A right in rem is a right exercisable against the world at large, as contrasted from a right in personam which is an interest protected solely against specific individuals. The contrast between the rights becomes clearer from the following illustrations. (i) If X (seller) and Y (purchaser) enter into an MOU for sale of land, Y will only have rights in personam against X. However, after execution and registration of the Sale Deed, Y will have rights in rem against the world at large, (ii) On sale of a car, the right to receive sale proceeds is a right in personam enforceable only against the purchaser of the car, (iii) If A advances a loan to B, A will only have a right in personam against B for repayment of the loan and interest thereon. (iv) Ownership of a house is a right in rem but the right to receive rent from a tenant is a right in personam.
In the case of Booz Allen,[1] the Supreme Court of India explained the distinction between rights in rem and rights in personam as follows.
“37. It may be noticed that the cases referred to above relate to actions in rem. A right in rem is a right exercisable against the world at large, as contrasted from a right in personam which is an interest protected solely against specific individuals. Actions in personam refer to actions determining the rights and interests of the parties themselves in the subject-matter of the case, whereas actions in rem refer to actions determining the title to property and the rights of the parties, not merely among themselves but also against all persons at any time claiming an interest in that property. Correspondingly, a judgment in personam refers to a judgment against a person as distinguished from a judgment against a thing, right or status and a judgment in rem refers to a judgment that determines the status or condition of property which operates directly on the property itself.”
As set out above, a judgment may operate in two ways, in rem or in personam. This distinction is recognised by Sections 41 and 42 of the Evidence Act, 1872. Elaborating on the distinction between a judgment in rem and a judgment in personam, the Supreme Court[2] held as follows:
“30. …A judgment in rem determines the status of a person or thing as distinct from the particular interest in it of a party to the litigation; and such a judgment is conclusive evidence for and against all persons whether parties, privies or strangers of the matter actually decided. Such a judgment “settles the destiny of the res itself” and binds all persons claiming an interest in the property inconsistent with the judgment even though pronounced in their absence.* By contrast, a judgment in personam, “although it may concern a res, merely determines the rights of the litigants inter se to the res”.** Distinction between judgments in rem and judgments in personam turns on their power as res judicata, *** i.e. judgment in rem would operate as res judicata against the world, and judgment in personam would operate as res judicata only against the parties in dispute….”
Rights in rem and rights in personam are also relevant in the context of arbitrability of disputes. In Booz Allen[3], the Supreme Court of India held as under:
“38. Generally and traditionally all disputes relating to rights in personam are considered to be amenable to arbitration; and all disputes relating to rights in rem are required to be adjudicated by courts and public tribunals, being unsuited for private arbitration. This is not however a rigid or inflexible rule…”
The distinction is important as the nature of rights will determine the person(s) against whom such rights may be enforced, the nature of proceedings to be filed and the forum before which such proceedings may be instituted.
Notes:-
[1] Booz Allen And Hamilton Inc. v. SBI Home Finance Limited and Others (2011) 5 SCC 532
[2] Vidya Drolia and Others v. Durga Trading Corporation (2021) 2 SCC 1
* Footnote 21 in judgment – G.C. Cheshire & P.M. North, Private International Law 12th ed. by North & Fawcett (London: Butterworth’s, 1992, p. 362
** Footnote 22 in judgment – Ibid
*** Footnote 23 in judgment – G.C. Cheshire & P.M. North, Private International Law 12th ed. by North & Fawcett (London: Butterworth’s, 1992
[3] (supra)
Author Bio
