Whether injunction order will operate from the date it is passed?

It is trite, and this principle was recognized in Mulraj‟s case (supra)
that an injunction operates from the date it is brought to the notice of the
party against whom the injunction order is issued. There is no proof that
injunction order dated May 15, 1992 was ever served upon the defendants in
the suit and in particular Anil Sirpaul, who entered into the collaboration
agreement dated noted above on March 25, 1993. The four storyed building
was built thereafter. 

 IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment Delivered on: May 13, 2016
 W.P.(C) 4505/2015
SWARAJ KISHORE ARORA 
versus
INDIAN BANK AND ORS. 
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE MUKTA GUPTA

1. A common question of law concerning the power of the Recovery
Officer, while executing orders passed by the Debts Recovery Tribunal
under Section 19 of the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (hereinafter referred to as the Act) wherein the bank
or a financial institution has obtained a right to recover the debt, as
determined by the Debts Recovery Tribunal from the borrower and the
guarantors, to proceed against a property held to be mortgaged with the
bank or the financial institution to which objections are filed by third
parties, claiming an interest in the property, arise for consideration in the
above captioned writ petitions and therefore though the factual matrix of
the four writ petitions are slightly different they are being decided by a
singular order.
2. The above captioned writ petitions relate to different floors of the
same building built on plot bearing municipal No.7/3 Old Rajinder Nagar,
New Delhi.
3. The admitted position concerning the building on plot bearing
municipal No.7/3 Old Rajinder Nagar, New Delhi is, that the Government
of India, through the Land and Development Office, granted perpetual leasehold
rights in favour of one Sh.Hari Ram son of Ralla Ram under an
indenture dated March 30, 1963, duly registered with the Sub-Registrar,
New Delhi. Appended as an Annexure to the lease-deed and described as an
Appendix is a conveyance deed. Jointly under the two, land ad-measuring
85.3 sq.yards with a two room single storey tenement constructed thereon
was demised in perpetuity in favour of Sh.Hari Ram. Vide para-c of the
lease-deed it was stipulated :-
“(c) The lessee can transfer the land after obtaining the
permission of the Lessor aforesaid and the Lessor will not
share any unearned increment in the value of the land
(being the difference in the premium paid by him to the
Lessor and the market value of the land then prevailing) for
permitting such transfer. The Lessor will, however, be
entitled to claim and recover the unearned increment in the
value of land in the event of any subsequent transfer of the
land by a transferee the amount so to be recovered being
50% of the unearned increment in the value of the land”.
4. Hari Ram died on October 11, 1970. Twelve years after he died, an
application was filed on July 12, 1982 by his legal heirs for being substituted
as joint lessees, on completion of the requisite codal formalities vide letter
dated September 29, 1982, it was conveyed by the lessor to the legal heirs,
who were ten in number, that the property stood mutated in their names with
Shakuntala Devi, Jagdish Chander, Rajinder Singh, Inder Singh, Randhir
Singh, Parkash Devi, Shanti Devi and Chander Kanta, the wife, sons and
daughters of the deceased, each having 1/9th share each in the property and
Rajinder Kumar and Sukrita Rani, the grand children of the deceased each
having 1/18th share in the property.
5. On the strength of a General Power of Attorney executed on May 31,
1983 jointly by the ten legal heirs of Hari Ram, one Ashok Sirpaul son of
Sh.Amrit Lal executed a sale-deed on June 23, 1986 in favour of his real
brother Anil Sirpaul which was registered as document No.5682 in
Additional Book No.1, Volume No.5518 at pages 82 to 85 in the office of
the Sub-Registrar, New Delhi on June 23, 1986.
6. Thus, Anil Sirpaul became the registered owner of the subject 
property. He died on September 09, 1996, but before that, during his life
time he entered into a collaboration agreement on March 25, 1993 with
Ms.Alka Wadhwa and Ms.Vibha Sabharwal, who were referred to as
builders in the collaboration agreement. The builders were to demolish the
existing two room tenement on the plot and construct a four storyed
building, comprising a ground floor, a first floor, a second floor and third
floor, with the ground and the second floor without terrace rights to be the
property of Anil Sirpaul and the first and the third floor with terrace rights
vesting in the builders.
7. The property was constructed as per the collaboration agreement and
Anil Sirpaul took possession of the ground floor and the second floor from
the builders who retained the first and the third floor thereof along with
terrace rights.
8. Anil Sirpaul executed an agreement to sell on June 19, 1996
concerning the ground floor of the property in favour of Kanwar Bhan
Kataria and recorded therein that he has received the entire sale
consideration and handed over vacant physical possession of the ground
floor to Kanwar Bhan Kataria. But for reasons unknown, Anil Sirpaul
executed a will bequeathing the ground floor to Sushma Pardel. Kanwar
Bhan Kataria expired on March 31, 2001. The facts are a little hazy, but the
haze is irrelevant because said part which cannot be clearly seen is irrelevant
to paint the picture. Sushma Pardel prosecutes the litigation before this
Court claiming a right under the will and we find that no natural heir of
Kanwar Bhan Kataria contests her claim.
9. Concerning the second floor, ownership whereof was with Anil
Sirpaul in terms of the collaboration agreement dated March 25, 1993,
relevant fact to be noted is that on March 01, 1994 Anil Sirpaul entered into
an agreement to sell with Satish Kumar Mongia, in whose favour he also
executed a power of attorney, an indemnity bond and a will, recording in
the agreement to sell that having received the entire sale consideration he
had handed over vacant physical possession of the second floor to Satish
Kumar Mongia. Less than within a year of having acquired possession under
the agreement to sell after paying the entire sale consideration, Satish Kumar
Mongia entered into an agreement to sell on January 17, 1995 recording
therein that having received the entire sale consideration he had handed over
vacant physical possession of the second floor to Smt.Vishan Devi Ahuja,
who expired on September 27, 2012 and her son Prem Ahuja succeeded to
the right of Smt.Vishan Devi Ahuja and litigates as the writ petitioner of
WP(C) No.4619/2015.
10. Concerning the first floor, ownership whereof under the collaboration
agreement dated March 25, 1993 vested with the builders, on March 01,
1994 Ms.Alka Wadhwa and Ms.Vibha Sabharwal (the builders), executed an
agreement to sell recording therein that having received the entire sale
consideration possession thereof had been handed over to Rajinder Kumar
Malhotra, in favour of whose wife : Madhu Bala Malhotra, a power of
attorney was executed by them. Rajinder Kumar Malhotra litigates as the
petitioner of WP(C) 4538/2015.
11. Concerning the third floor and the terrace above, one of the two
builders : Vibha Sabharwal, entered into two agreements to sell on June 10,
1994, recording therein that having received the entire sale consideration
she had handed over vacant physical possession of the third floor as also the
terrace above to one Bhupinder Singh Bajaj, in whose favour Vibha 
Sabharwal also executed a will. At the asking of Bhupinder Singh Bajaj,
Vibha Sabharwal executed a special power of attorney as also a general
power of attorney in favour of his wife Harsharan Banaj. However, a receipt
and a possession letter of even date acknowledging receipt of payment and
possession handed over was executed jointly by both builders : Alka
Wadhwa and Vibha Sabharwal. One agreement to sell concerns the third
floor and the other terrace above. On May 16, 1995, under two agreements
to sell, recording therein that entire sale consideration under the two
agreements was received by him from Swaraj Kishore Arora and his wife
Uma Arora, Bhupinder Singh Bajaj handed over the possession of the third
floor and the terrace above to Swaraj Kishore Arora and his wife Uma Arora
and also executed a special power of attorney and a general power of
attorney in favour of Swaraj Kishroe Arora empowering him to deal with the
third floor and terrace above. He willed the third floor to Swaraj Kishore and
terrace above to Uma Arora. It needs to be highlighted that one agreement
to sell concerning the third floor was with Swaraj Kishore Arora and the
other concerning the terrace was with Uma Arora.
12. But before these transactions took place on different dates in the years
1994, 1995 and 1996, on October 12/19, 1990, concerning a request made
by M/S Globerac & Alloys Pvt.Ltd.(the principal borrower) to Indian Bank
for a credit facility to be advanced by the bank to the company, a letter was
written under the signatures of Ashok Sirpaul in his capacity as the
Director of the company containing an undertaking to the bank :-
“It is just for your information that we shall transfer this
property in the name of M/s Globerac & Alloys Pvt.Ltd.
after few days and as when it is felt convenience on our
part. This has further reference to the discussion had with 
the Zonal Manager.”
13. The contents of the letter evince that the bank was desiring a security
by way of charge on some immovable property and the company had
offered to create a charge on the immovable property bearing municipal
No.7/3, Old Rajinder Nagar, New Delhi, which as of the year 1990 comprise
the land a two room tenement thereof for the reason the four storyed
building was constructed pursuant to the collaboration agreement dated
June 10, 1994.
14. Within a few days of the letter dated October 12, 1990, a letter dated
October 21, 1990 was addressed to the bank under the signatures of Anil
Sirpaul. The letter reads as under:-
“Dear Sir,
I/We hereby acknowledge having already deposited
with your at Rana Pratap Bagh, Delhi on 19.10.1990 the
title deeds relating to my/our property at 7/3 Old Rajinder
Nagar (give full description of property, village, taluk etc.,)
with intent to create a valid equitable mortgage over the
said property by way of security for due repayment of all
advances and credit facilities granted and to be granted by
the Bank to M/s Globarc & Alloys Pvt Ltd, at my/our
request and on the condition of my/our agreeing to deposit
the title deeds of my/our property upto a maximum of
`1,17,08,274/59 being amount (eligible) in various limits
such as OCC/KCC/DCOBP together interest costs, and
other charges payable by them to the Bank.
Yours faithfully
Sd/-
Anil Sirpaul
List of documents
1. Lease deed dated 30.3.1963 between President of
India and Shri Hari Ram S/o Ralla Ram resident of
7/3, Old Rajinder Nagar, New Delhi (Nine pages)
2. Receipt obtained from the seller constituting legal
heirs (fourteen paras in these sheets)
3. Affidavit executed by the persons in favour of Ashok
Sirpaul (total-10)
4. Affidavit cum understanding from Mrs. Vinod Sehgal
5. General power of Attorney from Mr.Rajinder Luthra
resident of USA in favour of Sh.I.S.Luthra.
6. Letter from Ministry of works and Housing &
mentioning all the names of legal heirs (reference
No.L& DO/PS I/1318 dated 20.9.1982.
7. Copy of death certificate of Shri Hari Ram son of Shri
Ralla, the allottee of plot at 7/3, Old Rajinder Nagar.
8. Site plan of the residence signed by all the legal
heirs.”
15. On April 19, 1992, Indian Bank filed a suit on the Original Side of
this Court claiming decree in sum of `1,48,65,134/- (Rupees One Crore
Forty Eight Lacs Sixty Five Thousand One Hundred and Thirty Four only)
against the company Globrac & Alloys Pvt.Ltd. impleading therein, amongst
others, Ashok Sirpaul and his brother Anil Sirpaul as respondents, pleading
that the two were guarantors and with further pleading that an equitable
mortgage was created by the company. But the suit was not filed under
Order 34 of the Code of Civil Procedure. It did not plead for foreclosure of 
the mortgage. It sought a money decree, though there are pleadings of the
mortgage being created. On May 15, 1992 the learned Single Judge of this
Court before whom the suit was listed passed an injunction order restraining
the defendants from transferring, encumbering or parting with possession of
property bearing Municipal No.7/3, Old Rajinder Nagar, New Delhi. With
the promulgation of the said Act and establishment of Debts Recovery
Tribunal, the suit was transferred to the Debts Recovery Tribunal at Delhi
and treated as an application under Section 19 of the said Act and registered
as OA No.868/1995.
16. The bank filed an affidavit by way of evidence of one Shri Arjun
Kumar, the Manager of the bank on March 17, 1997, wherein the bank
exhibited various documents and concerning the charge created by way of
equitable mortgage, exhibited a photocopy of the perpetual lease-deed dated
March 30, 1963 as Ex.P-61 and photocopy of the conveyance deed annexed
as an appendix thereto, as Ex.P-62. The letter dated September 20, 1982
written by the Land & Development Office as Ex.P-63 and the letter dated
October 12/19, 1990 written on behalf of company by Ashok Sirpaul as its
Director as Ex.P-64. Photocopy of the equitable mortgage register evincing
receipt of the documents sent to the bank by Anil Sirpaul under cover of the
letter dated October 21, 1990 as Ex.P-65.
17. Interestingly, the bank filed, and through the affidavit by way of
evidence of Arjun Kumar, exhibited letters dated November 27, 1990 and
November 28, 1990 as Ex.P-66 and Ex.P-68, which letters show that Ashok
Sirpaul in his capacity as Director of the company informed the bank vide
letter dated November 27, 1990 that the property was intended to be sold to
one Ram Lal and `1,00,000/- (Rupees One Lac only) received from him had 
already been deposited with the bank and balance payment received would
be deposited with the bank but to effect the sale in favour of Ram Lal, he
requires the title deed of the property. Vide letter dated November 28, 1990
it was informed to the bank that `12,00,000/- (Rupees Twelve Lacs only)
would be deposited when balance sale consideration shall be received by
December 30, 1990.
18. The respondents in the Original Application chose to remain ex-parte.
They led no evidence. The result was that the learned Debts Recovery
Tribunal passed an order on March 18, 1997 allowing the claim with
pendente lite and future interest. The cryptic one and half page order simply
allows the claim and makes no mention of the charge by way of an equitable
mortgage as claimed by the bank.
19. Proceeding to execute the order dated March 18, 1997, the Recovery
Officer finalized a sale proclamation, and when it was published objections
were filed to the proposed sale and needless to state interest under the
various agreements to sell to which we have referred to hereinabove, under
which agreements the sale consideration was recorded as having been paid
and possession taken over from Anil Sirpaul with respect to the ground floor
and the second floor and with respect to the first floor, third floor and terrace
above, under the builders, were the foundation of the objections. Another
principal fulcrum was that the bank did not have any title document
deposited with it and could not claim right as a mortgagee under the
perpetual lease-deed dated March 30, 1963 and needless to state this was the
only title document with it relied upon by the bank in its pleadings. It was
specifically pleaded by the objectors that the title documents in favour of
Anil Sirpaul was shown to them in original when they purchased the 
different floors of the property under the agreements to sell. The result was
the Recovery Officer passing an order on April 28, 1999 directing the bank
to produce the original title document on strength whereof it was claiming
the rights as a mortgagee, and this document was obviously the original
perpetual lease-deed dated March 30, 1963 together with the appendix
thereto i.e. the conveyance deed. The bank did not do so. No original title
document was produced and none was filed, resulting in the same directions
being repeated by the Recovery Officer on November 04, 2003. Even said
order was not complied with.
20. Now, from the facts noted hereinabove the following issues arose for
determination :
(i) Whether by not producing any title document and only filing and proving
(Ex.P-61 and P-62) the photocopies of the perpetual lease-deed and the
appended conveyance deed thereto could the bank claim right as a
mortgagee.
(ii) What was the effect of the sale-deed dated June 23, 1986 executed by
Ashok Sirpaul, the holder of a general power of attorney from the ten legal
heirs of Hari Ram who were substituted in the record of the Land &
Development Office as the joint perpetual lessees, in favour of Anil Sirpaul,
which sale-deed preceded the date when the alleged mortgage was created
by way of deposit of the perpetual lease-deed dated March 30, 1963.
(iii) What was the scope of the power of the Recovery Officer to
adjudicate the objections to the attachment and sale of the four floors and the
terrace above of the property by the four objectors claiming rights under the
agreements to sell which record the entire sale consideration paid and
possession handed over under the agreements to sell. 
(iv) The effect of the injunction order dated May 15, 1992 passed in the
suit before it was transferred to the Debts Recovery Tribunal for
adjudication.
21. Without focusing on these issues, vide four orders dated July 30,
2004, the objections were dismissed holding that the bank had a charge in its
favour under an equitable mortgage created vide letter dated October 21,
1990. An additional reason was given. That on May 15, 1992, when the
suit filed by the bank was pending in this Court, a restraint order was passed
against the defendants restraining them from transferring, encumbering or
selling the property No.7/3, Old Rajinder Nagar, New Delhi.
22. Order dated July 30, 2004 was challenged by way of an appeal(s)
under Section 30 of the said Act before the learned Debts Recovery Tribunal
and since no stay was granted in the appeal(s), during the pendency thereof,
different floors were put up for auction and were purchased by Maninder
Singh s/o of Daljit Singh, who also joins the fray because his rights have
come into being.
23. Vide order dated September 21, 2011 the four appeals were disposed
of. Whereas the claim of the objectors that the four floors and the terrace
right above could not be sold in execution of the order dated March 18, 1993
allowing the claim of the bank was rejected and to said extent the objections
were dismissed, the sale was set aside, which had taken place during the
pendency of the appeal(s), on account of various irregularities found in the
conduct of the sale.
24. Thus, five appeals fell into the lap of Debts Recovery Appellate
Tribunal, four by the objectors and one by the auction purchaser.
25. Vide order dated January 28, 2015 whereas appeal(s) filed by three 
objectors concerning first floor, second floor, third floor and terrace above
were dismissed, the one filed by the auction purchaser was allowed. By a
subsequent order dated March 18, 2015, the appeal filed by the objector
concerning the ground floor was also dismissed following the reasoning in
the order dated January 28, 2015. Simply stated, the learned DRT and
learned DRAT held that in execution of the order dated March 18, 1993 the
four floors and the terrace above could be sold, treating it to be a case of
mortgage and additionally on account of an injunction order being passed by
the Delhi High Court on May 15, 1992 and the sales under the agreement to
sell being subsequent.
26. It is in the aforesaid factual backdrop of the facts, where the claim of
the objectors flows through the same channel, the above captioned four writ
petitions concerning property at 7/3, Old Rajinder Nagar, New Delhi are
being decided together.
27. Section 25 of the Recovery of Debts due to Banks and Financial
Institutions Act, 1993, reads as under:-
“25. Modes of recovery of debts.--
The Recovery Officer shall, on receipt of the copy of the
certificate under sub-section (7) of section 19, proceed to
recover the amount of debt specified in the certificate by one
or more of the following modes, namely:-
(a) attachment and sale of the movable or immovable
property of the defendant;
(b) arrest of the defendant and his detention in prison;
(c) appointing a receiver for the management of the movable
or immovable properties of the defendant.” 
28. Section 29 of the said Act reads as under:-
“29. Application of certain provisions of Income-tax Act.—
The provisions of the Second and Third Schedules to the
Income-tax Act, 1961 (43 of 1961) and the Income-tax
(Certificate Proceedings) Rules, 1962, as in force from time to
time shall, as far as possible, apply with necessary
modifications as if the said provisions and the rules referred to
the amount of debt due under this Act instead of to the Incometax:
Provided that any reference under the said provisions and the
rules to the “assessee” shall be construed as a reference to the
defendant under this Act.”
29. Section 30 of the said Act reads as under:-
“30. Appeal against the order of Recovery Officer.—
(1) Notwithstanding anything contained in section 29, any
person aggrieved by an order of the Recovery Officer made
under this Act may, within thirty days from the date on which a
copy of the order is issued to him, prefer an appeal to the
Tribunal.
(2) On receipt of an appeal under sub-section (1), the
Tribunal may, after giving an opportunity to the appellant to
be heard, and after making such inquiry as it deems fit,
confirm, modify or set aside the order made by the Recovery
Officer in exercise of his powers under sections 25 to 28 (both
inclusive).”
30. Rule 4 and 11 of the Second Schedule to the Income Tax Act, 1961
read as under:-
“4. If the amount mentioned in the notice is not paid within
the time specified therein or within such further time as the Tax
Recovery Officer may grant in his discretion, the Tax Recovery
Officer shall proceed to realise the amount by one or more of
the following modes:
(a) by attachment and sale of the defaulters movable property;
(b) by attachment and sale of the defaulters immovable
property;
(c) by arrest of the defaulter and his detention in prison;
(d) by appointing a receiver for the management of the
defaulters movable and immovable properties.”
x x x x x x
“11. (1) Where any claim is preferred to, or any objection is
made to the attachment or sale of, any property in execution of
a certificate, on the ground that such property is not liable to
such attachment or sale, the Tax Recovery Officer shall
proceed to investigate the claim or objection :
Provided that no such investigation shall be made where the
Tax Recovery Officer considers that the claim or objection was
designedly or unnecessarily delayed.
(2) Where the property to which the claim or objection applies
has been advertised for sale, the Tax Recovery Officer ordering
the sale may postpone it pending the investigation of the claim
or objection, upon such terms as to security or otherwise as the
Tax Recovery Officer shall deem fit.
(3) The claimant or objector must adduce evidence to show
that
(a) (in the case of immovable property) at the date of the 
service of the notice issued under this Schedule to pay the
arrears, or
(b) (in the case of movable property) at the date of the
attachment,
he had some interest in, or was possessed of, the property in
question.
(4) Where, upon the said investigation, the Tax Recovery
Officer is satisfied that, for the reason stated in the claim or
objection, such property was not, at the said date, in the
possession of the defaulter or of some person in trust for him or
in the occupancy of a tenant or other person paying rent to him,
or that, being in the possession of the defaulter at the said date,
it was so in his possession, not on his own account or as his
own property, but on account of or in trust for some other
person, or partly on his own account and partly on account of
some other person, the Tax Recovery Officer shall make an
order releasing the property, wholly or to such extent as he
thinks fit, from attachment or sale.
(5) Where the Tax Recovery Officer is satisfied that the
property was, at the said date, in the possession of the defaulter
as his own property and not on account of any other person, or
was in the possession of some other person in trust for him, or
in the occupancy of a tenant or other person paying rent to him,
the Tax Recovery Officer shall disallow the claim.
(6) Where a claim or an objection is preferred, the party
against whom an order is made may institute a suit in a civil
court to establish the right which he claims to the property in
dispute; but, subject to the result of such suit (if any), the order
of the Tax Recovery Officer shall be conclusive.”
31. Rule 4 of the Second Schedule of the Income Tax Act, 1961, mirrors
Section 25 of the Recovery of Debts due to Banks and Financial Institutions 
Act, 1993, and one mode of recovery of a debt determined by the Debts
Recovery Tribunal upon the determination attaining finality is by way of
sale of the defaulter’s immovable property. Rule 11 of the Second Schedule
of Income Tax Act, 1961 contemplates a situation where a claim is preferred
or an objection is made to the attachment or sale of any property, be it
movable or immovable. As per sub-Rule (1) of Rule 11, either a claim may
be preferred to the property attached or an objection made to the attachment
or sale of the property. If made, the sub-Rule casts an obligation upon the
Recovery Officer to investigate the claim or the objection and the proviso to
the sub-Rule vests a discretion in the Recovery Officer not to make any
such investigation if the claim or the objection is unnecessarily delayed.
Thus, one can safely say that the proviso itself throws light on the legal
position being that the Recovery Officer has a discretion vested with respect
to the recovery proceedings when a claim is preferred or an objection is
made to the attachment or sale of the property. As per sub-Rule (2) of the
Rule, if the claim or objection is filed after the advertisement is issued
inviting offers for sale of the property, the Recovery Officer is empowered
to postpone the sale pending investigation of the claim or the objection and
may do so upon such terms and furnishing security or otherwise as the
Recovery Officer deems fit. The sub-Rule also throws light on the legal
position, being that, the Recovery Officer has a discretion vested in the
matter of even postponing a sale. As per sub-Rule (3), the claimant or
objector is obliged to adduce evidence to show : in case of immovable
property, that on the date of service of the notice issued under the Schedule
upon the defaulter to pay, the objector has some interest in or was possessed
of the property in question. The words in the sub-Rule „some interest‟ and 
„or was possessed‟ are of importance and we shall discuss the same a little
later. Sub-Rule (4) evinces that the scope of the inquiry which takes its
colour from the preceding sub-Rule requires the Recovery Officer to decide
whether the objector has proved that the subject property was not in the
actual or constructive possession of the defaulter on the date of the
attachment, the property has to be released wholly or to such extent as the
Recovery Officer determines.
32. The Rules under the Second Schedule of the Income Tax Act, 1961
have to be understood in their contextual incorporation under the Recovery
of the Debts due to Banks and Financial Institutions Act, 1993. Whereas
income tax dues are recovered by proceeding against immovable property
of a defaulter and not by way of enforcing a charge or a lien created under
a mortgage, but dues determined under the Recovery of Debts due to Banks
and Financial Institutions Act, 1993 may be with respect to a mortgaged
property and may be not.
33. We have hereinabove highlighted that the expression used in the
Rules is ‘some interest‟ and ‘was possessed’ in the sub-Rule 3 of Rule 11.
34. Property is a legal concept that grants and protects a person’s
exclusive right to own, possess, use and dispose of a thing. The term
property does not suggest a physical item but describes a legal relationship
of a person to a thing.
35. Real property consists of lands, tenements and hereditaments. Land
refers to the ground, the air above, the area below the earth’s surface and
everything that is erected on it. Tenements include the land and certain
intangible rights recognized by municipal laws related to the lands. A
hereditaments embraces every tangible or intangible interest in real property
that can be inherited.
36. An interest describes any right, claim or privilege that an individual
has towards real property. The law recognizes various types of interests in
real property. A non-possessory interest in land is the right of one person to
use or to restrict the use of land that belongs to other persons such as
easementary rights. Non-possessory interest do not constitute ownership of
land itself : holders of a non-possessory interest in real property do not have
title and the owner of the land continues to enjoy the full rights of
ownership, subject to any encumbrances. An encumbrance is a burden,
claim or charge on real property that can affect the quality of title and the
value and/or use of the property. Encumbrances can represent nonpossessory
interests in real property. Examples of encumbrances include
liens, encroachments, easements, leases, restrictive covenants and protective
covenants.
37. The following kinds of interests have been recognized in property:-
(i) Right to receive voluntary and uncertain offerings at a worship;
(ii) Priestly office or emoluments attached to it;
(iii) Grants for maintenance;
(iv) The office of Mutwali of a Wakf or of Shebait of a temple of
Mohunt of a mutt;
(v) Service tenures e.g. Ghatwali tenures in Bengal;
(vi) An allowance granted;
(vii) Personal inams;
(viii) The right of pre-emption.
38. Though an agreement to sell does not create any title in an immovable
property as understood by Section 54 of the Transfer of Property Act, 1882, 
but it is settled law that objections to attachment of immovable property can
be preferred under Order 21 Rule 58 of the Code of Civil Procedure by a
person in whose favour there is a contract of sale of immovable property
because the word ‘interest’ contemplated by said Rule is not in the sense in
which the expression ‘interest’ has been used under Section 54 of the
Transfer of Property Act, 1882. As held by a Division Bench of this Court
in the decision reported as 94 (2001) DLT 841 (DB) Asha M.Jain Vs.
Canara Bank & Ors., the attached immovable property can be sold subject
to the interest that has been created in the property with possession handed
over under an agreement to sell, and we may highlight that an interest is
recognized in a property, where under an agreement to sell the entire sale
consideration is paid and possession taken over by the purchaser from the
seller with an irrevocable power of attorney executed by the seller in favour
of the buyer, and falling within the interest irrevocably protected by Section
202 of the Indian Contract Act, 1872.
39. A plain reading of Rule 11 of the 2nd Schedule to the Income Tax Act,
1961 shows that if a person demonstrates an interest or establishes that he is
in possession of the property attached, the Recovery Officer has to recognize
said interest or possession and pass such suitable orders as are warranted.
Needless to state, as per sub-Rule 6 of Rule 11 the decision is subject to a
challenge before a Civil Court.
40. Thus, where the objector claims, as in the instant case, agreements to
sell in their favour, with sale consideration fully paid and possession handed
over to them, it would be sufficient interest and sufficient possession of the
objector, for the possession and/or the interest to be recognized, if the
agreement to sell precedes the date of the mortgage. In said circumstance,
the bank or the financial institution would be deemed to be in notice of the
interest and the possessory title of the objector on account of Explanation II
to Section 3 of the Transfer of Property Act, 1882, which reads as under:-
“Explanation II – Any person acquiring any immovable
property or any share or interest in any such property
shall be deemed to have notice of the title, if any, of any
person who is for the time being in actual possession
thereof.”
41. A note of clarification. The applicable Rules do not contemplate the
objector to prove ownership of the subject property sought to be attached. It
would suffice for the objector to plead some interest or being in possession
of the property attached, and if the same is made good by the objector, the
Recovery Officer is obliged to pass an order either lifting the attachment or
continuing with the attachment and sell the property attached, but with the
sale proclamation drawn up, clearly indicating to the prospective bidders the
nature of interest or the possessory right of the objector, so that the bidder
knows the said interest or the possessory right; and needless to state the final
bundle of rights conferred upon the bidders if sale bid is accepted would be
subject to the interest or the possession of the objector.
42. Since cases of different hues of possession are being filed in this
Court concerning orders passed by the Recovery Officer, we would be
obliged to speak a few more words on the subject of possession to guide the
Recovery Officers. De facto possession can be understood as a person being
in physical possession and de jure possession as the one which is possession
in law. Constructive possession would be a possession through a
representative, agent, tenant or a trustee. A person in de facto possession
could be in adverse possession and since we find cases where the objector
simply claims possession for long and adverse to the defaulter, the Recovery
Officers have to be guided as to what orders to pass and what should guide
them to determine whether the person is, if at all, in adverse possession for
the reason fraudulent claims are being put up by defaulters through their
friends and well wishers. And we therefore proceed to discuss the concept
of ‘juridical possession’.
43. Dealing with possession, in Chapter 9, Salmond On Jurisprudence
(12th Edition), states that few relationships are as vital to man as that of
possession, and we may expect any system of law, however primitive, to
provide rules for its protection. Possession of material things is essential to
life, it is the most basic relationship between men and things.
44. Elaborating the concept of possession, at page 266, the learned author
has opined:
“But the concept of possession is as difficult to define as
it is essential to protect. In the first place, possession is
an abstract notion and involves the same sort of
difficulties, which we have seen to arise with other
abstract terms such as "law" and "rule". There is nothing
which we can point at and identify as possession in the
same way as we can do with concrete things such as
tables and chairs. Moreover, it is an abstract term to
which the traditional type of definition is as
inappropriate as we saw it to be for the term "rule". Just
as we could not locate the notion of a rule within some
wider class of concepts, so too with possession we cannot
define it by placing it in a wider class and then
distinguishing it from other members of the class; for
possession is, it would seem, is a class of its own.
A second cause of difficulty is the fact that possession is
not purely a legal concept. Our discussion of ownership
showed that possession differs from ownership in that the 
former is of temporary duration whereas the latter is of a
more permanent, ultimate and residuary nature. But
possession differs from ownership in another quite
different respect. ownership, as we saw, consists of a
combination of legal rights, some or all of which may be
present in any particular instance; and such rights imply
the existence of legal rules and a system of law. With
possession this is not so. A possessor is not so much one
who has certain rights as one who actually has
possession. Whether a person has ownership depends on
rules of law; whether he has possession is a question that
could be answered as a matter of fact and without
reference to law at all. The notion of possession has
application in a pre-legal society, and even perhaps
outside society altogether. Of course in so far as
statements about possession are statements of law, then
they imply the existence of that law, but the existence of
possession is independent of, and prior to, that of law.
Whereas ownership is strictly a legal concept, possession
is both a legal and a non-legal or pre-legal concept.”
45. At page 274, the learned author has opined that in a civilized society
some protection of possession is essential. There are two methods of
protecting the possession. Firstly, the possessor can be given certain legal
rights, such as a right to continue in possession free from interference by
others. Secondly, the law can protect possession by prescribing criminal
penalties for wrongful interference and wrongful dispossession.
46. In relation to the former i.e. the first method by which law can protect
possession, the learned author opines that the possessory right in rem can be
supported by various sanctioning rights in personam against those who
violate the possessor's right: he can be given a right to recover compensation
for interference and for dispossession, and a right to have his possession
restored to him.
47. The learned author goes on to explain that whenever such remedies
are invoked, it will be important to ascertain whether a person invoking
them actually has any possession to be protected. Consequently, a legal
criteria has to be evolved to determine whether a person is in possession of
an object.
48. But, legal concept of possession is not restricted to the commonsense
concept of possession, namely physical control. Possession in fact is not a
simple notion. The question whether in fact a person is in possession of an
article depends on various factors such as the nature of the article itself and
the attitudes and activities of other persons.
49. 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 lease, 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.
50. Can he do so by entering upon the tenanted premises and physically
throwing out the tenant?
51. From a commonsense 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 the law; having the qualifications prescribed by
law and not contrary to nor forbidden by the law.
52. But law recognizes possession as a substantive right or an interest.
Continued possession of a person is recognized by law as a sufficient
interest capable of being protected by the possessor, right being founded on
mere fact of possession.
53. This concept of law relating to possession has been a source of fertile
litigation and if I may use the expression, a lawyer's delight and a Judge's
despair.
54. Salmond On Jurisprudence (12th Edition), page 294, while discussing
possessory remedies has noted that in English law, possession is a good title
of right against anyone who cannot show a better title. Thus, a possessor,
including a wrongful possessor, has the rights of an owner with respect to all
persons except the true owner. Many legal systems go much further and treat
possession as a provisional or temporary title even against the true owner. A
wrongdoer who is deprived of his possession can recover it from any person
whatsoever, simply on the ground of his possession and where the true
owner uses force to throw out the wrongdoer, these legal systems do not
permit the true owner to set up his superior title to protect the possession
which was regained by force. He is compelled to give up possession and
then proceed in due course of law for the recovery of the thing on the
strength of his ownership. 
55. In the latter legal systems, the intention of the law is that every
possessor shall be entitled to retain and recover his possession until deprived
of it by an action according to law.
56. Legal remedies for protection of possession even against ownership
are called possessory. Legal remedies for protection of possession or
regaining possession based on ownership (title) are proprietary. In the
modern and medievous civil law, the distinction is expressed by the
contrasted terms petitorium (a proprietary suit) and possessorium (a
possessory suit).
57. This duplication of remedies, with the resulting provisional protection
of possession, has its beginnings in Roman Law. It became part of the
Canon Law, where it received considerable extension, and through the
common law it became a prominent feature of medieval Jurisprudence. It is
a part of modern continental systems; but although well known to the earlier
law of England, it has been long since rejected in England as cumbrous and
unnecessary.
58. Reason why some legal systems recognize possessory suit as distinct
from proprietary suits is that evils of violent self help are deemed serious
and Therefore are discouraged. It is also based on the recognized principle
of law that no one has a right to become a judge in his own cause. Civil
society recognizes that where law recognizes a right and provides for a
remedy to protect the right, the right has to be protected only as per the
remedy provided by law. 
59. Extended to the extreme it would mean: he who helps himself by
force even to that which is his own must restore it even to the thief and
recover the same as per a recognized legal procedure.
60. Section 6 of the Specific Relief Act recognizes a right of a person
possessed of immovable property to recover possession thereof if
dispossessed without his consent or otherwise than in due course of law.
61. What does the phrase 'due course of law' mean? As explained in the
report published 1992 Supp (2) SCC 29, East India Hotels Ltd. v. Syndicate
Bank (Para 30):
“30. What is meant by due course of law? Due course of
law in each particular case means such an exercise of the
powers by duly constituted tribunal or court in
accordance with the procedure established by law under
such safeguards for the protection of individual rights. A
course of legal proceedings according to the rules and
principles which have been established in our system of
jurisprudence for the enforcement and protection of
private rights. To give such proceedings any validity,
there must thus be a tribunal competent by its
constitution, there is by law of its creation, to pass upon
the subject matter of the suit or proceeding; and, if that
involves merely a determination of the personal liability
of the defendant, it must be brought within its jurisdiction
by service of process within the State, or his voluntary
appearance. Due course of law implies the right of the
person affected thereby to be present before the tribunal
which pronounces judgment upon the question of life,
liberty or property in its most comprehensive sense; to be
heard, by testimony or otherwise, and to have the right
determination of the controversy by proof, every material
fact which bears on the question of fact or liability be 
conclusively proved or presumed against him. This is the
meaning of due course of law in a comprehensive sense.
62. But as we see it, the real problem lies where a person openly
proclaims: Yes I am a trespasser, yes I admit that I wrongfully took
possession of the property, but because I have continued to be in possession
thereof over a sufficiently long period of time, my possession is a settled
possession. It has given to me an enforceable right. Since I was dispossessed
by force, please restore my possession.
63. Position of a person who lawfully enters upon possession is different
than he who gains possession in an unlawful manner. The former would not
be a trespasser. The latter would be. When right of the former to continue in
possession is extinguished by law or by contract, continued possession is not
akin to the possession of a trespasser. The possession, if original entry was
under a lease would be that of a tenant at sufferance. If initial possession
was permissive, possession would be simple at sufferance. Possession of a
person who lawfully enters upon a property but retains it beyond the terms
of the grant is treated as a juridical possession.
64. Decisions under Section 6 of the Specific Relief Act 1963, equating
possession of a trespasser whose very entry was unlawful at par with the
possession of a person who otherwise lawfully enters upon the property,
with consent of the owner, but asserts a right to continue in possession after
the agreed period during which he was to retain possession has expired
would be illustrated of the principle of law to be adopted.
65. A peep into the legal precedents show a fairly hazy picture. 
66. The fore runner of Section 6 of the Specific Relief Act 1963 was
Section 9 of the Specific Relief Act 1877. It was the subject matter of
discussion in various decisions.
67. In the report published as (1911)13 Bom.LR 1200 Hillava Subbava v.
Narayanappa it was observed:
“No doubt, the true owner of property is entitled to
retain possession, even though he has obtained it from a
trespasser by force or other unlawful means: Lillu v.
Annaji ILR (1881) 5 Bom. 387 and Bandu v. Naba ILR
(1890) 15 Bom. 238.”
68. Speaking through to Chagla C.J., a Division Bench of the Bombay
High Court, in the decision reported as AIR 1954 Bom. 358 Brig. K.K.
Verma and Anr. v. UOI and Anr. opined as under:
"The statement of the law just referred to in Hill and
Redman on Landlord and Tenant would rather go to
show that in every case a landlord must express his
intention by some act which is subsequent to the
termination of the ,tenancy. and the reason for that seems
to be clear because after the termination of the tenancy, -
however the tenancy may be terminated, - there is as it
were a neutral position created. The landlord may
consent to the tenant continuing, may accept rent from
him, in which case the tenant would become a tenant at
will. He may, on the other hand, make it clear that he
does not want the tenant to continue in possession in
which case the tenancy on sufferance which was created
by the termination of the tenancy would cease and the
tenant would become a trespasser.
But, in our opinion, the position in English law is
unnecessary to be considered because, as we shall
presently point out, the law in India is essentially 
different, and even assuming Mr. Desai is right that
under the English law on the facts of this case the tenant
became a trespasser, the same position would not arise
under the Indian law. Under the Indian law, the
possession of a tenant who has ceased to be a tenant is
protected by law. Although he may not have a right to
continue in possession after the termination of the
tenancy, his possession is juridical and that possession is
protected by statute. Under Section 9 of the Specific
Relief Act, a tenant who has ceased to be a tenant may
sue for possession against his landlord if the landlord
deprives him of possession otherwise than in due course
of law, but a trespasser who has been thrown out of
possession cannot go to Court under Section 9 and claim
possession against the true owner.
Therefore, our law makes a clear and sharp distinction
between a trespasser and an erstwhile tenant. Whereas
the trespasser's possession is never juridical and never
protected by law, the possession of an erstwhile tenant is
juridical and is protected by law. Therefore, as far as the
Indian law is concerned, an erstwhile tenant can never
become a trespasser. It may or may not be that in
English law in certain circumstances he can become a
trespasser and it does seem that the landlord can enter
the premises and deprive the erstwhile tenant of his
possession, but in India a landlord can only eject his
erstwhile tenant by recourse to law and by obtaining a
decree for ejectment.
(underlining emphasized)
69. In the report published as AIR 1968 SC 620 Lallu Yeshwant Singh v.
Rao Jagdish Singh and Ors. , in para 11 of the report, 2nd passage above
quoted from the decision of Chagla C.J. in K.K. Verma's case was noted and
approval accorded in para 15 of the decision by recording as under:
In our opinion, the law on this point has been correctly
stated by the Privy Counsel, by Chagla C.J. and by the
full Bench of the Allahabad High Court, in the cases cited
above.”
70. However, we may hasten to add that in the decision in Lallu Yeshwant
Singh's case, the Supreme Court observed that law respects possession even
if there is no title to support it.
71. On facts, the Supreme Court was dealing with a dispute between the
plaintiff and the defendant pertaining to a Land Tenancy Act where the
plaintiffs claim to be inducted as Sairda - Khillkar Cultivators and alleged
forcible dispossession. The defendant pleaded that the right in favor of the
plaintiff having ceased as per law, defendant was entitled to regain
possession. The Board of Revenue took a view that possession of the tenant
whose right has been so extinguished is not put to an end automatically and
the land owner must be regain possession by following the procedure
prescribed by the Tenancy Act. The High Court took a contra view, holding
that the tenant could protect only lawful possession. The Supreme Court
reversed the view taken by the High Court and restored the decision of the
Board of Revenue.
72. Though without a detailed legal discussion, much less drawing a
distinction between possession of a trespasser whose very entry was
unlawful viz-a-viz right to continue in possession by a person whose initial
entry was lawful but dispute was on right to continue in possession, a
learned Single Judge of the Allahabad High Court, in the report published as
AIR1960All227 Anant Bahadur Singh v. Ashtbhuja Baks Singh held that
where a person entitled to possession based on title regains possession, but 
by peaceful means, from a person not entitled to possession, the latter cannot
recover possession on basis of mere possessory title.
73. The facts were that a widow transferred possession of property which
had devolved through her husband and as per Hindu Law she had no right to
alienate the same. She had a limited right to possess the property during her
life time. Corpus vested in the reversioners. On her death, the reversioners of
the husband took peaceful possession. The alienee brought an action for
recovery of possession based on possessory title. It was observed:
“In the present case, the defendants did dispossess the
plaintiff peacefully. Now that the rightful owners are in
possession, the plaintiff, who has no title in the property,
cannot obtain the aid of court to dispossess the rightful
owners.”
74. Though not dealing with an issue directly relating to Section 6 of the
Specific Relief Act 1963, jural concepts evolved in the decision reported as
AIR 1974 SC 104 M.C.Chockalingam & Ors.Vs. V.Manickavasagam & Ors.
give good guidance to understand the concept of lawful, legal and juridical
possession. The Supreme Court was dealing with the claim of a lessee,
whose lease had expired, to obtain a license to operate a cinema hall on the
leased premises under the Madras Cinemas (Regulation) Act 1955. The rules
framed there under, in particular Rule 13, viz-a-viz non owner occupants of
a site required lawful possession of the applicant. It was urged by the lessee
that notwithstanding lease having expired and the landlord having not
consented to the continued occupation, till lessee was evicted by due process
of law, his possession was lawful as also legal and Therefore he was entitled
to the requisite license. 
75. Noting the decision of Chagla C.J. in K.K. Verma's case (supra) as
affirmed by the Supreme Court in Lallu Yeshwant Singh's case (supra), the
Supreme Court held that lawful possession and juridical possessions are
different concepts. A tenant holding over without the consent of the landlord
would be in juridical possession. His possession would not be lawful.
Notwithstanding that the landlord could evict such tenant through the
medium of a process recognized by law, possession of the tenant, post efflux
of the lease period, was and could not be treated as lawful possession. It was
held that he may not be a trespasser as conventionally understood and to that
extent it may be said that the possession is legal, but in jural concept the
possession would be treated as a juridical possession.
76. In para 13 of the report, ratio of Lallu Yeshwant Singh's case (supra)
was explained with reference to Section 9 of the Specific Relief Act 1877, in
that, said Section was held as protecting juridical possession. To quote, the
Supreme Court stated as under:
“In Lallu Yeshwant Singh's case AIR 1968 SC 620 where
this Court considered the possession of a tenant after
expiry of the lease, as in this case, as a juridical
possession in the context of a provision similar to Section
9 of the Specific Relief Act.”
77. Black's law dictionary, 4th Edition (page 990), defines juridical as
follows:
“Juridical: Relating to administration of justice or office
of a Judge.”
78. In the same dictionary (page 1032) the word ‘lawful’ is defines as
follows:
“Lawful: Legal; warranted or authorized by the law;
having the qualifications prescribed by law; not contrary
to nor forbidden by the law.”
79. Thus, lawful possession would mean a legal possession which is
rightful or at least excusable and consistent with the superior right to possess
in some other person i.e. the owner.
80. Decision of the Supreme Court reported as AIR 1996 SC 140
R.V.Bhupal Prasad v. State of A.P. highlights the applicability of the
concept of a legal/lawful or juridical possession.
81. The Supreme Court referred to and explained its earlier decisions in
Lallu Yeshwant Singh's case and M.C.Chockalingam's case.
82. In R.V.Bhupal Prasad's case the Supreme Court was dealing with a
right to have a license renewed under the A.P. Cinemas (Regulation) Act
1955. In para 8 it was noted that a tenant who continues in possession after
the expiry of a lease, though referred to as a tenant holding over, actually is
a tenant at sufferance but where the landlord consents to the continued
retention of possession, the tenant is holding possession under a tenancy at
will. It was held that the possession under the former category would not be
a lawful possession but would be a juridical possession. In para 9, with
reference to its decision in M.C.Chockalingam's case meaning of the
expression lawful possession was explained in the following words:
“...Lawful possession is not litigious possession and must
have some foundation in a legal right to possess the
property which cannot be equated with a temporary right
to enforce recovery of the property in case a person is
wrongfully or forcibly dispossess from it....We are clearly 
of opinion that juridical possession is possession
protected by law against wrongful dispossession but
cannot per-se always be equated with lawful
possession....Lawful possession means legal possession
which is also rightful or at least excusable. Thus that
which is not stricto legalo may yet be lawful. It should
not be forbidden by law.... Lawful is wider in connotation
than legal”
83. However, I would be failing if do not note that in para 11 of the
report, the Supreme Court has noted that even a trespasser would be entitled
to be evicted by a due process of law.
84. There are two maxims of law which need to be noted. First: adversus
extraneous vitiose possession prodesse solet - prior possession is a good title
of ownership against all who cannot show a better title. Second: possession
contra omnes valat praeter eur cui ius sit possessionis - he that hath
possession hath right against all but him that hath the very right.
85. If the 2 maxims are strictly applied, no possession can be protected
without a right to possess against the owner of the property in whom law
recognizes the right to possess.
86. However the maxim: nemo debet esse judex in propria causa - no one
should be judged in his own cause, is also recognized by law and this maxim
is the foundation against permitting the owner to regain possession of his
property without the aid of a court or a tribunal established by law i.e.
compels the owner to regain possession in the manner prescribed by law.
87. Indeed, if people are allowed to be the judge of their own cause, there
would be lawlessness in the society. More often than not there are 
competing claims. More often than not a party asserts no right in the
occupier who affirms a right in himself. The two must have the dispute
resolved from the court of competent jurisdiction.
88. There are wheels and wheels within the laws. Niceties, caveats,
exceptions to the rule and rules within rules have unfortunately become a
part of every legal system.
89. Whatsoever and howsoever may be the theories of law, the common
man understands law by instinct. His instinct guides him that whatever is
rational and fair is lawful and anything which is irrational or oppressive is
unlawful. But, more often than not, law is discovered in a court room
through forensic battles fought at length by legal luminaries. On many an
occasion, after hearing arguments, a Judge goes into legal transcendental
meditations to unfathomed the niceties of the law.
90. Instinct and commonsense would guide that where a man trespasses
into somebody's property and proclaims no right to possess the property and
states that I am a trespasser but please go to court to regain possession, such
a claim cannot be countenanced inasmuch as it would protect a wrongdoer.
91. After all, possession may prima facie raise a presumption of a title,
but when the facts are known, where is the place for a presumption? I
wonder!
92. It could be urged that regaining lost possession, albeit, without
creating a law and order problem and without resorting to violence, prima
facie, from a commonsense point of view would not amount to taking
advantage under an illegal action. 
93. From a moralist point of view, why should a court come to the aid of
a person who founds his cause of action upon an immoral or illegal act of
his. The maxim ex dolo malo non oritur actio means: a right of action does
not arise out of fraud. No court will lend its aid to a man who founds his
cause of action on an illegal act. As observed by Lord Mansfield C.J. in
(1775) 1 Cow 341 Holman v. Johnson:
“If, from the plaintiff's own stating or otherwise the
cause of action appears to arise exturpicausa or the
transgression or a positive law or this country, there the
court says he has no right to be assisted. It is upon that
ground the court goes; not for the sake of the defendant,
but because they will not lend their aid to such a
plaintiff.”
94. Courts in India have struck a middle path. Where possession of a
trespasser assumes the status of a settled possession, it is protected against
forcible ejectment by even the true owner. The guiding principle of this
middle approach is the observations of Lord Macnaghten in the celebrated
decision of the Judicial Committee reported as 1907 AC 73 Perry v. Clissold
wherein the principle was stated as follows:
“It cannot be disputed that a person in possession of
land in the assumed character of owner and exercising
peaceably the ordinary rights of ownership has a
perfectly good title against all the world but the rightful
owner. And if the rightful owner does not come forward
and assert his title by the process of law within the
period prescribed by the provisions of the statute of
Limitation applicable to the case, his right is forever
extinguished, and the possessory owner acquires an
absolute title.” 
95. Without expressly authorizing a person to occupy one's property and
lose the right to possess the same, an owner may by his action, inaction or
deeds do something which would be treated as acquiescence by the owner,
resulting in the person entering into possession acquiring settled possession.
96. In the report published as 1 (2004) SLT 675 Rame Gowda v.
M.Varadappa Naidu, recognizing the right of a owner who has been
wrongly dispossessed of property to regain possession, if he can do so,
peacefully and without the use of unreasonable force, only limitation placed
was when the trespasser acquires effective possession or settled possession.
In para 11 of the report it was observed that the sine qua non for settled
possession or effective possession of a trespasser was when the same
extended over a sufficiently long period of time and acquiesced to by the
true owner. In relation to the concept of settled possession developed by
various judicial pronouncements, noting the same in para 11 of the report, it
was observed that the phrase ‘settled possession‟ does not carry any special
charm or magic, nor is it a ritualistic formula which can be confined in a
straight jacket. However, following tests which could be adopted as working
rules were evolved:
“(i) That the trespasser must be in actual physical
possession of the property over a sufficiently long
period;
(ii) That the possession must be to the knowledge (either
express of implied) of the owner or without any attempt
at concealment by the trespasser and which contains an
element of animus possidendi. The nature of possession
of the trespasser would, however, be a matter to be
decided on the facts and circumstances of each case; 
(iii) The process of dispossession of the true owner by
the trespasser must be complete and final and must be
acquiesced to by the true owner; and
(iv) That one of the usual tests to determine the equality
of settled possession, in the case of culturable land,
would be whether or not the trespasser, after having
taken possession, had grown any crop. If the crop had
been grown by the trespasser, then even the true owner
has no right to destroy the crop grown by the trespasser
and take forcible possession.”
97. A deceitful, undercover or a trespass shrouded under darkness of
secrecy; not to the knowledge, express or implied of the owner, howsoever
long may be the duration of the possession would not amount to a settled
possession. The reason for the law is that where a person knowingly permits
another to take possession of his property and deal with the same he may
encourage the trespasser to improve upon the property i.e. permit the
trespasser to spend his time, money or energy on the property. Having
encouraged the trespasser to do so, the owner would be precluded i.e.
estopped from alleging that the trespasser has no right whatsoever in the
property.
98. To put it differently, where the owner permits a trespasser to be in
settled possession, he permits the status of the possession of the trespasser
acquiring a status akin to that of a juridical possession. Thus, juridical
possession or possession akin thereto in any case becomes the sine qua non
for an actionable claim to resist possession being taken over.
99. It would therefore be wrong to state that every trespasser has a right to
retain possession till evicted by a due process of law. If that was the legal 
position there would have been no need for courts to evolve the concepts of
legal possession, lawful possession, juridical possession, settled possession
etc.
100. In legal possession or lawful possession the possessor has a claim
recognized by law to enjoy possession of a property. The entry upon the
property and it's retention is with the consent or permission of the owner. In
a case of juridical possession, the possessor asserts a legal right to possess
and the facts on which the right is found is asserted have to be decided and
since no one can be a judge in his own cause, the dispute has to be resolved
by a lawful authority. But where a person asserts no right to possess a
property but illegally holds on to it, nothing requires adjudication. The
judicial forum has to be decide nothing, or to put it differently there is not
even a semblance of a claim. There is nothing juridical which exists.
101. To put it pithily ‘juridical possession’ can be understood as
possession founded on some right as was held in the decision reported as
AIR 1956 All 709 Batra Vs. Laxmi Insurance Company Ltd. and this right
could be settled possession for long.
102. Where possession is claimed under an agreement to sell post
mortgage created, it would have to be seen very carefully by the Recovery
Officer whether at all a proper mortgage was created and if it is a case where
the mortgage is by way of deposit of title, it has to be ensured that the bank
proves title document deposited with it and continuing to lie deposited with
it. For if the buyer claims that the seller showed the original title document
to the buyer, said statement on oath has to be believed if the bank does not 
produce the original title deed, if it is a case of mortgage by deposit of title
deed.
103. Regretfully, in spite of the Recovery Officer passing directions twice,
firstly on April 28, 1999 and secondly on November 04, 2003 directing the
bank to produce the title deeds, and none being produced the Recovery
Officer held that the mortgage could be enforced. The record of the Original
Application in which the order was passed shows that only a photocopy of
the lease-deed dated March 30, 1963 was filed by the bank. There is just no
evidence that the original title deed in question was with the bank.
104. There is a further problem. Acting under the General Power of
Attoreny dated May 31, 1983 executed in his favour by ten legal heirs of
Hari Ram, Ashok Sirpaul sold the lease-hold property to his brother Anil
Sirpaul by executing a sale-deed on June 23, 1986. Thus title in the property
vested in Anil Sirpaul on said date. Therefore no mortgage of the property
by deposit of title deeds could be created by depositing the perpetual leasedeed
dated March 30, 1963. The bank was totally negligent in not carrying
out a proper title search. Further, from the facts noted by us in para 12 to
16, the position would be that the borrower company informed the bank in a
letter written on October 12, 1990 under the authority of Ashok Sirpaul that
the property would be transferred in the name of the company and would be
offered as security. Within a few days, on October 21, 1990 Anil Sirpaul
addressed a letter acknowledging his intention to create an equitable
mortgage over the property and wrote that the leased-deed dated March 30,
1963 has been deposited with the bank. This letter can be treated as Anil
Sirpaul’s unequivocal intent to mortgage the property and admission qua 
him that the title deed i.e. the lease-deed dated March 30, 1963 was
deposited with the bank. But as regards third parties the bank had to show
that as a matter of fact the title deed was deposited with the bank and
continued to remain with the bank, for the reason if the lease-deed went
outside the custody of the bank and in the hands of Anil Sirpaul an innocent
third party had no means to verify and acquire knowledge of the mortgage.
105. The facts probablize that the officers of the bank were hand in glove
with Anil Sirpaul and his brother Ashok Sirpaul who appear to have
deposited the perpetual lease-deed with the bank to create a mortgage but
managed to procure the same back, and we have good intrinsic evidence in
the form of Ex.P-66 and Ex.P-68, concerning the contents whereof we have
made a reference in para 17 above. Regretfully, the issues which the
Recovery Officer had to focus on and discuss, which we have highlighted in
paragraph 20 above have just not been kept in mind by the Recovery Officer
and this omission permeates in the decision passed by the learned Debts
Recovery Tribunal as also the learned Debts Recovery Appellate Tribunal.
106. Now, there is a serious problem with respect to the charge created by
way of an equitable mortgage. Concededly Hari Ram was the perpetual
lessee of the property under the perpetual lease-deed March 30, 1963
executed in his favour by the Land & Development Officer, which was
registered by the Sub-Registrar New Delhi on April 16, 1963. On his death,
10 legal heirs were substituted as perpetual lease in the office of Land &
Development Officer evinced by letter dated September 20, 1982 written by
the Land & Development Officer. The 10 legal heirs executed a power of
attorney on May 31, 1983 in favour of Ashok Sirpaul. In the letter dated 
October 12/19, 1990 written by Ashok Sirpaul to the bank in his capacity as
Director of the company he offered to create a charge over the property after
it was transferred in the name of the company i.e. wrote that the company
would consent to the charge being created and would deposit the title deed
in the name of the company. Ashok Sirpaul did not follow up this letter and
neither the bank insisted on the follow up action. The letter written by Anil
Sirpaul would be his consent and act of creating the charge by way of an
equitable mortgage by deposit of the perpetual lease-deed dated March 30,
1963, for which he did not have the authority because there were ten legal
heirs of the perpetual lessee whose names were entered in the record of Land
& Development Office as the perpetual lessees. The bank remained totally
negligent. Everything was done unofficially as if it was a family affair.
Further, by the year 1990 dawning, as noted above, much prior thereto, on
June 23, 1986, acting on the strength of general power of attorney dated
May 31, 1983, Ashok Sirpaul had executed a sale deed in favour of Anil
Sirpaul and had the bank bothered to inspect the record of the Sub-Registrar
which the bank was obliged to do, it would have dawned on the bank that
Ashok Sirpaul could not, acting under the power of attorney dated May 31,
1983 offered to create a charge over the property by depositing the
perpetual lease-deed dated March 30, 1963. He had no authority to write to
the bank that as the general power of attorney holder of the ten recorded
perpetual lessees he would convey the property in the name of the company
and secured a charge by depositing the said title deed. As regards Anil
Sirpaul, if he was to create the charge over the property by deposit of title
deed, it had to be the sale-deed dated June 23, 1986 which was duly
registered with the Sub-Registrar, Delhi.
107. The impugned orders, on the reasoning that the property was
mortgaged in October, 1990 and the agreements to sell relied upon by the
petitions are subsequent thereto, cannot be sustained for two reasons.
Firstly, the bank has failed to prove creation of an equitable mortgage by
deposit of the original perpetual lease-deed dated March 30, 1963 and its
continued possession with the bank. Secondly that the deposit of the said
perpetual lease-deed as the title document to encumber the property was on
the strength of the general power of attorney dated May 31, 983 executed by
the ten legal heirs of Hari Ram in favour of Ashok Sirpaul, but before
October, 1990, under the sale-deed dated June 23, 1986 Ashok Sirpaul had
sold the property to his brother Anil Sirpaul and the registered sale-deed
dated June 23, 1986 became the document of title under which Anil Sirpaul
alone became the owner of the property. It was incumbent upon the bank to
carry out a title search and if the bank did so it would have insisted that the
equitable mortgage be created by Anil Sirpaul by depositing the sale-deed in
question which the bank admittedly did not do. It is apparent that the
petitioners or their predecessors-in-interest, to whom the original sale-deed
dated June 23, 1986 was shown acted bona-fide to enter into the agreements
to sell and after giving the entire sale consideration take possession of
different floors of the subject property.
108. That leaves the issue concerning the injunction order dated May 15,
1992 passed by this Court and possessions handed over under agreements to
sell subsequently.
109. Relying upon the decision reported as (2013) 5 SCC 397 Thomson
Press (India) Ltd. vs. Nanak Builders and Investors Pvt.Ltd. & Ors., an 
issue arising out of an application for impleadment in a suit speaking
specific performance, it was urged by learned counsel for the petitioners
that, in paragraph 53 of the opinion it was observed:-
“53. There is, therefore, little room for any doubt that the
transfer of the suit property pendente lite is not void ab
initio and that the purchaser of any such property takes the
bargain subject to the rights of the plaintiff in the pending
suit. Although the above decisions do not deal with a fact
situation where the sale deed is executed in breach of an
injunction issued by a competent court, we do not see any
reason why the breach of any such injunction should render
the transfer whether by way of an absolute sale or otherwise
ineffective. The party committing the breach may doubtless
incur the liability to be punished for the breach committed
by it but the sale by itself may remain valid as between the
parties to the transaction subject only to any directions
which the competent court may issue in the suit against the
vendor.”
110. The argument was that since the bank did not prove a valid mortgage
created by deposit of title-deed the petitioners were bona-fide purchasers for
valuable consideration and in any case by themselves or through their
predecessor-in-interest were in possession of different floors of the property
when the attachment was effected and thus had sufficient interest as also
possessory rights to defeat the attachment.
111. On the other hand, learned counsel for the respondents cited the
decisions reported as AIR 1996 SC 135 Surjeet Singh vs. Harbans Singh &
Ors. AIR 1967 SC 1386 Mulraj vs. Murti Raghunathji Maharaj, to urge to
the contrary.
112. But we need not quibble with said decisions because, before a legal
principle has to be applied, the facts have to be kept in mind. It is trite that it 
is the facts which attract the law.
113. It is trite, and this principle was recognized in Mulraj‟s case (supra)
that an injunction operates from the date it is brought to the notice of the
party against whom the injunction order is issued. There is no proof that
injunction order dated May 15, 1992 was ever served upon the defendants in
the suit and in particular Anil Sirpaul, who entered into the collaboration
agreement dated noted above on March 25, 1993. The four storyed building
was built thereafter. There appears to be a total connivance of the officers
of the bank evidenced from the fact that the injunction order was conveyed
by the Superintendent (O) of this Court on January 27, 1994, and the formal
order drawn up to be conveyed is as under:-
“THE HIGH COURT OF DELHI AT NEW DELHI
(ORDINARY ORIGINAL CIVIL JURISDICTION)
I.A.No.7042/92 IN THE SUIT NO.1788/92
INDIAN BANK PLAINTIFF
VS.
GLOBERC AND ALLOYS P.LTD. DEFENDANTS
TO
1. Globearc and Alloys P.Ltd. 3992, Ajmere Gate, Delhi
2. A.L.Sirpaul, Director, M/s Globerc and Alloys P.Ltd. 7/2,
Old Rajinder Nagar, New Delhi.
3. Ashok Sirpaul/Director, M/s Globerc and Alloys P.Ltd.
7/2, Old Rajinder Nagar, New Delhi.
4. Anil Sirpaul, Director M/s X Globerac and Alloys P.Ltd.
7/2, Old Rajinder Nagar, New Delhi.
5. H.S.Lalwani, Director, M/s Globerac and Alloys P.Ltd. WP(C) No.4505/2015 & conn.matters Page 48 of 50
3992, Ajmere Gate, Delhi
6. Smt.Prabha Pradhan, Director M/s Globerac and Alloys
P. Ltd., 82/C, Paschim Apartments, 8th floor, Opp.Kirti
College, Dadar, Bombay
7. Arun Kapoor, Director, M/s Globerac and Alloys P.Ltd.
19/3, Moti Nagar, New Delhi-110015.
UPON MOTION made into this court by Sh.Nanda
counsel for the plaintiff/applicant and UPON
CONSIDERING the application (I.A.No.7042/92) u/o 39
rules 1 and 2 sec. 151 CPC (copy enclosed) and after
hearing the counsel for the plaintiff THIS COURT doth
order THAT you, your servants, employees or agents be
and the same are hereby restrained from alienating,
transferring, selling or otherwise creating any third party
rights in properties bearing No.D-220, out of khasra 149,
Shakarpur, Delhi-3 Mehrauli Road, Gurgaon and 7/3,
Old Rajinder Nagar, New Delhi.
TAKE NOTICE that the application (I.A.No.7042/92)
and 7084/92) are fixed for hearing on 13/5/94.
AND THIS COURT DOTH LASTLY ORDER that this
order will punctually be observed, obeyed and carried
out by all concerned.
Given under my hand and the seal of this court this
the 27th
day of Jan 1994.
Sd/-
SUPERINTENDENT (O)I
FOR REGISTRAR”
114. There is no proof of the injunction order ever being served. The suit
was transferred to the Debts Recovery Tribunal when the Tribunal was
constituted and was registered as OA No.868/1995. Further, prior to the 
date when the injunction order was conveyed by the Registrar Original of
this Court i.e. on January 27, 1994, on March 25, 1993 a collaboration
agreement was entered into with the builders under which the first and third
floor as also the terrace rights vested in the builder and the ground and the
second floor were retained by Anil Sirpaul. On March 01, 1994 the builders
handed over the first floor to Rajinder Kumar Malhotra. On June 10, 1994
they handed over the third floor as also the terrace above to Bhupinder Singh
Bajaj and his wife. As regards Anil Sirpaul, he executed the agreement to
sell concerning the ground floor on June 19, 1996 and regarding the second
floor on March 01, 1994. The injunction order which had to be conveyed
was formally drawn up and signed by the Registrar General of this Court on
January 27, 1994. The dispatch registers and receipt registers of this Court
for said period are not available, but our experience firstly as members of
the Bar and then on the Bench is that it takes about 2 days to 3 days for the
dispatch branch to enter the dockets in the dispatch register and thereafter
send it to the process serving agency for service and the process service
agency takes 2 to 3 weeks to serve the injunction orders. Thus there is
intrinsic evidence that the agreements to sell entered into on March 01, 1994
by Anil Sirpaul and the builders concerning the second floor and the first
floor respectively were entered prior to when the injunction order could
possibly have been served and thus said purchasers in any case would not
only be bona-fide purchasers but without any taint of the two floors being
sold in contravention of the knowledge of the injunction order to the seller.
Regarding the other portions of the property, today there cannot be any
proof gathered as to when were the injunction orders served, if it all they
were served because the dispatch and the receipt registers of the year 1994 
are not available.
115. The writ petitions are accordingly allowed. The impugned orders
dated July 30, 2004 passed by the Recovery Officer, September 21, 2011
passed by the Debts Recovery Tribunal and the orders dated January 28,
2015 and March 18, 2015 passed by the Debts Recovery Appellate Tribunal
are set aside. Objections to the attachment filed are allowed holding that the
writ petitioners have shown sufficient interest including protectable
possession. Sale effected is set aside with a direction that the purchaser
would be refunded the bid amount deposited.
116. Parties shall bear their own costs in the writ petitions.
(PRADEEP NANDRAJOG)
 JUDGE
 (MUKTA GUPTA)
 JUDGE
MAY 13, 2016

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