Adverse Possession and Limitation

The Supreme Court’s Recent Examination of the Law

However, what do you do when you are in the UK and you have property in India, which you come to know at a later stage, by which time someone has encroached on your property?

Adverse possession is all about granting ownership rights to an individual who resides on or possesses another person’s land without their permission. According to the Indian Limitation Act, if a property owner fails to assert their ownership rights for a period of 12 years, then the concept of ‘Adverse Possession’ legalises the occupation (of the trespasser or caretaker, as the case may be) over the property.

The Supreme Court, in a recent landmark decision this year (13.02.2024) in the case of Vasantha Thr. LR. v. Rajalakshmi @ Rajam Thr. LRs, examined the law of adverse possession and the implications of Section 27 of the Limitation Act, 1963, on property rights.

Facts of the case:

A mother entered into a settlement agreement (the first settlement agreement), which transferred rights to her assets for life to her two sons and then to her eldest son’s two daughters, namely “A” and “B” (“Defendant”). The two sons then entered into a second settlement in 1952, which returned their interests in the property to their mother. The third deed of settlement was signed by the mother, pledging to bequeath absolute rights to these assets for the sole benefit of her two sons. Her youngest son had no children, and her wife ‘P’ enjoyed the use of the property bequeathed to her husband. The appellant is their adopted daughter. In 1993, A’s husband (plaintiff), who was A’s sole heir under the first deed of settlement, filed an action that is the subject of the Act and sought declaration as the owner of the property. The trial court held that the first settlement deed was genuine. The First Appellate Court in the appeal against the Trial Court’s decision confirmed the same, and the appeal was dismissed.

In the second appeal, the High Court held that the interest vested in ‘A’ was full and not life interest. Therefore, upon her death, the interest does not revert to the settlor. In other words, that ‘A’ died before her interest stood fructified is an incorrect statement, and it is only the right of enjoyment that stood postponed till the life interest of the two sons. Further, it was held that the documents executed between the mother and her sons, and subsequently, ‘P’ and the present appellant, were only in respect of life interest, i.e., a limited right, and the other two deeds of settlement executed after the First Settlement Deed are against or beyond the competency of the executants and therefore, not binding.

The main issue before the Supreme Court was to decide whether the suit filed by A’s husband for declaration as owner based on the first settlement deed, eventually filed in the year 1993, was barred by limitation.

Verdict:

The Court referred to Saroop Singh v. Banto (2005), 8 SCC 330, wherein it was observed that Article 65 of the First Schedule to the Limitation Act states that the starting point of limitation does not commence from the date when the right of ownership arises to the plaintiff but commences from the date the defendant’s possession becomes adverse. It was observed that the physical fact of exclusive possession and the animus possidendi to hold as owner in exclusion from the actual owner are the most important factors that are to be accounted for in cases related to adverse possession.

The Court said that the plea for adverse possession is not a pure question of law but a blend of questions of fact and law. Therefore, the Court said that a person claiming adverse possession should show (i) as to on what date he got the possession; (ii) what was the nature of his possession; (iii) whether the factum of possession was known to the other party; (iv) how long his possession has continued; and (v) that his possession was open and undisturbed.

The Court added that since the person claiming adverse possession is trying to defeat the rights of the true owner, it is for him to clearly plead and establish all facts necessary to prove his adverse possession.

Further, the Court referred to Hemaji Waghaji Jat v. Bhikhabhai Khengarbhai Harijan, (2009) 16 SCC 517, wherein it was reiterated,

“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. 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 also to vest the possessor with title. The intention of such a statute is not to punish one who neglects to assert rights but to protect those who have maintained possession of property for the time specified by the statute under a claim of right or colour of title.”.

The Court noted that in Shakti Bhog Food Industries Ltd. v. Central Bank of India (2020), 17 SCC 260, it was observed that the right to sue accrues ‘from the date on which the cause of action arose first’. The Court noted that in the present case, the suit for declaration was filed in 1993 and said that this implies that the cause of action to seek any other declaration, i.e., a declaration of A’s husband in the property, should have arisen only in the year 1990. The Court explained that the possible causes of action would be at the time of the Second Settlement Deed (1952) or the younger son’s deed of settlement, at the time of vesting of the property in favour of the present appellant (1993), or at the time of death (2004), where, apart from the declaration, he ought to have sought relief of possession as well. The Court said that no record was available to show that a declaration was sought, much less within the stipulated period of three years on such possible occasions.

The Court added that it is now well settled that the lapse of limitation bars only the remedy but does not extinguish the title. The Court said that the High Court overlooked the said aspect in reversing the findings of the Trial Court and the First Appellate Court.

Given this recent judgement and the huge impact it can have on NRIs or people based outside India, we at MGB Law would be able to assist in claiming your property in India. We have ongoing matters where we provide advice and also provide legal services in courts in India to ensure that your rights and possession of the property are safeguarded.