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SUPREME COURT OF INDIA
KULDIP SINGH AND K. RAMASWAMY, JJ.
Dr. Bhargava & Co. and another, Appellants
Versus
Sh. Shyam Sunder Seth by L. Rs., Respondents.
Civil Appeal No. 910 of 1988
Decided on 12-7-1994.
Advocates appeared
Mr. Shiv Dayal Srivastava and Mr. S. Bagga, Sr. Advocates, Mr. Seeraj Bhagga and Ms. S. Bagga, Advocates with them for Appellants; Mr. A. P. Mohanty, Advocate for Respondents.
Constitution Of India,1950 - Article 65 - Rule 90, Displaced Persons Compensation and Rehabilitation Rules, 1955 - Payment of purchase price – Quash - Thereafter Sunder Seth paid remaining sale price in respect of suit property to competent authority - Said payment was made in year 1980 - Thereafter sale certificate was issued to Sunder Seth on March - Sale certificate confirmed title of Sunder Seth to suit property with effect from January present suit for possession was filed by Sunder Seth on February - Suit was contest editor alien ground that defendants appellants were in actual physical possession of property continuously for more than years such they had become owners of property by adverse possession - It was also contended that suit was barred by limitation - Trial court rejected all contentions raised by defendants-appellants and decreed suit - Before High Court appellants reiterated contentions rose before trial court but primarily concentrated on points that appellants had perfected their title to property by adverse possession and that suit was barred by limitation – Held, It seems to us that matter must be considered on general principles - In this case highest bid was of respondent and he paid full price before sale in his favor was confirmed - sale certificate though issued later mentioned date of confirmation of sale in his favor - tenant was asked to at torn to purchaser from date of confirmation of sale and thus possession was also delivered on that day – Title therefore was not in abeyance till certificate was issued but passed on confirmation of sale - Intention behind rules appears to be that title shall pass when full price is realized and this is now clear from new form of certificate reproduced in Jaime’s case Pun No doubt till price is paid in full there is no claim to property but it seems somewhat strange that person who has paid price in full and in whose favor sale is also confirmed and who is placed in possession should only acquire title to property from date on which certificate is issued to him - There may conceivably be great deal of time spent before certificate is granted - In this case tenant was told to at torn from October because nothing remained to be done except ministerial acts of issuing certificate and getting it registered - Therefore so far as title was concerned it must be deemed to have passed and certificate must relate back to date when sale became absolute - Relying upon case vehemently contended that so far as title in this case was concerned it must be deemed to have passed with effect from January - Date mentioned in sale certificate - Certificate must relate back to said date - There is obvious fallacy in argument - In case super sale had become absolute much earlier to date of issue of sale certificate as full price had been paid by highest bidder before confirmation of sale - In present case it is not disputed that full price of suit property was paid in year - It is not necessary for us to go into question as to whether title in property passes to auction purchaser from date of sale certificate or from date mentioned in certificate - It all depends on facts of each case - Court are however firmly of view that auction purchaser cannot claim title to property till time full price in respect of said property is paid which is condition precedent and sale certificate is issued - It is not disputed that in present case full price of property in dispute was paid in year and sale certificate was issued thereafter - As such title passed on to respondent in said year - suit was filed in year and as such was clearly within limitation - Appeal dismissed
The property in dispute was an evacuee property purchased through an auction sale. The original sale was held in 1962, but the purchaser failed to pay the full auction price, leading to the cancellation of the sale by the authorities. The purchaser challenged this cancellation and subsequently paid the remaining sale price in 1980, after which a sale certificate was issued confirming the purchaser’s title from a specific date, which was earlier than the date of the certificate itself (!) (!) .
The court held that the title to the property passes to the purchaser only upon the full payment of the purchase price and the issuance of the sale certificate, which relates back to the date of sale confirmation and the payment of the full amount. In this case, since the full price was paid before the sale was confirmed and the sale certificate was issued, the title was deemed to have passed on the date of sale confirmation, not on the date of certificate issuance (!) (!) .
The purchasers' possession was initially permissive, coming through lawful occupancy, and they did not demonstrate any overt acts to claim adverse possession. Their possession remained permissive until the sale was confirmed and the sale certificate issued, establishing that they did not acquire adverse possession rights during the period prior to the full payment and formal transfer of ownership (!) (!) .
The suit for possession was filed within the limitation period because the title had effectively passed to the purchaser at the time of sale confirmation, prior to the issuance of the sale certificate. Therefore, the claim was not barred by limitation, and the legal transfer of ownership was deemed to have occurred earlier than the date of the sale certificate (!) (!) .
Overall, the court emphasized that ownership rights are only transferred once all procedural requirements, including full payment and formal certification, are completed, and until then, possession remains permissive. The timing of these formalities is critical in determining the date of transfer and the commencement of limitation periods for possession claims.
JUDGMENT
KULDIP SINGH, J. :- This appeal is sequel to a suit for possession instituted by Shyam Sunder Seth predecessor-in-interest of the respondents in the appeal herein. The suit was decreed by the trial court. Appeal against the judgment and decree of the trial court was dismissed by a Division Bench of the Delhi High Court. This appeal by way of special leave is against the judgment of the High Court.
2. The property in dispute was an evacuee property. Late Shyam Sunder Seth purchased the property in an auction-sale held on November 20, 1962. He failed to pay the full auction price in accordance with the terms of the sale and as such the Deputy Chief Settlement Commissioner cancelled the sale by his order dated May 27, 1977. Shyam Sunder Seth challenged the order of cancellation by way of a writ petition before the Delhi High Court. A learned single Judge of the High Court allowed the writ petition by his judgment dated December 6, 1979 and directed as under :-
"The petitioner, as in apparent from the record has made payments of more than Rs. 56,000/-. He is ready and willing to pay the remainder in cash. For the reasons stated above, the orders dated 22-7-75, 27-5-77 and 4-11-77 passed by the Settlement Commissioner, Chief Settlement Commissioner and the Central Government are quashed. However, as the conduct of the petitioner with regard to making payments has been very far from exemplary, he is not entitled to costs."
3. Thereafter, Shyam Sunder Seth paid the remaining sale-price in respect of the suit property to the competent authority. The said payment was made in the year 1980. Thereafter a sale certificate was issued to Shyam Sunder Seth on March 31, 1981. The sale certificate confirmed the title of Shyam Sunder Seth to the suit property with effect from January 16, 1964. The present suit for possession was filed by Shyam Sunder Seth on February 1, 1984. The suit was contested, inter alia, on the ground that the defendants- appellants were in actual physical possession of the property continuously for more than 12 years and, as such, they had become the owners of the property by adverse possession. It was also contended that the suit was barred by limitation. The trial court rejected all the contentions raised by the defendants-appellants and decreed the suit. Before the High Court, the appellants reiterated the contentions raised before the trial court but primarily concentrated on the points that the appellants had perfected their title to the property by adverse possession and that the suit was barred by limitation. The High Court upheld the findings of the trial court on both the issues. The High Court rejected the first contention on the following reasoning [AIR 1988 Delhi 349 at p. 355, Paras 19 and 20]:-
"These documents show that the appellants were not the trespassers but the appellants came into possession of the suit property as a licensee or sub-tenants through the lawful occupants under the Custodian. Thus, the possession of the appellants was permissive. It is settled law that the appellants whose possession was permissive cannot claim title on the basis of adverse possession unless they show specific overt act and assertion on their part that they disclaimed the title of the true owner. They must allege and prove that as to when and under what circumstances, their possession became adverse. This requires a definite overt act and assertion on the part of the appellants. This has neither been pleaded nor proved by the appellants. We are of the view that the appellants have not made out a case of adverse possession.
We find that there is nothing on record to show any hostility on the part of the appellants against the title of the true owner. Accordingly, we hold that the possession of the appellants in respect of the property in suit was not adverse till the sale certificate Ext. PW-1/1 dated March 31,1981 was issued in favour of the respondent."
4. We see no ground to interfere with the above quoted findin
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