Tag Archives: Possession of Property

Possession of Agent – Is Possession of Principal

In Smt. Chandrakantaben v. Vadilal Bapalal Modi,  (1989) 2 SCC 630, the Hon’ble Supreme Court has held that the possession of the agent is the possession of the principal and in view of the fiduciary relationship he cannot be permitted to claim his own possession. Thus, the agent is an extended hand of principal.         Thus, an agent who receives property or money from or for his principal obtains no interest for himself in the property. An agent holds the principal’s property only on behalf of the principal. He acquires no interest for himself in such property. He cannot deny principal’s title to property. Nor he can convert it into any other kind or use. His possession is the possession of the principal for all purposes. The agent has no possession of his own. Caretaker’s possession is the possession of the principal. The possession of the agent is the possession of the principal and in view of the fiduciary relationship he cannot be permitted to claim his own possession. Thus agent is the extended hand of principal. Dr. Vishwanath Mishra v. XIIIth Additional District Judge, 2020 (138) ALR 159.

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Assertion of Possessory Title – Over a Particular Property

The crux of the matter is that a person who asserts possessory title over a particular property will have to show that he is under settled or established possession of the said property. But merely stray or intermittent acts of trespass do not give such a right against the true owner. Settled possession means such possession over the property which has existed for a sufficiently long period of time, and has been acquiesced to by the true owner. A casual act of possession does not have the effect of interrupting the possession of the rightful owner. A stray act of trespass, or a possession which has not matured into settled possession, can be obstructed or removed by the true owner even by using necessary force. Settled possession must be (i) effective, (ii) undisturbed, and (iii) to the knowledge of the owner or without any attempt at concealment by the trespasser. There cannot be a straitjacket formula to determine settled possession. Occupation of a property by a person as an agent or a servant acting at the instance of the owner will not amount to actual legal possession. The possession should contain an element of animus possidendi. The nature of possession of the trespasser is to be decided based on the facts and circumstances of each case. Poona Ram v. Moti Ram, (2019) 11 SCC 309

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Adverse Possession

Adverse Possession is hostile possession by assertion of a hostile title in denial of the title of the true owner as held in M. Venkatesh v. BDA, (2015) 17 SCC 1.In Chatti Konati Rao v. Palle Venkata Subba Rao, (2010) 14 SCC 316 it was held as under:         “Animus Possidendi as is well known is a requisite ingredient of adverse possession. Mere possession does not ripen into possessory title until the possessor holds the property adverse to the title of the true owner for the said purpose. The person who claims adverse possession is required to establish the date on which he came in possession, nature of possession and that possession was open and undisturbed. A person pleading adverse possession has no equities in his favour as he is trying to defeat the rights of the true owner and, hence, it is for him to clearly plead and establish all facts necessary to establish adverse possession.” Brijesh Kumar v. Sharda Rai, (2019) 9 SCC 369.

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Lawful Possession

Possession may be lawful, it may be unlawful. It may be legal or illegal. The acquisition of legal possession would obviously be lawful and would of necessity involve the occurrence of some event recognized by law whereby the subject matter falls under the control of the possessor. But a problem arises where the duration for which possession is recognized is limited by the grantor or the law. Continuance of possession beyond the period specified by the grantor or recognized by law is not treated as a lawful possession. For example, a tenant acquires legal as well as lawful possession of the tenanted premises from the landlord with the express consent of the landlord but limited to the duration of the lease. On expiry of the leaser, if the landlord does not consent to the lease being continued, the possession of such tenant would not be a lawful possession. The nature of possession being not lawful would entitle the landlord to regain possession.

        From a common sense point of view, lawful possession must be the state of being a possessor in the eyes of law. The possession must be warranted or authorized by law; having the qualifications prescribed by law and not contrary to nor forbidden by law. Sawwad Ali v. Rajesh Kumar, 2019 (135) ALR 927.

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Securitisation Act – Deposit under Section 18

Though no principle of law has been laid by the Hon’ble Supreme Court in the Judgment of Persn Medicinal Plants Pvt. Ltd. v. Indian Bank, decided on 25.02.2011 but it clearly indicates that in a given situation where an amount more than the amount due from the borrower/guarantor had already been realized by auction sale, which stands confirmed and the possession of the property also had been handed over to the Bank which is utilizing the same or is utilizing the property having purchased the same in the said auction, insistence on the deposit referred to under proviso to Section 18 would be contrary to the legislative intent as also the express provision as is evident from the use of the words “50% of the amount of debt due from him”.
A similar view has been taken by a Division Bench of the Punjab and Haryana High Court in similar fact situation in the case of S.R. Forging Ltd. v. UCO Bank and another, 2013 (1) DRTC 734, which reads as under:
“At this stage, we find that out of total due amount of Rs. 18.24 crores, Rs. 17.75 crores have been received by the bank in a public auction. Therefore, the deposit of 50% of the amount due prior to sale from the petitioner would be wholly unjustified. The proviso to section 18 of the Act restricts the entertainment of the appeal unless the borrower deposits 50% of the amount of the debt claimed by the Secured Creditors. Once Rs. 17.75 crores have been received by the secured creditors, that is more than 50% of the debt due from the petitioners, the purpose of the proviso stands satisfied”. Akash Ganga Airlines Ltd. v. DRAT, 2015 (5) AWC 5186.

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