Ultimate Ownership of All Property Vests in State; It is an Incident of Sovereignty.

Saji Koduvath, Advocate, Kottayam.

Introspection.

  • In a dispute between State and a ‘private person’
    • as to the ownership of property,
  • if the private person fails to prove his title,
  • it is not Constitutional for him to argue
    • that ‘the State also failed to prove its title
    • and failed in discharging its burden’.

Who is the Ultimate Owner of a Property?

The answer is: ‘The State’.

Because, the reply to the following questions that determines the ‘ultimate ownership’ of a property is – ‘the State’. The questions are:

  • Who is the owner of the property:
    • that is abandoned by all,
    • that has no rightful owner,
    • over which all claims raised are invalid, and
    • over which none can raise a valid claim?

Escheat and Bona Vecantia

What are the legal principles behind the doctrine that the State is the ‘ultimate owner’ of all properties?

  • Generally, there are two answers:
  • First, doctrine of Escheat; that is, land is escheated or reverted to the State, as the lord paramount, on the owner’s death without legal heirs or lawful claimants.
  • Second, bona vacantia; that is, Crown takes as bona vacantia goods in which no one else can claim property as a rightful owner.

Escheat and Bona Vecantia – Incident of Sovereignty

Our Apex Court, in Pierce Leslie and Co. Ltd. v. Violet Ouchterlong Waoshare,, AIR 1969 SC 843,  appraised the principles of escheat in the Constitutional context (particularly, Article 296 of the Constitution) and held as under:

  • “In this country escheat is not based on artificial Rules of Common Law and is not an incident of feudal tenure. It is an incident of sovereignty and rests on the principle of ultimate ownership by the State of all property within its jurisdiction.”

Article 296 of the Constitution

Article 296 of the Constitution of India, provides as under:

  • “Subject as hereinafter provided, any property in the territory of India which, if this Constitution had not come into operation, would have accrued to His Majesty or, as the case may be, to the Ruler of an Indian State by escheat or lapse, or as bona vacantia for want of a rightful owner, shall if it is property situate in a State, vest in such State, and shall, in any other case, vest in the Union.”

State is the Ultimate Owner of the Property – Recognised Long Back

In Pierce Leslie and Co. Ltd. v. Violet Ouchterlong Waoshare (supra) the Supreme Court relied on the Privy Council decision in 1860 in Collector of Massulipatnam v. Cavali Venata Narrainapeli, (1859-61) 8 MIR 500, where it was declared that the doctrine of bona vacantia or escheat was a part of the law in India. In Collector of Masulipatam v. Cavary Vancata Narrainappah it was observed as under:

  • “There can be, legally speaking, no unowned property, the law of escheat intervenes and prevails, and is adopted generally in all Courts of the Country alike. Private ownership not existing, the State must be owner as ultimate Lord.”

The same principle is iterated by Sinha, CJ, in in Chhote Khan Vs Mohammad Obedulla Khan, AIR 1953 Nag 361, as under:

  • “The State Government is not in the position of the assignee interest of the proprietor, nor is it his successor in title, The State does not claim the proprietary interest, either through or under the outgoing proprietor. The State, as the ultimate owner of all property situate within its boundaries, naturally becomes, the owner of all property in villages, except those interests which have been recognized by the State as still vesting in or held by individuals in their rights as cultivators (‘malik-makbuza’ or otherwise) or as house-holders by virtue of being inhabitants of the village, or as having acquired by purchase or otherwise house-sites or buildings on house-sites.”

General Law of Universal Application

In Amir Hussain v. Deputy Director of Consolidation, 1978 RD 204, it had been noted as under:

  • “All important systems of Law provide for escheat to the Crown or Government of the property of a deceased person in the absence or failure of heirs.”

It is pointed out in Biswanath Vs Prafulla Kumar Khan, AIR 1988 Cal 275, also that it is a General Law of universal application that ‘private ownership not existing, the State must be the owner as the ultimate Lord’.

It is interesting to note that the US Senate Resolution No. 62, April 1933 recognised the doctrine, ‘the ultimate ownership of all property vests in the State’. The Resolution reads as under:

  • “The ultimate ownership of all property is in the State; individual ownership is only by virtue of Government, amounting to mere user; and that use must be in accordance with law and subordinate to the necessities of the State.”

State need not Prove Title

  • From Article 296 of the Constitution of India, it is clear that where a property:
    • is abandoned by all,
    • that has no rightful owner,
    • over which all claims raised are invalid, and
    • over which none can raise a valid claim
  • it vests with State.

Therefore, when a dispute comes as to the ownership of property between State and a ‘private person’, and the private person fails to prove his title, it is not Constitutional for him to argue that ‘the State also failed to prove its title and failed in discharging its burden’.

In Amir Hussain v. Deputy Director of Consolidation, 1978 RD 204, 1977 AWC 1, it observed as under:

  • “But, in a case where in proceedings under Section 9, the consolidator authorities reached at the conclusion that both the claimants had failed to prove their title, the necessary consequence of the finding was that the land had to be recognised as having vested in the State and in the Gaon Sabha. … To require a Gaon Sabha to file a claim at the commencement of the consolidation proceedings would be placing an impossible burden upon the Gaon Sabha because at that stage the Gaon Sabha could not possibly be in a position to know that the claim of the contending parties would be negatived and the land would be deemed to have vested in the State. In our opinion, the proper course in these cases is that if the authorities find that both the parties have failed to prove their title, and that in law the land has vested in the State under the Rule of escheat, they, in order to give effect to their findings, should direct the land to be recorded in the name of the Gaon Sabha.”
  • (Quoted in Mohd.  Shafiq Vs. Asstt.  Director Of Consolidation, Lucknow, 2011- 9 ADJ 24.)

In Vishwa Vijai Bharti vs Fakhrul Hasan, AIR 1976 SC 1485, it is held as to the presumption of correctness on revenue-records as under:

  • “It is true that the entries in the revenue record ought, generally, to be accepted at their face value and courts should not embark upon an appellate inquiry in to their correctness. But the presumption of correctness can apply only to genuine, not forged or fraudulent, entries. The distinction may be fine but it is real. The distinction is that one cannot challenge the correctness of what the entry is the revenue record states but the entry is open to the attack that it was Made fraudulently or surreptitiously. Fraud and forgery rob a document of all its legal effect and cannot found a claim to possessory title.”

Read in this Cluster (Click on the Topic):

Book No. 1.   Handbook of a Civil Lawyer

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

Published by sajikoduvath

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