Supreme Court Quarterly Digest On Property Law [January to March,2023]

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31 May 2023 12:26 PM GMT

  • Supreme Court Quarterly Digest On Property Law [January to March,2023]

    Adverse inference cannot be drawn against a plaintiff merely because he did not produce his bank passbook. Basavaraj v. Padmavathi, 2023 LiveLaw (SC) 17 : AIR 2023 SC 282 : (2023) 4 SCC 239Code of Civil Procedure, 1908; Order XXI Rule 84, 85 - The deposit of 25% of the amount by the purchaser other than the decree-holder is mandatory and the full amount of the purchase money must be paid...

    Adverse inference cannot be drawn against a plaintiff merely because he did not produce his bank passbook. Basavaraj v. Padmavathi, 2023 LiveLaw (SC) 17 : AIR 2023 SC 282 : (2023) 4 SCC 239

    Code of Civil Procedure, 1908; Order XXI Rule 84, 85 - The deposit of 25% of the amount by the purchaser other than the decree-holder is mandatory and the full amount of the purchase money must be paid within fifteen days from the date of the sale - If the payment is not made within the period of fifteen days, the Court has the discretion to forfeit the deposit, and there the discretion ends but the obligation of the Court to resell the property is imperative - The provisions of the rules requiring the deposit of 25 per cent of the purchase money immediately, on the person being declared as a purchaser and the payment of the balance within 15 days of the sale are mandatory and upon noncompliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favour of a purchaser without depositing 25 per cent of the purchase money in the first instance and the balance within 15 days. When there is no sale within the contemplation of these rules, there can be no question of material irregularity in the conduct of the sale. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. (Para 8-9) Gas Point Petroleum India Ltd. v. Rajendra Marothi, 2023 LiveLaw (SC) 89 : AIR 2023 SC 936 : (2023) 1 SCR 433

    Code of Civil Procedure, 1908; Order XXII Rule 3 - When a claim in suit has been adjusted wholly or in part by any lawful agreement or compromise, the compromise must be in writing and signed by the parties and there must be a completed agreement between them -. In a suit for partition of joint property, a decree by consent amongst some only of the parties cannot be maintained. (Para 93, 94) Prasanta Kumar Sahoo v. Charulata Sahu, 2023 LiveLaw (SC) 262

    Constitution of India, 1950; Article 300A - To continue with the temporary acquisition for number of years would be arbitrary and can be said to be infringing the right to use the property guaranteed under Article 300A of the Constitution of India. Even to continue with the temporary acquisition for a longer period can be said to be unreasonable, infringing the rights of the landowners to deal with and/or use the land. (Para 7) Manubhai Sendhabhai Bharwad v. Oil and Natural Gas Corporation Ltd; 2023 LiveLaw (SC) 55 : AIR 2023 SC 992

    Decree of possession cannot be passed in favour of the plaintiff on the ground that defendants have not been able to fully establish their right, title and interest in the property - A person in possession of land in the assumed character as the owner, and exercising peaceably the ordinary rights of ownership, has a legal right against the entire world except the rightful owner - The defendants, being in possession, would be entitled to protect and save their possession, unless the person who seeks to dispossess them has a better legal right in the form of ownership or entitlement to possession. Smriti Debbarma v. Prabha Ranjan Debbarma, 2022 LiveLaw (SC) 19 : AIR 2023 SC 379

    Hindu Succession Act 1956 - Partition Suit - Effect of 2005 amendment to pending partition suit - As the law governing the parties has been amended before the conclusion of the final decree proceedings, the party benefitted by such amendment (like the two daughters in the case on hand) can make a request to the Trial Court to take cognizance of the Amendment and give effect to the same. (Para 80) Prasanta Kumar Sahoo v. Charulata Sahu, 2023 LiveLaw (SC) 262

    Hindu Succession Act 1956 - the institution of a suit for partition by a member of a joint family is a clear intimation of his intention to separate, and there was consequential severance of the status of jointness - In case during the pendency of partition suit or during the period between the passing of preliminary decree and final decree in the partition suit, any legislative amendment or any subsequent event takes place which results in enlargement or diminution of the shares of the parties or alteration of their rights, whether such legislative amendment or subsequent event can be into consideration and given effect to while passing final decree in the partition suit - Even though filing of partition suit brings about severance of status of jointness, such legislative amendment or subsequent event will have to be taken into consideration and given effect to in passing the final decree in the partition suit - This is because, the partition suit can be regarded as fully and completely decided only when the final decree is passed. It is by a final decree that partition of property of joint Hindu Family takes place by metes and bounds. (Para 73(C)) Prasanta Kumar Sahoo v. Charulata Sahu, 2023 LiveLaw (SC) 262

    IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - Regulation 30 - NCLT as well as NCLAT were right in holding that the possession of the Corporate Debtor, of the property needs to be protected. This is why a direction under Regulation 30 had been issued to the local district administration. (Para 50) Victory Iron Works Ltd. v. Jitendra Lohia, 2023 LiveLaw (SC) 193

    In suit for possession, prior possession becomes relevant when both parties fail to establish title. Shivashankara v. H.P. Vedavyasa Char, 2023 LiveLaw (SC) 261

    Insolvency and Bankruptcy Code, 2016 - the development rights created in favour of the Corporate Debtor constitute “property” within the meaning of the expression under Section 3(27) of IBC -Since the expression “asset” in common parlance denotes “property of any kind”, the bundle of rights that the Corporate Debtor has over the property in question would constitute “asset” within the meaning of Section 18(f) and Section 25(2)(a) of IBC- these rights and interests in the immovable property are definitely liable to be included by the Resolution Professional in the Information Memorandum and the Resolution Professional is duty bound under Section 25(2)(a) to take custody and control of the same. (Para 37) Victory Iron Works Ltd. v. Jitendra Lohia, 2023 LiveLaw (SC) 193

    Insurance Contract - Fire and Special Perils policy - Supreme Court directs insurer to pay reinstatement value of the goods damaged and not the depreciated value, because as per the policy, in case the insurance company is unable to reinstate or repair because of some municipal or other regulations, it shall be liable to pay such sum as would be requisite to reinstate or repair such property. Oswal Plastic Industries v. Manager, Legal Dept., 2023 LiveLaw (SC) 34 : AIR 2023 SC 412

    Land cannot be kept under temporary acquisition for years, It violates right to property under Article 300A. Manubhai Sendhabhai Bharwad v. Oil and Natural Gas Corporation Ltd; 2023 LiveLaw (SC) 55 : AIR 2023 SC 992

    Possessory Title - Principle of “jus tertii”- ‘right of a third party - no defendant in an action of trespass can plead the ‘jus tertii’ that the right of possession outstanding in some third person. (Para 28) Shivashankara v. H.P. Vedavyasa Char, 2023 LiveLaw (SC) 261

    Possessory Title - when the facts disclose no title in either party, at the relevant time, prior possession alone decides the right to possession of land in the assumed character of owner against all the world except against the rightful owner - ‘Possessio contra omnes valet praeter eur cui ius sit possessionis’ (he that hath possession hath right against all but him that hath the very right)”. (Para 30) Shivashankara v. H.P. Vedavyasa Char, 2023 LiveLaw (SC) 261

    Section 28 Specific Relief Act - Time to deposit balance sale consideration cannot be extended as a matter of course. P. Shyamala v. Gundlur Masthan, 2023 LiveLaw (SC) 151 : AIR 2023 SC 1224

    Section 52 TP Act - Alienation of suit property pendente lite not invalid; but it'll be subject to rights of litigants. Shivashankara v. H.P. Vedavyasa Char, 2023 LiveLaw (SC) 261

    Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 - Object behind enacting the Act, 1976 is to provide for forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators, and at the same time to ensure effective prevention of smuggling activities and foreign exchange manipulation - It is necessary to deprive persons engaged in such activities and manipulations of their ill-gotten gains. It also provides that such persons have been augmenting such gains by violations of wealth tax, income tax or other laws or by other means and have thereby been increasing their resources for operating in a clandestine manner and to nail such persons who are holding the properties acquired by them through such gains in the name of their relatives, associates and confidants. (Para 9) Platinum Theatre v. Competent Authority, 2023 LiveLaw (SC) 226

    Specific Relief Act, 1963 - Suit for specific performance of agreement to sell -Supreme Court bench comprising Justices MR Shah and BV Nagarathna delivers a split verdict on whether the plaintiff is entitled to the decree of specific relief. C. Haridasan v. Anappath Parakkattu Vasudeva Kurup, 2023 LiveLaw (SC) 31

    Specific Relief Act, 1963; Section 16 - Unless the plaintiff was called upon to produce the passbook either by the defendant or, the Court orders him to do so, no adverse inference can be drawn. Basavaraj v. Padmavathi, 2023 LiveLaw (SC) 17 : AIR 2023 SC 282 : (2023) 4 SCC 239

    Specific Relief Act, 1963; Section 28 - The Court cannot as a matter of course, allow extension of time for making payment of balance amount of consideration in terms of a decree - The Court has to see all the attendant circumstances including if the vendee has conducted himself in a reasonable manner under the contract of sale-the power under Section 28 of the Specific Relief Act is discretionary and the Court has to pass an order as the justice may require. (Para 7) P. Shyamala v. Gundlur Masthan, 2023 LiveLaw (SC) 151 : AIR 2023 SC 1224

    Suit for recovery of possession - In a case where the owner of the land filed suit for recovery of possession of his land from the encroacher and once he establishes his title, merely because some structures are erected by the opposite party ignoring the objection, that too without any bona fide belief, denying the relief of recovery of possession would tantamount to allowing a trespasser/encroacher to purchase another man’s property against that man’s will. (Para 21) Baini Prasad v. Durga Devi, 2023 LiveLaw (SC) 78 : AIR 2023 SC 894

    Supreme Court bench delivers split verdict in civil appeal from specific performance suit. C. Haridasan v. Anappath Parakkattu Vasudeva Kurup, 2023 LiveLaw (SC) 31

    The Supreme Court directs insurer to pay reinstatement value of goods damaged in fire instead of depreciated value. Oswal Plastic Industries v. Manager, Legal Dept., 2023 LiveLaw (SC) 34 : AIR 2023 SC 412

    Transfer of Property Act - Encroacher cannot claim benefit of Section 51. Baini Prasad v. Durga Devi, 2023 LiveLaw (SC) 78 : AIR 2023 SC 894

    Transfer of Property Act 1882; Section 60 - Right to redemption of mortgage- Unless the equity of redemption is so extinguished, a second suit for redemption by the mortgagor, if filed within the period of limitation, is not therefore barred. (Para 61, 62) Ganesh Prasad v. Rajeshwar Prasad, 2023 LiveLaw (SC) 189

    Transfer of Property Act, 1882 - Principle of Estoppel - Though the release deed executed by the son was with respect to only a spes successonis right, his conduct of relinquishment will bind his sons through estoppel-despite the fact that what was purported to be released by Shri Chandran, was a mere spec successonis or expectation his conduct in transferring/releasing his rights for valuable consideration, would give rise to an estoppel. The effect of the estoppel cannot be warded off by persons claiming through the person whose conduct has generated the estoppel. (Para 23) Elumalai @Venkatesan v. M. Kamala, 2023 LiveLaw (SC) 65 : AIR 2023 SC 659 : (2023) 1 SCR 261

    Transfer of Property Act, 1882; Section 51 - Section 51 applies in terms to a transferee who makes improvements in good faith on a property believing himself to be its absolute owner -In order to attract the Section the occupant of the land must have held possession under colour of title, his possession must not have been by mere possession of another but adverse to the title of the true owner and he must be under the bone fide belief that he has secured good title to the property in question and is the owner thereof - Section 51 gives only statutory recognition to the above three things I it was after encroaching upon the land in question and ignoring the absence of any title that the defendant made structures thereon at his own risk -Once it is so found, the defendant cannot be treated as a ‘transferee’ within the meaning of the TP Act and for the purpose of Section 51, TP Act. (Para 7-11) Baini Prasad v. Durga Devi, 2023 LiveLaw (SC) 78 : AIR 2023 SC 894

    Transfer of Property Act, 1882; Section 52 - Lis Pendens - It is a well-nigh settled position that wherever TP Act is not applicable, such principle in the said provision of the said Act, which is based on justice, equity and good conscience is applicable in a given similar circumstance, like Court sale etc. - Transfer of possession pendente lite will also be transfer of property within the meaning of Section 52 and, therefore, the import of Section 52 of the TP Act is that if there is any transfer of right in immovable property during the pendency of a suit such transfer will be non est in the eye of law if it will adversely affect the interest of the other party to the suit in the property concerned. We may hasten to add that the effect of Section 52 is that the right of the successful party in the litigation in regard to that property would not be affected by the alienation, but it does not mean that as against the transferor the transaction is invalid. (Para 16) Shivashankara v. H.P. Vedavyasa Char, 2023 LiveLaw (SC) 261

    Transfer of Property Act, 1882; Section 6 (a) - spes successonis - A living man has no heir- Release deed executed by son relinquishing his share in the self-acquired property of father has no effect- A person who may become the heir and entitled to succeed under the law upon the death of his relative would not have any right until succession to the estate is opened up. Unlike a co-parcener who acquires right to joint family property by his mere birth, in regard to the separate property of the Hindu, no such right exists. (Para 10) Elumalai @Venkatesan v. M. Kamala, 2023 LiveLaw (SC) 65 : AIR 2023 SC 659 : (2023) 1 SCR 261

    Transfer of Property Act, 1882; Section 6 (a) -Transfer by an heir apparent being mere spes successonis is ineffective to convey any right. By the mere execution of Release Deed, in other words, in the facts of this case, no transfer took place-This is for the simple reason that the transferor, namely, the father of the appellants did not have any right at all which he could transfer or relinquish. (Para 14) Elumalai @Venkatesan v. M. Kamala, 2023 LiveLaw (SC) 65 : AIR 2023 SC 659 : (2023) 1 SCR 261

    When a person has relinquished rights in father's self acquired property, his sons are estopped from claiming share. Elumalai @Venkatesan v. M. Kamala, 2023 LiveLaw (SC) 65 : AIR 2023 SC 659 : (2023) 1 SCR 261

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