The Himachal Pradesh High Court ruled that an agreement to sell does not transfer ownership or title of property, emphasizing that only a registered sale deed executed under the law can confer valid ownership rights.
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HIMACHAL PRADESH: The Himachal Pradesh High Court has reiterated that an agreement to sell does not amount to a transfer of ownership or title of property, emphasizing that such an agreement cannot be equated with a sale or conveyance deed.
A single-judge Bench of Justice Vivek Singh Thakur observed while allowing a civil revision petition filed by a landlord challenging an order of the Rent Controller, which had erroneously accepted the tenant’s objections to eviction based on an agreement to sell.
“An agreement to sell does not create any title in favour of the purchaser as it is only an agreement to sell, but not sale or transfer of property subject matter of the agreement to sell,”
the Court observed.
Background of the Case
The dispute arose from an eviction petition filed by a landlord seeking possession of rented premises and recovery of arrears of rent. The tenant did not contest the case, leading to an ex parte eviction order.
However, during execution proceedings, the legal heirs of the tenant objected to the eviction, claiming that an agreement to sell had been executed years earlier between the landlord and a member of the tenant’s family. They contended that this agreement altered the landlord-tenant relationship and made the eviction order unenforceable.
The Rent Controller accepted these objections, holding that the landlord’s right to seek eviction was weakened due to the alleged agreement to sell.
Challenging this, the landlord, represented by Advocate Y.P. Sood, approached the High Court, arguing that ownership and title could not pass in the absence of a registered sale deed executed under Section 54 of the Transfer of Property Act, 1882.
Court’s Findings and Observations
The High Court carefully examined the contents of the alleged agreement and held that it did not amount to a sale or transfer. The Bench clarified that:
- Under Section 54 of the Transfer of Property Act, an agreement to sell merely indicates an intention to transfer property in the future — it does not convey ownership or title.
- The tenancy remained intact, as the agreement related only to a portion of the property, not the entire tenanted premises.
- The alleged purchaser had never sought specific performance, nor was any registered sale deed executed, despite multiple extensions of time.
Justice Thakur further observed that even if such an agreement existed, its execution did not automatically terminate the tenancy.
“Had it been an Agreement to Sell only, then there was a possibility of drawing inference that tenancy came to an end at the time of execution of the agreement. As the agreement was in alternative to sell or lease out, therefore, it has to be construed that on execution of such agreement, the tenancy would not come to an end,”
the Court remarked.
Holding that the Rent Controller had misconstrued the scope of the agreement, the High Court concluded that it did not cover the entire tenanted premises and hence could not alter the landlord-tenant relationship.
Accordingly, the Court set aside the Rent Controller’s order, restored the execution proceedings, and directed that the matter be concluded expeditiously. The parties were instructed to appear before the Rent Controller on a specified date for further proceedings, with any pending objections to be decided as per law.
Appearances:
Petitioner: Advocate Y.P. Sood
Respondent: Proceeded ex parte
Case Title:
Prem Mohini Gupta v. Sumitra (Deceased) through LRs
Civil Revision No.88 of 2021
READ ORDER