Encroacher not 'transferee', cannot claim benefit under Section 51 of Transfer of Property Act: Supreme Court

The Supreme Court recently held that an encroacher cannot be treated as a ‘transferee’, and therefore cannot claim a 'right to require' under Section 51 of the Transfer of Property Act of 1882 (TP Act) [Baini Prasad through LRs v. Durga Devi]..Section 51 provided that when a transferee of immoveable property makes any improvement to the property, believing in good faith that he is absolutely entitled to the property, and he is subsequently evicted by any person having a better title, the transferee has a right to require the person causing the eviction either to have the value of the improvement estimated and paid to the transferee, or to sell interest in the property to the transferee at the then market value of the property, irrespective of the value of such improvement.A division bench of Justices BR Gavai and CT Ravikumar was of the view that in order to attract Section 51, the occupant of the land must have held possession under colour of title, his possession must not have been by mere possession of another but adverse to the title of the true owner and he must be under the bone fide belief that he has secured good title to the property in question and is the owner of the property."Where the owner of the land filed suit for recovery of possession of his land from the encroacher and once he establishes his title, merely because some structures are erected by the opposite party ignoring the objection, that too without any bona fide belief, denying the relief of recovery of possession would tantamount to allowing a trespasser/encroacher to purchase another man’s property against that man’s will," the Court observed..As per the facts of the case, the present respondent had filed a civil suit for possession of land by demolition of the structure put up on the land and for permanent prohibitory injunction restraining the appellant from interfering on the disputed land. The suit was decreed holding the present respondent as the owner of the encroached land and directing that the same be handed over to the respondent after demolition of the structures put up on the land.Challenging the same, the appellant moved the first appellate court, which confirmed the findings on ownership and the question of encroachment. However, the appellate court modified the judgment and decree holding that the respondent was not entitled to recovery possession of land after demolition of the structures put up there based on the principles of acquiescence.Consequently, the respondent was found entitled to a decree of compensation at the market value prevalent at the time of filing of the suit and the compensation was assessed at ₹5,500. However, the respondent moved a second appeal before the Himachal Pradesh High Court challenging the modification of the judgment by appellate court.The High Court allowed the second appeal and set aside the judgment and decree of the first appellate court and the judgment and decree of the trial court was restored, which allowed for demolition and handing over of the possession of the encroached land to the respondent. Aggrieved, the appellant preferred the present appeal before the apex court..Before the top court, the appellant argued that he had effected the construction on the bona fide belief that he was effecting construction on his own land and, therefore, the construction raised by him on the land in question is protected under Section 51 of the TP Act.It was also argued that the respondent did not object and resort to civil remedy against the construction effected on the land in dispute within a reasonable time and, therefore, the respondent is estopped from claiming recovery of the land in question after demolition of the structure raised on it. .The Supreme Court noted that the first contention of the appellant founded on Section 51 of the TP Act, was totally misplaced and misconceived. "The original appellant has failed to establish that he is a “transferee” within the meaning of the TP Act and for the purpose of Section 51, TP Act. In order to attract the Section the occupant of the land must have held possession under colour of title, his possession must not have been by mere possession of another but adverse to the title of the true owner and he must be under the bone fide belief that he has secured good title to the property in question and is the owner thereof. At the same time, in the case on hand, the concurrent findings of the courts below is that the respondent herein is the owner of the land in question and the original appellants had encroached upon it and effected construction. The appellants herein have failed to establish the above mentioned three things."Moreover, the Court was also of the view that it was after encroaching upon the land in question and ignoring the absence of any title that the appellant raised the structures on it at his own risk and once it is so found, the appellant cannot be treated as a ‘transferee’ within the meaning of the TP Act and for the purpose of Section 51 of the TP Act..While rejecting the second contention of the appellant, the Court observed:"In a suit for recovery of possession filed within the period of limitation provided under Limitation Act, the doctrine of laches or acquiescence has no place to defeat the right of the plaintiff to obtain the relief on his establishing his title. We may hold that in such a situation in the absence of any misrepresentation by an act or omission, the mere fact after making objection the plaintiff took some reasonable time to approach the Court for recovery of possession cannot, at any stretch of imagination, be a reason to deny him the relief him of recovery of possession of the encroached land on his establishing his title over it."Therefore, the Court was of the view that merely because some structures were erected by the opposite party ignoring the objection, that too without any bona fide belief, denying the relief of recovery of possession would tantamount to allowing a trespasser or encroacher to purchase another man’s property against that man’s will..Hence, the appeal was dismissed and the judgment and decree passed by the trial court was restored..Senior Advocate Kiran Suri appeared for the appellant while advocate Rajesh Srivastava appeared for the respondent..[Read Judgment]