Delhi High Court Sets Aside Tenant Eviction Decrees; Holds Agreement to Sell Defence Requires Trial Despite Being Unregistered and Ineligible for Section 53A Protection
Delhi High Court Restores Possession to Prospective Buyers; Holds ₹43.20-Lakh Part Payment and Agreement Terminating Tenancy Raised Substantive Triable Defence
Facts
The Delhi High Court decided two connected Regular First Appeals concerning different portions of Property No. 36/7, East Punjabi Bagh, New Delhi-110026. Both appeals arose from possession decrees passed by the District Judge under Order XII Rule 6 CPC, and both involved a common defence founded upon an alleged Agreement to Sell dated 16 November 2016.
In the first suit, respondent Raj Rani Uppal claimed that Rahul Chaudhary had been inducted as a tenant on the Upper Ground Floor under a Rent Agreement dated 31 August 2016 at ₹32,000 per month. The tenancy was subsequently extended and the rent enhanced. She alleged defaults and ultimately terminated the tenancy through a legal notice dated 1 March 2021.
Rahul admitted his initial induction as a tenant but asserted that the legal character of his possession subsequently changed. According to him, Raj Rani agreed to sell the Upper Ground Floor and Third Floor with roof rights to him and Kamal Kant Sharma for ₹1.50 crore under the Agreement to Sell dated 16 November 2016.
The defendants claimed that the Agreement expressly cancelled the earlier Rent Agreement and terminated the tenancy. They further asserted that payments aggregating to ₹43.20 lakh had been made towards the sale consideration.
A separate suit concerned the Third Floor. Kamal Kant Sharma denied that he had ever been a tenant and claimed that possession had been handed over pursuant to a Receipt-cum-Possession Letter dated 10 January 2019 in furtherance of the Agreement to Sell.
Raj Rani, however, denied executing the Agreement to Sell and described it as forged and fabricated. She maintained that all payments received were towards rent.
The District Judge nevertheless decreed possession under Order XII Rule 6 CPC, principally reasoning that the Agreement to Sell was unregistered and therefore could not protect possession under Section 53A of the Transfer of Property Act because of Section 17(1A) of the Registration Act.
Issues
The principal issues before the High Court were:
- Whether there was a clear, unequivocal and unconditional admission sufficient to decree possession under Order XII Rule 6 CPC.
- Whether Rahul Chaudhary’s admitted initial tenancy continued even after the alleged Agreement to Sell dated 16 November 2016.
- Whether an Agreement to Sell containing an express clause cancelling the Rent Agreement could alter the jural relationship between landlord and tenant.
- Whether the defendants’ reliance upon an unregistered Agreement to Sell could simply be rejected because Section 53A protection was unavailable.
- Whether the inability of an unregistered Agreement to Sell to protect possession under Section 53A automatically entitled the landlord to a decree for possession under Order XII Rule 6 CPC.
- Whether the genuineness, enforceability and legal consequences of the Agreement to Sell required a full trial, particularly when a separate suit for specific performance was pending.
Appellants’ Arguments
The appellants argued that the District Judge wrongly equated the non-registration of the Agreement to Sell with an automatic entitlement to possession.
They contended that the Agreement dated 16 November 2016 expressly provided that the earlier Rent Agreement would stand cancelled and the tenancy terminated. According to them, their possession thereafter was attributable to their status as prospective purchasers, rather than tenants.
They also relied upon the payment of ₹43.20 lakh towards the agreed ₹1.50 crore consideration and asserted that these circumstances constituted a substantive defence that could not be summarily rejected.
On Order XII Rule 6 CPC, they argued that there was no unconditional admission. Rahul admitted only his initial tenancy but specifically asserted that it ended upon execution of the Agreement to Sell. Kamal Kant Sharma denied ever having been inducted as a tenant.
They further pointed out that a separate suit for specific performance of the Agreement to Sell was already pending. Therefore, the substantive dispute required adjudication on evidence rather than summary disposal.
Respondent’s Arguments
Raj Rani Uppal supported the possession decrees and contended that the tenancies had been validly terminated before the institution of the suits.
She denied having executed the Agreement to Sell and claimed that it was forged and fabricated.
More importantly, she argued that even if the defendants relied upon it, the Agreement was unregistered. Since Section 17(1A) of the Registration Act mandates registration of documents relied upon for protection under Section 53A TPA, the defendants could not use the Agreement to protect their continued possession.
She further submitted that an Agreement to Sell does not itself create an interest in immovable property. At best, it gives the proposed purchaser a right to seek its enforcement—which the appellants had already done through their separate specific performance suit.
Analysis of the Law
1. The Real Question Was Not Merely Section 53A TPA
The High Court identified a critical distinction overlooked by the District Judge.
The dispute was not simply whether the unregistered Agreement to Sell could confer protection under Section 53A TPA. The anterior question was whether the pleadings contained a clear and unconditional admission that the appellants continued to occupy the premises as tenants despite their specific case that the Agreement to Sell changed the character of their possession.
This distinction ultimately determined the appeals.
2. Agreement Expressly Provided That Tenancy Would End
The Agreement to Sell was particularly significant because it expressly stated that:
- the Rent Agreement dated 31 August 2016 would stand cancelled; and
- the tenancy would stand terminated.
It further contemplated adjustment of post-dated rent cheques against the remaining sale consideration.
The High Court therefore observed that, on a bare reading of the Agreement, Rahul’s possession arguably changed from that of a tenant to that of a prospective purchaser.
Importantly, this was not a final finding that the Agreement was genuine or enforceable. Those questions remained disputed and required trial.
3. Agreement to Sell Does Not Automatically Terminate Tenancy
The Court clarified that merely executing an Agreement to Sell between landlord and tenant does not ipso facto terminate the tenancy.
What matters is whether the terms of the agreement or unequivocal conduct of the parties demonstrate an express or implied surrender under Section 111(e) or (f) of the Transfer of Property Act.
Here, however, the Agreement itself contained an express stipulation that the existing tenancy would stand terminated. That made the appellants’ defence a matter requiring adjudication rather than summary rejection.
4. No Unequivocal Admission Under Order XII Rule 6 CPC
The Court held that the written statements, read comprehensively, did not contain a clear, unconditional and unequivocal admission warranting a possession decree.
Rahul admitted the original tenancy but qualified that admission by asserting that it ended under the Agreement to Sell.
Kamal Kant denied being a tenant altogether and claimed possession under the subsequent transaction.
The defendants had also pleaded payment of ₹43.20 lakh and instituted proceedings for specific performance.
Accordingly, the District Judge could not treat their substantive defence as though it did not exist.
5. Section 53A and Order XII Rule 6 Are Distinct Questions
This is the most significant legal proposition emerging from the judgment.
The High Court accepted that an unregistered Agreement to Sell may not afford protection of possession under Section 53A TPA, having regard to Section 17(1A) of the Registration Act.
But that did not automatically mean that possession must be decreed under Order XII Rule 6 CPC.
The Court specifically noted that the proviso to Section 49 of the Registration Act permits an unregistered document to be received as evidence of a contract in a suit for specific performance.
Thus, the Agreement’s inability to independently protect possession under Section 53A did not permit the Court to ignore it when deciding whether the defendants had made an unequivocal admission justifying summary judgment.
Precedent Analysis
R. Kanthimathi v. Beatrice Xavier, (2000) 9 SCC 339
The Supreme Court had considered whether the landlord-tenant relationship changed following an Agreement to Sell and payment of substantial consideration.
The Court held that the intention of the parties could be gathered from the terms of the Agreement itself, particularly where the contractual language demonstrated that the previous tenancy had been surrendered and possession thereafter continued under a changed jural relationship.
Shah Mathuradas Maganlal & Co. v. Nagappa Shankarappa Malage, (1976) 3 SCC 660
This precedent was relied upon for the principle of express and implied surrender of tenancy under Section 111(e) and (f) TPA.
Whether surrender has occurred depends upon the terms of the subsequent transaction and conduct inconsistent with continuation of the earlier tenancy.
Vayyaeti Srinivasarao v. Gaineedi Jagajyothi, 2026 SCC OnLine SC 84
The Supreme Court reiterated that an implied surrender can arise where the conduct of the parties and creation of a new relationship are inconsistent with continuation of the pre-existing tenancy.
Nazim Shaikh Hasan v. Nasir Mushtaq Shaikh, 2026 INSC 853
The High Court extracted four important propositions from this recent Supreme Court decision:
- an Agreement to Sell does not automatically terminate tenancy;
- express or implied surrender under Section 111 TPA must be established;
- continued possession after an Agreement to Sell does not by itself attract Section 53A unless possession is directly attributable to that Agreement; and
- an Agreement to Sell, without a registered conveyance, does not itself confer title or interest in the property.
S.M. Asif v. Virendra Kumar Bajaj, (2015) 9 SCC 287
This precedent directly supported the appellants on Order XII Rule 6 CPC.
The Supreme Court held that judgment on admissions is discretionary. Where a tenant admits the original tenancy but raises a substantive Agreement to Sell defence going to the root of the eviction claim—and specific performance proceedings are pending—the matter should not ordinarily be summarily decreed.
Karan Kapoor v. Madhuri Kumar
The Supreme Court similarly held that Order XII Rule 6 should be exercised only where the admissions are specific, clear and categorical.
Where the tenant disputes continuation of the landlord-tenant relationship on the strength of Agreements to Sell and specific performance litigation is pending, the defence requires a full-fledged trial.
Court’s Reasoning
The High Court found that the District Judge had conflated two legally distinct propositions.
First, the unregistered Agreement to Sell could not necessarily provide statutory protection under Section 53A TPA.
Second, however, that did not establish that the defendants had admitted all facts necessary for an immediate decree of possession under Order XII Rule 6 CPC.
The appellants had consistently asserted:
- the Agreement to Sell dated 16 November 2016;
- payment of ₹43.20 lakh towards sale consideration;
- an express contractual clause terminating the earlier tenancy;
- continued possession as prospective purchasers rather than tenants; and
- a pending suit seeking specific performance.
The Court therefore concluded that their admissions concerning the original tenancy were qualified by a substantive defence and could not be treated as clear, unequivocal and unconditional admissions.
The genuineness and enforceability of the Agreement to Sell, and the true legal character of the appellants’ possession, required evidence and adjudication at trial. Until those rights were determined, the appellants could not be dispossessed through the summary mechanism of Order XII Rule 6 CPC.
Conclusion
The Delhi High Court allowed the appeals, set aside the District Judge’s possession decrees dated 9 October 2024 and 15 October 2024, and remanded both suits for adjudication on merits.
The judgment does not finally declare the appellants to be purchasers, uphold the Agreement to Sell, or grant them Section 53A protection. Rather, it holds that these disputed questions cannot be summarily decided against them under Order XII Rule 6 CPC.
The parties were directed to appear before the District Judge, West District, Tis Hazari, Delhi on 17 September 2026.
Case Details
Case: Rahul Chaudhary v. Raj Rani Uppal connected with Kamal Kant Sharma v. Raj Rani Uppal & Anr.
Court: High Court of Delhi at New Delhi
Case Numbers: RFA 104/2025 & RFA 222/2025
Judge: Justice Neena Bansal Krishna
Reserved: 26 May 2026
Pronounced: 31 August 2026
Result: Appeals allowed; possession decrees under Order XII Rule 6 CPC set aside; both suits remanded for adjudication on merits.
