GURU GHASIDAS UNIVERSITY, BILASPUR, CG

SCHOOL OF LAW

ACADEMIC SESSION: 2019-20

PROJECT ON
“DOCTRINE OF ESCHEAT”
LAND LAW

Submitted To: Submitted By:

Mr. Sushil Jain, Amiya Bhushan & Yogi Jaiswal
Assistant Professor (Land Laws), B.A. LLB
Guru Ghasidas University, Bilaspur 8th Semester

DATE: 17.03.20

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 ACKNOWLEDGEMENT

It feels great pleasure in submitting this research project to Mr.Sushil Jain, Asst. Professor (Land
Law), without whose guidance this project would not have been completed successfully.

Next, we would like to sincerely thank our seniors, friends and family members, whose
suggestions and guidance assisted us throughout the entire tenure of making the project.
We would also like to express our special thanks to those original thinkers, whom we have taken
the privilege to quote.

Last but not the least, we would like to express our heartfelt gratitude towards the
examiner who would take pains to go through the project. Though a lot of care has been taken,
there may be scope for some improvement. All criticism and suggestions are kindly invited.

Amiya Bhushan & Yogi Jaiswal

B. A. LLB.

8th Semester

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 CERTIFICATE

We are glad to submit this project report on “Doctrine of Escheat” as a part of our academic
assignment. The project is based on Research methodology and further discusses the interview
method.

We think this would be significant for academic purposes as well as prove Information to all the
readers.

Here though we declare that this paper is an original piece of research and the borrowed text and
ideas have been duly acknowledged.

Faculty Signature

________________

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 DECLARATION

We, AMIYA BHUSHAN & YOGI JAISWAL, BA-LLB 8thSemester of GURU GHASIDAS
UNIVERSITY do hereby declare that this project is our original work and we have not copied
this project or any part thereof from any source without acknowledgement.

We are highly indebted to the authors of the books that we have referred in our project as well as
all the writers of all the articles and the owners of the information taken from the website for it.

It is only because of their contribution and proper guidance of my faculty advisor Assist. Prof.
Mr. SUSHIL JAIN that we were able to gather light on the subject.

AMIYA BHUSHAN & YOGI JAISWAL

B.A.-LL.B

8th SEMESTER

DOCTRINE OF ESCHEAT

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 CONTENTS

1. INTRODUCTION

2. HISTORY

3. NECESSITY OF ESCHEAT:

3.1 INTRODUCTION 

3.2 RIGHT OF GOVERNMENT TO TAKE PROPERTY 

3.3 OBJECTIVE OF THE DOCTRINE OF ESCHEAT 

4.CONCLUSION AND SUGGESTION

5.BIBLIOGRAPHY

 
 

1. INTRODUCTION 

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Escheat is a common law doctrine which transfers the property of a person who dies without
heirs to the crown or state. It serves to ensure that property is not left in "limbo" without
recognized ownership. It originally applied to a number of situations where a legal interest in
land was destroyed by operation of law, so that the ownership of the land reverted to the
immediately superior feudal lord.
The primary burden of proving that there is no proper individual entitled to own the property in
question rests with the state, and the general rules regarding the admissibility of evidence are
applicable. Rules of presumption, such as the common-law presumption of death after a seven-
year disappearance, can be used to support the case of the state. After the state has proved a
legally sufficient case, any individual claiming a right to the property has an opportunity to go
forward and argue against the evidence submitted by the state. 
Escheat is a concept in land law. It means the reversion of land to the state on failure of heirs of
the owners on his outlawry. 

The concept of escheat has been derived from the feudal rules that where an estate simply comes
to an end, the land is reversed to the state by whose ancestors or predecessors the estate was
originally created.

The aim of escheat is that no land should be left in limbo or ownerless.

Escheat statutes vary by state, but all prescribe a procedure for location of the rightful owner. In
some states title to certain types of property automatically passes to the state when it escheats for
lack of a proper claimant. In other states, a required period of time must elapse in prior to the
commencement of escheat proceedings. This does not bar a claimant from stating his or her
claim before completion of the escheat proceedings. Some laws require claimants to assert their
rights within a period of time or forfeit them. Often, states mandate that individuals
administering estates notify the state government of the existence of property that might be
subjected to escheat. 

The primary burden of proving that there is no proper individual entitled to own the property in
question rests with the state, and the general rules regarding the admissibility of evidence are

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applicable. Rules of presumption, such as the common-law presumption of death after a seven-
year disappearance, can be used to support the case of the state. After the state has proved a
legally sufficient case, any individual claiming a right to the property has an opportunity to go
forward and argue against the evidence submitted by the state. 
 
Some states offer money to informers who notify the state of property that might be subjected to
escheat. Informers might be required to provide evidence and pursue the case to a conclusion
before they will be entitled to a fee. Other states provide compensation for an escheater, a person
appointed by the court to manage the claim of the state for escheat. An escheater is entitled to be
paid a reasonable amount even if he or she does not succeed in recovering the property for the
state.

2. HISTORY  

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The principle of escheat originated in England during the middle Ages. The basic premise was
that property which remained without an owner or upon failure to make claim by a descendant’s
heirs, reverted to the Sovereign from whom all property rights were derived. This concept was
brought to the American colonies by the English settlers.
Upon the conclusion of the Revolutionary War, the State of North Carolina succeeded to the
rights previously held by the Crown, including the right of escheat. The North Carolina
Legislature adopted the University Act of 1789 which gave the newly formed University “all the
property that has heretofore or shall hereafter escheat to the state.”
Children may be fond of the phrase "finders keepers, losers weepers” but unclaimed property
professionals know this is rarely the case and state escheatment laws are never as simple as
calling "dibs” on abandoned assets.
So, our confusing patchwork of unclaimed property laws originate and how has it evolved over
the years. Like many time-honored American traditions (whiskey and fried food come to mind
immediately), the concept of unclaimed property was first established in feudal England. The
term "escheat" derives from the Latinex-cadere – meaning "to fall out.” Under English common
law, any lands held "by tenure” (i.e., occupied by someone other than the owner) were returned
to the feudal lord upon the death of an heirless tenant.
The idea behind escheatment laws was simple: when a landholder died, went to war or was
convicted of a crime and imprisoned, his property reverted to the landowner in order to ensure its
continued productivity and to prevent "squatters” without inheritance rights from usurping land
that did not belong to them.
Following the Norman Conquest of England, the monarch became the sole "owner" of all the
land in the kingdom, a position that persists to the present day. The king then granted land to his
favored followers, who became “tenants-in-chief,” under various contracts of feudal land tenure.
Such tenures never conferred ownership of land but merely ownership of rights over it. This
distinction between ownership and stewardship of unclaimed property would be a hallmark of
later U.S. laws.
Seems logical enough, right? All land belongs to the state (or in this case the crown) and reverts
back to the crown once the holder is dead or otherwise loses his claim to the property.

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Early common law forms of escheatment applied only to real estate – the concept of bona
vacantia ("ownerless goods”) emerged many years later as a statute provision governing personal
property without a clear heir.
On the ground of the above said Escheat also gets a place in our Indian constitution Doctrine
of Escheat also finds mention in Article 296 of the Constitution.

“Article 296 – Subject as hereinafter provided, any property in the territory of India which, if this
Constitution had not come into operation, would have accrued to His Majesty or, as the case may
be, to the Ruler of an Indian State by escheat or lapse, or as bona vacantia for want of a rightful
owner, shall, if it is property situate in a State, vest in such State, and shall, in any other case,
vest in the Union.”

Doctrine of Escheat or bona vacantia in India

The Doctrine of bona vacantia or Escheat was declared to be a part of the law in India by the
Privy Council as early as in 1860 in Collector of Masulipatam v. Cavary Vancata Narrainappah 1.
This case also held that the General Law of universal application and that General Law was
that “private ownership not existing, the State must be the owner as the ultimate Lord”.

The right to acquire by way of escheat or as bona vacantia is not a creature of any Private Law of
Succession but is an attribute of Sovereignty. It is true that Statutory provisions of Private Law
of Succession such as Section 29 of Hindu Succession Act sometimes expressly recognize right
of the State to acquire properties by escheat or as bona vacantia. But that right would have been
very much there even without any such provisions2.
The case of Pierce Leslie and Co. Ltd. v. Violet Ouchterlong Waoshare 3categorically states that:

“Property of an intestate dying without leaving lawful heirs and the property of a dissolved
Corporation passes to the Government by escheat or as bona vacantia". And relying on this

1(1859-61) 8 Moo Ind App 500 at PP. 525.

2Biswanath Khan And Ors. v. Prafulla Kumar Khan, AIR 1988 Calcutta 275.
3AIR 1969 SC 843.

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decision, the Supreme Court in Narendra Bahadur Tandon v. Shanker Lal4, has reiterated that "in
India the law is well-settled that the property of an intestate dying without leaving lawful heirs,
and the property of a dissolved Corporation, passes to the Government by escheat or as bona
vacantia" and that "if the Company had a subsisting interest in the lease on the date of
dissolution, such interest much necessarily vest in the Government by escheat or as bona
vacantia.”
It is not only the tangible property that comes within the ambit of Doctrine of Escheat orbona
vacantia. The word ‘property’, when used without any qualification or limitation, as above, is a
term of the widest import. In the case of J.K. Trust v. Commissioner of Income Tax5, it was
stated that “Property signifies every possible interest which a person may acquire”. There
should, therefore, be no doubt that the expression ‘property’ used without any qualification or
limitation would even include a tenant's interest in the demised land or premises. The interest of
a Tenant is usually heritable as well as transferable and it would be trite to say that only owner of
a property, however limited, can transfer or transmit the same 6. This reasoning was upheld in the
case of Municipal Corporation of Greater Bombay v. Lala Pancham 7, wherein it was held that
the tenant has, under the Transfer of Property Act or the Rent Control Legislations, an interest in
the demised premises which would squarely fall within the expression ‘property’.

4AIR 1967 Allahabad 405. This ruling was upheld by the Supreme Court in AIR 1980 SC 575.
5AIR 1957 SC 846.
6AIR 1988 Calcutta 275.
7AIR 1965 SC 1008.

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 3. NECESSITY OF ESCHEAT 

Introduction `

The most common reason that an escheat takes place is that an individual dies intestate, meaning 
without a valid will indicating who is toinherit his or her property, and without relatives who are 
legally entitled to inherit in the absence of a will. A state legislature has the authorityto enact an 
escheat statute. Escheat is a concept in Land Law. It means the reversion of land to the State on
failure of heirs of the owner or on his outlawry.

The concept of Escheat has been derived from the feudal rules that, where an estate in fee simple
comes to an end, the land reverts to the State by whose ancestors or predecessors the estate was
originally created. The aim of Escheat is that no land should be left in limbo and owner-less.

Right of government to take property

In feudal England, escheat was a privilege exclusively given to the king. The policy of inheritanc
e was to preserve the wealth of noblefamilies by permitting one individual to inherit an entire est
ate. There was no writing of wills that would leave property to several heirsbecause that would h
ave the effect of breaking up the estate. In addition, the law established a hierarchy of heirs who 
stood in line to inheritthe estate. If there was no living person of a designated class to inherit, the 
king took the property by escheat.

Historically, reasons existed for escheat apart from the absence of heirs to inherit a decedent's pr
operty. When corporations were subject tostrict regulation, it was unlawful for a corporation to o
wn property in any way not permitted by its state-granted charter. Any property beyondthat need
ed by the corporation for the operation of its business, or in excess of the amount designated in it
s charter, or held for a period oftime beyond that which was permitted, was subject to escheat.

Certain states mandated escheat of property belonging to religious societies that either promoted 
Polygamy or neglected to incorporate asrequired by law. Additionally, where public lands were 
provided for settlers, statutes frequently made provisions for escheat when oneindividual took po
ssession of more than the permitted acreage or did not properly cultivate the homestead.

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Escheat statutes vary by state, but all prescribe a procedure for location of the rightful owner. In 
some states title to certain types of propertyautomatically passes to the state when it escheats for 
lack of a proper claimant. In other states, a required period of time must elapse priorto the comm
encement of escheat proceedings. This does not bar a claimant from stating his or her claim befo
re completion of the escheatproceedings. Some laws require claimants to assert their rights withi
n a period of time or forfeit them. Often, states mandate that individualsadministering estates not
ify the state government of the existence of property that might be subject to escheat.

The primary burden of proving that there is no proper individual entitled to own the property in q
uestion rests with the state, and the generalrules regarding the admissibility of evidence are appli
cable. Rules of presumption, such as the common-law presumption of death after aseven-year dis
appearance, can be used to support the case of the state. After the state has proved a legally suffi
cient case, any individualclaiming a right to the property has an opportunity to go forward and ar
gue against the evidence submitted by the state.

Some states offer money to informers who notify the state of property that might be subject to es
cheat. Informers might be required toprovide evidence and pursue the case to a conclusion befor
e they will be entitled to a fee. Other states provide compensation for anescheater, a person appoi
nted by the court to manage the claim of the state for escheat. An escheater is entitled to be paid 
a reasonableamount even if he or she does not succeed in recovering the property for the state.

 
Objective of the Doctrine of Escheat 

Ordinarily, the property subject to escheat is all the property within the state belonging to the ori
ginal owner upon his or her death. Althoughinitially the doctrine was applicable solely to real pr
operty, it presently extends to Personal
Property, including such intangibles as bankaccounts and shares of stock. Certain other types of 
property can be the subject of escheat for lack of a known owner. The determination iscontingent 
upon state law.

Unclaimed or abandoned property escheats to the state under some statutes. However, the state c
annot merely declare property abandonedand appropriate it. Such laws must function within cons
titutional limits by observing the requirements imposed by DUE PROCESS. The state isrequired to 

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adopt a routine procedure for notifying the public and must provide potential claimants an opport
unity to argue that the propertymight belong to them. Without declaring that certain abandoned p
roperty has been escheated, the state may lawfully possess the propertyand hold it for a period of 
time so that claims can be asserted. A state is not mandated to take over unclaimed property but 
may choose toexercise the power to escheat only when the value of the property does not exceed 
the expense of legal proceedings.

Items subject to escheat under various statutes include abandoned bank accounts, deposits left wi
th utility companies, stock dividendswhose owners cannot be found; unpaid wages; unclaimed le
gacies from the estate of a deceased relative; insurance money to unknownbeneficiaries; and unc
laimed money retained by employers or public officials.

Certain statutes specify that the property of charitable or religious institutions escheats upon diss
olution if its donors have not retained theright to recover it when it is no longer used for religious 
or charitable objectives.

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 4. CONCLUSION AND SUGGESTION 

Escheat is distinguishable from Forfeiture even though both terms refer to a relinquishment of pr
operty. Forfeiture can be applied to any typeof property interest, including possession, the right t
o inherit, or the right of reversion. In addition, forfeiture often is used as a penalty againstan indi
vidual who has an interest in property, for an illegal act. An escheat takes place due to the lack of 
any person with a valid interest inthe property, and is not usually linked to any illegality or wron
gdoing.Succession is the passing of a decedent's property to his or her heirs. Escheat is not treate
d in law like succession; the two concepts arecompletely separate.Since there is a contract
between the people and the state it is no wrong to take the right of the ownerless property. Since
it is for the welfare of the state and again which again goes back to the welfare of the people. So
it is concluded that the contract prevails between the state and government therefore it is nothing
wrong in giving away the property to the state government which will be misused by individual.
Instead government taking away the ownerless property for the welfare of the state is much
better than to be in hands of individual who has no right over the land or to be left ownerless.

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BIBLIOGRAPHY

Books reffered

Dr. Saxena Poonam Pradhan, Family Law Lectures: Family Law II, third edition, lexis nexis
publication

Mulla.DF, mulla hindu law, 21st edition, lexis nexis publication

Gibson S.T, "The Escheatries, 1327–1341", English Historical Review, 36(1921).

Articles reffered
Rao, G.C.V. Subba, Family law in India, Tenth edition, S.Gogia &Company, 2011, Print.
www.lawnotes.in referred on 1st April 2015.

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