Case at a Glance
In 1989 a landowner in Gohad, District Bhind, executed a registered agreement to sell agricultural land to the plaintiff for Rs. 33,000, taking Rs. 5,200 as advance. When the owner began negotiating with others, the plaintiff sued only for a declaration and an injunction against sale, and later challenged a 1991 sale deed in favour of another buyer; both lower courts decreed the suit. In a second appeal pending since 2001, the Madhya Pradesh High Court held that an agreement to sell does not create any interest in or transfer title to the property, and that without seeking specific performance the plaintiff could not get a declaration or injunction. Both decrees were set aside and the suit dismissed.
The suit land, 0.158 hectare out of Survey No. 1712 in village Gohad, District Bhind, came from a family holding. By a registered agreement dated 27 December 1989, defendant no. 1 agreed to sell it to the plaintiff for Rs. 33,000, of which Rs. 5,200 was paid as advance; the plaintiff said he was given possession, and the sale deed was to be executed once defendant no. 1’s name was mutated for his late uncle’s share. Alleging that defendant no. 1 was negotiating to sell to others, the plaintiff filed a suit on 13 July 1990 seeking a declaration that defendant no. 1 had no right to sell to anyone else and a permanent injunction against alienation.
On 10 October 1991, defendant no. 1 and his brothers sold the land to defendant no. 4, and the plaintiff amended his plaint to challenge that sale. The Civil Judge Class-I, Gohad (18 January 2001) and the Additional District Judge, Gohad (28 September 2001) decreed the suit, holding that the registered agreement gave the plaintiff title and possession, declaring the later sale deed void and restraining further sale. The purchaser’s side filed a second appeal, admitted in 2008 on two substantial questions of law.
The Key Question Before the Court
Can a person holding only an agreement to sell, who has not sued for specific performance, obtain a declaration and permanent injunction preventing the owner from selling the property to someone else?
Why an agreement to sell is not a source of title
Justice Ashish Shroti noted that the plaintiff’s entire claim to title rested on the agreement to sell. Relying on Suraj Lamp & Industries (P) Ltd. v. State of Haryana, (2011) 10 SC CK 0059, which in turn quotes Narandas Karsondas v. S.A. Kamtam, (1976) 12 SC CK 0012, and on Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra, (2004) 08 SC CK 0031, the Court held: “Thus, it is clear that the agreement to sell does not create any interest or transfers any title in the property.” It also referred to Indian Overseas Bank v. M.A.S. Subramanian (as quoted in Prem Bai v. Smt. Neelam) for the rule that immovable property worth more than Rs. 100 can be sold only by a registered sale deed, and to Nehal Shah v. Jameet Singh Kachhwahe: “a mere agreement to sale by itself is wholly incapable of conferring title in the land.”
Since the plaintiff had not asked for specific performance, the Court observed that “in absence of any relief for specific performance of agreement to sell, there is no chance of plaintiff’s acquiring title”. Without title he could not obtain a permanent injunction, and the declaration that the owner could not sell to others was not permissible in law. The Court noted that an intending purchaser in possession may protect that possession under Section 53-A of the Transfer of Property Act, but no such protection had been claimed or its ingredients proved. On the second question, relying on Suhrid Singh v. Randhir Singh, (2010) 03 SC CK 0012, it held that the plaintiff, being a non-executant of the 1991 sale deed, was not required to pay ad valorem court fee for declaring it void, but this was inconsequential given the answer to the first question.
What the Court Actually Held
- An agreement to sell does not create any interest in or transfer title to immovable property; title passes only by a registered sale deed.
- Without seeking specific performance, a person holding only an agreement to sell cannot obtain a declaration that the owner cannot sell to others or a permanent injunction against alienation.
- A non-executant seeking to have a sale deed declared void need not pay ad valorem court fee (Suhrid Singh), but this did not help the plaintiff given the first finding.
- The judgments of both lower courts were set aside, the suit was dismissed, and the plaintiff was directed to bear the costs of the appeal.
Why This Judgment Matters
- Buyers who pay an advance under an agreement to sell often rush to court for an injunction alone; this ruling shows that such a suit can fail decades later.
- It applies the settled position from Suraj Lamp that agreements to sell, GPAs and similar documents do not convey title.
- It explains the limited protection available under Section 53-A of the Transfer of Property Act to a purchaser in possession.
What Should Advocates Take Away From the Judgment?
For Buyers
- If the seller backs out or tries to sell to someone else, the remedy is a suit for specific performance, not just an injunction.
- Possession under an agreement to sell may be protected under Section 53-A of the Transfer of Property Act, but its conditions must be pleaded and proved.
- A registered agreement to sell is still not a sale; insist on a registered sale deed.
For Counsel
- Frame the plaint with a prayer for specific performance, with declaration and injunction as consequential reliefs.
- Rely on Suraj Lamp, Rambhau Namdeo Gajre and Nehal Shah against a plaintiff claiming title through an agreement to sell.
- On court fee, Suhrid Singh distinguishes executants from non-executants seeking to avoid a deed.
Key Takeaways
- An agreement to sell does not transfer title.
- No injunction against sale can be granted on an agreement to sell alone, without a claim for specific performance.
- Section 53-A protection must be specifically claimed and proved.
- The suit, filed in 1990, was dismissed with costs of the appeal on the plaintiff.
Frequently Asked Questions
Does a registered agreement to sell make me the owner?
No. The Court held that an agreement to sell does not create any interest in or transfer title to the property. Ownership passes only through a registered sale deed.
Can I stop the seller from selling to someone else?
On the reasoning in this judgment, not through a suit for declaration and injunction alone. The plaintiff here had not sought specific performance, and the Court held he had no chance of acquiring title without it.
What about my possession under the agreement?
The Court noted that an intending purchaser in possession may protect that possession under Section 53-A of the Transfer of Property Act, but in this case that protection was neither claimed nor proved.
Conclusion
The decision is a sharp reminder that the form of the suit matters. A buyer who had paid an advance and won in two courts lost after 36 years of litigation because he never asked the court to enforce the agreement itself.
Practical takeaway: When a seller under an agreement to sell turns to other buyers, file for specific performance within limitation and seek injunction as an ancillary relief; an injunction suit alone may not survive appeal.
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