Supreme Court Quashes Criminal Proceedings Against Tenants in Wakf Property Dispute: P.V. Nidhish & Ors. vs. Kerala State Wakf Board & Anr. (28 April 2023)

Introduction

Date of the Judgment: 28 April 2023

Citation: 2023 INSC 388

Judges: S. Ravindra Bhat, J., Dipankar Datta, J.

Can a tenant, who has been occupying a property for decades, be suddenly labeled an “encroacher” and face criminal charges because of a change in the law? The Supreme Court of India recently addressed this critical question in a case involving a long-standing dispute over a Wakf property in Kerala. The core issue was whether the tenants of a Wakf property could be prosecuted under the amended Wakf Act of 1995 for continuing to occupy the property after their lease had expired, given that their possession began long before the amendment came into effect. The judgment was delivered by a two-judge bench comprising Justice S. Ravindra Bhat and Justice Dipankar Datta, with Justice Bhat authoring the opinion.

Case Background

The case revolves around a property in Kozhikode, Kerala, where a printing business, “Norman Printing Bureau,” has been operating since 1916. The property was initially leased by P.M. Mammu Haji. The respondents claim that Mammu Haji created a Wakf (a religious endowment) in 1951. However, disputes arose among Mammu Haji’s legal heirs regarding whether the property was a Wakf or a private trust. A suit was filed in 1965, and the court determined that it was a private trust, removing the existing trustee. A rent enhancement deed was executed in 1973. Due to the uncertainty of the ownership, the appellants filed an interpleader suit in 1998, which was later decreed, directing them to pay rent to a third party. The Wakf Board initiated multiple eviction proceedings against the appellants, including an order in 2004 stating that they were not unauthorized occupants. A civil suit was filed in 2012, challenging the Wakf Board’s injunction against reconstruction, with the appellants contending that a Wakf and a trust cannot co-exist. The Wakf Act was amended in 2013, introducing the concept of “encroacher” and making unauthorized possession of Wakf property a criminal offense. Subsequently, a criminal complaint was filed against the appellants, leading to the present appeal.

Timeline

Course of Proceedings

The Wakf Board initiated several proceedings against the appellants for eviction. Initially, in 2004, the Wakf Board ordered that the appellants were not in unauthorized occupation and could be evicted after a notice under the Transfer of Property Act. Subsequently, another proceeding was filed before the Wakf Tribunal, which decreed eviction. However, the Kerala High Court ruled that the Wakf Tribunal lacked jurisdiction, and the appellants could only be evicted through a civil proceeding. A civil suit was filed by the appellants challenging an injunction against reconstruction, arguing that a Wakf and a trust cannot co-exist. The tribunal ruled in favor of the respondent, which was challenged before the Kerala High Court. The High Court held the suit maintainable but observed that the issue of the plaintiff’s competence to seek an injunction against the tenanted properties was a “vexed” question of fact and law that needed independent consideration. During the pendency of these suits, the Wakf Act, 1995, was amended in 2013, leading to the criminal complaint against the appellants.

Legal Framework

The core legal provisions at play in this case are from the Wakf Act, 1995, as amended in 2013, and Article 20(1) of the Constitution of India. The 2013 amendment introduced Section 3(ee), which defines “encroacher” as any person occupying Wakf property without legal authority, including those whose tenancy has expired. Section 52A of the Wakf Act, 1995, makes it a criminal offense to alienate, purchase, or take possession of Wakf property without prior sanction of the Board, punishable with imprisonment. Section 54 of the Wakf Act, 1995, outlines the procedure for removing encroachments from Wakf property. Article 20(1) of the Constitution of India prohibits conviction or punishment under ex-post facto laws, meaning a person cannot be convicted for an act that was not an offense when it was committed.

The relevant provisions are:

• Section 3(ee) of the Wakf Act, 1995: “‘encroacher’ means any person or institution, public or private, occupying wakf property, in whole or part, without the authority of law and includes a person whose tenancy, lease or licence has expired or has been terminated by mutawalli or the Board.”
• Section 3(c) of the Wakf Act, 1995: “c) “Board” means a Board of Waqf established under sub -section (1), or as the case may be, under sub -section (2) of section 13 and shall include a common Waqf Board established under section 106”
• Section 52A(1) of the Wakf Act, 1995: “Whoever alienates or purchases or takes possession of, in any manner whatsoever, either permanently or temporarily, any movable or immovable property being a waqf property, without prior sanction of the Board, shall be punishable with rigorous imprisonment for a term which may extend to two years: Provided that the waqf property so alienated shall without prejudice to the provisions of any law for the time being in force, be vested in the Board without any compensation therefor.”
• Section 54 of the Wakf Act, 1995: “Removal of encroachment from waqf property. –(1) Whenever the Chief Executive Officer considers whether on receiving any complaint or on his own motion that there has been an encroachment on any land, building, space or other property which is 1 [waqf] property and, which has been registered as such under this Act, he shall cause to be served upon the encroacher a notice specifying the particulars of the encroachment and calling upon him to show cause before a date to be specified in such notice, as to why an order requiring him to remove the encroachment before the date so specified should not be made and shall also send a copy of such notice to the concerned mutawalli.”
• Article 20(1) of the Constitution of India: “No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.”

Arguments

Appellants’ Arguments:

• The appellants argued that the penal provision under Section 52A of the Wakf Act, 1995, cannot be applied retrospectively. Their possession of the property began in 1916, long before the Wakf Act and its subsequent amendments. Therefore, they cannot be prosecuted under a law that did not exist when they took possession.
• They contended that the 2013 amendment was not intended to treat long-standing tenants as “encroachers” upon the expiry of their leases. The proper procedure for dealing with such situations is through eviction proceedings under Section 54 of the Wakf Act, 1995, not criminal prosecution.
• The appellants relied on Article 20(1) of the Constitution of India, arguing that applying Section 52A to their case would violate their fundamental right against ex-post facto laws.

Respondents’ Arguments:

• The respondents argued that the 2013 amendment to the Wakf Act, 1995, was intended to criminalize the illegal holding and occupation of Wakf properties. They cited the statement of objects and reasons of the amendment to support their claim.
• They contended that the amendment applies to the appellants because they are still in possession of the property, making it a continuing offense. They relied on the judgments in Securities & Exchange Board of India v. Ajay Agarwal and Mohan Lal v. State of Rajasthan to assert that the amendment applies to ongoing situations.
• The respondents argued that the lease granted to the appellants in 1973 was without prior sanction of the Board, making their possession illegal. They also stated that the appellants have been conducting a business in the Wakf building for over 40 years without any right to continue.
• They argued that under Section 472 of the Cr. PC, the continued possession of the appellants constituted a continuing offense, and therefore, the reliance on Article 20(1) is misplaced.

Innovativeness of the Argument: The appellants’ argument that the amendment should not apply retrospectively to tenants who were in possession before the amendment, and that they should not be treated as encroachers without a proper civil adjudication of their tenancy, was a novel approach to the issue.

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the newly inserted Section 52A of the Wakf Act, 1995, can be applied retrospectively to those who took possession of Wakf properties before the amendment came into force.
2. Whether the appellants, who were in possession of the property as tenants before the 2013 amendment, can be considered “encroachers” under Section 3(ee) of the Wakf Act, 1995.
3. Whether the criminal prosecution of the appellants under Section 52A of the Wakf Act, 1995, violates their fundamental rights under Article 20(1) of the Constitution of India.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Legal Provisions Considered:

• Section 3(ee) of the Wakf Act, 1995: Definition of “encroacher.”
• Section 52A of the Wakf Act, 1995: Criminalizes unauthorized possession of Wakf property.
• Section 54 of the Wakf Act, 1995: Procedure for removing encroachments.
• Article 20(1) of the Constitution of India: Prohibition against ex-post facto laws.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Ramesh Gobindram (Dead) through L.Rs. v Sugra Humayun Mirza Wakf [CITATION]: The Court used this case to explain the scheme of the Wakf Act, 1995, and its purpose.
• Securities & Exchange Board of India v. Ajay Agarwal [CITATION]: The Court distinguished this case, noting that it did not involve a penal provision and therefore was not applicable to the current matter.
• Mohan Lal v. State of Rajasthan [CITATION]: The Court distinguished this case, noting that it did not involve a penal provision and therefore was not applicable to the current matter.
• Rao Shiv Bahadur Singh v. State of Vindhya Pradesh [CITATION]: The Court relied on this case to explain the fundamental principle against ex-post facto laws under Article 20(1).
• T. Barai v. Henry Ah Hoe [CITATION]: The Court used this case to further explain the prohibition of retroactive criminal legislation.
• Kanaiyalal Chandulal Monim v. Indumati T. Potdar and Another [CITATION]: The Court referred to this case to support the principle that penal provisions should not be applied retrospectively.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle against retrospective application of penal laws and the protection of fundamental rights under Article 20(1) of the Constitution. The Court emphasized that the 2013 amendment to the Wakf Act, 1995, should not be interpreted to criminalize actions that were not offenses when they were committed. The Court also considered the fact that the appellants were in possession of the property before the amendment, and civil proceedings for their eviction were ongoing. The Court was not persuaded by the argument that continued possession constituted a continuing offense. The Court also highlighted the potential for injustice if tenants were to be prosecuted without a proper adjudication of their tenancy rights.

Fact:Law Ratio Analysis: The Supreme Court’s decision was heavily influenced by legal considerations (70%), particularly the interpretation of Article 20(1) and the principles against retroactive penal laws. Factual aspects of the case, such as the history of the property and the ongoing civil proceedings, also played a role (30%), but were secondary to the legal principles.

The court’s reasoning was based on the following points:

• The court emphasized that the penal provision under Section 52A cannot be applied retrospectively. The court reasoned that the appellants’ possession of the property began in 1916, long before the Wakf Act and its subsequent amendments.
• The court held that the 2013 amendment was not intended to treat long-standing tenants as “encroachers” upon the expiry of their leases. The court reasoned that the proper procedure for dealing with such situations is through eviction proceedings under Section 54 of the Wakf Act, 1995, not criminal prosecution.
• The court relied on Article 20(1) of the Constitution of India, arguing that applying Section 52A to the appellants’ case would violate their fundamental right against ex-post facto laws.
• The court noted that the respondents’ argument that the amendment applies to the appellants because they are still in possession of the property, making it a continuing offense, was not valid.

The Supreme Court rejected the argument that the appellants’ continued possession constituted a continuing offense, stating that the expression “Whoever alienates or purchases or takes possession of” cannot be read to include possession taken in the past. The court emphasized that the plain text of Article 20(1) forbids such an interpretation, and that giving effect to a penal statute to cover past acts is a proscribed action in law.

The Court stated, “The consequences of such an interpretation would be too startling; even before an adjudication of the validity of termination (of leases, for instance) , tenants holding over would be exposed to prosecution.” The Court also observed that, “To hold otherwise, this court would be resorting to an interpretation that directly deprives the appellants of their rights under Article 20 (1) – a consequence that cannot be countenanced.” The Court further clarified that, “Section 52A cannot cover cases where leases of wakf properties had expired in the past and where the tenant or lessee was, at the time the amendment of 2013 came into force, in physical possession and facing civil proceedings for eviction.”

The judgment was unanimous, with both judges concurring on the reasoning and conclusion.

Key Takeaways

• Penal provisions of the Wakf Act, 1995, cannot be applied retrospectively to actions that occurred before the amendment came into force.
• Tenants who were in possession of Wakf properties before the 2013 amendment and whose leases have expired are not automatically considered “encroachers” under the Act.
• Criminal prosecution is not the appropriate remedy for dealing with tenants holding over after the expiry of their leases; civil proceedings should be initiated.
• The judgment protects the fundamental rights of individuals against ex-post facto laws, ensuring that people are not punished for actions that were not offenses when they were committed.
• This judgment provides clarity on the interpretation of the Wakf Act, 1995, and its amendments, ensuring that tenants are not unfairly targeted.

Directions

The Supreme Court set aside the impugned judgment of the Kerala High Court, which had rejected the appellants’ petition to quash the criminal proceedings. The appeal was allowed, but without any order on costs.

Specific Amendments Analysis

The judgment extensively analyzed the 2013 amendment to the Wakf Act, 1995, particularly the introduction of Section 3(ee) defining “encroacher” and Section 52A criminalizing unauthorized possession of Wakf property. The Court’s analysis focused on the retrospective application of these amendments and their impact on tenants who were in possession before the amendments came into effect. The Court clarified that the amendments should not be interpreted to criminalize past actions and should not override the fundamental rights guaranteed under Article 20(1) of the Constitution.

Development of Law

The ratio decidendi of this case is that penal provisions cannot be applied retrospectively to actions that were not offenses when they were committed. Specifically, the Supreme Court clarified that the 2013 amendment to the Wakf Act, 1995, cannot be applied to tenants who were in possession of Wakf properties before the amendment, and whose leases had expired, without first adjudicating on their rights in civil proceedings. This judgment reinforces the principle against ex-post facto laws and protects the rights of tenants against arbitrary criminal prosecution. This is a change from the previous position of the High Court, which held that upon termination of tenancy, the tenants become encroachers.

Conclusion

The Supreme Court’s judgment in P.V. Nidhish & Ors. vs. Kerala State Wakf Board & Anr. provides significant relief to tenants of Wakf properties who were facing criminal prosecution under the amended Wakf Act, 1995. The Court’s emphasis on the principle against retrospective application of penal laws and the protection of fundamental rights under Article 20(1) of the Constitution ensures that tenants are not unfairly targeted. The judgment clarifies that the term “encroacher” cannot be applied to those who were in possession before the amendment, and that civil proceedings should be the appropriate course of action in such cases. This ruling sets a crucial precedent for future cases involving similar disputes over Wakf properties.