The Court ruled that an unregistered sale agreement is not a basis for claiming protection under Section 53A of the Transfer of Property Act. It further reaffirmed that a tenant cannot claim ownership rights based just on discussions or a purported contract to buy the property.

According to the Delhi High Court, unless the agreement is a registered document as required by Section 17(1A) of the Registration Act, 1908, a person in possession of property under an agreement to sell cannot seek protection under Section 53A of the Transfer of Property Act, 1882.

The Court additionally noted that the mere fact that negotiations for sale have occurred or possession has been delivered does not grant an agreement purchaser ownership rights. No ownership rights may be claimed against the rightful owner in the absence of a registered agreement and an executed conveyance document.

"Likewise, Mr. Sanjay Dubey cannot seek protection of his possession under Section 53A of the TPA," noted a bench of Justice Neena Bansal Krishna. Even if it is acknowledged that he acquired the property as a result of the talks for the Agreement to Sell, Mr. Sanjay Dubey may only request protection under Section 53A of the TPA if the instrument is registered, as stated in Section 17(1)(A) of the Registration Act.

The appellants were represented by Senior Advocate Jayant Bhushan. The respondent was represented by Senior Advocate Priya Kumar.

Context
A residential property was at issue. Claiming that the owner had consented to transfer the property for a sale amount of ₹19.50 lakh, the plaintiff filed a lawsuit seeking specific performance of an alleged agreement to sell. The lawsuit claims that significant sums had been paid toward the intended selling deal and that possession of the property had been transferred during talks.

The plaintiff's family joined the property as renters on a monthly rent, according to the owner, who denied the existence of any finalized agreement to sell. It was argued that the parties' relationship remained that of landlord and tenant and that the documents the plaintiff cited were not authentic.

The Trial Court used Order XII Rule 6 CPC after reviewing the pleadings, admissions, and documents entered into the record. It concluded that a tenancy was established, decided the suit for possession, and dismissed the suit for particular performance. The appellants, feeling wronged, went to the High Court.

Observations of the Court
The High Court first looked at whether the Trial Court's use of Order XII Rule 6 CPC to resolve the issues based on admissions made in the pleadings and other court documents was appropriate.

The Court observed that the appellants themselves had repeatedly acknowledged that they had first accessed the suit property in exchange for monthly rent payments, and that these admissions were reflected in both the Trial Court's pleadings and the High Court's proceedings.

The Bench noted that the appellants' own case revealed that, notwithstanding their story, they had moved into the premises as renters and continued to pay ₹9,000 a month. The Court found it challenging to reconcile this stance with the later assertion that the occupancy of the property was solely in accordance with a sale agreement.

The Court observed that the filings themselves demonstrated that rent payments persisted long after the purported purchase talks had started.

The Court noted that the appellants had themselves indicated before the High Court that they had moved to the suit premises as tenants after selling their prior residential residence, citing earlier procedures that the Trial Court had relied upon.

The Court determined that the landlord-tenant relationship documented by the Trial Court was significantly supported by these admissions. The Court further held that no legal ownership rights developed in the appellants' favor, even if the whole case they pled about the sale talks was accepted at face value.

The Bench noted: "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."

The Court reaffirmed that an agreement to sell does not, by itself, create any right, title, or interest in real estate. The Court noted that ownership rights only result from a properly completed conveyance, not just from conversations or an unfulfilled agreement, based on established standards governing contracts for the sale of real estate.

The Bench further took into account the appellants' argument that because they had entered the property in accordance with the anticipated sale transaction, their ownership should be protected. The Court stated that protection under Section 53A of the Transfer of Property Act is only accessible when the statutory requirements stipulated by law are completed, citing precedents defining the doctrine of part performance.

The appellants were not entitled to the statutory shield under Section 53A since they acknowledged that they lacked a registered agreement. The Court observed that the plea of protected possession was defeated by the lack of registration.

The Court further cited the well-established rule that a tenant who has been given possession cannot unilaterally change his status to that of an owner only because purchase negotiations have taken place.

The Bench noted, citing the Supreme Court's ruling in Md Raza v. Geeta (2023), that "the licensee cannot claim to have become the owner of the Suit Property merely on the basis of Agreement to Sell." The licensee cannot claim ownership of the suit property until and unless a decree is issued in his favor and the sale deed is executed in accordance with it.

The Court also cited Jiwan Das v. Narain Das (1981) and reaffirmed that until a transfer is finally accomplished, even a decree for particular performance does not automatically grant ownership to the buyer. As a result, the Court determined that the appellants could not contest the respondent's possession claim by claiming ownership based on a purported agreement that never resulted in a final transfer.

The respondent denied having signed the purported agreement that the appellants relied upon, which the court found to be another significant circumstance. Even using the appellants' own version of events, the Court noted that the documents they cited did not prove a completed and enforceable contract that could grant proprietary rights over the land.

The Court found no fault with the Trial Court's conclusion that the appellants continued to occupy the premises as tenants and then as unauthorized occupants after termination of tenancy, taking into account the admissions regarding tenancy, the lack of any concluded transfer, the established legal position governing agreements to sell, and the inapplicability of Section 53A protection.

In conclusion

The Trial Court's conclusions that the appellants had joined the suit property as renters and could not assert ownership rights based on the purported agreement to sell were maintained by the Delhi High Court, which found no merit in the appeals. The Court determined that the Trial Court's decisions were valid and that the appellants were not entitled to protection under Section 53A of the Transfer of Property Act in the absence of a registered agreement.

As a result, the Court upheld Nandlal's possession decision and declared that the learned District Judge had correctly rejected Sanjay Dubey's complaint for specific performance.

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