Introduction

• This is a case law that deals with possessory right of a person based on execution of agreement to sell under Section 53A of Transfer of Property Act, 1882 (TOPA).

Facts

• The plaintiff instituted a suit against the defendants to evict them from the suit premises and for mesne profits.
• It is the case of the plaintiff that he is the owner of the premises by virtue of an agreement to sell power of attorney, a memo of possession and a receipt of payment of sale consideration as well as a “will” of the defendant-appellant bequeathing the said property in his favour. The possession of the suit property was handed to the plaintiff and he had allowed the plaintiff to occupy certain portion of the property as a licensee and the license terminated on 18.02.2003.
• The leave was admitted and appeal was admitted on the question as to whether documents namely the power of attorney, the will, the agreement to sell coupled with possession memo and the receipt of payment of sale consideration would confer any title upon the plaintiff-respondent so as to entitle him to a decree of eviction and mesne profits.
• Thus, above is the question that comes before the Court for consideration.

Issue Involved

• Whether the documents namely the power of attorney, the will, the agreement to sell coupled with possession memo and the receipt of payment of sale consideration, would confer any title upon the plaintiff-respondent?

Observation

• The Supreme Court here first of all observed that Section 54 of Transfer of Property Act (TOPA) provides that transfer of ownership of the property never happens unless document contemplated under Section 54 is executed and registered under Section 17 of Indian Registration Act, 1908.
• The Court here cited the judgment of Suraj Lamp & Industries Pvt. Ltd. v State of Haryana and othrs. (2009) where the Supreme Court deprecates the practise of transferring an immovable property by executing the agreement to sell, power of attorney and the will instead of registered conveyance deed.
• Further, the Court observed that since no document was executed in pursuance of the power of attorney it is of no consequence. Similarly will is of no consequence as it comes into force after the death of the executant.
• The Court further observed that an agreement to sell indeed cannot transfer proprietary right but by virtue of Section 53A of TOPA the transferor cannot disturb the possession of the plaintiff as he has possessory rights over the property.
• The Court held:

“Legally an agreement to sell may not be regarded as a transaction of sale or a document transferring the proprietary rights in an immovable property but the prospective purchaser having performed his part of the contract and lawfully in possession acquires possessory title which is liable to be protected in view of Section 53A of the Transfer of Property Act, 1882. The said possessory rights of the prospective purchaser cannot be invaded by the transferer or any person claiming under him”.

• Thus, the Court held that the plaintiff is entitled for decree of eviction with mesne profits.

Conclusion

• The Supreme Court held that the practice of transferring immovable property by executing documents like power of attorney, agreement to sell and will is in violation of statutory law.
• The prospective purchaser's possessory title is protected by virtue of Section 53A of the TOPA in case agreement to sell is executed and all other formalities under the provision have been met.