The decision in Lala Prasad (Through Legal Heirs) v. Safi Mohammed and Others, S.A. No. 406 of 2005, delivered by the High Court of Chhattisgarh, is an important ruling on the doctrine of adverse possession and the legal nature of possession under an agreement to sell. The judgment clarifies that permissive possession cannot ripen into adverse possession unless there is a clear, hostile assertion of title against the true owner.

I. Facts of the Case

The plaintiff claimed ownership of the suit property based on an alleged agreement to sell executed in 1977. He contended that he had been in long-standing possession of the property and, therefore, had perfected his title by adverse possession.

The Trial Court initially granted relief; however, the First Appellate Court reversed the decree and held that the plaintiff’s possession was permissive in nature, as it originated from an agreement to sell. The matter was then brought before the High Court in a Second Appeal under Section 100 of the Code of Civil Procedure, 1908 (CPC).

II. Core Legal Issue

The primary question before the Court was:

Whether possession delivered pursuant to an agreement to sell can be treated as adverse possession merely on account of long and continuous occupation?

III. Permissive Possession vs. Adverse Possession

1. Nature of Possession Under an Agreement to Sell

The Court observed that possession delivered under an agreement to sell is permissive. It is not hostile to the true owner because:

• The possessor acknowledges the title of the original owner.
• The entry into possession is lawful and consensual.
• There is no denial of the owner’s ownership at the inception.

Such possession remains juridical and protected, but it does not automatically confer ownership.

2. Essential Ingredients of Adverse Possession

For possession to ripen into adverse possession, the following conditions must be satisfied:

• Possession must be open and notorious.
• It must be continuous and uninterrupted.
• It must be exclusive.
• Most importantly, it must be hostile to the true owner.

The Court emphasized that hostility must be clearly pleaded and proved. A person who enters possession acknowledging the owner’s title cannot later claim adverse possession unless there is:

• A clear and unequivocal repudiation of the owner’s title.
• Communication of such hostile assertion to the true owner.

Mere long possession is insufficient.

IV. Legal Position on Agreement to Sell and Title

Under Indian law, an agreement to sell does not create ownership rights in immovable property. It only creates a contractual right to seek specific performance.

The Supreme Court in Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana held that an agreement to sell does not convey title nor create any interest in immovable property, except to the limited extent recognized under Section 53A of the Transfer of Property Act (doctrine of part performance).

Therefore, possession under an agreement to sell is not ownership and cannot automatically convert into adverse possession without a clear hostile claim.

V. Repudiation of Title – A Mandatory Requirement

The High Court reiterated that:

• If possession begins permissively, it cannot become adverse unless the possessor distinctly asserts hostile title.
• The burden lies heavily on the person claiming adverse possession.
• Courts require strict proof, as adverse possession results in divesting a lawful owner of property.

The plaintiff in this case failed to plead or prove any specific overt act indicating denial of the defendant’s title.

VI. Section 149 CPC – Co-Extensive Appellate Powers

Another important principle discussed in the case relates to Section 149 of the Code of Civil Procedure, 1908.

The Court held:

• An appeal is a continuation of the original suit.
• Appellate courts have co-extensive jurisdiction with trial courts.
• Under Section 149 CPC, courts may permit the curing of court fee deficiencies at any stage.
• Such rectification can be allowed even at the appellate stage before execution of the decree.

Thus, the High Court permitted the defendant to make good the deficit court fee before execution proceedings.

VII. Decision of the High Court

The High Court:

• Dismissed the Second Appeal.
• Affirmed the decree passed by the First Appellate Court.
• Directed the plaintiff to hand over possession to the defendant.
• Allowed rectification of deficit court fee under Section 149 CPC prior to execution.

VIII. Significance of the Judgment

This judgment reinforces two settled yet frequently litigated principles:

1. Permissive Possession Cannot Become Adverse Automatically

Possession arising from an agreement to sell remains permissive unless there is a clear and hostile denial of the owner’s title.

2. Appeal as Continuation of Suit

Appellate courts possess co-extensive powers with trial courts regarding procedural rectifications such as deficit court fees.

IX. Broader Doctrinal Impact

The ruling aligns with the strict judicial approach toward adverse possession adopted in decisions like:

• Karnataka Board of Wakf v. Government of India, where the Supreme Court held that adverse possession must be “nec vi, nec clam, nec precario” (peaceful, open, and without permission).
• Gurudwara Sahib v. Gram Panchayat Village Sirthala, which clarified that adverse possession is a defense and not a basis for declaratory relief in isolation.

The Chhattisgarh High Court’s decision is consistent with this jurisprudence.

Conclusion

The ruling in Lala Prasad (Through Legal Heirs) v. Safi Mohammed and Others is a reaffirmation of the principle that permissive possession under an agreement to sell does not mature into adverse possession unless accompanied by a clear, hostile assertion of title against the true owner.

The judgment serves as an important precedent for property disputes where long-standing possession is mistakenly equated with ownership. It strengthens the protection of lawful title holders and maintains doctrinal clarity regarding adverse possession and procedural powers under the CPC.

If you would like, I can expand this into a 2500–3000 word academic case note with structured headings, statutory provisions, and comparative Supreme Court jurisprudence suitable for LLB/LLM exams.