In the high-stakes world of debt recovery, borrowers often invoke adverse possession claims to seek stays from Debt Recovery Tribunals (DRT) under the SARFAESI Act, 2002. But do these claims hold water? The search query DRT Stays on Basis of Adverse Posession highlights a common concern: can long-term possession arguments halt recovery proceedings? This post breaks down judicial precedents, possession nuances, and DRT's cautious approach, drawing from key Supreme Court rulings. Note: This is general information, not legal advice. Consult a lawyer for your specific case, as outcomes vary by facts.
Debt Recovery Tribunals (DRT) handle recovery of dues under the Recovery of Debts and Bankruptcy Act, 1993, often alongside SARFAESI Act proceedings where banks seize secured assets. Borrowers challenge notices under Section 13(4) via Section 17 applications, seeking stays on possession.
Adverse possession requires proving open, continuous, hostile possession for 12 years (Article 65, Limitation Act, 1963), extinguishing the owner's title. In recovery contexts, claimants argue settled possession to block evictions. However, courts emphasize physical possession vs. symbolic/legal possession, especially post-award vesting. Indore Development Authority VS Manoharlal & Ors. Etc. - 2020 5 Supreme 194
Once possession is taken, the land vests in the State free from all encumbrances - Title of landholder ceases and State becomes absolute owner. Indore Development Authority VS Manoharlal & Ors. Etc. - 2020 5 Supreme 194
DRT stays are not routine, particularly for public dues recovery. Supreme Court warns against liberal grants, prioritizing lenders. Abhinav Kumar VS Oriental Bank of Commerce
Landmark rulings clarify DRT's restraint. In Indore Development Authority v. Manoharlal (overruling Pune Municipal Corp.), the Supreme Court interpreted Section 24(2), Right to Fair Compensation Act, 2013, stressing physical possession via panchnama suffices for vesting, barring lapse/divesting. Indore Development Authority VS Manoharlal & Ors. Etc. - 2020 5 Supreme 194
Key holdings:
- Or in Section 24(2) reads as and: Lapse only if neither possession taken NOR compensation paid post-5 years. Indore Development Authority VS Manoharlal & Ors. Etc. - 2020 5 Supreme 194
- Mere deposit in treasury (not court) counts as paid if tendered/refused. Indore Development Authority VS Manoharlal & Ors. Etc. - 2020 5 Supreme 194
- Interim stays exclude from 5-year computation; actus curiae neminem gravabit** (court acts prejudice no one). Indore Development Authority VS Manoharlal & Ors. Etc. - 2020 5 Supreme 194
Applied to DRT/SARFAESI:
- Stays not merely on asking for public money recovery. High Courts/DRT must avoid Article 226 interference where statutory remedies exist. Abhinav Kumar VS Oriental Bank of Commerce
Stay against recovery of public dues is not to be granted merely on asking. Abhinav Kumar VS Oriental Bank of Commerce
Adverse possession pleas falter without exclusive, hostile animus. In joint family or tenancy cases, permissive possession defeats claims. Jose Da Costa VS Bscora Sadasiva Sinai Narcornim - 1975 Supreme(SC) 249
In Pune Municipal Corp v. Harakchand (overruled), disjunctive or led to lapses; now conjunctive reading protects acquisitions. Indore Development Authority VS Manoharlal & Ors. Etc. - 2020 5 Supreme 194
DRT orders possession stays sparingly. In one consumer case, DRT protected against SARFAESI dispossession but required compliance; parallel Consumer Forum claims dismissed for forum-shopping. HARVIN CHADHA AND ANR. vs DEVELOPMENT CREDIT BANK LTD.
Gujarat HC rejected amendment for residential property sale, noting DRT's dismissal. SURESH CHANDRA PANCHAL Vs AUTHORISED OFFICER, PUNJAB NATIONAL BANK, SHASTRY PARK BRANCH - 2019 Supreme(Online)(Guj) 2014
Supreme Court in SARFAESI appeals:
- Banks not liable for landlord's mortgage concealment; tenants pursue landlords. Abhinav Kumar VS Oriental Bank of Commerce
- No automatic protection from tenancies; focus on secured creditor's rights.
Adverse Possession Burden: Claimant proves 12-year uninterrupted possession with nec vi, nec clam, nec precario (no force, secrecy, permission). Courts reject inconsistent pleas (e.g., title + adverse). State Of A. P. , through District Collector, Mahabubnagar VS Sayanna - 2000 Supreme(AP) 379
Plea of adverse possession is not a pure question of law but a blended one of fact and law. M. Sekaran (Died) VS Palaniammal - 2023 Supreme(Mad) 2086
In eviction suits, divorced spouses or heirs fail without privity/title. Ruma Chakraborty VS Sudha Rani Banerjee - 2005 6 Supreme 734
Rarely, if:
1. Proven Exclusive Possession: Continuous, public, hostile for 12+ years pre-NPA. Nana Raji Reddy vs Kamireddy Dhanandhar Reddy - 2024 Supreme(Online)(TEL) 20480
2. No Vesting: Pre-award, no panchnama. But post-possession, immutable.
3. Interim Relief: Balance of convenience, prima facie case, irreparable injury—but public interest trumps. Abhinav Kumar VS Oriental Bank of Commerce
Typically denied:
- Litigation Delays: Exclude stay periods; no benefit from own wrongs. Indore Development Authority VS Manoharlal & Ors. Etc. - 2020 5 Supreme 194
- Treasury Deposits: Valid if tender refused. Indore Development Authority VS Shailendra (Dead) Through LRs. - 2018 Supreme(SC) 123
- Stale/Misuse Claims: Decades-old challenges abuse process. Indore Development Authority VS Manoharlal & Ors. Etc. - 2020 5 Supreme 194
Borrowers:
- File Section 17 promptly; plead specific facts (e.g., panchnama absence).
- Avoid forum-shopping; DRT primary.
- Prove animus non-tenendi (intent to dispossess permanently).
Lenders:
- Document physical possession via panchnama/video.
- Tender compensation; deposit treasury if refused.
- Oppose stays citing public money.
Courts urge realistic costs/mesne profits for abuse. Ramrameshwari Devi VS Nirmala Devi - 2011 4 Supreme 625
Navigating DRT/SARFAESI demands precision. While adverse possession offers theoretical shield, judicial trends favor recovery. Stay informed—legal landscapes evolve.
Disclaimer: This analysis synthesizes judgments like Indore Development Authority Indore Development Authority VS Manoharlal & Ors. Etc. - 2020 5 Supreme 194, SARFAESI appeals Abhinav Kumar VS Oriental Bank of Commerce, and others. Not advice; seek professional counsel. Cases vary by jurisdiction/facts.
in the State free from all encumbrances - Title of landholder ceases and State becomes absolute owner and in possession of the property ... government of title over the land which vested after taking possession and third party rights are also created thereon - Divesting ... animus both are necessary - A person with title is considered to be in actual possession - Once possession is taken, the land vests ... of the suit pro....
record a specific finding on the issue as to whether defendants had acquired full title to suit property by prescription under the ... acquired the rights from some of his sisters and became the owner of suit property with other heirs. ... devolved on the plaintiffs-Bascora and his six sisters - Before partition, of the property among legal heirs of Sitabai, Bascora ... Before the partition, of the property among the legal....
a court – Compensation dependent and subject to possession – Compensation cannot become due and payable unless possession is taken ... – Thus when possession is stayed by interim orders of court there would be no question of compensation – Everything remains in abeyance ... such delays – In case of continued possession of land owner or non-payment of compensation to due to court order – Section 24(2) ... to entitle them to claim #HL....
a confirmation in writing that he has no interest in the ground floor accommodation of the house in question and surrender the possession ... The Family Court has granted a decree for divorce on payment of certain sum by way of maintenance. ... It was argued by Ms. ... possession to the appellant. ... The husband parted with legal possession and not retaining any control thereof whatsoever without complying with the statutory provisions ... ... In this case, this #HL....
of a defence in a suit instituted by auction purchaser to recover possession. ... Bajaranglal by way of a defence in the suit filed by the plaintiff auction purchaser for recovery of possession, is erroneous. ... In reply to the plaintiffs suit that she had derived title to the suit property by virtue of the auction sale and the certificate ... except by adverse possession. ... On 15.7.1972, Suit ....
property possession. ... and was subordinate to any Civil Court stay, thus maintaining the law and order. ... Court's decree favoring the second respondent's possession and deemed no jurisdictional error occurred. ... It is, therefore, apparent that the Civil Court has found that the 2nd respondent is in possession of the plaint schedule property ... It is, therefore, clear that the 2nd respondent's possession has been approved by t....
... ... Issues: The main issues included the validity of the plaintiffs' title, the defendant's claims of adverse possession, and ... (Paras 11, 28, 32) ... ... (B) Adverse Possession - The court held that the ... he had prior ownership through an agreement of sale and adverse possession. ... As such, the defendant No.1 gets title over the suit properties by adverse possession also. ... Alterna....
possession since 1992 under an earlier agreement of sale, claiming adverse possession - Trial court decreed in favor of plaintiffs ... , establishing their ownership and possession rights. ... (A) Civil Procedure Code - Sections 41, 64, 53-A - Title and possession disputes - Plaintiffs sought declaration of title and recovery ... As such, the defendant No.1 gets title over the suit properties by adverse#H....
defendant claimed ownership through adverse possession. ... Fact of the Case: The plaintiffs filed a suit for declaration of joint ownership and possession of land, while the ... based on the evidence and legal arguments presented before it. ... since 1997 had become owner by way of adverse possession. ... The learned trial court had not accepted the plea of the defendant that he had become owner by way of adverse possession and t....
The defendant claimed ownership through adverse possession. The trial court decreed in favor of the plaintiffs. ... not consider the powers of the appellate court to grant temporary injunction and stay the execution of a decree. ... Powers - Status Quo Directive Fact of the Case: The plaintiffs filed a suit for declaration of joint ownership and possession ... since 1997 had become owner by way of adverse possession. ... The learned trial ....
It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right ... If these were the views expressed by the Hon’ble Supreme Court in respect of the exercise of the powers of even High Courts in the matter of grant of stays of recoveries of public money the Debts Recovery Tribunals cannot afford to gran....
It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right ... If these were the views expressed by the Hon’ble Supreme Court in respect of the exercise of the powers of even High Courts in the matter of grant of stays of recoveries of public money the Debts Recovery Tribunals cannot afford to gran....
Therefore, the Trial Court has rightly rejected the claim on the basis of adverse possession also, and accordingly, this point is answered. J. The Result: 10. ... The defendant failed to prove even their posession for such a long period as alleged by them. ... Plea of adverse possession is not a pure question of law but a blended one of fact and law. ... It would follow that whatever may be the animus or intention of a person wanting to acquire title by adverse possession his adverse p....
To protect dis-posession of the property, complainants filed application u/s 17 (1) Sarfasi Act before DRT on 11.08.2017. OP was directed not to take physical possession vide order 21.08.2017. New re-payment schedule was made by OP on 09.07.2018. ... The complainants have filed an appeal before DRT and were requested to comply with the orders of DRT. Having approached the DRT, the complainants cannot come under Consumer Protection Act.
Secondly, it was contended that when the plaintiff all along failed to produce any sale deed, as it has been well settled that a plea of adverse possession cannot go together with title and failing to establish that he has purchased the suit property on the basis of any registered sale deed, it is not ... Therefore, after the death of Kuppusamy and her mother Thulasiammal, the children of the said persons cannot challenge the posession and enjoyment of the suit property. ... Whether the Courts below are correct in granting the relief of #....
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.