Orissa High Court Confirms Lessee Owns Structure Erected on Leased Land

Odisha, August 21, 2025: The Orissa High Court has reaffirmed that a lessee who constructs any structure on leased land owns it—and that the lessor, despite owning the underlying land, cannot lay claim to the structure itself. This pronouncement came during proceedings concerning a mobile tower built on leased terrain.

Justice Dixit Krishna Shripad distilled the settled legal doctrine succinctly, stating: “The lessor continues to be the owner of the plot, whereas the lessee becomes the owner of the structure which he has built under the lease in question by virtue of [the] doctrine of dual ownership.”

The dispute originated from a lease deed dated 5 May 2014, under which the petitioner, the landowner, leased land to the lessee (OP No. 5) who then erected a mobile tower. When the tower later became defunct, the Collector ordered its demolition on 1 July 2015. The landowner challenged that directive before the High Court.

The petitioner’s counsel, Advocate Bini Mishra, contended that the demolition order prejudiced the petitioner’s interests and was thus legally unsound. However, the Court questioned whether the petitioner had the locus standi to challenge the order at all. As Justice Shripad observed: “By virtue of [the] impugned order, the vinculum juris created by the subject lease deed, is not disrupted and therefore, the lessor continues to be the lessor and so does the lessee… Case of the Petitioner is largely one of damnum sine injuria and therefore, without a legal injury, legal remedy cannot be sought.”

The Court highlighted that the real aggrieved party is OP No. 5—the lessee who constructed the tower. It invoked the doctrine of dual ownership, a well-established tenet of property law. Drawing from Mulla on the Transfer of Property, the Court emphasised: “The lessee is the owner of the building put up by him on the land leased. … A person who bona fide puts up constructions on land belonging to others with their permission would not be a trespasser, nor would the buildings so constructed vest in the owner of the land.”

The ruling also referenced precedent from the Bombay and Madras High Courts—Lakshmipat v. Larsen & Toubro (1949) and Mohammed Abdul Kadar v. The District Collector of Kanyakumari (1971)—fortifying its position.

Finally, the Court noted that a separate suit remains pending before the Civil Judge (Senior Division)/Commercial Court in Kendrapara, wherein the petitioner seeks to recover outstanding rent from OP No. 5. The High Court directed that this must be resolved within one year.

Source : Live Law

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