Agreement To Sell Must Be Registered To Claim Protection Of Possession Under Section 53A Transfer Of Property Act: Delhi High Court

The Court further observed that an agreement purchaser does not acquire ownership rights merely because negotiations for sale had taken place or possession had been delivered. In the absence of a registered agreement and an executed conveyance deed, no proprietary rights can be asserted against the true owner.

A Bench of Justice Neena Bansal Krishna observed: “Likewise, Mr Sanjay Dubey cannot seek protection of his possession under Section 53A of the TPA. Even if it is accepted that he had come into possession of the Property pursuant to the negotiations for Agreement to Sell, the Protection under Section 53A of TPA, can be sought by Mr Sanjay Dubey only if it is a registered document, as has been provided in Section 17(1)(A) Registration Act.”

Senior Advocate Jayant Bhushan appeared for the appellants. Senior Advocate Priya Kumar appeared for the respondent.

Background

The dispute concerned a residential property. The plaintiff instituted a suit seeking specific performance of an alleged agreement to sell, contending that the owner had agreed to transfer the property for a sale consideration of ₹19.50 lakh. According to the plaintiff, possession of the property had been handed over during negotiations, and substantial amounts had been paid towards the proposed sale transaction.

The owner disputed the existence of any concluded agreement to sell and asserted that the plaintiff's family had entered the property as tenants on a monthly rent. It was contended that the documents relied upon by the plaintiff were not genuine and that the relationship between the parties remained one of landlord and tenant.

Upon considering the pleadings, admissions and material placed on record, the Trial Court invoked Order XII Rule 6 CPC, held that the existence of a tenancy stood established, decreed the suit for possession and dismissed the suit for specific performance. Aggrieved thereby, the appellants approached the High Court.

Court's Observations

The High Court first examined whether the Trial Court was justified in invoking Order XII Rule 6 CPC and deciding the disputes on the basis of admissions contained in the pleadings and other judicial records.

The Court noted that the appellants themselves had consistently admitted that they had initially entered the suit property on payment of monthly rent and that such admissions were reflected not only in the pleadings before the Trial Court but also in proceedings before the High Court.

The Bench observed that the appellants' own case disclosed that they had entered the property as tenants and had continued paying ₹9,000 per month, even according to their version. The Court found it difficult to reconcile this position with the subsequent claim that the occupation of the premises was exclusively pursuant to an agreement to sell.

The Court noted that the pleadings themselves showed that rent payments continued long after the alleged negotiations for the purchase had commenced.

Referring to the earlier proceedings relied upon by the Trial Court, the Court observed that the appellants had themselves represented before the High Court that they had shifted to the suit premises as tenants after disposing of their previous residential property.

The Court found that these admissions constituted a significant circumstance supporting the landlord-tenant relationship recorded by the Trial Court. The Court further held that even if the entire case pleaded by the appellants regarding negotiations for sale was accepted at face value, no enforceable ownership rights accrued in their favour.

The Bench observed: "Even if the entire case of Mr Ramesh Chandra Dubey and Mr Sanjay Dubey is admitted to be correct, then too, they do not acquire any right against the alleged Agreement to Sell, which admittedly never got signed by Mr Nandlal, to give rise to a concluded Agreement to Sell."

Examining the legal effect of an agreement to sell, the Court reiterated that such an agreement does not by itself create any right, title or interest in immovable property. Relying upon settled principles governing contracts for the sale of immovable property, the Court observed that ownership rights flow only from a duly executed conveyance and not merely from negotiations or an unperformed agreement.

The Bench also considered the appellants' contention that their possession deserved protection because they had entered the property pursuant to the proposed sale transaction. Referring to precedents governing the doctrine of part performance, the Court noted that protection under Section 53A of the Transfer of Property Act is available only when the statutory requirements prescribed by law are fulfilled.

Since the appellants admittedly did not possess a registered agreement, the statutory shield under Section 53A was unavailable to them. The Court noted that the absence of registration was fatal to the plea of protected possession.

The Court further relied upon the settled principle that a tenant inducted into possession cannot unilaterally transform his status into that of an owner merely because negotiations for purchase have taken place.

Referring to the Supreme Court's decision in Md Raza v. Geeta (2023), the Bench observed: "Merely on the basis of Agreement to Sell, the licensee cannot claim to have become the owner of the Suit Property. Until and unless a decree is passed in favour of the licensee, and the Sale Deed is executed pursuant thereto; the licensee cannot claim himself to be the owner of the Suit Property."

The Court also referred to Jiwan Das v. Narain Das (1981) and reiterated that even a decree for specific performance does not by itself vest title in the purchaser unless a conveyance is ultimately executed. The Court therefore held that the appellants could not resist the respondent's claim for possession by asserting ownership based on an alleged agreement which never culminated into a completed transfer.

Another important factor noticed by the Court was that the alleged agreement relied upon by the appellants was itself disputed by the respondent, who denied having signed it. The Court observed that even proceeding on the appellants' own version, the documents relied upon by them did not establish a concluded and enforceable contract capable of conferring proprietary rights over the property.

Having regard to the admissions regarding tenancy, the absence of any concluded transfer, the settled legal position governing agreements to sell, and the inapplicability of Section 53A protection, the Court found no infirmity in the Trial Court's conclusion that the appellants continued to occupy the premises as tenants and thereafter as unauthorised occupants after termination of tenancy.

Conclusion

Finding no merit in the appeals, the Delhi High Court upheld the Trial Court's findings that the appellants had entered the suit property as tenants and could not claim ownership rights on the basis of the alleged agreement to sell. The Court held that the appellants were not entitled to protection under Section 53A of the Transfer of Property Act in the absence of a registered agreement and found no infirmity in the decrees passed by the Trial Court.

The Court accordingly affirmed the decree for possession in favour of Nandlal and held that the suit for specific performance instituted by Sanjay Dubey had been rightly dismissed by the learned District Judge.

Cause Title: Ramesh Chandra Dubey & Anr. v. Nandlal and connected matter (Neutral Citation: 2026:DHC:5095)

Appearances

Appellants: Senior Advocate Jayant Bhushan with Advocates Tushar Bhushan, Yojit Mehra and Amartya Bhushan

Respondents: Senior Advocate Priya Kumar with Advocates Deepesh Aneja and Shruti Verma

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