SC rules property tax receipts alone cannot establish title; execution courts must adjudicate third-party claims under Order XXI CPC.
Tax Receipts Insufficient to Prove Ownership, SC Clarifies
The Supreme Court has reiterated that possession of property tax receipts does not confer ownership or title to immovable property. In an execution proceeding, a decree-holder cannot rely solely on tax payment records to claim ownership or defeat third-party objections.
The Court held that under Order XXI Rules 97–101 of the Code of Civil Procedure (CPC), any person claiming title to a property under attachment must be heard, and the execution court is duty-bound to decide such objections on merits.
"Payment of tax is merely an indication of possession and not of ownership,"the bench observed, citing Bhura v. Kesharbai.
The decision is critical for insolvency and recovery practitioners. Relying on municipal records without due diligence on title documents exposes resolution applicants and banks to post-acquisition litigation. A comprehensive title search remains indispensable in asset-based enforcement.
Citations
- Rajesh Gupta v. State of UP (2026) SCC Online SC
