Unregistered Agreement To Sell Cannot Protect Tenant's Possession Under Section 53A Transfer Of Property Act: Delhi High Court

"Un-registered Agreement to Sell cannot be used as a shield to protect the claimant’s possession under Section 53A of Transfer of Property Act, 1882," Delhi High Court, in a significant ruling, held that an unregistered Agreement to Sell does not confer any right to protect possession under Section 53A of the Transfer of Property Act (TPA), especially when a pre-existing landlord-tenant relationship is admitted.

A bench of Justice Neena Bansal Krishna observed that a contract for sale is merely a right created in personam and does not create any interest in the estate until a registered Sale Deed is executed.

The dispute arose after the landlord (Respondent) filed a suit for possession and arrears of rent against the tenants (Appellants). While the tenants admitted to being inducted as tenants, they contended that they were now in possession as prospective owners under an Agreement to Sell dated August 3, 2011. The Trial Court had decreed the suit in favor of the landlord under Order XII Rule 6 of the CPC based on admissions, which was challenged in this appeal.

The primary legal issue before the Court was whether the Appellants could resist a decree of possession based on an unregistered Agreement to Sell. The Court also determined whether the execution of such an agreement automatically terminated the existing landlord-tenant relationship between the parties.

Agreement To Sell Does Not Create Interest In Property

The Court, while dismissing the appeal, relied on the settled legal position that Section 54 of the Transfer of Property Act provides that a contract for sale does not, of itself, create any interest in or charge on such property. The bench noted that such a contract is merely a document creating a right to obtain another document, namely a registered sale deed, in accordance with the law.

"A contract for sale is a right created in personam and not in estate; no privity in estate can be deduced therefrom... Till a Decree for Specific Performance is obtained, the vendor/seller is entitled to full enjoyment of the Property."

Tenancy Relationship Continues Until Execution Of Sale Deed

The Court highlighted that in the present case, the Agreement to Sell specifically stipulated that the prospective buyer would continue to reside in the premises as a tenant and pay monthly rent until the sale materialized. Justice Neena Bansal Krishna observed that the status of a tenant would only cease upon the actual execution of a Sale Deed.

"Appellant No.2 Mr. Tejpal Singh may have acquired a right to get the Sale Deed executed, but till such time, he continues to be a tenant; more so, as has been specifically provided in the Agreement to Sell dated 03.08.2011. His status as a tenant would cease only after the execution of Sale Deed."

Registration Is Mandatory For Seeking Protection Under Section 53A TPA

Addressing the statutory requirements, the Court referred to Section 17(1A) of the Registration Act, 1908, which was inserted in 2001. The Court clarified that for the purpose of Section 53A of the Transfer of Property Act, any document containing a contract to transfer immovable property for consideration must be registered if executed after the 2001 amendment.

"If such documents are not registered... then, they shall have no effect for the purposes of the said Section 53-A. Therefore, it is evident that Appellants cannot claim even a right of protection of their possession under Section 53A of Transfer of Property Act, 1882."

"Once Agreement to Sell is not registered, the prospective buyer has no right of seeking protection of his possession, especially when he was inducted in the property as a tenant."

Ingredients For Judgment On Admissions Satisfied

The Court affirmed the Trial Court's decision to decree the suit under Order XII Rule 6 CPC. It reiterated that the three essential ingredients for a decree of possession—namely the existence of a landlord-tenant relationship, the termination of the tenancy, and the monthly rent being above the statutory threshold of Rs. 3,500—were fully satisfied in this case.

The bench noted that the relationship was admitted, the rate of rent was Rs. 12,000, and a notice of termination had been duly served and received by the Appellants. The Court held that the complexity claimed by the tenants regarding the Agreement to Sell was irrelevant to the suit for possession and could only be considered in a separate suit for specific performance.

The Court concluded that there was no infirmity in the Trial Court’s judgment. The appeal was dismissed, holding that the tenants cannot remain in possession without paying rent or having a registered title document in their favor.

Date of Decision: 3rd June 2026