The Supreme Court has clarified that an agreement for sale is not a transfer and cannot be used to claim ownership rights over immovable property unless a suit for specific performance is filed. The judgment confirms that ownership can only be transferred through a registered sale document.
“Without filing a suit for specific performance, the agreement for sale cannot be relied upon to claim ownership or any transferable interest in the property,”— Supreme Court
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A bench of Justices JB Pardiwala and R Mahadevan delivered this judgment in a case where respondent no. 1 had sought property rights on the basis of an agreement for sale and power of attorney. However, the appellant argued that the agreement and the POA had already been cancelled, yet the respondent executed the sale deeds and got the property mutated in the revenue records in 2022.
To counter this, the appellant approached the civil court seeking declaration of title, possession and injunction, but the High Court dismissed the suit under Order VII Rule 11 of the CPC. The appellant then filed an appeal in the Supreme Court.
Allowing the appeal, the Supreme Court held that:
"To claim transfer benefits under the Transfer of Property Act, 1882, a suit must be filed for specific performance of the contract. Mere reliance on an agreement to sell is insufficient." - Justice R Mahadevan
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The court placed significant reliance on Section 54 of the Transfer of Property Act, which states that an agreement to sell does not create any interest or title in the property.
Additionally, the Court cited the landmark decision in Suraj Lamp & Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656, which held that an unregistered agreement to sell, even if possession is delivered, does not amount to a valid transfer of title.
In Cosmos Co-operative Bank Ltd. v. Central Bank of India 2025, the Supreme Court again held that ownership in immovable property can be transferred only by means of a registered deed of sale.
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Another recent case, M.S. Ananthamurthy v. J. Manjula, 2025 reaffirmed the principle that:
“Transfer of immovable property by way of sale can be done only by a deed of transfer. An agreement to sale is not a document of title or transfer and does not confer ownership rights.”- M.S. Ananthamurthy v. J. Manjula
The Court conclusively held that the unregistered sale agreement dated 24.05.2014 could not confer any title or right on the respondent, and the cancellation of the POA further invalidated any such claim.
“Accordingly, it is amply clear that the unregistered sale agreement dated 24.05.2014 cannot, under any circumstances, create or transfer any right, title or interest in favour of respondent no. 1 under Section 54 of the Transfer of Property Act, 1882.” – Supreme Court
This judgment serves as a strong legal reminder that mere agreements or POAs are not substitutes for registered sale deeds, and property rights should only be enforced through proper legal channels.
Case Title: VINOD INFRA DEVELOPERS LTD. VERSUS MAHAVEER LUNIA & ORS
