Transfer Made in Violation of Allotment Terms Is Void — Unproved Will Offers No Title: Punjab & Haryana High Court on Property Rights Between Siblings

“In the absence of ownership transfer, legal heirs are co-allottees; possession alone does not create title” — On 22 September 2025, the Punjab and Haryana High Court at Chandigarh delivered a significant verdict in a case arising from two connected suits between siblings Bhushan Sehgal and Pushpa Devi, over possession and title of a Chandigarh Housing Board property. The Bench of Justice Deepak Gupta set aside the First Appellate Court’s partial grant of relief to Pushpa Devi and ruled that neither party had exclusive title, and the transfer of the house to Pushpa Devi was illegal, having been made in contravention of the 10-year lock-in clause under the allotment conditions.

This case underscores the limitations of discretionary transfers in public housing schemes and the necessity of proving testamentary documents such as Wills when title is asserted on their basis.

“No transfer before ownership vests; blood relation clause cannot override statutory bar” — Court declares Housing Board transfer to Pushpa Devi illegal

The core legal question before the High Court was whether the transfer of ownership by the Chandigarh Housing Board in favour of Pushpa Devi was valid when it was made prior to the completion of the lock-in period and before the original allottee had become owner.

The disputed property, House No. 3180/1, Sector 41D, Chandigarh, was originally allotted to Kaushalya Devi, the mother of both parties, on 21.01.1991. Possession was given on 25.01.1991, and under Clause 12 of the allotment:

"The allottee shall not sell, alienate, transfer, or part with possession of the property until either the expiry of the hire-purchase period, or a period of 10 years from actual possession, whichever is later."

Pushpa Devi had applied for a transfer in her favour under the “blood relation policy”, and the Chandigarh Housing Board issued a transfer letter on 23.01.2001 — just two days before the expiry of the 10-year lock-in period, and before ownership had been conferred.

Justice Deepak Gupta held: “Since the allottee had not acquired ownership at that time, the transfer could not lawfully be effected. Accordingly, the trial Court rightly concluded that the plaintiff’s claim based on the transfer letter was baseless.”

The Court rejected the First Appellate Court’s justification that Regulation 50 allowed relaxation, holding:

“No reasons were recorded in the transfer letter for any relaxation… the contention that the transfer letter was valid is wholly without merit.”

“Will not produced, not proved — No claim can rest on unsubstantiated testament” — Court strips Pushpa Devi of possessory claim based on unproven Will

Pushpa Devi had also claimed rights under a registered Will dated 14.07.1999 allegedly executed by Kaushalya Devi in her favour. The Court found that the original Will was never produced, and she had never entered the witness box to prove its execution. It noted:

“The present litigations do not concern the Will… The beneficiary neither appeared for cross-examination nor produced the original Will.”

The Court also noted that Bhushan Sehgal’s separate civil suit to challenge the Will had failed, but crucially emphasized:

“The mere fact that the plaintiff could not prove forgery due to non-production of the Will does not establish its legality in favour of the respondent.”

Thus, no rights could be derived from the Will, and the property was to be treated as jointly held by all legal heirs in the absence of a valid testament.

“No conveyance deed means no exclusive ownership” — Court denies absolute ownership claim of appellant Bhushan Sehgal too

In the cross-appeal, Bhushan Sehgal had claimed exclusive ownership, relying on the fact that he paid the instalments and resided at the property since 1991. However, the Court firmly rejected this as well, noting:

“There is no evidence indicating that the Chandigarh Housing Board has executed a conveyance deed transferring ownership after the allotment.”

In the absence of such transfer, the Court ruled: “All legal heirs of Smt. Kaushalya Devi, including Smt. Pushpa & Bhushan Sehgal, hold equal allotment rights… and are entitled to have the same transferred from the Chandigarh Housing Board in equal shares.”

“Possession is not proof of title; unauthorised occupation claim fails without valid document” — Pushpa Devi’s suit for eviction and mesne profits dismissed

Pushpa Devi had filed Civil Suit No. 68 of 2004, claiming that Bhushan Sehgal had forcibly occupied a portion of the house and sought possession and mesne profits of ₹57,000. The Court noted that the basis of her claim was the invalid transfer, and she had failed to prove exclusive title or valid Will.

The Court ruled:

“The appeal arising from Civil Suit No. 68 of 2004… is accepted. Accordingly, the suit filed by Smt. Pushpa Devi seeking possession… and recovery of mesne profits is dismissed.”

Both Parties Declared Co-Allottees, Chandigarh Housing Board to Transfer in Equal Shares

The Court carefully balanced the equities, holding neither party entitled to full relief, and directed that:

“All legal heirs of Smt. Kaushalya Devi, including Smt. Pushpa & Bhushan Sehgal, hold equal allotment rights in respect of the house and are entitled to have the same transferred from the Chandigarh Housing Board in equal shares.”

This decision restores status quo ante and ensures that the Housing Board complies with its regulations before executing ownership transfers.

Date of Decision: 22 September 2025