 108, which prescribed the rights and liabilities of the lessor and the lessee, stood as follows :

“(h) The lessee may remove, at any time during the continuance of the lease, all things which he has attached to the earth; provided he leaves the property in the state in which he received it.”

This provision came up for consideration, in 1900 in Ismail Khan Mahomed v. Jaigun Bibi, ILR 27 Cal 570. Their Lordships said:

“The provision of the Transfer of Property Act relating to a tenant’s right with reference to structures raised on the land held by him is that contained in clause (h) of Section 108, which only authorises the tenant to remove structures raised.”

Referring to Thakoor Chunder Paramanick’s case, 6 Suth WR 228 (FB), they observed that the same was the law as laid down in that decision in cases not governed by the Transfer of Property Act. They further said that there was no authority to support the contention that a tenant was entitled to compensation for buildings erected by him upon the land from which a decree for his ejectment was being passed.

40. The same question was considered in Ismai Kani Rowthen v. Nazarali Sahib, ILR 27 Mad 211, Bhashyam Ayyangar, J. pointed out that Clause (h) of Section 108 provided only for removal of materials By the tenant “during the continuance of the lease”. He also observed that, if the tenant did not remove the materials while the, lease continued, the option, as laid down in Thakoor Chunder Paramanick’s case, 6 Suth WE 228 : Beng. LR Sup FB 595, “according to the customary or common law of the land”, was with the lessor either to take the building on payment of compensation or to allow the tenant to remove its materials… ‘

41. Mr. Chatterji has relied upon the following observations in Nundo Kumar Naskar v. Banomali Gayan, ILR 29 Cal 871 at p. 885;

“….. we think that if it had been shown that, the plaintiff knew that, they were expending money upon the improvement of the land, and knew also they were doing so in the belief that they had a good title, and that he nevertheless stood by and allowed them to proceed with their expenditure, he ought not to be allowed now to insist as against them on his legal right, without indemnifying them for their outlay, (see Cawdor v. Lewis, (1835) 1 Y, and, C. 427, and Willmott v. Barber, (1880) 15 Ch:D,96)”

These observations are, however, clearly of the nature of obiter dicta because their Lordships have said in the very next sentence that the existence of none of these facts had been proved in the case, and, therefore, the claim for compensation failed.

42. It may now be mentioned that Clause (h) of Section 108 was amended by Act X^.,of 1929. After the amendment, the clause “stands as follows:

“(h) The lessee may even after the ‘determination of the lease remove, at any time whilst he is in possession of the property leased but not after wards all things which he has attached to the earth; provided he leaves the property in the state in which he received it.”

This provision leaves no room for doubt at all. It does not provide for payment of any compensation to the lessee for any structure put up by him upon the land in question; but it provides that, at any time while he is in possession, he can remove whatever he has attached to the earth. The amendment thus removes the defect pointed out by Bhashyam Ayyangar, J. in Ismai Kani Rowthan’s case, ILR 27 Mad 211, that Clause (h) provided for removal of materials only “during the continuance of the lease”.

43. Mr. Chatterji, however, relies strongly upon a Bench decision of this Court in Maina Sahu v. Balak Das, 19 Pat LT 791 : (AIR 1938 Pat 435). Relying upon two decisions of the Calcutta High Court, namely, Badal Chandra Sadhukhan v. Deben-dr’a Nath, 37 Cal WN 473 : (AIR 1933 Cal 612) and Moharnmad Ali Khan v. Kanailal Haldar, AIR 1935 Cal 625, their Lordships held that the tenant-defendant was entitled to compensation for the building erected by him on the land from which he was to be evicted. Their Lordships have not discussed the question, nor have they referred to Section 108 (h) of the Transfer of Property Act.

They have merely relied upon the two cases which I have mentioned. The decision in Badal Chandra Sadhukhan’s, case, 37 Cal WN 473 : (AIR 1933 Cal 612), is that of Mukerji, J., sitting as a single Judge. His Lordship has not referred to Section 108 (h). A permanent lease purported to have been created in that case by an unregistered document. The learned Judge observed that, though the intention of the landlord to create a permanent tenancy was clear, the law stood in the way, and it was not open to the tenants to plead an estoppel against the statute in so far as the lease was concerned.

He then arrived at the conclusion that the doctrine of estoppel applied in so far as the structures were concerned, and that the defendant was entitled to compensation for them. He has not given any reason in support of this conclusion, and, with great respect, I am unable to accept it. Mukherji, J, was also a party to the Bench decision in Mohammed Ali Khan’s case, AIR 1935 Cal 625. The view taken in the latter case, however, appears to be quite different as a distinction has been made between improvements, which were inseparable from the land, and structures which were erected upon the land and which were described as being removable.

Compensation was allowed for the improvement, and, so far as the structures were concerned, it was said that the plaintiffs were “not bound to take the land burdened with them”, and that the appellant was entitled to remove them, if he so liked. Their Lordships then said, however, that the tenant was entitled to an order that the plaintiffs-landlord should sell their interest to him in respect to the land on which he had erected his dwelling house, and they passed an order to that effect. Whatever may be said about the order for sale of the landlords’ interest to the tenant, the decision that the tenant was not entitled to compensation for the structures does not support the view taken in Maina Sahu’s case, 19 Pat LT 791 : (AIR 1938 Pat 435).

44. A similar question came up for consideration before another Bench of this Court in Darbari Lal Mudi v. Raneeganj Coal Association Ltd., AIR 1944 Pat 30. Their Lordships have considered Section 108 (h) of the Transfer of Property Act, and have held that the tenants are not entitled to com-pensation in circumstances like those of the present case for structures built by them upon the land in question. Brough, J. who delivered the judgment, Sinha, J. (as he then was) agreeing, has stated that the decision in Maina Sahu’s case, 19 Pat LT 791 : (AIR 1938 Pat 435) was given without any reference to, or discussion of, Section 108 (h), and that it could not be accepted as an authority for the proposition that equitable principles could override the provisions of that clause.

He also pointed out that the single Judge decision in Badal Chandra Sadhukhan’s case was apparently made without full argument, and the Division Bench decision in Mohammad AH Khan’s case was an authority not for allowing compensation but for refusing it. He, therefore, refused to allow Maina Sahu’s case.

45. The question has been further considered in this court and also in the Calcutta High Court. In Subodh Chand Mitter v. Bhagwandas Saha, 50 Cal WN 851 : (AIR 1947 Cal 353), both the learned Judges delivered separate judgments; but both agreed that the correct view about compensation had been taken by this Court in Davbarilal Mudi’s case. Badal Chandra Sadhukhan’s case and Mohammad Ali Khan’s case were not followed. Chakra-vartti, J. further pointed out that, in the latter case, no compensation was held payable for the structure itself.

46. The decision of this Court is that of a Division Bench in AIR 1957 Pat 331. Their Lordships followed the decision in Darbari Lal Mudi’s case, AIR 1944 Pat 30, and held that, on ejectment, a tenant is entitled only to remove all the things he had attached to the earth, and not to compensation.

47. Thus, the provisions of law and the preponderance of authority are against the argument that the lessees are entitled on ejectment to compensation for the structures made by them. It must, therefore, be held that, so far as this point is concerned, the case of Maina Sahu, 19 Pat LT 791 : (AIR 1938 Pat 435), has been wrongly decided, and it is, accordingly, overruled. It follows that the defendants in these two cases are not entitled to any compensation but are entitled to remove their structures and materials.

48. As a result of the conclusions which I have reached on the points raised, both these appeals are allowed and the suits are decreed with costs throughout. The decrees passed by the learned Subordinate Judge on appeal are set aside, and those passed by the learned Additional Munsif of Dhanbad are restored with this modification that the defendants will have three months’ time from today to remove their structures and materials from the suit lands and to deliver possession of the suit lands to the plaintiff.

Ramaswami, C.J.

49. I agree.

Choudhary, J.

50. I agree.