The Delhi High Court has upheld a commercial court's order directing a tenant to vacate a shop, holding that unverified cash receipts and an alleged oral sale arrangement cannot create a legal right to remain in possession of the property. The Court found that the admitted landlord-tenant relationship, expiry of the lease, and termination of tenancy were sufficient to justify a decree for possession.
Background of the Case
The dispute arose from a suit filed by the property's owner seeking possession of a shop, recovery of unpaid rent, and damages. According to the record, the shop had been rented out through three successive registered rent agreements between 2014 and 2019, with the monthly rent eventually increasing to ₹50,000.
After the tenancy ended and no fresh lease was executed, the owner terminated the tenancy and approached the trial court for possession.
The tenant, however, resisted the suit by claiming that the parties had entered into an oral agreement for the sale of the property. He asserted that he had paid substantial amounts in cash towards the sale consideration and therefore had a right to continue occupying the premises.
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Court's Observations
A Division Bench of Justice Prathiba M. Singh and Justice Madhu Jain examined whether the tenant had established any legal right to retain possession despite the admitted tenancy.
The Court noted that the existence of the landlord-tenant relationship was never disputed. The rent agreements were admitted, the last registered lease had expired in 2019, and the tenancy had already been terminated.
While the tenant relied on several receipts to claim that ₹50 lakh had been paid towards purchasing the property, the Bench found serious inconsistencies in those documents.
Some receipts referred to the sale of the entire property rather than the shop in question. Others appeared to relate to loans, security deposits, or even payments connected to a scooter or car. The Court observed that these documents lacked consistency and failed to inspire confidence.
The Bench further noted that the alleged payments were claimed to have been made entirely in cash and that no written agreement to sell had been produced.
"There is no document executed between the parties which shows any remote intention of sale of the suit property."
The Court also remarked that the tenant attempted to amend the written statement, introduce additional documents, and file a counterclaim only after arguments on the owner's application had concluded and the matter was reserved for orders. According to the Bench, this belated conduct raised serious doubts regarding the credibility of the defence.
Court Declines Protection Based on Alleged Sale
The High Court distinguished earlier judgments relied upon by the tenant, observing that those cases involved written agreements to sell or materially different facts.
Here, no such written agreement existed. The Court held that the tenant could not invoke legal protection merely on the basis of disputed cash receipts and an alleged oral understanding.
The Bench also noted that proceedings relating to dishonoured cheques and other criminal complaints between the parties would continue independently, but those disputes could not justify continued occupation of the property in the present proceedings.
Decision
Concluding that the property owner remained the lawful owner and that the tenant had failed to establish any enforceable legal right to stay in possession, the Delhi High Court dismissed the appeal.
The Court upheld the preliminary decree directing the tenant to hand over possession of the shop and imposed costs of ₹50,000, payable within four weeks.
Pending applications were also disposed of.
Case Details
Case Title: Sanjay Narang & Anr. v. Raj Rani Saini
Case Number: RFA (COMM) 272/2026
Judge: Justice Prathiba M. Singh and Justice Madhu Jain
Decision Date: 7 July 2026
