Supreme Court Upholds Title Based on Registered Sale Deed, Dismissing Adverse Possession Claim: Neelam Gupta & Ors. vs. Rajendra Kumar Gupta & Anr. (2024)

Date of the Judgment: 14 October 2024
Citation: 2024 INSC 769
Judges: C.T. Ravikumar, J., Sanjay Kumar, J.
Can a claim of adverse possession succeed against a title established through a registered sale deed? The Supreme Court of India recently addressed this question in a property dispute, ultimately ruling in favor of the party holding a registered sale deed and dismissing the claim of adverse possession. The court emphasized the importance of establishing a clear title and the high burden of proof required to claim adverse possession. The judgment was delivered by a two-judge bench comprising Justices C.T. Ravikumar and Sanjay Kumar.

Case Background

The case revolves around a property dispute concerning land in Mowa village, Raipur. Rajendra Kumar Gupta (Respondent No. 1) filed a civil suit on December 24, 1986, against Ashok Kumar Gupta and Rakesh Kumar Gupta (original defendants) seeking recovery of possession based on title. Rajendra Kumar Gupta claimed he had purchased the land, measuring 7.60 acres, through a registered sale deed dated June 4, 1968, from Sitaram Gupta. He alleged that he was dispossessed by the original defendants in July 1983.

The original defendants contended that their father, Ramesh Chandra Gupta, and the plaintiff’s father, Kailash Chandra Gupta, had purchased the land in 1963 in the name of their nephew, Sitaram Gupta. They claimed that they had been in possession of the land since then and that an oral partition in 1976 had allotted the suit property to their share. They also raised pleas of adverse possession and limitation, claiming they had been in possession for over 12 years.

Timeline:

Course of Proceedings

The Trial Court dismissed the suit, holding that the suit property was a joint family property and that the plaintiff’s claim was barred by limitation. The First Appellate Court upheld the dismissal, although it disagreed with the Trial Court’s finding that the property was a joint family property. The High Court of Chhattisgarh at Bilaspur reversed the judgments of the lower courts, holding that the plaintiff had established his title and that the defendants’ claim of adverse possession was not valid. The High Court decreed the suit in favour of the plaintiff, ordering the defendants to hand over vacant possession of the suit property.

Legal Framework

The Supreme Court considered the following legal provisions:

• Section 6(h) of the Transfer of Property Act: This section states that no transfer can be made to a person legally disqualified to be a transferee.
• Section 7 of the Transfer of Property Act: This section specifies who is competent to transfer property, stating that every person competent to contract is competent to transfer property.
• Section 11 of the Indian Contract Act, 1872: This section defines who is competent to contract, including those who have attained the age of majority, are of sound mind, and are not disqualified by any law.
• Section 54 of the Transfer of Property Act: Defines sale as a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
• Section 4 of the Benami Transactions (Prohibition) Act, 1988: This section prohibits suits, claims, or actions to enforce rights in respect of property held benami against the person in whose name the property is held.
• Article 65 of the Limitation Act, 1963: This article deals with suits for possession of immovable property based on title, stating that the limitation period begins when the defendant’s possession becomes adverse.

Arguments

Appellants’ (Original Defendants’) Arguments:

• The sale deed of 1968 (Ext.P1/C) was a sham transaction, and Sitaram Gupta had no right to transfer the property as it was purchased by the joint family in 1963 in his name.
• The property was purchased by the fathers of the original defendants and the plaintiff in the name of their nephew Sitaram, as benami, and hence Sitaram was not the real owner.
• The defendants had perfected their title by adverse possession, having been in continuous possession since 1968.
• The suit was barred by limitation as it was not filed within 12 years from the date of the alleged sale.
• The defendants contended that an oral partition had taken place in 1976, allotting the suit property to them.

Respondent’s (Plaintiff’s) Arguments:

• The High Court correctly interfered with the lower courts’ judgments as they were based on a perverse appreciation of evidence.
• The defendants admitted in Ex. P-4 that they were in possession of the suit land as lessees (Adhiyadar) in 1973 and 1974, which meant their possession was permissive, not adverse.
• The suit was filed within the limitation period, as the limitation period for adverse possession starts from when the possession becomes adverse, not from the date of the sale deed.
• The plaintiff’s title was established by the registered sale deed of 1968.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in the judgment. However, the core issues addressed were:

1. Whether the High Court was correct in reversing the concurrent judgments of the lower courts.
2. Whether the sale deed dated 04.06.1968 (Ext.P1/C) was valid and transferred ownership to the plaintiff.
3. Whether the defendants had perfected their title by adverse possession.
4. Whether the suit was barred by limitation.
5. Whether the suit property was a joint family property.

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Judgment

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

How each authority was viewed by the Court?

• Indira v. Arumugam and Anr. [AIR 1999 SC 1549]: The court followed this case to hold that once the plaintiff proves title, the defendant must prove adverse possession to claim ownership.
• Saroop Singh v. Banto and Ors. [(2005) 8 SCC 330]: The court followed this case to determine that the limitation period for adverse possession starts when the defendant’s possession becomes adverse, not when the plaintiff’s right of ownership arises.
• R. Rajagopal Reddy (D) by LRs. v. Padmini Chandrasekharan (D) by LRs. [AIR 1996 SC 238]: The court relied on this case to reject the benami claim, stating that such transactions are prohibited.
• Arulvelu & Anr. v. State Rep. by Public Prosecutor & Anr. [(2009) 10 SCC 206]: The court cited this case to define ‘perverse finding’ as one that is against the evidence.
• General Manager (P), Punjab & Sind Bank and Others v. Daya Singh [(2010) 11 SCC 233]: The court cited this case to define ‘perverse finding’ as one based on no evidence or that no reasonable person would arrive at.
• Mrs. Om Prabha Jain v. Abnash Chand & Anr. [AIR 1968 SC 1083]: The court cited this case to emphasize that evidence can only be given on a plea properly raised.
• Ram Sarup Gupta (dead) by LRs v. Bishun Narain Inter College and Others [(1987) 2 SCC 555]: The court cited this case to reiterate that in the absence of pleading, evidence cannot be considered.
• Kashi Nath (Dead) through LRs. v. Jaganath [(2003) 8 SCC 740]: The court cited this case to state that evidence not in line with pleadings cannot be relied on.
• Damodhar Narayan Sawale (D) through LRs. v. Tejrao Bajirao Mhaske [2023 SCC OnLine SC 566]: The court cited this case to state that evidence must be in tune with pleadings.
• Vasantiben Prahladji Nayak v. Somnath Muljibhai Nayak [(2004) 3 SCC 376]: The court cited this case to state 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.
• Mohd. Mohd. Ali v. Jagadish Kalita [(2004) 1 SCC 271]: The court cited this case to state that “Animus possidendi” is one of the ingredients of adverse possession.
• M. Durai v. Muthu and Others [(2007) 3 SCC 114]: The court followed this case to reiterate that once the plaintiff proves his title, the burden shifts to the defendant to establish that he has perfected his title by adverse possession.
• Prasanna & Ors. v. Mudegowda (D) by LRs [2023 SCC OnLine SC 511]: The court followed this case to reiterate the law laid down in Saroop Singh’s case.
• Vasantha v. Rajalakshmi [2024 SCC On Line SC 132]: The court followed this case to reiterate the law laid down in Saroop Singh’s case.
• Brij Narayan Shukla (D) through LRs. v. Sudesh Kumar alias Suresh Kumar (D) through LRs. and Ors. [(2024) 2 SCC 590]: The court cited this case to hold that tenants or lessees cannot claim adverse possession against their landlord/lessor.
• Ravinder Kaur Grewal and Ors. v. Manjit Kaur and Ors. [(2019) 8 SCC 729]: The court cited this case to emphasize that adverse possession requires continuity, publicity, and hostility to the true owner.
• M. Siddiq (D) through LRs (Ram Janmabhumi Temple case) v. Mahant Suresh Das and Ors. [(2020) 1 SCC 1]: The court cited this case to state that a plea of adverse possession requires establishing peaceful, open, and continuous possession.
• D.R. Rathna Murthy v. Ramappa [(2011) 1 SCC 158]: The court cited this case to emphasize that concurrent findings could be set aside if perversity is found with the impugned decision.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

1. Registered Sale Deed: The existence of a registered sale deed (Ext.P1/C) in favor of the plaintiff was a crucial factor in establishing the plaintiff’s title. The court emphasized that a registered sale deed carries significant weight in establishing ownership.
2. Permissive Possession: The defendants’ own admission in Ex. P-4 that they were in possession of the suit land as lessees (Adhiyadar) from 1973-1974 was a critical factor. This admission negated their claim of adverse possession, as their possession was deemed permissive rather than hostile.
3. Failure to Prove Adverse Possession: The defendants failed to prove the necessary elements for adverse possession, including continuous, open, and hostile possession for the prescriptive period. They did not establish the requisite “animus possidendi” (intention to possess as an owner).
4. Rejection of Benami Claim: The court rejected the argument that Sitaram Gupta was a benami owner, citing the Benami Transactions (Prohibition) Act, 1988, which prohibits such claims.
5. Perversity of Lower Court Findings: The High Court correctly identified perversities in the lower courts’ appreciation of evidence, which led the Supreme Court to uphold the High Court’s decision.
6. Legal Principles on Adverse Possession: The court relied on established legal principles and precedents, such as the need for the defendant to prove adverse possession once the plaintiff proves title, and that the limitation period starts when possession becomes adverse.

Logical Reasoning:

The court considered the argument that the sale deed was a sham transaction and the property was purchased by the joint family. However, the court rejected this argument based on the Benami Transactions (Prohibition) Act, 1988 and the fact that the defendants did not challenge the First Appellate Court’s finding that the property was not a joint family property. The court also rejected the argument that the suit was barred by limitation, holding that the limitation period for adverse possession starts from when the possession becomes adverse, not from the date of the sale deed.

The Court held that the High Court was correct in reversing the judgments of the lower courts. The Court stated that the High Court had rightly concluded that the plaintiff had established his title over the suit land based on the registered sale deed and that the defendants had failed to prove adverse possession. The Court emphasized that the defendants’ own admission in Ex. P-4 that they were in possession of the suit land as lessees (Adhiyadar) from 1973-1974 was a critical factor in rejecting their claim of adverse possession.

The Supreme Court quoted the following from the judgment:

• “A perverse verdict may probably be defined as one that is not only against the weight of evidence but is altogether against the evidence.”
• “It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered.”
• “In terms of Article 65 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.”

There were no dissenting opinions in this case. The two-judge bench unanimously agreed on the judgment.

The judgment reinforces the principle that a registered sale deed is strong evidence of title and that the burden of proof to establish adverse possession is very high. It also clarifies that permissive possession cannot be converted into adverse possession unless the possessor asserts a hostile claim to the knowledge of the true owner for the prescriptive period.

Key Takeaways

• A registered sale deed is a strong piece of evidence for establishing title to immovable property.
• The burden of proof to establish adverse possession is very high. The possessor must prove continuous, open, and hostile possession for the prescriptive period.
• Permissive possession cannot be converted into adverse possession unless the possessor asserts a hostile claim to the knowledge of the true owner.
• The limitation period for adverse possession starts when the possession becomes adverse, not from the date of the sale deed.
• Benami transactions are prohibited, and no action can be taken against the person in whose name the property is held.

This judgment clarifies the legal position on adverse possession and the importance of registered sale deeds in establishing title. It is likely to be cited in future cases involving similar disputes.

Directions

The Supreme Court directed the appellants to deliver vacant and peaceful possession of the suit land to the plaintiff, in accordance with the decree of the High Court.

Development of Law

The ratio decidendi of this case is that a registered sale deed is a strong evidence of title, and the burden of proof to establish adverse possession is very high. The court reiterated the position of law that the limitation period for adverse possession starts from the date when the possession becomes adverse, not from the date when the right of ownership arises to the plaintiff. The judgment also reinforces the principle that permissive possession cannot be converted into adverse possession unless the possessor asserts a hostile claim to the knowledge ofthe true owner.

This judgment builds on the existing legal framework regarding adverse possession and registered sale deeds. It reinforces the importance of clear title and the high standards required to prove adverse possession. It also clarifies the starting point for the limitation period in adverse possession cases and reiterates the prohibition of benami transactions. This case serves as a significant precedent for future property disputes involving similar issues.