Delhi High Court Says Tenant Cannot Resist Eviction on Alleged Oral Sale Deal Without Registered Agreement to Sell
Facts
The appeal was filed by Sanjay Narang and another against the order dated 30 March 2026 passed by the District Judge, Commercial Court, Tis Hazari Courts, Delhi.
The respondent, Raj Rani Saini, filed a suit for possession of Shop No. 2, M/s Jai Steel and Furnitures, MCD No. 79, Plot No. D-1, Mauja Tihar Colony, Fateh Nagar, Jail Road, New Delhi.
The respondent claimed ownership over property bearing Nos. 77 and 79, Plot No. D-1, Fateh Nagar, New Delhi, through a registered Gift Deed dated 8 October 2013. Shop No. 2 in property No. 79 was let out to the appellant.
The appellant was inducted as a tenant in July 2014. The first rent agreement dated 5 June 2014 fixed rent at ₹40,000 per month for two years. A second rent agreement dated 23 June 2016 fixed rent at ₹45,000 per month for one year. A third rent agreement dated 25 June 2018 fixed rent at ₹50,000 per month for one year, ending on 24 June 2019.
The respondent alleged that the appellant became irregular in payment of rent and last paid rent in March 2021. The tenancy was terminated and a suit was filed seeking possession, arrears of ₹5,50,000 and future damages.
In defence, the appellant claimed that he had paid ₹7 lakh as security and ₹50 lakh towards purchase of the suit property. According to him, the total sale consideration was ₹80 lakh, but due to COVID-19, the agreement to sell was to be executed later.
The appellant also relied on cheques allegedly issued by the respondent’s husband and claimed that when the respondent failed to execute sale documents, he deposited those cheques, which were dishonoured. Proceedings under Section 138 of the Negotiable Instruments Act were then initiated.
The respondent filed an application under Order XII Rule 6 CPC seeking a decree on admissions. The Trial Court allowed the application and passed a preliminary decree for possession. The tenant challenged that order before the Delhi High Court.
Issues
- Whether the Trial Court was justified in passing a decree for possession under Order XII Rule 6 CPC.
- Whether the appellant’s plea of an oral sale transaction and alleged cash payment of ₹50 lakh created a triable defence.
- Whether the appellant could claim protection under Section 53A of the Transfer of Property Act without a written and registered agreement to sell.
- Whether belated documents, amendment application and counter-claim filed at the stage of orders could defeat the respondent’s application for judgment on admissions.
- Whether the appellant had any legal right to continue in possession after expiry and termination of tenancy.
Appellant’s Arguments
The appellant argued that he had raised a substantial defence which could not be decided summarily under Order XII Rule 6 CPC.
He submitted that he had paid ₹50 lakh to the respondent towards purchase of the suit property and had documents and receipts to show such payments.
According to the appellant, the transaction of sale had actually taken place and the dispute required a full trial.
The appellant also argued that he was willing to pay outstanding rent, if any, for the period during which he remained in possession.
He relied on Daljeet Singh Anand v. Harjinder Singh Anand, S.M. Asif v. Virender Kumar Bajaj, and Karan Kapoor v. Madhuri Kumar to contend that where a defence based on sale transaction is raised, the matter should ordinarily proceed to trial.
Respondent’s Arguments
The respondent opposed the appeal and argued that the appellant’s tenancy was admitted, the rent agreements were admitted, and the rent was admittedly above the protection limit under the Delhi Rent Control Act.
The respondent submitted that no registered agreement to sell was ever executed between the parties. Therefore, the appellant could not claim any protection under Section 53A of the Transfer of Property Act.
The respondent contended that the receipts relied upon by the appellant were forged, fabricated and inconsistent. Several discrepancies were pointed out in the documents.
It was argued that the alleged payments were all claimed to have been made in cash, without any bank transaction. According to the respondent, such a large cash transaction itself raised serious legal concerns.
The respondent further submitted that the appellant filed the amendment application, additional documents and counter-claim only at the stage when the Order XII Rule 6 application had already been heard and was listed for orders. This showed that the defence was an afterthought.
The respondent relied on The Correspondence, RBANMS Educational Institution v. B. Gunashekar to submit that courts cannot lightly accept large cash transactions and that such transactions may attract scrutiny under the Income Tax Act.
Analysis of the Law
The Delhi High Court held that the landlord-tenant relationship was clearly admitted. The three rent agreements were also admitted, and there was no renewal after 2019.
Since the rent was ₹50,000 per month, the appellant could not claim protection under the Delhi Rent Control Act.
The Court held that after expiry of the last rent agreement, the appellant was at best a month-to-month tenant. Once the tenancy was terminated, he had no right to continue in possession unless he could show an independent legal right.
The appellant’s main defence was based on an alleged oral agreement to sell and alleged cash payments of ₹50 lakh. The Court held that this did not create a legal right to retain possession.
The Court specifically held that protection under Section 53A of the Transfer of Property Act requires a written agreement containing the terms of transfer. In the absence of a written and registered agreement to sell, the appellant could not rely on Section 53A.
The Court also examined the receipts produced by the appellant. It found that the documents did not inspire confidence. Some receipts referred to the entire property or plot instead of the tenanted shop. Some documents appeared to relate to loans, promissory notes, or even payment towards a scooter/car. The judgment also reproduces on page 11 an image of one such “cash receipt”, which on its face referred to payment relating to a scooter/car and not a sale of the shop.
The Court held that these documents were inconsistent and could not establish payment of sale consideration for the suit shop.
Precedent Analysis
The appellant relied on Daljeet Singh Anand v. Harjinder Singh Anand, where the Court had refused to pass a decree on admissions in a partition dispute involving brothers and allegations of fraudulent documents. The Delhi High Court distinguished that case, holding that it arose from a different factual situation involving family property and fraud allegations.
The appellant also relied on S.M. Asif v. Virender Kumar Bajaj and Karan Kapoor v. Madhuri Kumar. The Court distinguished both judgments because in those cases, there was a proper agreement to sell between the parties. In the present case, no written agreement to sell existed.
The respondent relied on The Correspondence, RBANMS Educational Institution v. B. Gunashekar, where the Supreme Court considered the legal concerns arising from large cash transactions. The High Court accepted that the alleged cash payments in this case could not form the basis of a valid defence to possession.
The Court also referred to Pushpa v. Dayawati, where the Supreme Court explained that Order XII Rule 6 CPC can be invoked only when admissions are clear, unambiguous and unconditional. Applying this principle, the High Court held that the necessary admissions regarding tenancy, rent, expiry of lease and absence of a registered lease were clear enough to justify a decree for possession.
Court’s Reasoning
The Court held that the appellant admitted the tenancy and the rent agreements. The last rent agreement had expired on 24 June 2019, and no fresh registered lease existed.
The rent was ₹50,000 per month, which was outside the protection of the Delhi Rent Control Act. Therefore, the appellant had no statutory protection as a tenant.
The Court held that the appellant’s alleged oral agreement to sell did not create any legal right in his favour. In the absence of a written registered agreement, Section 53A of the Transfer of Property Act was not available.
The Court also found the appellant’s documents unreliable. The receipts were inconsistent in property description; many referred to the entire property rather than the tenanted shop. Some receipts described amounts as loans, and one document appeared to relate to a scooter/car transaction.
The Court further noted that the appellant did not file these documents with the written statement. They were produced only after the respondent’s Order XII Rule 6 application had been heard and the matter was listed for orders. The Court treated this conduct as doubtful and lacking bona fides.
The Court held that even if the appellant had any money claim against the respondent, or even if proceedings under Section 138 NI Act or criminal complaints were pending, those disputes could proceed separately. They did not give the appellant a right to remain in possession of the shop.
The respondent was the lawful owner and admitted landlady. The Court held that she could not be deprived of possession and beneficial use of her property merely on the basis of unreliable and belatedly produced documents.
Conclusion
The Delhi High Court dismissed the appeal.
The Court upheld the Trial Court’s preliminary decree for possession under Order XII Rule 6 CPC.
It held that the appellant was an admitted tenant whose lease had expired and whose tenancy stood terminated. The alleged oral sale transaction and alleged cash payments did not create any legal right to continue in possession.
The Court held that Section 53A of the Transfer of Property Act was not available because there was no written and registered agreement to sell.
The appeal was dismissed with costs of ₹50,000, payable by the appellant to the respondent within four weeks.
Case Details
Case: Sanjay Narang & Anr. v. Raj Rani Saini
Court: Delhi High Court
Case Number: RFA(COMM) 272/2026 & CM APPL. 27491/2026
Judge: Justice Prathiba M. Singh and Justice Madhu Jain
Date: 07 July 2026
Result: Appeal dismissed; preliminary decree for possession upheld; costs of ₹50,000 imposed on the appellant.
