The High Court of Jammu & Kashmir and Ladakh has reiterated that allotments made under the J&K Evacuees (Administration of Property) Act operate only as temporary licences and do not bestow any leasehold or proprietary title upon the allottee.

The Court clarified that an allottee merely receives a conditional right to occupy and use the premises, subject to the statutory framework. Even if parties subsequently execute a document termed as a “lease,” such nomenclature cannot alter the legal nature of the initial grant governed by the statute.

This observation came while deciding a Letters Patent Appeal challenging the termination of an industrial allotment. The allotment had been withdrawn on grounds of prolonged default in rent payment and discontinuation of the industrial activity for which it was authorised.

A Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar emphasized that Section 2(a) of the Act expressly treats such grants as “otherwise than by way of lease,” rendering them licences by default. The Bench underscored that the essential character of the transaction must be determined by statutory intent, not by the wording of subsequent documents:

“Where the law stipulates that an allotment confers only a licence, a later instrument styled as a lease cannot transform the nature of rights. Being a mere licence, the occupancy remains terminable under Rule 14 of the Evacuee Property Rules.”

The property in question was originally allotted in 1952 for running an industrial unit. Though extensions were periodically issued and a 60-year “lease deed” was later executed, the original allottee passed away in 1990, after which the premises continued to be occupied without lawful renewal or transfer. In 2006, the Custodian cancelled the allotment owing to massive rent arrears and abandonment of industrial operations.

A revision was rejected in 2008, confirming that the unit had ceased functioning and arrears exceeded permissible limits. The writ petition filed thereafter in 2009 was dismissed in 2023, prompting the present appeal.

The appellants argued that long possession and payment of rent had matured into a heritable leasehold right and that the cancellation suffered from procedural irregularities. They sought restoration of their status and protection against eviction.

Rejecting the contentions, the Court relied on the Full Bench ruling in Gian Kaur v. Provincial Rehabilitation Officer, which held that evacuee property allottees obtain no right capable of inheritance, transfer, or conversion into tenancy. It further highlighted that Section 3(2) of the Act excludes the application of rent-control protections.

The Bench also noted that arrears exceeding three months constitute an independent and sufficient ground for termination under Rule 14(2), and the admitted closure of the industrial unit demonstrated violation of essential allotment conditions. The occupiers had not even applied for regularisation as permitted under Rule 13-C despite being given the opportunity.

Finding no error in the decision-making process of the authorities or the writ court, the Division Bench upheld the cancellation.

Accordingly, the appeal was dismissed, affirming that the appellants had no leasehold entitlement. The right they enjoyed was a revocable licence liable to be withdrawn upon breach. However, the earlier liberty to seek regularisation in accordance with the Rules remains open to them.

Cause Title: Ishtiaq Ahmad Mir & Others v. Custodian General & Another