Summary: Building upon our previous exploration of the Karnataka High Court’s landmark decision, this blog examines how Indian courts continue to refine the doctrine of dual ownership.

Introduction: A Doctrine Gaining Momentum

The “dual ownership” doctrine allows separate ownership of land and structures on that land. The landowner owns the land; the builder owns the structure. The Orissa High Court recently strengthened this doctrine in Nirmala Sahu v. Telecom Regulatory Authority of India (TRAI) & Ors.[1], addressing a significant issue concerning the rights of a lessor and lessee in relation to structures built on leased land.

Background

A dispute arose over a mobile tower erected by the Lessee, a telecom operator, on the leased land owned by the Petitioner, Nirmala Sahu. The Collector ordered its dismantling on July 1, 2015. The Petitioner challenged the order before the High Court, claiming it adversely affected her interests.

The Petitioner’s Perspective: Economic Interests vs. Legal Rights

The Petitioner’s argument that the Collector’s order directing the dismantling of the mobile tower had a direct negative effect on her rights as the owner of the leased land was particularly relevant because the Lessee had defaulted on rental payments.

The Petitioner claimed that considering the tower was constructed on her land, any dismantling order targeting the structure undermined her ownership and affected her anticipated financial returns through the lease agreement.

The Court’s Decision: Dual Ownership Doctrine Strengthened

Distinguishing Legal Injury from Economic Loss

The Court questioned the petitioner’s locus standi, concluding that her case amounted to damnum sine injuria meaning “damage without legal injury”. It clarified that under the doctrine of dual ownership, while the lessor remains the owner of the land, the lessee is the true owner of any structure the lessee builds on it, denying the lessor’s claim over any lessee-erected structure on the land. This interpretation must, however, be construed in the larger context of the terms of the lease, including its express and implied terms.

In its order, the Court directed the Petitioner to pursue proper remedy through the civil suit already pending before the Civil Judge (Senior Division)/Commercial Court, Kendrapara, which sought to recover outstanding rents from the Lessee.

Rejecting the English Common Law Maxim

The Court referred to Mulla’s authoritative commentary on the Transfer of Property Act, 1882, emphasising that the doctrine of annexation to the soil has not been accepted as an absolute rule in India. Although the English common law principle “quicquid plantatur solo, solo cedit” establishes “whatever is planted in the soil belongs to the soil”, Indian law rejects this absolute rule.

Instead, a person who constructs a building in good faith on leased land with the lessor’s permission is regarded as the lawful owner of the structure, not a trespasser.

Comparative Analysis: Karnataka vs. Orissa Approaches

Convergent Principles

The two High Court decisions align on several key aspects:

1. Both the Karnataka and Orissa High Courts confirmed that Indian law recognises dual ownership of property, departing from the English Common Law principle “quicquid plantatur solo, solo cedit”.
2. The Karnataka judgment underscored that the subject of stamp duty is the “instrument” as executed, not the broader “transaction”. The Orissa court focused on the legal relationship or “vinculum juris” or “legal bond” the lease deed had created.
3. Both courts acknowledged the commercial reality of separate ownership structures.

Practical Implications

The Orissa judgment provides crucial guidance:

1. Lessors must understand their economic interests in rental income will not necessarily translate to ownership rights over lessee-erected structures.
2. Drafting considerations for lease agreements and other contracts involving construction of structures should include:
   • clear ownership clausesexplicitly identifying the ownership rights of each party to structures proposed to be built on the land;
   • clauses that capture maintenance and insurance-related obligations, defining responsibilities for lessee-owned structures; and
   • termination clauses to address removal or transfer of structures upon lease termination.

Conclusion

Both the Karnataka and Orissa High Courts have confirmed that Indian law permits separate ownership of land and structures built on that land by upholding dual ownership and focusing on the specific contents of legal instruments. The doctrine’s flexibility, combined with judicial consistency, provides a solid foundation for innovative property structures. As the doctrine continues to evolve, we can expect further refinements that will enhance its utility for India’s dynamic property market.

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[1] W.P.(C) No. 1734 of 2016 and judgment was passed on August 19, 2025