Immovable Property Not Merely A Corporeal Asset; Its Deprivation Be Subjected To Strict Judicial Scrutiny: Delhi High Court
The Delhi High Court observed that the right to property, though no longer a fundamental right, continues to occupy a sacrosanct position as a constitutional and legal right under Article 300-A of the Constitution.
Justice Purushaindra Kumar Kaurav, Delhi High Court
The Delhi High Court emphasized that immovable property is not merely a corporeal asset and the actions of the State involving deprivation of the same is subjected to strict judicial scrutiny.
The Court emphasized thus in a Civil Suit seeking for damages of mesne profits, loss of market rent, and the damages arising out of outstanding property tax, along with pendente lite and future interest, etc.
A Single Bench of Justice Purushaindra Kumar Kaurav remarked, “… the Court is conscious of the fact that immovable property, for an individual, is not merely a corporeal asset or a physical manifestation of ownership. It constitutes a fundamental pillar of economic security, social identity, and personal dignity. … It is, thus, imperative that actions of the State, particularly those involving the deprivation or restriction of immovable assets, be subjected to strict judicial scrutiny.”
The Bench observed that the right to property, though no longer a fundamental right post the 44th Amendment to the Constitution, continues to occupy a sacrosanct position within the democratic framework as a constitutional and legal right under Article 300-A of the Constitution.
Advocate Sidhant Kumar appeared on behalf of the Plaintiffs while Advocate Vikrant N. Goyal appeared on behalf of the Defendants.
Facts of the Case
The Plaintiffs were the flat owners who leased out the Suit property to the Defendant i.e., the Directorate of Estates, Ministry of Housing and Urban Affairs in the year 1976. Thereafter, further lease agreements were executed which stood expired in 1995. In 1998, the Competent Authority under Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) forfeited the property in purported exercise of power under Section 7 thereof.
Resultantly, in 1999, the Defendant stopped paying the rent to the Plaintiffs, citing that the property was forfeited. Thereafter, the Order was challenged by the Plaintiffs before the High Court and the Division Bench quashed the same holding it to be without jurisdiction. Despite that, the Defendant failed to hand over the possession of the property to the Plaintiffs. Consequently, the Plaintiffs filed a fresh Writ Petition and the Court clarified that in terms of the earlier Order, all rights of the parties were directed to be reserved. Hence, the Plaintiffs instituted the Civil Suit, seeking reliefs.
Reasoning
The High Court in view of the facts and circumstances of the case, said, “… merely demonstrating good faith does not exonerate a party from fulfilling contractual duties or complying with statutory mandates. Invoking the doctrine of good faith cannot shield a party from liability in instances of contractual breach, malfeasance, or statutory violations. Consequently, while good faith remains a cornerstone principle, it does not supersede explicit legal obligations and responsibilities. It is only invoked when a party acts with integrity, exhibits reasonable conduct, and anticipates equitable treatment from the other party.”
The Court noted that the possession and occupation of the suit property by the Defendants cannot be justified under the provisions of Section 23 of SAFEMA and holding otherwise would mean stretching the doctrine of good faith to an extent where an illegal action which has already been found to be impermissible in law would be impliedly approved by the Court.
“… no person shall be deprived of their property except by authority of law. It is a dynamic constitutional safeguard that strikes a delicate balance between the sovereign power of the State and the proprietary rights of individuals. The provision embodies the principles of the rule of law, procedural fairness, and non-arbitrariness, mandating that any deprivation of property must be sanctioned by law and carried out in a just and equitable manner”, it added.
Furthermore, the Court reiterated that the judiciary, as the ultimate guardian of constitutional values, has the corresponding onus to protect the constitutional, statutory and legal rights of the citizens and that the Court in a catena of decisions, have consistently held that property rights cannot be interfered with except by authority of law.
“Any law which authorises deprivation of property for a primarily private interest, or where public interest is incidental, would be unconstitutional and liable to be struck down upon judicial review. … executive authority must conform to the principles of reasonableness and non-arbitrariness, in line with broader constitutional values. The mere existence of a law is not sufficient; the law must be reasonable, proportionate, and not excessive in its restriction of property rights”, it enunciated.
The Court also remarked that the State, being a constitutional authority and repository of public trust, is duty-bound to protect, rather than transgress, the civil rights of its citizens, including the right to property.
“The powers of the State are not plenary or absolute but are circumscribed by constitutional and statutory limitations. Any executive or legislative action that seeks to divest a citizen of property without due process, in the absence of an enabling law, would fall foul of Article 300-A and render such action void ab initio”, it further said.
The Court was of the view that the State must not only comply with the letter of the law but also act in a manner that is fair, just, and equitable and executive overreach beyond the four corners of the law must be met with constitutional censure, for when the protector of rights becomes the violator, the very fabric of the rule of law is imperilled.
“In a constitutional democracy governed by the principles of justice, equity, and good conscience, the preservation of legal rights such as that of proprietary must remain an unyielding commitment of the State”, it emphasised.
Conclusion
The Court, therefore, held that the possession of the Defendants, not being under a valid lease but as unlawful occupants asserting a claim of title, cannot give rise to any contractual liability for the payment of maintenance charges, in the absence of a fresh legal or contractual arrangement imposing such an obligation.
“… this Court finds that the plaintiffs are not entitled to the claimed maintenance charges amounting to Rs 9,69,397/-. … The continued possession of the defendants, in the absence of a formal lease or document stating that the defendants were to reimburse the property tax, cannot automatically give rise to liability for statutory dues”, it observed.
The Court reiterated that property tax is a statutory burden imposed upon the recorded owner of the property, independent of occupancy and hence, the Plaintiffs, being the registered owners for municipal purposes, were primarily liable for such dues.
“… the plaintiffs are not held entitled to payment of the property tax. … The suit stands decreed in terms of paragraphs No. 70 and 72. Further, the costs of the litigation, including the counsel fees of the plaintiff, shall be borne by the defendants”, it concluded.
Accordingly, the High Court disposed of the Suit and directed the Registry to draw a decree sheet and take necessary steps in accordance with the law.
Cause Title- Rajiv Saran & Ors. v. Directorate of Estates (Neutral Citation: 2025:DHC:3297)
Appearance:
Plaintiffs: Advocates Sidhant Kumar, Manya Chandok, and Om Batra.
Defendants: Advocates Vikrant N. Goyal, Nitin Chandra, Aditya Shukla, and Nishu.
