Agreement to Sell Cannot Shield Tenant from Eviction: Delhi HC

The Delhi High Court has clarified that an unregistered agreement to sell between a landlord and tenant does not alter their landlord-tenant relationship and cannot be relied upon to resist eviction proceedings.

Delivered by Justice Neena Bansal Krishna, the court affirmed a lower court's decree for possession, emphasizing that the status of a tenant remains unchanged until a formal sale deed is executed, especially when the agreement itself stipulates the continued payment of rent.

The Intersection of Tenancy and Agreements to Sell

The court scrutinized the legal standing of a tenant who claimed that a subsequent agreement to sell signed by his father effectively terminated the tenancy. The bench noted that even if a party acquires a right to seek specific performance, they do not automatically acquire an interest in the estate. The relationship of landlord and tenant persists so long as the title is not formally transferred through a registered deed.

The Court, in its reasoning, observed: "...Section 54 of Transfer of Property Act, 1882 provides that a contract for sale does not, of itself, create any interest in or charge on such property. Such contract is merely a document creating a right to obtain another document, in the form of registered sale deed, in accordance with law. In other words, 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."

Statutory Requirement of Registration for Possession Protection

Applying Section 17(1)(A) of the Registration Act, 1908, the High Court highlighted that protection under Section 53-A of the Transfer of Property Act, 1882 is only available if the agreement to sell is registered. Since the document in question was unregistered, the appellants could not use it as a 'shield' to protect their possession.

Background:

The dispute originated when Adesh Kumar Barua (Respondent) filed a suit for possession and arrears of rent against Kailash Chand (Appellant 1). Initially, a lease was executed in 2010. Later, on August 3, 2011, the landlord entered into an agreement to sell with Tejpal Singh (Appellant 2, father of Appellant 1) for Rs. 35 lakhs. The appellants argued that once the agreement was signed and substantial payments (approx. Rs. 29.5 lakhs admitted) were made, the tenancy ceased to exist. They contended they were in possession as prospective purchasers.

However, the landlord pointed to a specific clause in the Agreement to Sell which stated that the " Rent of flat, bills of Water and Electricity shall be paid by the Tenant/ Second party as usual as per the Rent Agreement between Land Lord and Tenant dated 03 Aug 2011 till the time of execution of proper transfer/registration of the aforesaid property." The Trial Court had passed a decree under Order XII Rule 6 of the Code of Civil Procedure, 1908, finding clear admissions of the landlord-tenant relationship and the receipt of the termination notice.

The High Court relied on Jiwan Das vs. Narain Das and Pawandeep Singh & Anr vs. Gurdeep Singh Virdi to reiterate that an unregistered agreement cannot protect possession. Furthermore, following Parveen Saini vs. Reetu Kapur & Anr., the court held that once a tenant, the party remains a tenant until the sale is complete. Since the three ingredients for a decree under Order XII Rule 6 of Code of Civil Procedure, 1908 relationship, termination, and rent above Rs. 3,500 were met, the appeal was dismissed.

Case Details:
Case No.: RFA 246/2022
Case Title: KAILASH CHAND & ANR vs. SHRI ADESH KUMAR BARUA
Appearances:
For the Petitioner(s): Mr. Kaushal Kishore Lal Gautam, Ms. Vaishali Nariyala, Mr. Rajbeer Singh, Mr. Sumit and Ms. Siddhi Shaiwal, Advocates.
For the Respondent(s): Mr. Amit Nahata, Adv.

Source: 2026 CaseBase(DEL) 408