Supreme Court’s Landmark Decision: Tenant Cannot Claim Ownership of Rented Property

New Delhi: In a significant ruling that protects property owners’ rights, the Supreme Court of India has delivered a landmark judgment clarifying that no tenant, regardless of the duration of their stay, can claim ownership of a rented property through adverse possession.

The Court made this ruling in the case of Jyoti Sharma vs. Vishnu Goyal, putting an end to years of confusion and disputes between landlords and tenants. The Supreme Court stated, “A tenant occupies the property only with the permission of the owner; therefore, the rule of adverse possession does not apply.”

This judgment, hailed as a “major victory for property owners,” is expected to prevent false ownership claims by long-term tenants and strengthen legal protections for landlords. However, it has also brought mixed reactions, with some celebrating it and others raising concerns about its impact on poor tenants and housing security.

The case began in Delhi, where landlord Jyoti Sharma filed an eviction case against her tenant, Vishnu Goyal, who had been living in her property for over 30 years. Goyal argued that because he had stayed there since the 1980s without interruption, had stopped paying rent, and the landlord had not taken strong action, he had become the rightful owner under the doctrine of adverse possession. Under the Limitation Act, 1963, a person can claim ownership of property after continuously and openly occupying it for 12 years without the owner’s permission.

Sharma disagreed, stating that Goyal was a tenant from the start and had always lived there with her permission. Therefore, he could not become an owner just because of long possession. The case went through different courts, and the Delhi High Court initially sided with Goyal, thinking about the fairness for long-term tenants. However, the Supreme Court, in a bench of Justices J.K. Maheshwari and K. Vinod Chandran, overturned that verdict and ruled in favor of Sharma.

The Supreme Court explained that tenancy is a legal relationship based on permission, not hostility. Since a tenant stays with the landlord’s consent, their possession cannot become “adverse.” The judges emphasized that time alone cannot change a tenant into an owner. The Court also referred to previous judgments like Balwant Singh vs. State of Punjab (1986) and Ravinder Kaur Grewal vs. Manjit Kaur (2019) to highlight that for adverse possession to apply, there must be animus possidendi—an intention to possess the property against the owner’s interest. This intention does not exist in rental cases.

To understand why this case matters so much, it is useful to know a bit about the background of adverse possession in India. The concept came from old English law and became part of Indian law through the Limitation Act, first in 1877 and later continued in the 1963 Act. The idea was meant to punish owners who neglected their property and reward those who used land productively. Over the years, Indian courts have interpreted it differently—sometimes protecting squatters on unused government land, as in Hemaji Waghaji vs. Bhikhabhai Khengarbhai (2008), while being more careful in private disputes.

In earlier cases, courts had made a clear difference between “permissive possession” and “hostile possession.” For example, as far back as 1902, in Secretary of State vs. Krishnamoni Gupta, the courts said that a person who has permission to stay cannot later claim ownership. After independence, as cities grew and housing became scarce, tenancy issues became more common, especially under old rent control laws in Mumbai and Kolkata. The 2019 Ravinder Kaur case had already suggested that people staying with permission (like family members) cannot claim adverse possession, but there was no specific clarity for tenants until this new ruling.

Landlords and property owners across the country have welcomed the decision. A member of the All India Landlords Association said, “Finally, justice prevails.” He pointed out how in Mumbai’s old pagdi system, many tenants pay extremely low rent but refuse to vacate, even when owners face financial hardship. Real estate developers under CREDAI also praised the judgment, saying it will increase investor confidence. They noted that the fear of losing property to tenants had discouraged redevelopment of old buildings. Now, owners can reclaim property more easily, which could unlock thousands of unused homes in major cities.

However, tenant rights groups have reacted with concern. Meera Singh from the National Tenants Union said, “It ignores ground realities of urban poverty.” She pointed out that in big cities, rents often consume 40-50% of a family’s income, and many long-term tenants also spend their own money maintaining and repairing old homes while landlords stay absent. Legal aid organizations also worry about senior citizens, widows, and low-income tenants who could face eviction after this judgment. Some tenant groups are asking for changes in the law—like adding a clause in the Limitation Act to protect tenants or updating Rent Control Acts to ensure fair treatment.

Vishnu Goyal’s lawyer, advocate Tanya Malhotra, said, “My client invested in the house—built extensions, paid taxes. Denying him equity is unjust.” Political leaders have also joined the debate. CPI(M) leader Brinda Karat called the decision “pro-elite,” saying, “In a country with 65 million slum dwellers, protecting absentee landlords over occupants is feudal.”

Economists believe this ruling could encourage redevelopment and bring more houses into the market. According to Census 2011, around 11 million rented houses are lying vacant, while the Ministry of Housing and Urban Affairs reports that cities face a shortage of about 18 million houses. The new clarity in law could push property owners to bring these homes back into circulation. However, social organizations like ActionAid warn that evictions could rise by as much as 20%, leading to homelessness for many poor families. A UN-Habitat study also noted that women tenants, who often live in informal or unregistered rentals, might face special challenges after this decision.

The ruling has also stirred political discussion. Supporters of the BJP say it matches the government’s goal of improving property rights and ease of doing business. Meanwhile, opposition parties like Congress criticize it as anti-poor and are promising to review tenancy laws in their manifestos. In rural areas, where informal tenancy and sharecropping are common, the judgment may prove to be a double-edged sword, potentially benefiting some while disadvantaging others.