Delhi HC: Tenant Cannot Block Eviction Based on Dubious Oral Agreement or Cash Payments

The Delhi High Court has reinforced that a tenant cannot resist eviction by claiming an unregistered, oral agreement to sell, particularly when such claims are backed by suspicious cash transactions that lack legal credibility. The ruling clarifies that a landlord’s right to recover possession remains absolute when the landlord-tenant relationship is admitted and no registered document exists to prove a change in legal status.

In a decisive rejection of what it termed a mala fide attempt to stall proceedings, the bench comprising Justice Prathiba M. Singh and Justice Madhu Jain upheld a preliminary decree for possession passed under Order XII Rule 6 of the Code of Civil Procedure, 1908. The Court emphasized that sham defenses involving inconsistent receipts for cash payments cannot serve as a shield against the termination of a month-to-month tenancy.

Court Upholds Ejectment Decree on Admissions

While hearing the appeal against a trial court order, the High Court observed that the essential ingredients for a decree of possession were clearly satisfied. The Defendant had admitted the landlord-tenant relationship, the execution of prior rent agreements, and the monthly rent amount, which exceeded the protection thresholds of the Delhi Rent Control Act, 1958.

The Court, in its reasoning, observed: "The tenancy is clearly admitted and the fact that the Defendant had taken the suit property on rent by three separate rent agreements from time to time is also admitted... the receipts are clearly not reliable... The suit property does not belong to the Defendant and the Plaintiff is the lawful owner thereof. The Plaintiff, who is dependent upon the rental amounts derived from the shops let out by her, cannot be deprived of the possession, enjoyment and beneficial use of the suit property, she being the admitted landlady."

Suspicious Cash Transactions and Unregistered Agreements

The Court analyzed the receipts produced by the tenant, finding significant inconsistencies. Some receipts referred to the entire plot instead of the specific shop, while others appeared to be loans or payments for vehicles. The Court also took note of the Supreme Court's stance in The Correspondence, RBANMS Educational Institution v. B Gunashekar & Anr. ( "2025 INSC 490": 2025 CaseBase(SC) 998), regarding high-value cash transactions and their potential violation of Section 269ST of the Income Tax Act, 1961.

The Court has the following directions:

"a preliminary decree of possession in respect of suit property is hereby passed in favour of the plaintiff and against the defendant directing the defendant to hand over actual, physical, peaceful and vacant possession of the suit property i.e. Private Shop No.2, ad measuring about 8’ x 40’, situated on the ground floor at MCD No.79, Plot No.D-1, Mauja Tihar Colony, known as Fateh Nagar, opposite Gurunanak Pura, Jail Road, New Delhi–110018."

Background:

The dispute began when Smt. Raj Rani Saini filed a suit for recovery of possession against her tenant, Sanjay Narang. The property, a shop in Fateh Nagar, had been rented out since 2014 through successive rent agreements. After the last agreement expired in 2019, the Plaintiff alleged that the Defendant became irregular in rent payments, leading to the termination of the tenancy.

The Defendant countered by claiming he had entered into an oral agreement to purchase the property for Rs. 80 Lakhs and had already paid Rs. 50 Lakhs in cash. He sought protection under Section 53A of the Transfer Of Property Act, 1882. However, the trial court noted that the Defendant only attempted to bring these documents on record and file a counter-claim after the Code of Civil Procedure, 1908 Order XII Rule 6 application was already heard. The High Court distinguished this case from precedents like Daljeet Singh Anand v. Harjinder Singh Anand ( "2008:DHC2533-DB": 2008 CaseBase(DEL) 189), S.M. Asif v. Virender Kumar Bajaj ( "(2015) 9 SCC 287": 2015 CaseBase(SC) 49), and Karan Kapoor v. Madhuri Kumar ( "(2022) 10 SCC 496": 2022 CaseBase(SC) 647), noting that in those instances, actual written agreements to sell existed.

The High Court dismissed the appeal, characterizing the Defendant's conduct as an afterthought to obstruct the delivery of justice. The Court also cited the principles of Pushpa & Ors. v. Dayawati & Ors. ( "2026 INSC 603": 2026 CaseBase(SC) 511) regarding the discretionary power to pass judgments on clear and unambiguous admissions.

Key Takeaways:

Admission Triggers Summary Judgment

Admitted landlord-tenant relationships and rent amounts above statutory limits provide sufficient grounds for the Court to pass a decree for possession without a full trial.

Unregistered Sale Agreements Offer No Protection

Section 53A of the Transfer Of Property Act, 1882 cannot be invoked to protect possession based on an oral or unregistered agreement to sell in the absence of a registered instrument.

Inconsistent Receipts Fatal to Defense

Documents that contain contradictory descriptions of property or transaction types (e.g., mixing loans with sale considerations) will be deemed fabricated and disregarded.

Penalty for Obstructive Litigation

Belated attempts to amend pleadings or file counter-claims just before judgment is pronounced are viewed as mala fide, attracting punitive costs.

Ratio Decidendi:

A tenant in a month-to-month tenancy cannot avoid eviction through the defense of part performance under Section 53A of the Transfer Of Property Act, 1882 unless there exists a written, signed, and registered agreement to sell. Furthermore, where the landlord-tenant relationship and the expiry of the lease are admitted, the court may exercise its discretion under Order XII Rule 6 of the CPC to grant immediate relief, especially when the tenant’s defense relies on inconsistent and legally invalid oral transactions.

Case Details:
Case No.: RFA(COMM) 272/2026 & CM APPL. 27491/2026
Case Title: SANJAY NARANG & ANR. v. RAJ RANI SAINI
Appearances:
For the Petitioner(s): Mr. Tanmay Mehta, Ms. Harshita Gulati and Mr. Arpit Singh, Advs.
For the Respondent(s): Ms. Pooja Chhabra & Mr. Pradeep Kumar, Advs.

Source: 2026 CaseBase(DEL) 479