A Permissive Occupant Cannot Question the Owner’s Title: Madras High Court Dismisses Appeal in Possession Dispute

“Admittedly, the 2nd Defendant Is in Permissive Possession — She Has Not Set Up Any Title to the Property”, In a decisive ruling on property rights and permissive possession, the Madras High Court on 09 February 2026 dismissed an appeal filed by a woman who claimed continued occupation of a flat as security for a loan allegedly advanced by her father.

The Division Bench comprising Justice N. Sathish Kumar and Justice R. Sakthivel upheld the decree of declaration of title and recovery of possession passed by the XVII Additional Judge, City Civil Court, Chennai, in O.S. No.4226 of 2020.

The Court reaffirmed a settled principle of property law — a person who admits to being in permissive possession cannot dispute the title of the true owner.

The plaintiffs, a husband and wife, purchased the suit vacant land under a registered sale deed dated 22.10.2003 (Ex.A1). Subsequently, they entered into a construction agreement dated 07.10.2004 (Ex.A2) with the 1st defendant company for construction of a 1200 sq.ft. flat. Construction was completed in 2005 and possession was handed over to them.

The 2nd defendant, who was working as Marketing Manager in the 1st defendant’s company, developed acquaintance with the plaintiffs. According to the plaintiffs, in January 2006, she requested temporary occupation of the flat on compassionate grounds stating that her mother was undergoing cancer treatment at Adyar Cancer Institute. The plaintiffs permitted her to stay temporarily.

Even after the demise of her mother in January 2007, the 2nd defendant did not vacate the premises. Instead, she filed a suit for injunction, which was dismissed, and the dismissal was confirmed in appeal.

Consequently, the plaintiffs instituted the present suit seeking declaration of title and recovery of possession.

Defence: Occupation as Security for Loan

The 2nd defendant contended that her possession was not permissive from the plaintiffs but stemmed from permission granted by the 1st defendant. She alleged that her father had advanced a loan of Rs.12 lakhs to the 1st defendant and that, in lieu of repayment, she was inducted into the flat as security.

She further claimed that the property originally stood in the name of the Managing Director in his individual capacity and not in the company’s name, thereby attempting to cast doubt on the plaintiffs’ title.

“The Fact Remains That the 2nd Defendant Is Only in Permissive Possession”

The Division Bench carefully analysed the pleadings and evidence. It noted that the 1st defendant had remained ex parte and had not claimed any title over the property.

The Court categorically observed:

“The fact remains that the 2nd defendant is only in permissive possession and she has not set up any title to the property.”

Even assuming that her possession was by permission of the 1st defendant, the Court held that such permission could not override the plaintiffs’ registered title.

The Bench emphasised that the plaintiffs’ title under Ex.A1 was undisputed and that the construction agreement under Ex.A2 was also not challenged.

Significantly, the Court relied on the earlier evidence of the 1st defendant (marked as Ex.B18) recorded in the prior injunction suit. In that evidence, the 1st defendant had denied borrowing money from the 2nd defendant’s father and denied permitting her occupation as security.

Thus, the alleged loan transaction and the theory of occupation as security were found unsubstantiated.

“The Appellant Cannot Dispute the Title of the Plaintiffs”

The Court held that once the plaintiffs established title through a registered sale deed, and the defendant admitted possession only through permission, no independent right could be asserted.

“The appellant/2nd defendant has no other defence except the permission said to have been granted by the 1st defendant.”

It reiterated that a permissive occupant cannot challenge the title of the true owner.

Suit Within Limitation

Addressing the plea of limitation, the Court observed that even according to the 2nd defendant’s own pleadings, she came into possession in 2006.

Since the suit was filed within 12 years, it was well within the limitation period prescribed under Article 65 of the Limitation Act for suits for possession based on title.

“The present suit has been filed within a period of 12 years, i.e., within the period of limitation.”

Interim Deposit and Mesne Profits

During pendency of the appeal, the High Court had directed the appellant to deposit Rs.25,000 per month from July 2023.

Recording that deposits were being made regularly, the Bench permitted the plaintiffs to withdraw the amount upon proper application before the trial Court.

Finding no merit in the appeal, the Division Bench dismissed the appeal with costs and upheld the judgment and decree dated 28.04.2022 granting declaration of title and recovery of possession.

However, acceding to the request of the appellant’s counsel, the Court granted eight weeks’ time to vacate and hand over vacant possession.

This judgment reiterates a fundamental property law principle — permissive possession does not ripen into ownership, nor can it be used as a weapon to dispute the title of a lawful owner. Where title is established by registered deed and the occupant admits entry by permission, courts will not permit speculative defences based on unproven loan arrangements.

Date of Decision: 09 February 2026