Apex court clarifies the principle of escheat

A division bench of the Supreme Court comprising Justices N V Ramana and Dr D Y Chandrachudkar in a judgement of far-reaching consequences delivered on September 22 has elaborately dealt with the principle of escheat and set aside the judgement of the High Court of Uttarakhand at Nainital.

Section 29 of the Hindu Succession Act, 1956, was invoked in this case Section 29. It states as follows: “Failure of heirs- if an intestate has left no heir qualified to succeed to his or her property in accordance with the provisions of this Act, such property shall devolve on the government and the government shall take the property subject to all the obligations and liabilities to which an heir would have been subject. This Section embodies the principle of escheat.

Speaking for the bench, Dr Y V Chandrachud in the case of Kutchi Lal Rameshwar Ashram Trust Evam Anna Kshetra Trust through Velji Devshi Patel Vs. Collector, Haridwar & Ors. (Civil Appeal No.3878 of 2009) said that the District Collector of Hardwar had exceeded his authority in exercising his powers in the matter.

The appeal arose from a judgment rendered on May 15, 2007 by a Division Bench of the High Court of Uttarakhand at Nainital. Finding no substance in the writ petition filed under Article 226 of the Constitution, the High Court affirmed the order passed by the Collector, Haridwar, on May 12 2003 holding that the property in dispute stands vested in the government under Section 29 of the Hindu Succession Act, 1956. This finding had been premised on the basis that there was no heir to succeed to the property following the death of Mohan Lal.

The petitioner claimed to be a public trust registered under the Bombay Public Trusts Act, 1950. The Trust claims to have a vast amount of property at Haridwar which is being used for charitable purposes.

Brief facts of the case are: Swamy Udhav Das Ji Maharaj was visually challenged. On November 28, 1955, he is stated to have purchased land admeasuring two bighas and fifty khewat at Haridwar in the name of his chela, Mohan Lal.

According to the petitioner, the Swamy founded the Kutchi Lal Rameshwar Ashram Trust. He is stated to have executed a will on 22 October 1956 nominating some individuals who would manage and administer his properties, including the property in question, after his lifetime. According to the petitioner, this was a second registered will executed by the Swamy since some of those who were nominated in an earlier registered will were not inclined to accept the responsibility. On January 13, 1957, the Swamy died. The Trust is stated to have been registered on November 11, 1957. Among the objects of the Trust, are the following:

" The main purpose for which the Ashram was established at Haridwar under the inspiration of Mahrajshri Odhavdasji has been to provide a centre and shelter for those Kutchi people in particular and others in general who go to the Holy Shrines at Haridwar, for the purposes of devotion and their peace of mind and the same shall continue to be the main objective and purposes of the Trust along with any other objective which might further the main object such as religious education prayers, etc.”

On July 10, 2001, a suit was instituted by the petitioner seeking an injunction against the third respondent (an individual by the name of Swamy Mahanand Awdhut Tatambri) described in the proceedings as: "Chela Swamy Brahmchari Ji Awdhut, Resident of Tatambri Ashram, Sapt Sarovar Road, Bhoopat Wala, Haridwar, Uttarakhand." The suit for injunction was instituted on the ground that the third respondent was attempting to make a construction on some part of the property in dispute. A few months after the institution of the suit, the third respondent filed a complaint on October 15, 2001 before the Collector alleging that the property belonged to Mohan Lal.

According to him, a Patta was executed on November 28, 1955 in favour of Mohan Lal by Govind Ram and Shiv Ram. According to the complaint, Mohan Lal had died and there being no legal heir, the property stands vested in the State government under Section 29 of the Hindu Succession Act 1958 followig which the Collector issued the show cause notice.

Subsequently, on May 12, 2003, the Collector at Haridwar adjudicated upon the notice to show cause issued by him. The Collector held that a patta of the property was secured by Mohan Lal on July 15, 1955 and on November 28, 1955. According to the Collector, the Trust had not submitted any documentary evidence from which it could be deduced that the property had been purchased in the name of Mohan Lal from the funds of Swamy Udhav Das. According to the Collector, the alleged admission deed of March 23, 1958 by Mohan Lal could not be relied upon, since he was shown to be a resident of Reha Kuch (presently Chandrakela) whereas the person in whose favour the patta had been executed was a resident of village.

According to the Collector, the Swamy died before November 11, 1957. The Trust, in the view of the Collector, had failed to submit evidence in respect of the heirs of Mohan Lal. The Collector proceeded to draw an inference of the death of Mohan Lal since he was not heard of for seven years. On this basis, the Collector arrived at the conclusion that the property vested in the State government by the operation of law. The City Magistrate at Haridwar was directed to take immediate action for taking over the possession of the property.

Aggrieved by the order of the Collector, the petitioner challenged the decision in a writ petition under Article 226 of the Constitution before the High Court of Uttarakhand. The Trust claimed to be in the management of the property for over forty five years and submitted that the only manner in which action adverse to it could have been taken was on the basis of a title action pursued through the Administrator General or through a Civil Court. The Collector, in the submission of the Trust, could not assume the power to decide a question of title in the manner in which he had purported to do.

The findings of the High Court were in the following terms:
“Undisputedly the land in question was purchased by Mohan Lal through pattas dated November 28 1955 and July 15, 1955 whereas the appellant's claim is that the land was purchased by Mahant Udhav Das in the name of Mohan Lal, but no evidence has been adduced on behalf of the appellant showing that the land was purchased from the money of Mahant Udhav Das Ji. The appellant has not been able to establish that Mohan Lal on whose name the land was purchased and the Mohan Lal who had executed the acceptance deed is the same and one person.”

Certain developments took place after the Trust instituted writ proceedings before the High Court of Uttarakhand in May 2003. The third respondent had filed an appeal against an order of interim injunction passed in favour of the Trust in the suit instituted by it in the Civil Court. The appeal was dismissed by the Additional District Judge, Haridwar on December 24, 2003. On May 9, 2005, a Division Bench of the High Court admitted the writ petition of the trust challenging the order of the Collector.

The apex court while considering the entire matter into its perspective held as follows:
“While addressing the preliminary issue, it would, in our view, be inappropriate and, perhaps even unsafe, to lay down a broad generalisation. The constitutional jurisdiction which is conferred upon this Court has its basis in the advancement of justice.

The power of the court to render justice should not be constricted by a narrow approach to its mandate.” In this context, the Court adverted to the Supreme Court Rules, 1966 which have been framed under Article 145 of the Constitution. Order XLVII Rule 6 of the rules of procedure of this Court. The Court cited a catena of judgements including the State of Uttaranchal v Alok Sharma, Indian Bank v Godhara Nagrik Cooperative Credit Society 3 (2009) 7 SCC 647 11 Limited, 4 (2008) 12 SCC 541 12 and State of Bihar v Radha Krishna Singh.

Finally, the Court observed, “Where the Crown or Government claims by escheat, the onus 5 (1992) Suppl (3) SCC 108 64th Ed. Vol 17, para 1439 7 (1983) 3 SCC 118 8 Twenty - second edition, pp. 1260-1261 13 lies on it to show that the owner of the estate died without heirs. An estate taken by escheat is subject to the trusts, charges and legal obligations (if any) previously affecting the estate, e.g., mortgages and other encumbrances.”

By:Dr H C Upadhyay