The Delhi High Court has directed the Central Government to pay ₹1.76 crore to private property owners for unlawfully occupying their flat for over two decades, stressing that property rights remain constitutionally protected and must be respected by the State.
The order was passed by Justice Purushaindra Kumar Kaurav, who strongly criticized the executive overreach. He stated:
“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 imperiled.”
Case Background:
The plaintiffs had challenged the forfeiture of their flat under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). The forfeiture was originally based on a revoked detention order from the Emergency period in 1977.
The Directorate of Estates under the Ministry of Housing and Urban Affairs argued that the property had been forfeited to the Central Government in 1988 under Section 7(3) of SAFEMA and remained under forfeiture until 2016.
However, the High Court found that the forfeiture order was issued ex parte, without any hearing for the plaintiffs, and that the property continued to be held by the government until July 2, 2020—seven years after the order was quashed.
Calling the 21-year occupation unlawful, the Court remarked:
“Immovable property is not merely a physical asset; it is a pillar of economic security, social identity, and personal dignity.”
It emphasized that though the right to property is no longer a fundamental right, it remains protected as a constitutional and legal right under Article 300-A of the Constitution.
“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.”
The Court further stated that any law authorizing the deprivation of property must be backed by public purpose and follow due process, implicitly recognizing the doctrine of eminent domain under Indian law.
Given the unlawful nature of the possession, the Court allowed the plaintiffs’ claim for mesne profits and ruled they were entitled to receive ₹1,76,79,550 along with 6% interest, based on prevailing market rates.
“It is well settled that a property owner is entitled to claim compensation for unlawful deprivation of possession of immovable property.”
The Court clarified that even if a forfeiture is held invalid, compensation must still be paid for the period of unauthorized occupation.
The plaintiffs had also sought reimbursement for maintenance charges and property tax, arguing that the government used the property without paying rent.
However, the Court rejected these claims, stating:
“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.”
On property tax, the Court noted:
“The continued possession of the defendants… cannot automatically give rise to liability for statutory dues. Property tax is a statutory burden imposed upon the recorded owner of the property, independent of occupancy.”
As the plaintiffs remained the registered municipal owners, they were liable to pay property tax, and no legal obligation existed requiring the defendants to reimburse these dues.
Appearance: Mr. Sidhant Kumar, Ms. Manya Chandok and Mr. Om Batra, Advocates for Plaintiffs; Mr. Vikrant N. Goyal, Mr. Nitin Chandra, Mr. Aditya Shukla and Ms. Nishu, Advocates for Defendants
Case title: Rajiv Sarin & Ors. v. Directorate Of Estates & Ors.
Case no.: CS (COMM) 12 of 2021
