Dissecting Inequities within the Property Right’s Bundle – NUALS Law Journal
Jaisila Bajaj
Introduction
A universally observable trend is that a city tends to develop without restraint. When exacerbated by rapid urbanisation and a dearth of regulatory mechanisms, the resultant urban sprawl shows little regard for preexisting legalities. Settlements of such unauthorised nature now assert their ‘right to the city’ and account for over 30 per cent of Delhi’s population, with an aggregate surpassing 4 million.
The National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Act, 2019, (“2019 Act”) through sections 2(b) and 2(a), elucidates upon the nature of an “unauthorised colony” and its inhabiting “resident” respectively. The former being classified as a ‘contiguous area’ identified by the Delhi Development Authority (“DDA”), wherein the absence of any permissions for approval of layout and/or building plans has precluded its formal recognition. The term “resident”, on the other hand, denotes an individual holding ‘physical possession’ of property located within such a colony.
Contrary to the Supreme Court’s ruling in Suraj Lamp & Industries (P) Ltd. v. State of Haryana 2011 INSC 739, this possession may be substantiated via alternative documentation, such as the latest Power of Attorney, Agreement to Sale, Will, Possession Letter, or other evidence, including proof of payment, upon the unavailability of a registered sale deed. The provision has further been extended to include the resident’s legal heirs while keeping tenants, licensees and permissive users at bay.
Regularization, in this context, adopts a two-fold approach facilitating the transition of the colony as well as of its residents from murky waters of illegitimacy to a state of recognition via the accordance of legal rights. Upon such an attainment, it further aims to ensure the systematic construction and expansion of community facilities and civic amenities through policies of land acquisition and development charges.
While depicted as ‘an act of largesse’ extending a coveted opportunity to obtain full ownership, the programme’s practical implications present an alternate reality. Imbued with statutory authority to encroach upon privately held land and property, restrain further construction in personal buildings and grant differential rights for structures built on varying categories of land, the state has given itself overarching powers under the garb of granting legitimacy.
In this paper, I analyse the inconsistencies prevalent in rights issued to residents of regularised colonies with regard to land and buildings situated therein. It is argued that the mandate within which these rights are accorded imposes such stringent conditions on their utilisation that it diminishes their inherent value and further undermines the utility of the property. Based on this, Part II of the paper grapples with limitations imposed upon newly declared owners of such buildings from a theoretical outlook emphasising on a value-oriented approach in addition to examining their pragmatic outcomes. Part III, similarly, delves into the realm of ownership of land and its impact on the buildings embedded within. Part IV, subsequently, lays out the concluding remarks while underlining the inherently restrictive character of the rights in discussion.
The scope of this paper has been limited to ‘unauthorised colonies’, one of the seven categories of ‘unplanned’ settlements as defined by the Government of Delhi, thereby excluding classes such as slum designated areas and jhuggi jhopri clusters among others.
From Ownership to Obligation: The Elusive ‘Claim Right’
Section 3(1) of the 2019 Act regularises the transactions of immovable properties in physical possession of a ‘resident’ as expounded upon in section 2(a) of the act. Demonstrating concurrence with the maxim, ‘possession is nine-tenths of the law’, the decision finds itself precedentially corroborated in judgements such as Pierson v. Post 3 Caines 175 (1805). As elucidated by Pufendorf:
‘One man’s seizing on a thing should be understood to exclude the right of all others to the same thing.’
While occupancy, in such instances, has been designated as the primary source of ownership, it does not eliminate the possibility of being proven otherwise. Resolving contestations with regard to varying claims present not only formidable challenges in the absence of a traceable chain of title but also threaten the ‘stable ownership’ (page 557-558) of such a property. Resultantly, the potential incorporation of interoperable assets, once deemed feasible under stable conditions, becomes unlikely and their ‘positive multiplier effects’ on the property, improbable. Its consequent implications can be observed in the resident’s reluctance with regard to investing in ancillary improvements such as upgrading fixtures thereby foregoing opportunities to significantly increase the building’s market price.
The inherent economic value of immovable buildings is further diminished through the imposition of constructional restraints. By prescribing the maximum number of floors beyond which even applications for regularisation of such buildings would be rendered ineligible, the state posits a limit on the owner’s ability to extract utmost utility from his property. A cogent example of similar circumstances can be observed in Lucas v. South Carolina Coastal Council 505 U.S. 1003 (1992) wherein a statutory restriction on building any improvements was deemed to be negating ‘all economically beneficial use of the property’ and amounting to virtually taking away the property itself.
Additionally, ‘decisional authority’ or the inexhaustive ability to conclusively determine a resource’s employment which should ideally reside with the owner of an asset finds itself compromised by virtue of eminent domain via provisions of acquisition. Private land and property even upon being regularised lay vulnerable to be appropriated by the state ‘either for the use of community facilities or for alternate allotment’ (page 11). Powers of such arbitrary nature have subsequently been held in violation of article 300A of the Constitution of India, 1950 by the Delhi High Court in Sarita Gupta v. Municipal Corporation of Delhi 2019 (6) ADR 740. In the absence of any compensation or legal justifications for acquisition, the court ruled that an owner cannot be divested of its title upon lawfully acquiring the same through regularisation. The prior status of the colony was accorded to be immaterial and any intrusion, an encroachment. However, despite such judgements, policies of the DDA continue to enable preferential practices.
From Soil to Skyline: Rights in Transition
Quicquid inaedificatur solo, solo cedit[1]
(He who owns the land, owns everything built on it)
Although embellished in maxims as the aforementioned, the notion of a landowner acquiring title over entities embedded into its soil has been disputed as early as 1866 in Thakoor Chunder Poramanick v. Ramdhone Bhuttacharjee (1866) 6 W. R. 228. Herein, Calcutta High Court, while expounding upon its decision, settled that a mere coincidental attachment of a building to land does not render it to be property of the soil owner.[2]
However, DDA, through classification of land into categories of varying ownerships, (page 26) has implied an accordance of differential rights to structures built upon such lands on grounds of the category so imputed to their soil.
Contrarily, a cursory reading of the provisions suggest, prima facie, the adoption of a uniform mode of allocation via conferral of leasehold rights to buildings on lands of all categories. The pragmatic outcomes, though, of extending such an offering to constructions even on lands categorised as ‘private’, that is, unnotified under section 4 of the Land Acquisition Act, 1894, paint a completely different picture.
The departure from statutory mandate has been defended in terms of an incapacity to effectively manage the multitude of individuals involved and a presupposition of their hesitancy to file claims given the prolonged passage of time. Relying on the doctrine of laches prevalent due to notifications of 1958-59 and ’66 wherein lands to be regularised were listed, only a meagre amount of compensation (page 27) is expected to be granted on legal suits of such nature if presently filed. The position of law, however, has been reiterated in judgements such as State of West Bengal & Ors. v. Asit Das & Ors. & Connected Appeals 2023 LiveLaw (Cal) 190, stating:
‘While it is true that the Courts are reluctant to enforce a stale claim, it also cannot be countenanced that the State shall take over possession of a citizen’s land and utilise the same [albeit for a public purpose], without paying due compensation therefor to the owner of the land.’
It is argued that in the absence of a legitimate claim affirming their ‘right to exclude’ (page 540), the owners of buildings situated on private lands remain in perpetual fear of suits asserting a better title to the land and thus relinquishing their corresponding rights in property. The inability to effectively enforce the granted rights in rem contribute significantly towards restraining the value of such property by arresting the extent of its utility. Thus, a mere status of legal ownership, often regarded by Barzel as amounting to nothing more than ‘residual claimancy on the value derived from an asset’ (page 571), holds no intrinsic benefits of its own if not coupled with the ability to completely realise its potential.
Moreover, for structures built on government land, an implied prohibition on further construction has been expressed through exclusion of vacant areas from conferment of ownership rights. The scope of the conveyance deed so drafted has been limited to only include ‘built-up properties’ in current possession. However, no such restrictions have been framed for properties on lands of private nature. This disparity is further augmented through the introduction of ‘Recovery costs of land and development charges’ as laid in the 2008 notification of DDA titled, ‘Regulations for Regularisation of Unauthorised Colonies’ under section 57 of The Delhi Development Act, 1957. While specifying the rates of recovery for ‘underdeveloped and developed government land’, levy of conversion charges for non-affluent colonies on private land has been expressly exempted (page 8).
Through operation of such blatantly discriminatory policies, actual authority has been withheld from individual owners who then find themselves exercising accorded powers only within the limited ambit sanctioned by the state.
Conclusion
While being amenable to numerous permutations, legal entitlements in property are often created through the accordance of ‘sticks’ of varying nature. This allocation, when governed by a system of social rules, aims to establish a determinate idea of whose dominion with regard to certain rights is to be adjudged socially conclusive (page 340). However, the prevalence, or rather exploitative employment of ‘regulatory takings’ (page 585) in the realm tends to engender a disproportionate distribution often marred with inconsistencies.
In the same vein, I have attempted to establish in this paper, that the state, while ostensibly granting ownership has vested in itself sweeping powers. Upon being endowed with such broad authority, it has fostered a disconnect between actual rights conferred and practical rights required in order to exercise effective control over the regularised property and partake in meaningful transactions.
The judiciary, on the other hand, has assumed a stance of abstinence in such matters. This reluctance stems from the fundamental premise that these structures occupy or rather encroach upon public or private land without any lawful justification for the same. Terming pleas for the grant of rights and facilities in unauthorised colonies as ‘legally untenable’, the court, in cases such as Akhil Sibal v. Govt. of NCT of Delhi AIRONLINE 2019 DEL 101, has simply redirected such requests to the government believing any interference to be ultra vires. Nonetheless, in a 2006 judgment, the Supreme Court stipulated that regularisation is contingent on the state’s ability to ensure basic amenities, failing which, the procedure would not be operational. Even this position, though more compassionate than the conventional viewpoint, does not provide any safeguards against state discretion in matters of ownership. Additionally, given the inapplicability of the Transfer of Property Act, 1882 upon enactments of special laws of transfer, the safeguards prevalent in sections such as 10 and 11, among many others, find themselves of no avail.[1]
Though regarded as mere mechanisms to achieve an end (page 539), rights in property serve essential facilitatory functions bridging symbolic ownership with an ability to enter longstanding arrangements of economic value. Upon the negation of such instrumental tools, the intrinsic benefits embedded within a property, a significant material resource capable of satisfying human needs (page 318), remain inextricable despite their lawful possession. It is thus, argued through an analysis of the restrictions imposed on owners of authorised structures in subsequently regularised colonies, that the state, while granting societal and systemic recognition, has disregarded the significance of such rights by either retaining most of them or imposing such stringent conditions that their exercise has become futile.
Given the jurisdictional limitations of the acts and policies examined, this paper and its conclusions may only be applicable to the National Capital Territory of Delhi.
Jaisila Bajaj is a first – year LL.B. (Hons.) student at the National Law School of India University, Bengaluru.
