Unregistered Agreement Insufficient To Transfer Leasehold Rights, Housing Board's Procedure Paramount: J&K High Court

In dismissing an appeal against a demolition order Justices Rajnesh Oswal and Sanjay Dhar highlighted the paramountcy of J&K Housing board over its properties on lease and observed,

“The J&K Housing Board is having its own procedure for the purpose of transferring the lease hold rights and the fact remains that the appellant cannot claim any right or title based on Agreement to Sell in respect of lease hold rights of the plot in question”

The matter began with an order issued under Section 7(3) of the J&K Control of Building Operations Act, directing Abdul Majeed Khan to demolish unauthorized construction on a Plot in Housing Colony. A writ petition was initially filed by Khan's attorney, Prem Lata, the mother of the appellant Sanjeev Gupta, seeking to quash the demolition order. However, the petition was dismissed for non-prosecution on April 20, 2022.

Subsequently, Gupta, claiming to be the legal heir of Prem Lata, sought to revive the writ petition, arguing that his mother had invested in the property and that he had acquired rights through an agreement to sell and a will executed by Khan. However, the Single Judge dismissed Gupta's writ petition holding that Gupta lacked the locus standi to challenge the demolition order. The court observed that neither the agreement to sell nor the will conferred legal ownership or leasehold rights.

Aggrieved, Gupta, represented by Senior Advocate Rahul Pant, argued before the Division Bench that the agreement to sell, executed on February 28, 2004, and the will executed on the same date, transferred leasehold rights to him. He contended that as the occupier and beneficiary, he had the legal standing to challenge the demolition order.

The respondents, represented by Senior AAG S.S. Nanda and Advocate Mayank Gupta, countered that an agreement to sell does not transfer ownership or leasehold rights under law. They argued that only registered deeds, such as a sale deed or mutation, are recognized for transferring property rights, and emphasized that under Muslim law, only one-third of the property can be bequeathed by will. Therefore, Gupta had no legal basis to challenge the demolition order.

Court Observations:

Upholding the Single Judge's findings, the court emphasised that Gupta could not establish ownership or leasehold rights through an unregistered agreement to sell. The Court highlighted that the J&K Control of Building Regulations require proof of ownership through registered documents such as a sale deed or mutation and an agreement to sell is insufficient and unrecognized as a legal mode of property transfer.

Observing that Gupta had failed to demonstrate his status as an occupier under Section 2(14) of the Act, as he neither paid rent nor held legal ownership the bench underscored,

“The expression 'owner' used in reference to any land or building, includes the person for the time being receiving the rent of the land or building or of any part of the land or building whether on his own account or as agent or trustee for any person or society or/for any religious or charitable purpose”

Scrutinising the provisions of the J&K Control of Building Operations Act and related regulations the court noted that legal ownership requires documented proof such as a sale deed, gift deed, or mutation none of which were presented by the appellant. The Court held that an unregistered agreement to sell does not establish lawful transfer of leasehold rights, particularly without the J&K Housing Board's approval.

“Similarly, the appellant cannot lay any claim over the plot mentioned above on the basis of a Will, unless the plot is transferred in his own name by the J&K Housing Board. Moreso, the appellant is silent as to why he did not get the lease hold rights transferred in his own name when as per his own assertion, he had purchased the lease hold rights vide Agreement to Sell”, the court remarked.

Additionally, discrepancies in claims regarding the construction timeline weakened Gupta's position, as earlier appeals by his mother omitted such assertions.

In light of these observations the court affirmed that Gupta lacked the legal standing to challenge the demolition and thus dismissed the appeal.

Case Title: Sanjeev Gupta vs UT Of J&K 

Citation: 2024 LiveLaw (JKL) 323

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