Section 54 TP Act | Title By Delivery Of Possession For Property Cannot Be Denied Merely Because Sale Deed Is Unregistered: Madhya Pradesh High Court

"In a case where independent of unregistered document, a party also establishes sale by delivery of possession of property, than in such case, the title cannot be denied to such a party based upon delivery of possession only because the document was not registered." Madhya Pradesh High Court has held that where a party independently establishes the transfer of immovable property valued at less than ₹100 by actual delivery of possession under Section 54 of the Transfer of Property Act, 1882, the mere execution of an unregistered sale deed will not defeat their claim of title.

Ruling on a second appeal, a single bench of Justice Ashish Shroti clarified that while Section 54 requires a written conveyance to be registered if relied upon solely without proof of possession, it does not preclude a purchaser from establishing ownership through delivery of tangible possession, and the existence of an unregistered document does not invalidate an otherwise legally valid oral sale accompanied by possession.

The dispute arose out of a civil suit instituted by the plaintiffs seeking a declaration of title and permanent injunction in respect of a plot situated in Sabalgarh, Morena, claiming their grandfather purchased it in 1937 from the erstwhile Zamindar for ₹70 through delivery of possession. The Gram Panchayat, Veerpur, resisted the suit, claiming ownership and alleging that the suit land housed a collapsed Panchayat club-house. Both the Trial Court and the First Appellate Court concurrently decreed the suit in favour of the plaintiffs, prompting the Gram Panchayat to prefer a second appeal under Section 100 CPC before the High Court.

The primary questions of law before the High Court were whether a suit based on an unregistered sale deed can be decreed when possession is claimed to have been delivered at execution, and whether the plaintiffs could be granted a decree without establishing the predecessor-in-title's ownership over the suit property.

Dual Modes Of Transfer Recognized For Properties Valued Under ₹100

Addressing the core challenge raised under Section 54 of the Transfer of Property Act, 1882, the High Court observed that the statutory provision clearly recognises two distinct modes of effecting a sale of tangible immovable property worth less than ₹100. The court noted that such a conveyance can take place either by way of a registered instrument or by the actual delivery of tangible physical property from the vendor to the vendee.

Relying on the Supreme Court ruling in Brijvasilal v. Abdul Haji (2001), the court emphasized that in transfers of immovable property valued below ₹100, the sale becomes legally operative the moment the purchaser is placed in actual physical possession of the property. The bench stressed that placing the purchaser in possession is the essential condition precedent to complete the transaction when an unregistered mode is adopted.

"The sale of immovable property of less than Rs.100/- is permissible by way of delivery of possession also. The delivery of possession however has to be actual physical possession."

Unregistered Document Does Not Destroy Valid Transfer By Delivery Of Possession

The appellant Panchayat, relying on the Coordinate Bench ruling in Smt. Yashoda Chaudhary v. Lallu Prasad Chaudhary and Gopal Das Chaubey v. Hari Prasad Chaubey, contended that once a transaction is reduced to writing, registration becomes mandatory irrespective of the valuation, and reliance cannot be placed on delivery of possession. The High Court rejected this submission as a misreading of the cited precedents, clarifying that those judgments dealt with cases where the plaintiffs failed to establish the delivery of actual physical possession independent of the unregistered deed.

The bench clarified that Section 54 nowhere lays down that reducing terms to writing precludes a buyer from proving title through delivery of possession. Justice Shroti explained that while an unregistered document alone cannot convey title in the absence of possession, the title cannot be denied if the purchaser independently demonstrates delivery of possession, since the statute expressly allows transfer through delivery.

Unregistered Sale Deed Can Be Used For Collateral Purpose Under Section 49 Registration Act

Endorsing the legal proposition laid down by the Allahabad High Court in Raj Bahadur v. Babu Lal (2011), the court noted that the provisions of Section 54 are supplemental to the Indian Registration Act, 1908. Under Section 17 of the Registration Act, a deed transferring property valued at less than ₹100 is not compulsorily registrable, and Section 49 permits unregistered documents to be received in evidence for collateral purposes.

The bench affirmed that an unregistered conveyance can be validly looked into to ascertain the nature, character, and factum of possession delivered to the vendee. The court cited extensive judicial authority, including decisions of the Madras High Court in Swaminatha Udayar, the Rajasthan High Court in Shesh Mal, the Orissa High Court in Parikhit Thapa, and the Hyderabad High Court in Nagayya Baliah, to reaffirm that the existence of an unregistered deed cannot destroy an otherwise complete transfer by delivery.

"If a party successfully establishes delivery of possession, independent of execution of an instrument, it cannot be said that the party is not entitled to claim sale by delivery of possession only because of existence of an unregistered document of sale."

Title Protected Under Section 5 Of Madhya Bharat Zamindari Abolition Act

The High Court further observed that the Trial Court had concurrently upheld the plaintiffs' ownership under Section 5(a) and 5(b) of the Madhya Bharat Zamindari Abolition Act, 1951. The court noted that because the plaintiffs and their grandfather had remained in continuous settled possession since 1937, the land stood statutorily settled with them upon the abolition of the Zamindari system.

Addressing the second substantial question of law regarding the title of the predecessor-in-title, the bench held that the concurrent findings established that Zamindar Murli Singh was the lawful owner who transferred the plot to the plaintiffs' grandfather. The court pointed out that the Gram Panchayat, which was only constituted after 1950, failed to demonstrate any source of title whatsoever and had already suffered adverse orders before the revenue authorities.

Concluding the judgment, the High Court held that the concurrent findings of fact recorded by the lower courts were founded on proper appreciation of oral and documentary evidence, including thirty-year-old documents admissible under Section 90 of the Evidence Act. Finding no illegality or perversity in the decree for declaration and permanent injunction, the High Court dismissed the second appeal.

Date of Decision: 23 October 2026