Court holds that agreement to sell does not confer ownership or right to injunction; Plaintiff's suit dismissed for claiming title without seeking specific performance
In a significant judgment dated October 23, 2026, the Madhya Pradesh High Court (Gwalior Bench) overturned the decrees passed by the lower courts in a property dispute involving Kiledar Singh (deceased) through his legal representatives and Anil Kumar and others. The case centered on whether an agreement to sell immovable property could confer title and grant permanent injunction against subsequent sale.
The plaintiff had claimed ownership over a 0.158 hectare land in village Gohad, District-Bhind, solely based on a registered agreement to sell dated December 27, 1989. According to the plaintiff, an advance payment was made, possession was handed over, and it was agreed that a sale deed would be executed once mutation of the seller's name in revenue records was completed. However, before execution of the sale deed, the defendants had sold the property to a third party through a registered sale deed dated October 10, 1991.
The Trial Court and the First Appellate Court had decreed the plaintiff's suit, holding that the agreement to sell created rights in favor of the plaintiff, and thus declared the subsequent sale deed null and void, restraining the defendant from alienating the property to others.
On appeal, the High Court examined the legal principles governing agreements to sell and transfer of immovable property under the Transfer of Property Act, 1882, and the Specific Relief Act, 1963. The Court relied on established Supreme Court precedents, including Suraj Lamp & Industries (P) Ltd. v. State of Haryana (2012) 1 SCC 656, and recent judgments emphasizing that an agreement to sell is a contract to transfer title and does not, by itself, convey any title or interest in immovable property.
The Court noted that:
- Section 54 of the Transfer of Property Act mandates that transfer of immovable property must be effected through a registered sale deed to confer ownership.
- An agreement to sell, even if registered and possession is delivered, only creates a personal contractual obligation and does not transfer title or interest.
- Section 53A protects possession of a purchaser who has part-performed the contract but does not confer ownership or rights against third parties.
- The plaintiff had not sought specific performance of the agreement, which is the remedy to enforce such contracts and claim ownership. Without claiming specific performance, the plaintiff could not claim declaration of title or permanent injunction to restrain alienation by the defendant.
- The lower courts erred in granting declaration and injunction based solely on the agreement to sell.
Additionally, the Court addressed the issue of court fees, holding that since the plaintiff was not an executant of the subsequent sale deed, he was not liable to pay ad valorem court fees for seeking a declaration that the sale deed was void.
Consequently, the High Court set aside the judgments and decrees of the Trial Court and First Appellate Court, dismissed the plaintiff's suit, and ordered the plaintiff to bear the costs of the appeal.
This ruling reaffirms the settled legal position that an agreement to sell is not a conveyance and cannot substitute a registered sale deed for transferring immovable property rights. It underscores the importance of seeking specific performance where ownership transfer is disputed and cautions against seeking declarations or injunctions without a legally enforceable title.
Bottom Line:
Agreement to sell does not by itself create any right, title or interest in immovable property. A plaintiff claiming title only on the basis of an agreement to sell, without seeking specific performance, is not entitled to declaration of title or permanent injunction against subsequent alienation. A non-executant challenging a sale deed is not required to pay ad valorem court fee for mere declaration that the deed is void or not binding.
Statutory provision(s):
Transfer of Property Act, 1882 Section 54, Section 53A; Specific Relief Act, 1963 Sections 34, 41(j); Indian Registration Act, 1908 Section 17; Court Fees Act (relevant provisions on ad valorem fees)
Kiledar Singh v. Anil Kumar, (MP)(Gwalior) : Law Finder Doc Id # 3004086
