Unauthorized Subletting Voids Possession Claims Over Public Premises: Chhattisgarh HC

The Chhattisgarh High Court has ruled that long-standing possession and permanent constructions cannot override the statutory framework governing public land or shield unauthorized occupants from eviction. The Bench discussed that possession of public premises derived through transactions prohibited by original allotment agreements confers no lawful right, regardless of the duration of occupancy or payment of municipal dues.

A Single Judge bench of Justice Amitendra Kishore Prasad heard a batch of writ petitions challenging eviction orders initiated by the Steel Authority of India Limited (SAIL). The Bench examined whether occupants claiming rights through original allottees could resist eviction under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 when the underlying lease agreements explicitly prohibited subletting or transfers.

Key Takeaways

Contractual Prohibitions Binding

Transactions entered into in violation of express clauses against subletting or partnership creation in original allotment letters are legally void against the owner.

Statutory Primacy Over Rent Laws

Eviction proceedings under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 override general State rent control legislations regarding unauthorized occupants of public property.

Duration Not a Defense

Neither decades of possession nor the payment of electricity charges and property taxes creates a vested legal title or a right to continue in occupation.

Stale Orders Remain Executable

Mere delay or lapse of time in executing a valid eviction order does not grant an unauthorized occupant the right to claim adverse possession or immunity from dispossession.

Overriding Effect of the Public Premises Act

The Chhattisgarh High Court emphasized that once premises are classified as public property, the statutory machinery for recovery is robust. Citing Liife Insurance Corporation of India and Another v. VITA ( "(2026) 3 SCC 427": 2025 CaseBase(SC) 1395), the bench noted that the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 is a special law that prevails over various State Rent Control Acts. The Court observed that a person in unauthorized occupation cannot invoke protections typically available to tenants under ordinary civil law.

Regarding the petitioners' reliance on their long-term stay, the Chhattisgarh High Court held that such factors might establish the factum of possession but do not translate into legal authority. The Bench observed that "A person deriving possession through a transaction prohibited by the original allotment agreement cannot claim a better right against the owner merely on the basis of such transaction... The petitioners cannot claim a right to continue in occupation merely on the basis of long possession, expenditure incurred on construction or payment of electricity charges."

Court Observations and Directions

The Chhattisgarh High Court found that the petitioners failed to demonstrate any independent right or title created by the Bhilai Steel Plant in their favor. The bench rejected the argument that the eviction orders had become 'un-executable' due to the passage of time, stating that unauthorized occupants cannot acquire rights by relying on administrative delays.

Ratio

Occupants who derive possession through an original allottee in violation of express contractual prohibitions against transfer or subletting are 'unauthorized occupants' under Section 2(g) of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971. Such occupation does not ripen into a legal right through the passage of time, payment of dues, or the raising of constructions, and the statutory owner remains entitled to recover possession through the prescribed summary procedure.

Background

The dispute centered on plots at G.E. Road, Khursipar, Bhilai, originally allotted by the Bhilai Steel Plant (a unit of SAIL) to various individuals starting in the 1970s. The petitioners had moved into these premises after paying consideration to the original allottees, often raising permanent structures and operating businesses for over 40 years. In 2004 and 2010, the Estate Officer passed eviction orders under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971, finding the occupants to be in unauthorized possession due to breaches of the original license terms which prohibited subletting.

The petitioners challenged these decades-old orders only when the respondents began physical execution and sealing of the premises in 2022. They argued that their long-standing possession and regular payment of taxes to the Municipal Corporation and electricity companies regularized their stay. One petitioner also filed a contempt plea under the Contempt of Courts Act, alleging dispossession despite a status quo order. The Chhattisgarh High Court dismissed all petitions, holding that the Estate Officer acted within jurisdiction and that the subsequent entry of the petitioners was fundamentally flawed.

Case Details:
Case No.: WPC No. 3644 of 2022
Neutral Citation: 2026:CGHC:46373
Case Title: M/s Mahalaxmi Trading v. Union of India and Others
Appearances:
For the Petitioner(s): Mr. B.P. Sharma, Mr. Samdarsh Nirankari, Mr. Pushp Kumar Gupta, Mr. Rohan Kumbhare, Advocates
For the Respondent(s): Dr. Saurabh Kumar Pande (SAIL), Mr. Abhyuday Tripathi (State), Mr. Sandeep Dubey (Municipal Corp), Mr. Pankaj Agrawal (Municipal Corp), Advocates

Source: 2026 CaseBase(CTH) 21291