Agreement to Sell Creates No Right In Property: Allahabad High Court Sets Aside Trial Court Order Allowing Vendees To Be Impleaded In Partition Suit

“A person holding only an agreement to sell does not acquire any legal or equitable interest in the property and is neither a necessary nor a proper party in title-based litigation”, held the Allahabad High Court, while allowing a civil revision against a trial court order that had permitted the impleadment of proposed purchasers during the pendency of a partition suit.

In a significant judgment Justice Manish Kumar Nigam reversed a trial court order dated 29 August 2023, which had allowed two proposed vendees to be added as parties in a partition suit on the strength of an unregistered agreement to sell executed by one of the co-owners during the pendency of the suit.

The High Court held that such impleadment was legally untenable, citing clear statutory provisions and authoritative precedents to hold that “an agreement to sell is only a personal contract and does not create any interest in the estate”.

“Agreement To Sell Is Not A Conveyance” – No Transfer Of Ownership Or Interest Until Execution Of Sale Deed

The Court reiterated the settled position under Section 54 of the Transfer of Property Act, 1882, that:

“A contract for sale of immovable property does not, of itself, create any interest in or charge on such property.”

Referring to the seminal judgment in Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra, (2004) 8 SCC 614, the Court emphasized:

“An agreement to sell creates only an enforceable right and not a proprietary interest. Title in immovable property can only be conveyed by a registered sale deed, not by an agreement for sale.”

Justice Nigam further explained:

“A contract for sale is a right created in personam, not in estate. No privity in estate can be deduced from such a contract which may bind the estate itself, as would be the case with a mortgage or lease.”

He clarified that even if a decree for specific performance is obtained, no interest in the property passes unless and until the sale deed is actually executed and registered.

“Transferee Pendente Lite Has No Right To Be Impleaded” – Lis Pendens Doctrine Bars Vendees From Interfering In Pending Title Disputes

The Court applied the doctrine of lis pendens under Section 52 of the Transfer of Property Act, holding that any transfer during the pendency of a suit concerning rights in immovable property is subordinate to the outcome of the suit, and cannot be used to interfere with the proceedings.

Justice Nigam relied on the ruling in Bibi Zubaida Khatoon v. Nabi Hassan Saheb, (2004) 1 SCC 191, where the Supreme Court held:

“There is no absolute rule that the transferee pendente lite should in all cases be allowed to join the suit. Unless the transferor takes leave of the court before alienating the property, the transferee acquires no enforceable right in the pending litigation.”

Applying this principle, the High Court noted:

“The defendant (mother of the plaintiff) executed the agreement to sell during the pendency of the partition suit without obtaining the court’s permission. Hence, the transfer is squarely hit by Section 52 TPA.”

The Court further observed:

“The proposed vendees took a conscious risk by entering into the agreement during the pendency of the suit. They cannot now claim to be impleaded as of right.”

“Necessary Or Proper Party Must Have Enforceable Legal Right” – Court Reaffirms Limited Scope Of Order I Rule 10 CPC

While interpreting Order I Rule 10(2) of the Code of Civil Procedure, the Court underlined that the discretion to add parties must be exercised judiciously and only where necessary for effective adjudication.

Quoting its own earlier decision in Babu Lal v. Nathi Lal, 2013 (6) ADJ 111, and relying on the classic Supreme Court ruling in Rambaran Prosad v. Ram Mohit Hazra, AIR 1967 SC 744, the Court clarified:

“A person may be added as a party only if (1) he ought to have been joined originally, or (2) without his presence, the matter in dispute cannot be completely decided.”

However, the Court held:

“The proposed vendees do not possess any interest in the property in question—legal, equitable or otherwise. Their only right is to pursue specific performance in a separate suit. Hence, their presence is not necessary for effective adjudication of the partition suit.”

The trial court’s reasoning that a mere agreement to sell conferred a sufficient stake in the suit property to justify impleadment was found to be contrary to law, and the High Court declared it a material irregularity in the exercise of jurisdiction.

“Sale Agreement Holders Cannot Frustrate Partition Suit” – Court Rejects Collusive Sale Attempts To Defeat Litigation

The plaintiff-revisionist, Deependra Chauhan, had alleged that the agreement to sell executed by his mother (co-owner and defendant in the suit) in favour of respondent Nos. 4 and 5 was a collusive act, designed to defeat his claim to partition.

The Court found substance in this claim, especially since:

• The NOIDA Authority had refused permission to execute any sale deed (order dated 14.06.2023);

• The mother, being a co-owner, had no authority to sell the entire joint property;

• The suit involved an unresolved dispute of title and ownership shares.

Justice Nigam held:

“Unless the court decides whether the defendant is sole owner or a co-sharer, she cannot unilaterally dispose of the joint property. Any such agreement during litigation must be seen with suspicion and cannot form the basis of impleadment.”

Impleadment Order Set Aside, Vendees Not Necessary Or Proper Parties

Concluding the matter, the High Court allowed the revision petition, holding that the trial court acted with material irregularity in permitting the impleadment of persons having no legal standing in a partition suit.

Justice Manish Kumar Nigam declared:

“The proposed vendees, having no sale deed in their favour, and holding no interest in law or equity, are neither necessary nor proper parties. The court’s order allowing their addition is legally unsustainable.”

Accordingly, the Court set aside the order dated 29.08.2023, and restored the suit to be proceeded with among the existing parties. The revision was allowed, with no order as to costs.

Date of Decision: 13 November 2025