Tag Archives: Possession of Property

Lawful Possession

Possession may be lawful, it may be unlawful. It may be legal or illegal. The acquisition of legal possession would obviously be lawful and would of necessity involve the occurrence of some event recognized by law whereby the subject matter falls under the control of the possessor. But a problem arises where the duration for which possession is recognized is limited by the grantor or the law. Continuance of possession beyond the period specified by the grantor or recognized by law is not treated as a lawful possession. For example, a tenant acquires legal as well as lawful possession of the tenanted premises from the landlord with the express consent of the landlord but limited to the duration of the lease. On expiry of the leaser, if the landlord does not consent to the lease being continued, the possession of such tenant would not be a lawful possession. The nature of possession being not lawful would entitle the landlord to regain possession.

        From a common sense point of view, lawful possession must be the state of being a possessor in the eyes of law. The possession must be warranted or authorized by law; having the qualifications prescribed by law and not contrary to nor forbidden by law. Sawwad Ali v. Rajesh Kumar, 2019 (135) ALR 927.

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Securitisation Act – Deposit under Section 18

Though no principle of law has been laid by the Hon’ble Supreme Court in the Judgment of Persn Medicinal Plants Pvt. Ltd. v. Indian Bank, decided on 25.02.2011 but it clearly indicates that in a given situation where an amount more than the amount due from the borrower/guarantor had already been realized by auction sale, which stands confirmed and the possession of the property also had been handed over to the Bank which is utilizing the same or is utilizing the property having purchased the same in the said auction, insistence on the deposit referred to under proviso to Section 18 would be contrary to the legislative intent as also the express provision as is evident from the use of the words “50% of the amount of debt due from him”.
A similar view has been taken by a Division Bench of the Punjab and Haryana High Court in similar fact situation in the case of S.R. Forging Ltd. v. UCO Bank and another, 2013 (1) DRTC 734, which reads as under:
“At this stage, we find that out of total due amount of Rs. 18.24 crores, Rs. 17.75 crores have been received by the bank in a public auction. Therefore, the deposit of 50% of the amount due prior to sale from the petitioner would be wholly unjustified. The proviso to section 18 of the Act restricts the entertainment of the appeal unless the borrower deposits 50% of the amount of the debt claimed by the Secured Creditors. Once Rs. 17.75 crores have been received by the secured creditors, that is more than 50% of the debt due from the petitioners, the purpose of the proviso stands satisfied”. Akash Ganga Airlines Ltd. v. DRAT, 2015 (5) AWC 5186.

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