Category Archives: Property Law

Bona Vacantia or Escheat

Law relating to bona vacantia provides for conservation of abandoned properties. The nature of the property to which the Escheats Act applies must necessarily be abandoned property in the sense that there should be no claimants to the property.

        The question is, what exactly is “abandoned property” or what property is “bona vacantia”. In Bombay Dyeing Manufacturing Co. Ltd. v. State of Bombay, AIR 1958 SC 328, a Constitution Bench of the Hon’ble Supreme Court while deciding the challenge to the constitutional validity of the Bombay Labour Welfare Fund Act observed and held that the expression “abandoned property”, or to use the more familiar term “bona vacantia”, comprises properties of two different kinds, those which come in by escheat and those over which no one has a claim.

        Property is subject to the right of escheat, where upon intestacy, there is no heir. Escheat was a right, whereby land of which there was no longer any tenant, returned by reason of tenure, to the Lord by whom, or by whose predecessors in title, the tenure was created.

        In A-G of Ontario v. Mercer, (1883) 8 App Cas 767, it was held, that “Escheat is a term of art and derived from the French word escheat that is cadere excidere or accidere and signifyeth property when by accident the lands fall to the Lord of whom they are holden.” Escheat was an incident of feudal tenure and was based on the want of tenant to perform the feudal services. State of Rajasthan v. Lord Northbrook, 2020 (1) AWC 122.

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Conditional Gift – Where Possession Remains with the Donor during his lifetime

Gift means to transfer certain existing movable or immovable property voluntarily and without consideration by one person called the donor to another called the donee and accepted by or on behalf of the donee as held by the Hon’ble Supreme Court in Naramadaben Maganlal Thakker v. Pranjivandas Maganlal Thakker, (1997) 2 SCC 255. As further held by the Hon’ble Court in Naramadaben Maganlal Thakker, (1997) 2 SCC 255:

“It would thus be clear that the execution of a registered gift deed, acceptance of the gift and delivery of the property together make the gift complete. Thereafter, the donor is divested of his title and the donee becomes absolute owner of the property.”

 A conditional gift with no recital of acceptance and no evidence in proof of acceptance, where possession remains with the donor as long as he is alive, does not become complete during lifetime of the donor. When a gift is incomplete and title remains with the donor, the deed of gift might be cancelled.

In Renikuntla Rajamma v. K. Sarwanamma, (2014) 9 SCC 445,  a Hindu woman executed a registered gift deed of immovable property reserving to herself the right to retain possession and to receive rent of the property during her lifetime. The gift was accepted by the donee but later revoked.

 In Renikuntla Rajamma  v. K. Sarwanamma, (2014) 9 SCC 445, it was held that the fact that the donor had reserved the right to enjoy the property during her lifetime did not affect the validity of the deed. The Court held that a gift made by registered instrument duly executed by or on behalf of the donor and attested by at least two witnesses is valid, if the same is accepted by or on behalf of the donee. Such acceptance must, however, be made during the lifetime of the donor and while he is still capable of making an acceptance. S. Sarojini Amma v. Velayudhan Pillai Sreekumar, (2019) 11 SCC 391.

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Assertion of Possessory Title – Over a Particular Property

The crux of the matter is that a person who asserts possessory title over a particular property will have to show that he is under settled or established possession of the said property. But merely stray or intermittent acts of trespass do not give such a right against the true owner. Settled possession means such possession over the property which has existed for a sufficiently long period of time, and has been acquiesced to by the true owner. A casual act of possession does not have the effect of interrupting the possession of the rightful owner. A stray act of trespass, or a possession which has not matured into settled possession, can be obstructed or removed by the true owner even by using necessary force. Settled possession must be (i) effective, (ii) undisturbed, and (iii) to the knowledge of the owner or without any attempt at concealment by the trespasser. There cannot be a straitjacket formula to determine settled possession. Occupation of a property by a person as an agent or a servant acting at the instance of the owner will not amount to actual legal possession. The possession should contain an element of animus possidendi. The nature of possession of the trespasser is to be decided based on the facts and circumstances of each case. Poona Ram v. Moti Ram, (2019) 11 SCC 309

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Self Acquired Property – Character of Joint Family Property

The law on the aspect of blending is well settled that property separate or self acquired of a member of a joint Hindu family may be impressed with the character of joint family property if it is voluntarily thrown by the owner into the common stock with the intention of abandoning his separate claim therein; but to establish such abandonment, a clear intention to waive separate rights must be established. Clear intention to abandon separate rights in the property must be proved. Even abandonment cannot be inferred from mere allowing other family members also to use the property or utilization of income of the separate property out of generosity to support the family members. S. Subramanian v. S. Ramasamay, (2019) 6 SCC 46.

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Corpus Possession & Permissible Possession

Corpus Possession means that there exists such physical contact of the thing by the possessor as to give rise to the reasonable assumption that other person will not interfere with it. Existence of corpus broadly depends on (1) upon the nature of the thing itself, and the probability that others will refrain from interfering with the enjoyment of it; (2) possession of real property, i.e., when a man sets foot over the threshold of a house, or crosses the boundary line of his estate, provided that there exist no factors negativing his control, for example the continuance in occupation of one who denies his right; and (3) acquisition of physical control over the objects it encloses. Corpus, therefore, depends more upon the general expectations that others will not interfere with an individual control over a thing, then upon the physical capacity of an individual to exclude others.

The animus possidendi is the conscious intention of an individual to exclude others from the control of an object.

There is also a concept of “constructive possession” which is depicted by a symbolic act. It has been narrated with an illustration that delivery of keys of a building may give right to constructive possession of all the contents to the transferee of the key.

A person other than the owner, if continued to have possession of immoveable property for a period as prescribed in a Statute providing limitation, openly, without any interruption and interference from the owner, though he has knowledge of such possession, would crystallize in ownership after the expiry of the prescribed period of limitation, if the real owner has not taken any action for reentry and he shall be denuded of his title to the property in law. “Permissible Possession” shall not mature a title since it cannot be treated to be an “adverse possession”. Such possession for however length of time be continued, shall not either be converted into adverse possession or a title. It is only the hostile possession which is one of the condition for adverse possession. Bhikhari v. D.D.C., 2018 (141) RD 130.

 

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Transfer of – Right, Title or Interest in Tangible Property

It is a settled principle of law that a person can only transfer to other person a right, title or interest in any tangible property which he is possessed of to transfer it for consideration or otherwise. In other words, whatever interest a person is possessed of in any tangible property, he can transfer only that interest to the other person and no other interest, which he himself does not possess in that tangible property. So, once it is proved that on the date of transfer of any tangible property, the seller of the property did not have any subsisting right, title or interest over it, then a buyer of such property would not get any right, title and interest in the property purchased by him for consideration or otherwise. Such transfer would be an illegal and void transfer. In such eventuality and subject to any terms and conditions, if agreed between the parties, a buyer will have a right to claim refund of sale consideration from his seller, which he paid for purchase of the property under the law of contract. The reason is that the contract to purchase has failed and, therefore the parties have to be restored back to their original positions, which existed at the time of execution of the contract. Eureka Builders v. Gulabchand¸(2018) 8 SCC 67

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GPA Transaction – Does Not Convey Any Title

In Suraj Lamp & Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656, it was observed as under:
“Therefore, an SA/GPA/will transaction does not convey any title nor creates any interest in an immovable property. The observations by the Delhi High Court in Asha M. Jain v. Canara Bank, (2001) 94 DLT 841, that the concept of power of attorney sales has been recognized as a mode of transaction when dealing with transactions by way of SA/GPA/will are unwarranted and not justified, unintendedly misleading the general public into thinking that SA/GPA/will transactions are some kind of a recognized or accepted mode of transfer and that it can be a valid substitute for a sale deed. Such decisions to the extent they recognize or accept SA/GPA/will transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law.
Transactions of the nature of ‘GPA sale’ or ‘SA/GPA/will transfers’ do not convey title and do not amount to transfer, nor can they be recognized a valid mode of transfer of immovable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of Section 53-
A of the Transfer of Property Act. Such transactions cannot be relied upon or made the basis for mutations in municipal or revenue records. What is stated will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered assignment of lease. It is time that an end is put to the pernicious practice of SA/GPA/will transactions known as GPA sales.” Delhi Development Authority v. Gaurav Kukreja, (2015) 14 SCC 254.

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