Property & Real Estate Disputes

Land is the most commonly held asset in India, and disputes relating to property and real estate form one of the largest segments of civil litigation. This is evident from the fact that approximately 17% of all cases in which judgments were delivered between 1 January 2007 and 31 December 2019 pertained to immovable property. In these cases, the overwhelming majority of disputes were between private parties. Interestingly, the Union Government was the petitioner (or appellant) in only about 2% of such cases, but appeared as the respondent in more than 18% of the litigation¹. Land litigation is a serious concern in India. It is estimated that more than two-thirds of litigations are related to land or property. This has a bearing on a rapidly developing economy like India since land is a factor of production².

In India, numerous legislations govern property and real-estate disputes. These include the Specific Relief Act, 1963 (specific performance of contracts), the Code of Civil Procedure, 1908 (procedure for suits, injunctions, execution, etc.), the Hindu Succession Act, 1956 and the Indian Succession Act, 1925 (partition and succession in families), and the Transfer of Property Act, 1882, which lays down the law relating to voluntary transfers of immovable property and the different modes and interests involved.

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Legal remedies as legislative measures in order to resolve these disputes are as follows:

1. Suit for Specific Performance

Specific performance of contract is a remedy under Specific Relief Act, 1963 which is often applied in property related adjudication matters under which court issues an order requiring a party to perform the specific performance of the terms of contract agreed upon earlier, instead of awarding damages of monetary in nature in case of breach of terms and conditions under the contract. Part II Chapter 1 of the Specific Relief act 1963, Recovering Possession of Property, Section 5 and Section 6, these provisions outlined in the act provide for individuals to recover the possession of immovable property. Recovery of possession of property is vital as it allows a rightful owner of the property to regain control in case being unlawfully deprived.

2. Injunction on Property sale

Permanent and temporary injunctions in property matters are vital legal remedies aimed at protecting property rights and preventing unlawful actions, these injunctions are governed primarily by the Specific Relief Act, 1963, and the Code of Civil Procedure, 1908. An injunction order on the sale of property prohibits, compels the legal owner from not selling, transferring, mortgaging or otherwise disposing of real estate when another party has a legitimate claim or interest in it. It is one of the most effective and frequently used remedies in property and real estate disputes because land is regarded as unique, and monetary damages are almost never considered an adequate substitute.

3. Partition Suit

Legislation governing in respect of partition are Hindu Succession Act, 1956 (for Hindus, Buddhists, Jains, Sikhs), Indian Succession Act, 1925 (for Christians and Parsis in some cases) and Transfer of Property Act, 1882 under which Section 44 deals with transfer of share by a co-owner and rights of the transferee. The decree for partition is passed by the competent court under Civil Procedure Code, 1908 under Order 20 Rule 18 which governs the procedure for passing a decree in a suit for partition of property or for the separate possession of a share therein. A partition suit is a civil lawsuit filed by one or more co-owners of immovable property seeking physical division of the property according to their respective shares. If physical division is not possible or practicable, the court orders the property to be sold and the sale proceeds distributed among the co-owners. Every co-owner — irrespective of the size of their share — has an absolute, indefeasible right to seek partition. Even a person owning just 1% share can force the division or sale of the entire property.

4. Declaratory Title Suit

A declaratory title suit is a civil legal remedy governed by Chapter VI Section 34 and Section 35 of the Specific Relief Act, 1963, is filed to remove a cloud on title created by forged documents, adverse revenue entries, benami claims, or disputed successions, a mere declaration is rarely sufficient the plaintiff must seek consequential relief such as permanent injunction, possession, or cancellation of documents. Section 34 allows a person who is entitled to a legal character or right related to property to file a suit against someone denying or challenging their right to such character or property. The court has the discretion to issue a declaration confirming the plaintiff's entitlement to that character or right. The plaintiff is not required to seek further relief, such as compensation or damages, in the same suit. However, the court will not grant such a declaration if the plaintiff, while being able to seek further relief, fails to do so. The Hon'ble SC in the case Vasantha (Dead) Thr. L.R. v. Rajalakshmi @ Rajam (Dead) Thr. Lrs.3 reiterated the well-established position of law that under Section 34 of the Specific Relief Act of 1963, a suit for declaration of title without seeking recovery of possession is not maintainable when the plaintiff is not in possession.4 Section 35 establishes that declaratory decrees operate in personam rather than in rem, creating binding obligations only between the specific parties to the litigation those claiming through them.

5. Doctrine of Lis Pendens

Doctrine of Lis pendens stems from Section 52 of the Transfer of Property act 1882, this act deals with the willful transfers of immovable property having legitimate title of the property. This section is based on the maxim "ut lite pendente nihil innovetur" which means that nothing new should be introduced into a pending litigation, therefore the immovable property under dispute can't be allowed to be sold or be dealt otherwise by the parties to the dispute during pending adjudication of the matter concerned, the reason underlined for this section that it would render impossible to successfully terminate the suit is any such transfers are permitted of disputed properties. The principle underlying the object of section 52 is to maintain the status quo unaffected by the act of any party to the litigations pending its determination. The doctrine of Lis Pendens does not prohibit the vesting of rights in property, but makes the purchaser of the disputed property bound by the result of the adjudication.5 The transfer made during the ongoing suit is not void but voidable at the instance of the affected party. The Hon'ble SC in the case of Dev Raj Dogra v. Gyan Chand Jain6 laid down essential conditions for the application of this doctrine in matters which are : 1) There is a pendency of a suit or proceeding, 2) The suit or proceeding must be pending in a Court of competent jurisdiction, 3) A right to immovable property is directly and specifically involved in the suit, 4) The suit or proceeding must not be collusive, 5) The property in dispute must be transferred or otherwise dealt with by any party to suit and 6) The transfer must affect the rights of the other party to litigation.

Footnotes

1. Damle, Devendra and Gulati, Karan (2022) "CHARACTERISING LAND AND PROPERTY RELATED LITIGATION AT THE DELHI HIGH COURT," National Law School of India Review: Vol. 34: Iss. 1, Article 8. DOI: 10.55496/GCBZ6561

2. Land Litigation in India: Learnings from a Study on Land Litigation in Delhi https://carnegieendowment.org/events/2021/09/land-litigation-in-india-learnings-from-a-study-on-land- litigation-in-delhi?lang=en

Co-Author: Ishank Agrawal, Intern

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