In a significant ruling, the Supreme Court of India held that no property ownership transfer can occur without a duly registered document.
The ruling came in the case of Beena and Ors. vs Charan Das (D) Thr. LRS. & Ors. (Civil Appeal No. 3190 of 2014), The court rejected a tenant’s claim of ownership over a property based on a settlement with the landlord.
The Court clarified that a settlement between the landlord and tenant, which prevented eviction upon the deposit of a stipulated amount, did not confer ownership rights to the tenant.
The Bench, comprising Justices Pankaj Mithal and R. Mahadevan, emphasized that ownership of immovable property cannot be transferred without a registered instrument.
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Background of the Case
The dispute began when the landlord, Beena, and Ors., filed an eviction suit against the tenant, Charan Das (now deceased, represented through legal heirs). The property in question was in a dilapidated condition and required urgent repairs.
To avoid eviction, the tenant and the landlord entered into a settlement. As per the agreement, the tenant was required to deposit a sum of Rs. 12,000/-. If this amount was deposited, the eviction suit would be dismissed; if not, the tenant would have to vacate the premises immediately.
After the tenant deposited the required amount, he claimed ownership of the property, interpreting the settlement as transferring the title to him.
The trial court and the first appellate court ruled in favor of the landlord, rejecting the tenant’s claim of ownership. However, the High Court, in the second appeal, reversed this decision, holding that the tenant had acquired ownership of the property upon payment of the stipulated amount.
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Supreme Court’s Ruling
The Supreme Court set aside the High Court’s judgment, reiterating that ownership of property cannot be conferred by a mere settlement agreement unless it is backed by a registered instrument.
The Court stated that the agreement only concerned the dismissal or acceptance of the landlord’s eviction application based on whether the tenant paid the stipulated amount. It did not include any provision for the transfer of property ownership.
Justice Pankaj Mithal, writing for the Bench, noted, “The settlement recorded in terms of the statements of the parties, and even the consent order, does not in any way provide or confer the right of ownership upon the tenant, nor could it have been done in a proceeding for eviction of the tenant.”
The Court further observed that the amount deposited by the tenant could not be construed as sale consideration.
“No document, much less a registered instrument, was executed between the parties transferring the title of the suit premises. In its absence, obviously, no transfer of title can pass from one party to another,” the judgment clarified.
Observations
The Supreme Court pointed out that by no stretch of the imagination could the amount deposited by the tenant be considered as a payment for the purchase of the property.
It emphasized that ownership rights over immovable property could only be established through a registered deed, not through a mere oral agreement or settlement.
The Court also highlighted that the High Court erred in its interpretation of the consent order and in reversing the decisions of both the trial court and the first appellate court, which had rightly dismissed the tenant’s suit.
Case Details:
- Case Title: Beena and Ors. vs Charan Das (D) Thr. LRS. & Ors.
- Civil Appeal No.: 3190 of 2014
- Bench: Justice Pankaj Mithal and Justice R. Mahadevan