The power of a state to acquire title to property for which there is no owner.
n. the forfeit of all property (including bank accounts) to the state treasury if it appears certain that there are no heirs, descendants or named beneficiaries to take the property upon the death of the last known owner.

Doctrine of Escheat also finds mention in Article 296 of the Constitution.
The most common reason that an escheat takes place is that an individual dies intestate, meaning without a valid will indicating who is to inherit his or her property, and without relatives who are legally entitled to inherit in the absence of a will. A state legislature has
the authority to enact an escheat statute.

In feudal England, escheat was a privilege exclusively given to the king. The policy of inheritance was to preserve the wealth of noble families by permitting one individual to inherit an entire estate. There was no writing of wills that would leave property to several heirs because that would have the effect of breaking up the estate. In addition, the law established a hierarchy of heirs who stood in line to inherit the 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 property. When corporations were subject to strict regulation, it was unlawful for a corporation to own property in any way not permitted by its state-granted charter. Any property beyond that needed by the corporation for the operation of its business, or in excess of the amount designated in its charter, or held for a period of time 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 as required by law. Additionally, where public lands were provided for settlers, statutes frequently made provisions for escheat when one individual took possession of more than the permitted acreage or did not properly cultivate the homestead.


Escheat is distinguishable from Forfeiture even though both terms refer to a relinquishment of property. Forfeiture can be applied to any type of property interest, including possession, the right to inherit, or the right of reversion. In addition, forfeiture often is used as a penalty against an individual 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 in the property, and is not usually linked to any illegality or wrongdoing.
Succession is the passing of a decedent's property to his or her heirs. Escheat is not treated in law like succession; the two concepts are completely separate.

Property Subject to Escheat

Ordinarily, the property subject to escheat is all the property within the state belonging to the original owner upon his or her death. Although initially the doctrine was applicable solely to real property, it presently extends to Personal Property, including such intangibles as bank accounts and shares of stock. Certain other types of property can be the subject of escheat for lack of a known owner. The determination is contingent upon state law.
Unclaimed or abandoned property escheats to the state under some statutes. However, the state cannot merely declare property abandoned and appropriate it. Such laws must function within constitutional limits by observing the requirements imposed by due process. The state is required to adopt a routine procedure for notifying the public and must provide potential claimants an opportunity to argue that the property might belong to them. Without declaring that certain abandoned property has been escheated, the state may lawfully possess the property and 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 to exercise 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 with utility companies, stock dividends whose owners cannot be found; unpaid wages; unclaimed legacies from the estate of a deceased relative; insurance money to unknown beneficiaries; and unclaimed money retained by employers or public officials.
Certain statutes specify that the property of charitable or religious institutions escheats upon dissolution if its donors have not retained the right to recover it when it is no longer used for religious or charitable objectives.

Process of Escheat:

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 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 subject 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 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 subject 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.

Black’s Law Dictionary defines ‘escheat’ as:
1. The reversion of land ownership back to the lord when the immediate tenant dies without heirs.
2. Reversion of property (especially real property) to the state upon the death of an owner who has neither a will nor any legal heirs.
3. Property that has so reverted.
Thus we see that Doctrine of Escheat is a common law doctrine which transfers the property of a person who dies without heirs to the crown or the state. It serves to ensure that property is not left in ‘limbo’ without recognized ownership.
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. 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 recognise 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 provisions.
The case of Pierce Leslie and Co. Ltd. v. Violet Ouchterlong Waoshare categorically 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 decision, the Supreme Court in Narendra Bahadur Tandon v. Shanker Lal, 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 or bona 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 Tax, 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. This reasoning was upheld in the case of Municipal Corporation of Greater Bombay v. Lala Pancham, 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’.

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