Full Judgment Text
2026 INSC 59
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. OF 2026
(Arising out of Special Leave Petition (C) Nos. 21976-21977 of 2023)
VAYYAETI SRINIVASARAO …APPELLANT
VERSUS
GAINEEDI JAGAJYOTHI …RESPONDENT
J U D G M E N T
NAGARATHNA, J.
Leave granted.
Factual Background:
2. Briefly stated, the facts of the case are that the respondent
in the suit is the absolute owner of the suit schedule property
admeasuring 955.11 square yards and bearing Door No.4-473,
situated at Dowlaiswaram Village, Rajahmundry Rural, Andhra
Signature Not Verified
Digitally signed by
NEETU SACHDEVA
Date: 2026.01.15
16:56:49 IST
Reason:
1
Pradesh. The appellant has been a tenant of the respondent for
a long period and the suit schedule property has been in the
appellant’s possession as a tenant for over fifty years.
2.1 On 14.10.2009, the appellant and respondent herein
entered into an agreement to sell the suit schedule property, with
the appellant agreeing to purchase the suit schedule property for
a total sale consideration of Rs.9,00,000/- (Rupees Nine Lakhs
Only). An advance amount of Rs.6,50,000/- (Rupees Six Lakhs
and Fifty Thousand Only) is said to have been paid by the
appellant to the respondent on 14.10.2009 i.e. the date of the
agreement to sell. It was further agreed that the appellant would
pay the balance sale consideration of Rs.2,50,000/- (Rupees Two
Lakhs and Fifty Thousand only) and that the respondent would
execute a sale deed in respect of the suit schedule property as
and when called upon to do so.
2.2 Thereafter, in the year 2013, the appellant received
summons in a suit filed by the respondent bearing O.S
No.6/2013 on the file of the Principal Junior Civil Judge,
Rajahmundry seeking perpetual injunction and in R.C.C
2
No.4/2013 on the file of the Rent Control-cum-Principal Junior
Civil Judge, Rajamahendravaram seeking eviction of the
appellant (tenant) from the suit schedule property. The said
proceeding was filed under Andhra Pradesh Buildings (Lease,
Rent and Eviction) Control Act, 1960 (for short, “A.P. Rent Act,
1960”).
2.3 On 08.04.2013, a legal notice was sent by the appellant to
the respondent offering to pay the balance sale consideration of
Rs.2,50,000/- (Rupees Two Lakhs and Fifty Thousand) of the
total sale consideration of Rs.9,00,000/- (Rupees Nine Lakhs) to
the respondent and calling upon the respondent to execute the
sale deed in favour of the appellant with regard to the suit
schedule property. On 04.05.2013, the respondent replied to the
legal notice denying the existence of the agreement to sell and
refusing to execute the sale deed.
2.4 Feeling aggrieved by the reply to his notice, the appellant
preferred O.S. No.188/2013 before the Court of the V Addl.
District Judge, East Godavari, Rajahmundry (“Trial Court”, for
short) seeking the relief of specific performance of the agreement
3
to sell dated 14.10.2009 on the part of the respondent or, in the
alternative, to direct the respondent to refund the advance
amount of Rs.6,50,000/- (Rupees Six Lakh and Fifty Thousand)
paid by the appellant along with interest from 14.10.2009, as
well as seeking a permanent injunction restraining the
respondent from alienating the suit schedule property till the
disposal of the suit. It was contended that the appellant had
made several requests to the respondent and her husband,
informing them of his willingness to pay the balance sale
consideration but the same was of no avail.
2.5 Thereafter in the suit filed for specific performance of the
agreement to sell, on 27.11.2015, the appellant as P.W. 1 filed
his affidavit in examination-in-chief before the Trial Court in O.S.
No.188/2013 along with the documents to be exhibited wherein
Exhibit A-1 was the agreement to sell dated 14.10.2009. The
respondent objected to the marking of Exhibit A-1 on the basis
that the said agreement to sell was in fact a conveyance deed and
thus the requisite stamp duty and penalty had to be paid by the
appellant before the said document could be adduced as
4
evidence. On 21.12.2016, the Trial Court held that the appellant
is liable to pay stamp duty and penalty for the agreement to sell
dated 14.10.2009, as it was a “conveyance deed”.
2.6 Subsequently, on 03.01.2017, the Court of Rent
Controller-cum-Principal Junior Civil Judge,
Rajahmahendravaram in R.C.C No.4/2013 allowed the rent
control case filed by the respondent herein and passed an order
of eviction against the appellant herein.
2.7 Being aggrieved by the order dated 21.12.2016 passed by
the Trial Court in O.S. No.188/2013 directing the appellant to
furnish the requisite stamp duty and penalty, the appellant
preferred Civil Revision Petition No.551 of 2017 before the High
Court of Andhra Pradesh at Amaravati. By order dated
20.12.2022, the High Court dismissed the said revision petition,
placing reliance upon various judgments of the High Court
including B. Ratnamala vs. G. Rudramma, (1999) SCC
OnLine AP 438 (“Ratnamala”) , wherein it was held that
delivery of possession may be contemporaneous and could even
be prior to the date of the agreement, so long as the possession
5
was “intimately and inextricably connected” to the agreement,
even in the absence of a specific recital in the agreement to that
effect. Hence, it was held that the agreement to sell dated
14.10.2009, was, in fact, a conveyance deed and therefore, the
order of the Trial Court in O.S. No.188/2013 was sustained by
holding that the appellant is liable to pay stamp duty and penalty
on the said agreement to sell.
2.8 Feeling aggrieved by the said order dated 20.12.2022, the
appellant preferred an application bearing I.A No.1 of 2023 in
Civil Revision Petition No.551 of 2017 seeking review of the order
dated 20.12.2022 passed by the High Court. By the impugned
order dated 19.07.2023, the High Court dismissed I.A No.1 of
2023 on the basis that the appellant was disentitled to seek a
review of the order dated 20.12.2022 of the High Court as no
error existed apparent on the face of the record in view of the
detailed nature of the said order.
2.9 Hence, the instant civil appeals.
6
Submissions:
3. We have heard learned counsel for the appellant and
learned counsel for the respondent, at length. We have perused
the material on record.
3.1 Learned counsel for the appellant submitted that the High
Court was not right in sustaining the order of the Trial Court by
which the document, namely, the agreement to sell dated
14.10.2009 was directed to be impounded for the purpose of
assessment of stamp duty and penalty and the same was not
permitted to be marked in evidence. Elaborating the said
contention, learned counsel for the appellant submitted that
Explanation I to Article 47A of Schedule I-A of the Stamp (Andhra
Pradesh Amendment) Act, 1922 (“A.P. Stamp Act”, for the sake
of convenience) states that an agreement to sell followed by or
evidencing delivery of possession of the property agreed to be
sold shall be chargeable as a “sale” under the said Article. The
emphasis is on the words “followed by” or “evidencing delivery of
possession” of the property agreed to be sold under the
agreement to sell. Therefore, the delivery of possession must be
7
related to the agreement to sell, which could be either prior or
subsequent thereto. If the delivery of possession of the property
is prior to the agreement to sell then it may be evidenced in the
document or, the delivery of possession of the property to be sold
could be subsequent to the agreement to sell. In both the
instances, the agreement to sell is the basic denominator which
has a direct bearing on the stamp duty to be paid depending
upon, whether, the agreement to sell is chargeable as a “sale” or
deemed conveyance under the said Article of the A.P. Stamp Act.
3.2 That, in the instant case, the appellant herein was the
tenant of the schedule property for almost five decades and the
respondent-landlady agreed to sell the said property to the
appellant. This fact is recorded in the said agreement to sell
dated 14.10.2009. Therefore, the possession of the schedule
property was already with the appellant on the date of the
agreement to sell, as a tenant and he did not enter into
possession of the same as a purchaser or a vendee under the
agreement to sell. Further, the tenancy did not come to an end
despite the agreement to sell being entered into between the
8
parties. The appellant continued to be a tenant even after the
execution of the agreement to sell by the respondent – landlady
and there was no determination of the lease or tenancy by any
express or implied surrender of tenancy or lease or coming into
possession as a vendee. This fact is proved on account of the
eviction decree that was passed against the appellant herein at
the instance of the respondent who had approached the Rent
Controller for eviction of the appellant-tenant and was also
successful in this regard. Therefore, the agreement to sell in the
instant case could not have been construed as facilitating a sale
within the meaning of Explanation I to Article 47A of Schedule I-
A of the A.P. Stamp Act.
3.3 Learned counsel for the appellant therefore contended that
the impugned orders may be set aside and a direction may be
issued to the Trial Court to mark the agreement to sell as an Exhibit
in the suit for specific performance filed by the appellant herein
against the respondent – landlady by allowing these appeals.
3.4 Per contra , learned counsel for the respondent – landlady
supported the impugned orders and placed reliance on a recent
9
judgment of this Court in the case of Ramesh Mishrimal Jain
vs. Avinash Vishwanath Patne, 2025 SCC OnLine SC 329
(“Ramesh Mishrimal”) wherein this Court while considering a
similar provision under Explanation I to Article 25 of the Bombay
Stamp Act, 1958 held that the agreement to sell was in fact a
sale deed and hence, stamp duty would be chargeable. He also
submitted that in the said judgment reference has been made to
Ratnamala, wherein a Division Bench of the Andhra Pradesh
High Court had interpreted the provision under consideration
and had opined that the document of agreement to sell was in
fact a sale deed and therefore subject to stamp duty as a
document of sale. That, in the said judgment the Division bench
of the Andhra Pradesh High Court overruled the earlier judgment
of the said Court in M.A. Gafoor vs. Mohd. Jani, 1998 SCC
Online AP 848 (“Gafoor”) . Therefore, there is no merit in these
appeals and the same may be dismissed.
4. Before we move forward, it is necessary to recall the
relevant facts of the present case. The appellant herein is a
tenant of the respondent in respect of the suit schedule property
10
and according to the appellant, the respondent entered into an
agreement to sell the said property on 14.10.2009. Suit for
specific performance of the said agreement has been filed by the
appellant herein in O.S. No.188/2013 which is pending before
the Trial Court. In the said suit, the appellant sought to mark
the agreement to sell dated 14.10.2009 as it is on the basis of
the said agreement that the suit for specific performance has
been filed by the appellant herein. An objection for marking of
the said document was raised by the respondent’s counsel on
the ground that it is insufficiently stamped and that Explanation
I to Article 47A of Schedule I-A of the A.P. Stamp Act would apply.
The said objection was sustained by the Trial Court which
ordered that duty and penalty has to be paid by the appellant on
the said document before it could be marked in evidence. The
High Court has sustained the said order in Civil Revision Petition
No.551/2017. Hence, these appeals.
4.1 It is also necessary to bear in mind the fact that the
respondent has been successful in seeking an order of eviction
11
of the appellant tenant by filing R.C.C. No.4/2013 dated
03.01.2017 under the A.P. Rent Act, 1960.
4.2 In the agreement to sell dated 14.10.2009 which is
produced as Annexure P-I, it is noted that two non-judicial
stamps, each valued at Rs.50/- i.e., totalling Rs.100/- as stamp
duty has been paid. Further, in the said agreement to sell
entered into by the respondent in favour of the appellant, it is
stated as under:
“… In view of changes of time and circumstances and
since I am unable to supervise the said property in future
and further decided and confirmed to develop my
property situate at Visakhapatnam and in view of
purchaser’s request previously made to sell and since
the Schedule property is in your possession since
around 50 years and enjoying the same. I, the seller
hereby thought it fit to sell the Schedule property to you,
I seller and agreed to sell the same for Rs.9,00,000/- and
received an amount of Rs.6,50,000/- (Rupees Six Lakhs
Fifty thousand only) on this day from the purchaser
towards advance and I further agreed to receive the
remaining balance sale consideration from your and the
Seller has agreed to receive the same before and in the
presence of the Sub-Registrar at the time of registration
and after duly engraving the Sale Deed on the stamps
purchased to effect the registration at Purchaser’s
expense and I, the seller hereby further agreed to do so
on my (self) assurance and guarantee and do execute the
Sale deed on proper stamps whenever the Purchaser
called upon to execute the sale deed. Further, I the seller
12
hereby agreed and assured to execute regular sale deed
without stipulation of time or referring to time……”
(underlining by us)
On a reading of the aforesaid clause, it is evident that – (i)
the appellant has been in possession of the suit schedule
property as a tenant for around fifty years, and (ii) the landlady-
respondent herein has agreed to sell the suit schedule property
to the appellant-tenant. The fact that the appellant has been in
possession of the property for the last fifty years as noted in the
said agreement to sell dated 14.10.2009 is significant and a
critical fact in the instant case. It means that the appellant-
tenant was not given possession of the suit property in the
backdrop of the agreement to sell, either prior thereto or
subsequently.
4.3 Further, the appellant has also suffered an eviction order
vis-à-vis the suit schedule property as a tenant. This was
because the respondent herein had preferred the petition seeking
eviction of the appellant under the A.P. Rent Act, 1960. The
relevant portion of the order of eviction dated 03.01.2017 passed
13
by the Rent Controller-cum-Principal Junior Civil Judge,
Rajamahendravaram in RCC No.4 of 2013 reads as under:
“1. This is a petition filed by the petitioner under Section
10 of A.P. Buildings (Lease, Rent and Eviction) Control
Act, 1960 against the respondent for eviction of the
respondent from the schedule property by directing him
to vacate and handover the vacant possession of the
premises to her and to award costs and such other
reliefs.
xxx
2. The petitioner submitted that she is the absolute
owner of the petition schedule property. In the first
instance, the respondent filed a suit in OS 1050/1999
against the petitioner and her husband for Permanent
Injunction restraining the petitioner and her husband
not to dispossess the respondent from the schedule
property except under due process of law on the file of
Prl. Junior Civil Judge Court, Rajahmundry. The
respondent averred in the plaint in O.S. 1050 of 1999
that he took the schedule premises on lease from the
petitioner on monthly rent of Rs.1200/-, thus the
respondent admitted the ownership of the petitioner and
also admitted that he is only a tenant under the
petitioner. Subsequently, the petitioner filed a suit in
O.S.611/2002 on the file of I Additional Junior Civil
Judge, Rajahmundry against the respondent seeking a
permanent injunction against the respondent
restraining him respondent from the schedule property
on the file of I Additional Junior Civil Judge,
Rajahmundry.
xxx
13. The respondent submitted that once the petitioner
and her husband expressed their willingness to sell away
the petition schedule property for reasonable price and
14
then he reserved his right to exercise the obligation
under presumption clause under tenancy whenever
occasion arises, subsequently during the year 1999 the
petitioner and her husband changed their mind and they
developed ill-will at the provocation of some local people
with a view to sell away the schedule property for higher
price and attempted to dispossess him from the schedule
property and attempted to use force to evict him on
intervention of elders by name Chekka Satyanarayana,
Sri Bhalla Varambabu of Dowaliswaram and others, the
respondent resisted the illegal attempts of the petitioner
and her husband, the petitioner and her husband openly
proclaimed that the will evict him from the schedule
property at any cost, apprehending danger in the hands
of the petitioner and husband, he was constrained to file
a suit for perpetual injunction against the petitioner in
O.S.1050/1999, in the said suit the petitioner filed a
memo stating that the suit may be decreed subject to the
result of the other suits filed by her in O.S.611/2002 and
2/2004, consequently the suit was decreed accordingly.
xxx
19. The respondent submitted that as per the advice of
the petitioner until the outcome of the registered sale
deed duly executed by her, the petitioner advised to him
to deposit the rental in her bank account as usual @
Rs.1200/- per annum and also to pay house tax to
Grampanchayat, Dowlaiswaram, accordingly he used to
deposit rents, but subsequently because of ill advices,
the petitioner refused to receive rents, consequently he
has been depositing the rents in the petitioner's bank
account bearing No.01190037135 of State Bank of India,
Dowlaiswaram since 2005, he has no objection to
deposit the entire accrued rent and the rental that
accrues hereinafter before this Tribunal illegible.
xxx
15
30. On a careful perusal of pleadings and evidence, it
can be safely concluded that there is a landlady and
tenant relationship between the petitioner and
respondent, hence point no.1 is answered in favour of
the petitioner.
xxx
39. …Thus, the contention of the petitioner that she is
the absolute owner of the property and she is having
necessity to recover the property is proved. Hence, I hold
that the respondent is liable to evict the petition
schedule property and deliver the possession to the
petitioner.
xxx
In the result, this petition is allowed with costs,
eviction ordered, granting one month time for the
respondent to vacate and deliver vacant possession of
the schedule property to the petitioner, failing which the
petitioner is at liberty to get the order executed by filing
E.P. in accordance with law.”
(underlining by us)
The aforesaid eviction order was passed on 03.01.2017
subsequent to the agreement to sell which is dated 14.10.2009.
Jural Relationship in the Instant Case:
5. In this case, the appellant was a tenant of the respondent-
landlady on the date of execution of the agreement to sell dated
14.10.2009, and the jural relationship between the parties was
that of lessor and lessee/landlady and tenant and the tenancy
16
was within the scope and ambit of the A.P. Rent Act, 1960 for
about fifty years. The question is whether the said jural
relationship was converted to one of vendor and vendee upon the
execution of the agreement to sell. In other words, whether the
possession of the schedule property by the appellant herein
continued in the capacity of a tenant or as a vendee on the
execution of the agreement to sell. If the possession of the suit
schedule property continued to be held by the appellant as a
tenant even upon the execution of the agreement to sell, there
would be no conveyance/sale within the meaning of the
Explanation I to Article 47A of Schedule I-A of the A.P. Stamp
Act. On the other hand, if the relationship in relation to the
agreement to sell became that of a vendor and vendee, then the
aforesaid Explanation I would apply and it would be in the
nature of a deemed conveyance. In order to ascertain this aspect
of the matter, it is necessary to discuss the relevant provisions
of the Transfer of Property Act, 1882 (“the Act” for short).
5.1 Section 105 of the Act defines a lease and the relationship
of a lessor and lessee is the relationship which exists between
17
the parties to a lease. The rate of rent, duration of lease, purpose
of lease, etc. are all governed by the terms of the contract entered
into between the parties. Thus, a lease is the transfer of a right
to enjoy immovable property for a certain period of time. The
said relationship is also of a landlord and a tenant i.e., a tenancy
where lease of a premises is recognised under a statute.
5.2 If a tenancy is covered under a statute, the eviction of a
tenant is under the particular statute. Irrespective of the same,
Section 111 of the Act speaks of determination of lease. There
are eight ways in which a lease can be determined i.e. when it
comes to an end and there is no order of eviction of a tenant
under a statute. Clauses (e) and (f) deal with express surrender
and implied surrender. For ease of reference, Section 111 (e) and
(f) of the Act are extracted as under:
“111. Determination of lease.— A lease of immoveable
property determines—
xxx
(e) by express surrender; that is to say, in case the lessee
yields up his interest under the lease to the lessor, by
mutual agreement between them;
(f) by implied surrender;”
18
5.3 The expression “express surrender” means the lessee
yields his interest under the lease to the lessor by mutual
agreement between them. In other words, express surrender
means giving up of the interest in the premises under the lease
to the lessor by mutual agreement between the lessor and the
lessee. Express surrender necessitates that the lessee has given
up possession of the holding. Surrender need not be in writing
nor by a registered deed. However, if there is an abatement of
rent, it should be only by a registered instrument for it effects a
variation in the contract of tenancy. The effect of surrender
under clause (e) of Section 111 of the Act is the determination of
the lease.
5.4 Clause (f) of Section 111 of the Act deals with the rule of
implied surrender. Implied surrender is by operation of law and
it can occur by - i) the creation of a new relationship of lease, or
ii) relinquishment of possession i.e., there is yielding of
possession by the lessee and taking over of possession by the
lessor. It is created by the acceptance of, and not by the mere
agreement for a new relation which, in effect, estops the lessee
19
from setting up the old one. Implied surrender of tenancy can be
established by the conduct of the parties and from attending
circumstances. Implied surrender is by the operation of law and
takes place in spite of the intention of the parties. It may come
into being in a number of ways, e.g., by acceptance of a new
lease, or by unequivocal giving up of possession by the lessee as
a lessee, or by re-letting to another person by the landlord, or by
accepting of a sub-tenant as his tenant by the landlord.
5.5 Where the agreement to sell entered into by the parties
clearly states that from the date mentioned in the agreement, the
tenant in possession of the property intended to be sold under
the agreement shall not be liable to pay any rent and shall alone
be in charge of any damage caused to the property in question,
it would imply a surrender of rights as a tenant vide B.
Paramashivaiah vs. M.K. Shankar Prasad, AIR 2009 Kar
88.
5.6 A surrender by operation of law determines the lease and
extinguishes the rights of the lessee in respect of the property
surrendered, from the date of the surrender and the estate vests
20
immediately in the lessor. The term “surrender by operation of
law” is used to describe all those cases where the law implies a
surrender from unequivocal conduct of both the parties which is
inconsistent with the continuance of the existing tenancy.
5.7 There is a distinction between an express and implied
surrender inasmuch as while express surrender is a matter of
intention of the parties, implied surrender is by implication of
the law. An implied surrender is the act of the law and takes
place independently of and in some cases even in spite of the
intention of the parties.
5.8 Further, Section 54 of the Act defines sale of immovable
property as a transfer of ownership in exchange for a price paid
or promised or part paid or part promised. A contract for sale or
an agreement to sell of immovable property is a contract that sale
of such property shall take place on terms settled between the
parties. It does not, of itself, create any interest in or charge on
such property. By virtue of Section 47 of the Registration Act,
1908, a mere agreement to sell immovable property, which
creates only a right to obtain another document conveying
21
property, is not compulsorily registrable under Section 17 of the
Registration Act, 1908. An averment of the existence of a
contract for sale, whether with or without an averment of
possession following upon the contract by itself, is not a relevant
defence to an action for ejectment. The reason is that a mere
agreement for sale does not create any interest in immovable
property. If an agreement to sell or an agreement for sale does
not create any interest in it, there can be no transfer of interest
in the property by such a mere contract for sale. A contract for
sale gives only a right to compel the other party to execute a sale
deed in respect of the property. An agreement to sell confers no
title and is not a transfer of any rights in an immovable property.
Therefore, an agreement to sell per se cannot be construed as a
“conveyance”, which is restricted to delivery of possession or
execution of a sale deed.
5.9 In Suraj Lamp and Industries Private Limited (2) vs.
State of Haryana, (2012) 1 SCC 656 , this Court speaking
through Raveendran, J. referred to the scheme of the Act, the
Registration Act, 1908 as well as the Indian Stamp Act, 1899
22
(Central Act, though the provisions may be similar to those in
the State Acts). Section 5 of the Act which defines transfer of
property, Section 54 which defines sale and Section 53A of the
Act which defines part performance as well as contract for sale
as defined in Section 54 of the Act were examined. Similarly,
Sections 17(1)(b) and 17(1A) of the Registration Act, 1908 and
the relevant provisions and Section 27 of the Indian Stamp Act,
1899 were considered. While referring to Section 54 of the Act,
the scope of an agreement to sell was considered to hold that
only when there is a transfer which means to convey ownership
and would entail the transfer of title, would there be a
requirement of registration of the document as a non-
testamentary instrument within the meaning of Section 17(1)(b)
of the Registration Act, 1908? Thus, only when there is a sale
deed, would there be any creation of an interest in the property
including transfer of title and the same would imply a
conveyance? In paragraphs 18 and 19 of the said judgment, it
was observed as under:
23
“18. It is thus clear that a transfer of immovable property
by way of sale can only be by a deed of conveyance (sale
deed). In the absence of a deed of conveyance (duly
stamped and registered as required by law), no right, title
or interest in an immovable property can be transferred.
19. Any contract of sale (agreement to sell) which is not
a registered deed of conveyance (deed of sale) would fall
short of the requirements of Sections 54 and 55 of the
TP Act and will not confer any title nor transfer any
interest in an immovable property (except to the limited
right granted under Section 53-A of the TP Act).
According to the TP Act, an agreement of sale, whether
with possession or without possession, is not a
conveyance. Section 54 of the TP Act enacts that sale of
immovable property can be made only by a registered
instrument and an agreement of sale does not create any
interest or charge on its subject-matter.”
5.10 Therefore, a contract for sale (agreement to sell) would not
confer any title nor transfer any interest in an immovable
property (except to the limited right granted under Section 53A
of the Act). Thus, an agreement to sell or a contract for sale with
or without possession is not a conveyance deed. Therefore, a sale
of immovable property can only be made by a registered
instrument and that an agreement of sale does not create any
interest or charge on its subject matter.
24
5.11 Section 53A of the Act reads as under:
“53A. Part performance.— Where any person contracts
to transfer for consideration any immoveable property by
writing signed by him or on his behalf from which the
terms necessary to constitute the transfer can be
ascertained with reasonable certainty,
and the transferee has, in part performance of the
contract, taken possession of the property or any part
thereof, or the transferee, being already in possession,
continues in possession in part performance of the
contract and has done some act in furtherance of the
contract,
and the transferee has performed or is willing to
perform his part of the contract,
then, notwithstanding that where there is an
instrument of transfer, that the transfer has not been
completed in the manner prescribed therefore by the law
for the time being in force, the transferor or any person
claiming under him shall be debarred from enforcing
against the transferee and persons claiming under him
any right in respect of the property of which the
transferee has taken or continued in possession, other
than a right expressly provided by the terms of the
contract:
Provided that nothing in this section shall affect the
rights of a transferee for consideration who has no notice
of the contract or of the part performance thereof.”
5.12 Section 53A applies to a person who contracts to transfer
immovable property in writing. If the proposed transferee in the
agreement has taken possession of the property or he continues
in possession thereof being already in possession in part
25
performance of the contract and has done some act in
furtherance of the contract and transferee has performed or is
willing to perform his part of the contract, the transferor shall be
debarred from enforcing any right in respect of the property vide
Shashi Kapila vs. RP Ashwin, (2002) 1 SCC 583.
5.13 In a case where a person claims benefit of part
performance, evidence that he was inducted into possession for
the first time subsequent to the contract, would be a strong piece
of evidence regarding the contract and of possession changing
hands pursuant to the contract. Continuous possession of a
tenant in the suit property even after entering into the sale
agreements would not by itself amount to a part-performance,
putting the tenant in possession of the suit properties pursuant
to the sale agreements vide Chinnaraj vs. Sheik Davood
Nachair, AIR 2003 Mad 89.
6. However, just like in many states, amendments were made
to the A.P. Stamp Act whereby agreements to sell acknowledging
delivery of possession or power of attorneys authorising the
attorney “to sell any immovable property” along with delivery of
26
possession were charged with the same duty as leviable on a
conveyance deed. In the instant case, Article 47A of Schedule I-
A of the A.P. Stamp Act reads as under:
“47A. Sale as defined in Section 54
of the Transfer of Property
Act, 1882 -
(a) in respect of property situated in
any local area comprised in a
Municipal Corporation-
(i) where the amount or value of
the consideration for such sale
as set forth in the instrument or
the market value of the property
which is the subject matter of
the sale whichever is higher but
does not exceed Rs.1,000.
*Eight rupees for
every one hundred
rupees or part thereof.
(ii) where it exceeds Rs.1,000. The same duty as
under clause (i) for the
first Rs.1,000 and for
every Rs.500 or part
thereof in excess of
Rs.1,000, forty
rupees.
(b) In respect of property situated
in any local area comprised in
the Selection Grade or in Special
Grade Municipality-
(i) where the amount or value of
the consideration for such sale
as set forth in the instrument or
the market value of the property
which is the subject matter of
the sake, whichever is higher,
but does not exceed Rs.1,000;
Seven rupees for every
one hundred rupees
for part thereof.
(ii) where if exceeds Rs.1,000. The same duty as
under clause (i) for the
first Rs.1,000 and for
27
every Rs.500 or part
thereof in excess of
Rs.1,000, Thirty five
rupees.
(c) Where the property is situated
in any area other than those
mentioned in clauses (a) and
(b)–
(i) where the amount or value of
the consideration for such sale
as set forth in the instrument or
the market value of the property
which is the subject matter of
the sale, whichever is higher,
but does not exceed Rs.1,000/-
*Six rupees for every
one hundred rupees
or part thereof.
(ii) where it exceeds Rs.1,000. The same duty as
under clause (i) for the
first Rs.1,000 and for
every Rs.500 or part
thereof in excess of
Rs.1,000, Thirty
rupees.
(d) If relating to a multi-unit house
or unit of apartment/flat/
portion of a multi-storied
building or part of such
structure to which the
provisions of Andhra Pradesh
Apartments (Promotion of
Construction and Ownership)
Act, 1987, apply :
(i) where the value does not
exceed Rs.2,00,000/-
Rupees Twelve
Thousand.
(ii) where it exceeds
Rs.2,00,000/- but does not
exceed Rs.3,50,000/-
Rupees Twelve
Thousand plus 4% on
the value above
Rs.2,00,000/-
28
(iii) where it exceeds
Rs.3,50,000/- but does not
exceed Rs.7,00,000/-
Rupees Eighteen
Thousand plus 6% on
the value above
Rs.3,50,000/-
(iv) where it exceeds
Rs.7,00,000/-
Rupees Thirty Nine
Thousand plus 8% on
the value above
Rs.7,00,000/-
Explanation I:- An agreement to
sell followed by or evidencing
delivery of possession of the
property agreed to be sold shall
be chargeable as a “sale” under
this Article:
Provided that, where
subsequently a sale deed is
executed in pursuance of an
agreement of sale as aforesaid
or in pursuance of an agreement
referred to in clause (b) of Article
6, the stamp duty, if any,
already paid or recovered on the
agreement of sale shall be
adjusted towards to total duty
leviable on the sale deed.
xxx
(underlining by us)
6.1 Explanation I to Article 47A is relevant to the instant case.
The said Explanation states that if an agreement to sell is
followed by or evidences delivery of possession of the property
agreed to be sold, then the same shall be chargeable as “sale”
under the said Article. The proviso states that where,
29
subsequently a sale deed is executed in pursuance of an
agreement of sale, the stamp duty if any already paid or
recovered on the agreement of sale shall be adjusted towards the
total duty leviable on the sale deed. Therefore, it is necessary to
interpret the agreement to sell in the instant case in light of the
aforesaid Explanation I to Article 47A of Schedule I-A of the A.P.
Stamp Act.
7. In Gafoor, an agreement to sell was executed with the
tenant in possession of the schedule property therein, wherein it
was contemplated that the purchaser (the tenant) can retain the
possession and further was authorised to collect rents for
himself by subletting the premises. It was held that in view of
the aforesaid express term in the agreement to sell, the jural
relationship between the parties had changed from that of
landlord-tenant to one of vendor and vendee. Even though the
parties remained in the same position vis-à-vis the schedule
property therein, the nature of their relationship was altered.
The tenant had transformed into a purchaser even though there
was no delivery of possession to the landlord and again re-
30
delivery to the same tenant as a purchaser. The factum of change
of relationship led to an inference of change in the nature of
possession. This is a case whereby through an implied
surrender, there was determination of the lease or tenancy.
Therefore, the relationship of landlord and tenant had ended and
the creation of a relationship of vendor and purchaser had
commenced on the execution of the agreement to sell. But, the
High Court held that the Explanation I to Article 47A of Schedule
I-A of the A.P. Stamp Act was not applicable.
8. In Ratnamala, a Division Bench of the High Court of
Andhra Pradesh interpreted Explanation I to Article 47A of
Schedule I-A of the A.P. Stamp Act on a reference made to it by
a learned Single Judge of that Court, differing with the view
taken by another learned Single Judge in Gafoor. In paragraph
9 of the judgment in Ratnamala while considering Explanation
I to Article 47A of Schedule I-A of the A.P. Stamp Act, it was
observed as under:
“… These expressions cannot be read in isolation and
one has to find the true meaning by reading the entire
Explanation and more so in conjunction with the earlier
expression i.e., “agreement”. Even if these two
31
expressions are looked independently, it means an
agreement to sell followed by delivery of possession and
an agreement to sell evidencing delivery of possession.
In the first case, i.e., “followed by delivery”, possession
cannot be disjuncted from the basic source i.e.,
agreement to sell. Therefore, the expression followed by
delivery of possession should have a direct nexus to the
agreement and should be read in juxtaposition to the
word ‘agreement’ and it cannot be independent or
outside the agreement. Therefore, the delivery of
possession should follow the agreement i.e., through the
agreement. It takes in its sweep the recital in the
agreement itself that delivery of possession is being
handed over. It will also cover cases of delivery of
possession contemporaneous with the execution of
agreement, even if there is no specific recital in the
agreement. In other words, the delivery of possession
should be intimately and inextricably connected with the
agreement. And in the second type, i.e., agreements
evidencing delivery of possession, if the document
contains evidence of delivery of possession by a recital in
that behalf, that is sufficient. Such delivery of possession
can be prior to the date of agreement and need not be
under the agreement. If the agreement records the fact
that the possession was delivered earlier and such recital
serves as evidence of delivery of possession, though prior
to the Agreement, it falls under the second limb.
Therefore, on a proper interpretation of the said
expressions, it would follow that an agreement
containing specific recital of delivery of possession or
indicating delivery of possession even in the past is liable
for stamp duty as a ‘sale’ under the said Explanation.”
(underlining by us)
8.1 In Ratnamala , it was observed that the judgment in
Gafoor was not the correct law by observing as follows:
32
“14. In the case on hand, there is a variation in the
expressions used viz., “followed by” and “evidencing
delivery of possession”. As discussed above, the
expression “followed by” should be read in conjunction
with the earlier expression “agreement” and in the latter
case, any agreement recording delivery of possession
should invite the stamp duty as a sale deed, even though
the possession had been delivered in the past. The
expression “evidencing delivery of possession” applies to
the situation with which we are concerned in the present
case.”
8.2 In our view, the Division Bench of the High Court was
right in overruling the judgment in Gafoor . This is because the
facts of the case and the recitals of the agreement therein in the
latter judgment were not appreciated in their proper perspective.
8.3 To recollect the facts in Gafoor , the agreement to sell had
a clause which stated that the purchaser who was the lessee can
retain and collect rent from the schedule property after the
agreement of sale of the property and the vendor will, in no way,
interfere or object to the same even if the purchaser sub-lets the
premises and collects rent. This recital meant that, (i) the tenant
of the building was specifically permitted to retain possession
and collect rent from the schedule property subsequent to the
execution of the agreement and (ii) he was also authorised to
33
sub-let the premises. (iii) Apart from that it was specifically
mentioned in the agreement that the vendee, who was the tenant
of the building, would not have to pay monthly rent subsequent
to the agreement of sale. Thus, the position of the tenant and his
relationship with his landlord had metamorphosed into that of
vendee and vendor. The possession of the property continued
with the tenant or lessee but not in that capacity but as a vendee
who had got possession pursuant to the agreement to sell.
Therefore, there was deemed conveyance and it was interpreted
to come within the scope and ambit of the Explanation I to Article
47A of Schedule I-A of the A.P. Stamp Act. In our view, this
interpretation in Ratnamala about Gafoor was just and proper
inasmuch as there was an implied surrender of the tenancy and
a cessation of the landlord-tenant relationship and pursuant to
the agreement therein, the relationship was one of vendor and
vendee. These recitals in the agreement by the vendor revealed
that the plaintiff therein i.e., the vendee who had filed the suit
for specific performance was already in possession of the
building as a tenant and as such the question of delivering of
34
physical possession of the property under the agreement did not
arise. It was held that the delivery of possession after the
execution of the agreement was notional on an implied surrender
of tenancy as the plaintiff therein was in actual possession of the
property as a tenant even prior to the agreement. Hence,
Explanation I to Article 47A of Schedule I-A of the A.P. Stamp
Act was rightly applicable.
9. Ramesh Mishrimal is a judgment of this Court. The facts
of the said case were that the Trial Court by its order had allowed
the application filed by the respondent therein and impounded
the document (Ex. 30) i.e. Agreement to Sell dated 03.09.2003 in
respect of a house property and an adjoining room and directed
the same to be sent to the Registrar of Stamps for recovery of
deficit stamp duty and penalty on it, as per law. This order was
passed in a suit for specific performance of the agreement to sell
dated 03.09.2003 and other reliefs. The respondents therein had
filed the application under Section 34 of the Bombay Stamp Act,
1958 for impounding the document stating that the agreement
in question was executed on a stamp paper of Rs.50/- and the
35
suit property was situated within the limits of a place called Khed
and hence stamp duty of Rs.44,000/- was required to be paid
besides penalty of Rs.1,31,850/-. The said application was
resisted by the appellant therein by contending that the
agreement to sell was not an agreement of conveyance and
hence, no stamp duty was payable on the same as a conveyance.
Reference was made to Explanation I to Article 25 of the Bombay
Stamp Act, 1958. The said Explanation presupposes an
immediate or agreed transfer of possession under the agreement
to sell itself but when the possession remains with the seller until
the sale deed is executed, the agreement to sell cannot be
equated with the conveyance and no stamp duty can be levied as
such. In the said case, the agreement to sell dated 03.09.2003
explicitly stated that the suit property was in the possession of
the appellant therein in the capacity of a tenant and this
possession was independent of the sale transaction. The
extension agreement dated 28.7.2004 entered into between the
parties also reiterated the same position.
36
9.1 The appellant therein had contended that three conditions
were not satisfied and hence Explanation I to Article 25 of the
Schedule I to the Bombay Stamp Act, 1958 did not apply. They
were namely, (i) no possession was transferred under the
agreement to sell; (ii) no agreement to transfer possession existed
until the sale deed was executed; and (iii) the possession of the
appellant remained that of a tenant, which was legally distinct
and independent. Hence, no stamp duty could be levied on the
agreement to sell dated 03.09.2003 as a conveyance.
9.2 Per contra , the respondent therein had submitted that the
said Explanation was applicable and the agreement to sell was
to be treated as a conveyance. In support of the same, reliance
was placed on two decisions of this Court in Veena Hasmukh
Jain vs. State of Maharashtra, (1999) 5 SCC 725, (“Veena
Hasmukh”) and Shyamsundar Radheshyam Agrawal vs.
Pushpabai Nilkanth Patil, (2024) 10 SCC 324
(“Shyamsundar Radheshyam”) wherein it was held by this
Court that the stamp duty is leviable only on the document and
not on the transaction.
37
9.3 At this stage itself, it could be observed that having regard
to the specific nature of recitals in the respective agreements to
sell considered by this Court in the aforesaid two cases, it was
held that there was in fact a deemed conveyance and hence, the
requisite stamp duty in terms of Explanation I to Article 25 of
Schedule I to the Bombay Stamp Act, 1958 was applicable.
9.4 The significant facts in Ramesh Mishrimal were that
there was a civil suit filed by the landlord against the tenant-
vendee seeking eviction and possession of the schedule
premises. This Court considered the question, whether, the
appellant was liable to pay the stamp duty and penalty on the
agreement to sell dated 03.09.2003 allegedly executed between
the appellant and mother of respondent no.1 therein in respect
of the suit property. It was the specific case of the appellant
therein that the agreement to sell clearly stated that the
possession of the appellant was on rental basis and the same
would not form part of the sale transaction. Therefore, the
question of treating the agreement a deemed conveyance did not
arise. This Court held that the suit property was occupied by
38
the appellant therein on a rental basis and there was a clause
that the transaction was to take place later by execution of the
sale deed. This Court noted the following clause in the
agreement, namely, “ this property is in their occupation on rental
basis and it will not be part of the sale transaction. After
completion of sale transaction, the possession of the said property
will be given to you on the ownership basis .”
9.5 This Court observed that the agreement to sell included a
clause stating that the physical possession had already been
handed over to the appellant. Regardless of the basis of such
possession, by applying the Explanation to Article 25 of Schedule
I of the Bombay Stamp Act, 1958 this Court held that there was
a conveyance within its meaning and hence dismissed the appeal
and directed that until duty and penalty was satisfied under
Section 34 of the Bombay Stamp Act, 1958, the document
impounded could not be used in evidence. This Court invoked
Section 53A of the Act to hold that the tenant therein had
acquired the possessory right and therefore there was a
conveyance or sale within the meaning of Explanation I to Article
39
25 to Schedule I of the Bombay Stamp Act, 1958. This Court
observed that the vendee therein was already in possession of
the property to be sold to him and continued to do so in part
performance of the contract as the said possession was
recognised under the agreement and therefore there was a sale
or conveyance.
9.6 The judgment of this Court in Ramesh Mishrimal has to
be distinguished on two aspects. Firstly , on the basis of the text
of Explanation I under the A.P. Stamp Act and Bombay Stamp
Act, 1958. Secondly , in Ramesh Mishrimal this Court has
invoked Section 53A of the Act which is not being done so in the
instant case.
10. Explanation I to Article 25 of Schedule I of the Bombay
Stamp Act, 1958 reads as under:
“ Explanation 1 .— For the purposes of this article, where
in the case of agreement to sell an immovable property,
the possession of any immovable property is transferred
or agreed to be transferred to the purchaser before the
execution, or at the time of execution, or after the
execution of such agreement without executing the
conveyance in respect thereof, then such agreement to
sell shall be deemed to be a conveyance and stamp duty
thereon shall be leviable accordingly:
40
Provided that, the provisions of Section 32-A shall
apply mutatis mutandis to such agreement which is
deemed to be a conveyance as aforesaid, as they apply to
a conveyance under that Section:
Provided further that, where subsequently a
conveyance is executed in pursuance of such agreement
of sale, the stamp duty, if any, already paid and
recovered on the agreement of sale which is deemed to
be a conveyance, shall be adjusted towards the total duty
leviable on the conveyance.”
However, in the present case, Explanation I to Article 47A
of Schedule I-A to the A.P. Stamp Act reads as under:
“An Agreement to Sell followed by or evidencing delivery
of possession of the property agreed to be sold shall be
chargeable as a sale under this Article.”
10.1 The phrases in the aforesaid two Explanations could be
highlighted. Under Explanation I to Article 47A of Schedule I-A
to the A.P. Stamp Act, the words used are “ followed by or
evidencing delivery of possession of the property agreed to be sold ”
whereas in Explanation I of the Bombay Stamp Act, 1958, the
words are “ the possession of any movable property is transferred
or agreed to be transferred to the purchaser before the execution,
or at any time of execution, or after execution of such instrument ”.
The differentiation in the wordings of the two Explanations reveal
41
that they are not identical and the intention of the respective
legislations are dissimilar. Under the A.P. Stamp Act, the delivery
of possession of the property must follow the execution of the
agreement to sell or if delivery of property has been made prior
to the agreement to sell then it should be evidenced in the
agreement to sell by a recital to that effect. However, if the
possession of the property by the vendee does not have any nexus
to the agreement to sell, as in the present case where the
possession of the property was with the appellant as a tenant for
nearly five decades and the respondent vendor has decided to sell
the same to the appellant vendee then, the said possession is not
relatable to the agreement to sell. In such a case, neither is the
sale within the meaning of Explanation I to Article 47A of
Schedule I-A to the A.P. Stamp Act nor is it a case of deemed
conveyance.
10.2 It is also necessary to observe that where pursuant to an
agreement to sell, possession is handed over to the vendee then
the protection under Section 53A of the Act would apply and the
possession of the vendee would be protected subject to the
42
conditions mentioned in the said provision including registration
of the instrument and therefore, the necessity to pay the requisite
stamp duty. However, in the present case, Section 53A of the Act
does not apply as the possession was not handed over to the
appellant herein in relation to the agreement to sell dated
14.10.2009. In fact, the appellant was in possession of the
subject property for almost fifty years prior to the said agreement
to sell. This is in fact recorded in the agreement to sell.
10.3 In the circumstances, it is necessary to distinguish the
ratio of the judgment in Ramesh Mishrimal as in the present
case, Section 53A will not apply as has been invoked in the
aforesaid case. Though in both the cases, the vendee on the date
of the agreement was in possession of the property as a tenant,
since Section 53A of the Act has been applied by this Court in
Ramesh Mishrimal , we restrict the said judgment only to the
facts of that case. This is because in the instant case, there is an
order of eviction against the appellant here subsequent to the
execution of agreement to sell which clearly proves that the
tenancy continued in respect of the suit schedule property in the
43
present case even subsequent to the execution of the agreement
to sell dated 14.10.2009. Therefore, Section 53A of the Act is not
applicable in the present case.
10.4 In Veena Hasmukh, the question raised for
consideration was as to the duty payable under the Bombay
Stamp Act, 1958 on an agreement for sale of flats covered by the
Maharashtra Ownership Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Act, 1963
(hereinafter referred to as “the MOF Act”) and the Maharashtra
Apartment Ownership Act, 1971. The contention of the appellant
therein was that she was not liable for payment of duty under
Entry 25 of Schedule I of the Bombay Stamp Act, 1958; that the
agreement for sale had been executed under Section 4 of the
MOF Act and in terms of the said provision, it was mandatory to
register the same under Section 17(1) of the Indian Registration
Act, 1908; that the provisions of the Bombay Stamp Act, 1958
were not applicable and consequently, proceedings under
Section 32-A of the Bombay Stamp Act, 1958 could not have
been initiated. Hence, it was contended that the action of
44
impounding the document was illegal. This Court noticed that in
paragraph 7 of the agreement, it was stated that subject to the
purchaser making full payment of all amounts due and payable
by him under the agreement and subject to a force majeure,
possession of the said premises was expected to be delivered by
the builders to the purchasers on or before 30.11.1987. The
agreement was dated 08.10.1987 and the possession was to
handed over by 30.11.1987. Paras 14 and 15 of the agreement
read as follows:
“14. Nothing contained in these presents is intended to
be nor shall it be deemed to be a grant, demise,
conveyance, assignment or transfer in law of the said
property premises or the building thereon, or any part
thereof to the purchaser by the builders.
15. The purchaser shall not let, sub-let, sell, transfer,
assign or otherwise deal with or dispose of the said
premises or his interest or benefit under this agreement
till all the dues payable by him to the builders under this
agreement have been fully paid up and until previous
consent in writing of the builders in that behalf is
obtained by him.”
The aforesaid terms were construed by this Court to hold
that the agreement entered into merely provided for sale of an
immovable property and there was also a specific time within
45
which possession had to be delivered (which was a few days after
the execution of the agreement to sell). It was therefore held that
the document in question fell within the scope of Explanation I
to Article 25 of Schedule I to the Bombay Stamp Act, 1958 and
the appeal filed by the appellant therein was dismissed.
10.5 In Shyamsundar Radheshyam , there were six
documents or instruments which were held to be different
transactions between different vendors and different purchasers.
The question involved was whether the appellant therein was
liable to pay stamp duty or penalty on the agreements to sell
executed prior to the sale deed executed in their favour in respect
of two properties. This Court observed that in order to determine
the stamp duty that is chargeable upon an instrument, the legal
rule is that the real and true meaning of the instrument is to be
determined by ascertaining the intention of the parties from the
contents and the language employed in the whole instrument
and the description or the nomenclature given to the instrument
by the parties is immaterial. This Court noted that the agreement
to sell consisted of a clause whereby the possession was handed
46
over to the purchaser satisfying the requirement to treat the
instrument as a conveyance and what remained was only the
formality of execution of the sale deed. Therefore, it was
concluded that the agreement to sell necessitated payment of
stamp duty as per the Explanation I of Article 25 of Schedule I
of Bombay Stamp Act, 1958. It was further held that the
subsequent sale deed executed could not be construed as the
principal transaction and that the agreement to sell was the
principal conveyance as per the aforesaid provision.
10.6 Therefore, the judgments of this Court in Veena
Hasmukh and Shyamsundar Radheshyam have no bearing
having regard to the facts of the present case.
11. On a conspectus reading of the recital in the agreement to
sell dated 14.10.2009 with the order dated 03.01.2017 passed in
RCC No.4 of 2013, it becomes clear that the appellant herein was
a tenant and as a tenant, he entered into an agreement to buy
the schedule property from the landlord. The respondent-
landlord did not treat the possession of the suit schedule
property by the appellant-tenant pursuant to the agreement to
47
sell dated 14.10.2009 as a vendee. In fact, long prior to that
agreement to sell (around fifty years), the appellant came into
possession of the suit schedule property as a tenant. Therefore,
this is not a case where pursuant to the agreement to sell dated
14.10.2009 or in relation to it, or prior to the agreement to sell
possession of the suit schedule property has been handed over
to the appellant herein as a vendee.
11.1 Thus, there is no express or implied surrender of the
tenancy by the appellant in favour of the landlord vendor. The
tenancy in fact continued and the appellant has also suffered an
order of eviction as a tenant vide order dated 03.01.2017.
Consequently, it is held that there is no “deemed conveyance”
within the meaning of Explanation I to Article 47A of the A.P.
Stamp Act, as the agreement to sell in the instant case does not
come within the scope and ambit of the Explanation thereto.
Therefore, neither there being transfer of title in the suit
schedule property nor there being any deemed conveyance from
the respondent to the appellant herein, the stamp duty payable
48
on the nature of the transaction being an agreement to sell
simplicitor is just and proper.
11.2 The facts of the case in Gafoor can be compared to the
present case, as it was rightly overruled by the Division Bench of
the Andhra Pradesh High Court in Ratnamala, as the findings
in the said case were incorrect wherein, it had been expressly
mentioned in the agreement to sell that the possession of the
schedule property was with the appellant therein as a tenant.
Therefore, the appellant therein also did not come into
possession of the property in relation to the agreement to sell but
was already in possession of the property as a tenant. But, there
was surrender within the meaning of Section 111 of the Act so
as to determine the lease or tenancy. On the other hand,
pursuant to the agreement to sell in the present case, there was
no change in the status of the appellant herein inasmuch as he
continued to be a tenant and did not acquire possession under
the agreement to sell. The appellant herein also suffered an
eviction order as a tenant of the schedule property. Therefore,
the appellant did not acquire possession of the property prior to
49
the agreement to sell dated 14.10.2009 in relation thereto or at
the time of its execution or subsequent thereto. In other words,
the possession of the schedule property by the appellant herein
was not following the agreement to sell nor was delivery of
possession pursuant to the execution of agreement to sell as
stipulated under the A.P. Stamp Act. It is only when the
possession is acquired in relation to the execution of the
agreement to sell, that it would be a deemed conveyance and
stamp duty has to be levied as conveyance.
12. However, in the instant case, the agreement to sell dated
14.10.2009 expressly states that the appellant was in possession
of the schedule property as a tenant for fifty years and in fact an
order of eviction was also passed against the appellant.
Therefore, the appellant did not come into possession of the
schedule property in relation to the execution of the agreement
to sell dated 14.10.2009 but almost fifty years prior thereto as a
tenant and not as a vendee. In fact, the existing tenant sought
to purchase the schedule property but there was no express or
implied surrender of tenancy so as to bring about determination
50
of the tenancy or lease by the appellant herein. Hence, the
judgment of this Court in Ramesh Mishrimal is not applicable
to the facts of the present case.
12.1 The Trial Court failed to notice this aspect of the matter
and simply directed the appellant herein to pay the stamp duty
as if it were a conveyance or sale and there was a transfer of title
from the respondent to the appellant herein. The High Court in
fact misdirected itself in assuming that there was in fact a
deemed conveyance between the respondent and the appellant
herein. The appellant herein is not liable to pay any additional
duty and penalty on the said instrument and neither is the said
instrument liable to be impounded for the purpose of payment
of duty and penalty. Hence, we find that the High Court was not
right in sustaining the order of the Trial Court. Consequently,
both the impugned orders of the High Court as well as the order
of the Trial Court are set aside. The appeals are allowed in the
aforesaid terms.
12.2 The Trial Court shall mark the agreement to sell dated
14.10.2009 as an Exhibit and proceed to dispose the suit as
51
expeditiously as possible and preferably within a period of six
months from the date of the next hearing before the Trial Court.
No costs.
….….……..………………….J.
(B.V. NAGARATHNA)
….….……..………………….J.
(R. MAHADEVAN)
NEW DELHI;
JANUARY 15, 2026.
52
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. OF 2026
(Arising out of Special Leave Petition (C) Nos. 21976-21977 of 2023)
VAYYAETI SRINIVASARAO …APPELLANT
VERSUS
GAINEEDI JAGAJYOTHI …RESPONDENT
J U D G M E N T
NAGARATHNA, J.
Leave granted.
Factual Background:
2. Briefly stated, the facts of the case are that the respondent
in the suit is the absolute owner of the suit schedule property
admeasuring 955.11 square yards and bearing Door No.4-473,
situated at Dowlaiswaram Village, Rajahmundry Rural, Andhra
Signature Not Verified
Digitally signed by
NEETU SACHDEVA
Date: 2026.01.15
16:56:49 IST
Reason:
1
Pradesh. The appellant has been a tenant of the respondent for
a long period and the suit schedule property has been in the
appellant’s possession as a tenant for over fifty years.
2.1 On 14.10.2009, the appellant and respondent herein
entered into an agreement to sell the suit schedule property, with
the appellant agreeing to purchase the suit schedule property for
a total sale consideration of Rs.9,00,000/- (Rupees Nine Lakhs
Only). An advance amount of Rs.6,50,000/- (Rupees Six Lakhs
and Fifty Thousand Only) is said to have been paid by the
appellant to the respondent on 14.10.2009 i.e. the date of the
agreement to sell. It was further agreed that the appellant would
pay the balance sale consideration of Rs.2,50,000/- (Rupees Two
Lakhs and Fifty Thousand only) and that the respondent would
execute a sale deed in respect of the suit schedule property as
and when called upon to do so.
2.2 Thereafter, in the year 2013, the appellant received
summons in a suit filed by the respondent bearing O.S
No.6/2013 on the file of the Principal Junior Civil Judge,
Rajahmundry seeking perpetual injunction and in R.C.C
2
No.4/2013 on the file of the Rent Control-cum-Principal Junior
Civil Judge, Rajamahendravaram seeking eviction of the
appellant (tenant) from the suit schedule property. The said
proceeding was filed under Andhra Pradesh Buildings (Lease,
Rent and Eviction) Control Act, 1960 (for short, “A.P. Rent Act,
1960”).
2.3 On 08.04.2013, a legal notice was sent by the appellant to
the respondent offering to pay the balance sale consideration of
Rs.2,50,000/- (Rupees Two Lakhs and Fifty Thousand) of the
total sale consideration of Rs.9,00,000/- (Rupees Nine Lakhs) to
the respondent and calling upon the respondent to execute the
sale deed in favour of the appellant with regard to the suit
schedule property. On 04.05.2013, the respondent replied to the
legal notice denying the existence of the agreement to sell and
refusing to execute the sale deed.
2.4 Feeling aggrieved by the reply to his notice, the appellant
preferred O.S. No.188/2013 before the Court of the V Addl.
District Judge, East Godavari, Rajahmundry (“Trial Court”, for
short) seeking the relief of specific performance of the agreement
3
to sell dated 14.10.2009 on the part of the respondent or, in the
alternative, to direct the respondent to refund the advance
amount of Rs.6,50,000/- (Rupees Six Lakh and Fifty Thousand)
paid by the appellant along with interest from 14.10.2009, as
well as seeking a permanent injunction restraining the
respondent from alienating the suit schedule property till the
disposal of the suit. It was contended that the appellant had
made several requests to the respondent and her husband,
informing them of his willingness to pay the balance sale
consideration but the same was of no avail.
2.5 Thereafter in the suit filed for specific performance of the
agreement to sell, on 27.11.2015, the appellant as P.W. 1 filed
his affidavit in examination-in-chief before the Trial Court in O.S.
No.188/2013 along with the documents to be exhibited wherein
Exhibit A-1 was the agreement to sell dated 14.10.2009. The
respondent objected to the marking of Exhibit A-1 on the basis
that the said agreement to sell was in fact a conveyance deed and
thus the requisite stamp duty and penalty had to be paid by the
appellant before the said document could be adduced as
4
evidence. On 21.12.2016, the Trial Court held that the appellant
is liable to pay stamp duty and penalty for the agreement to sell
dated 14.10.2009, as it was a “conveyance deed”.
2.6 Subsequently, on 03.01.2017, the Court of Rent
Controller-cum-Principal Junior Civil Judge,
Rajahmahendravaram in R.C.C No.4/2013 allowed the rent
control case filed by the respondent herein and passed an order
of eviction against the appellant herein.
2.7 Being aggrieved by the order dated 21.12.2016 passed by
the Trial Court in O.S. No.188/2013 directing the appellant to
furnish the requisite stamp duty and penalty, the appellant
preferred Civil Revision Petition No.551 of 2017 before the High
Court of Andhra Pradesh at Amaravati. By order dated
20.12.2022, the High Court dismissed the said revision petition,
placing reliance upon various judgments of the High Court
including B. Ratnamala vs. G. Rudramma, (1999) SCC
OnLine AP 438 (“Ratnamala”) , wherein it was held that
delivery of possession may be contemporaneous and could even
be prior to the date of the agreement, so long as the possession
5
was “intimately and inextricably connected” to the agreement,
even in the absence of a specific recital in the agreement to that
effect. Hence, it was held that the agreement to sell dated
14.10.2009, was, in fact, a conveyance deed and therefore, the
order of the Trial Court in O.S. No.188/2013 was sustained by
holding that the appellant is liable to pay stamp duty and penalty
on the said agreement to sell.
2.8 Feeling aggrieved by the said order dated 20.12.2022, the
appellant preferred an application bearing I.A No.1 of 2023 in
Civil Revision Petition No.551 of 2017 seeking review of the order
dated 20.12.2022 passed by the High Court. By the impugned
order dated 19.07.2023, the High Court dismissed I.A No.1 of
2023 on the basis that the appellant was disentitled to seek a
review of the order dated 20.12.2022 of the High Court as no
error existed apparent on the face of the record in view of the
detailed nature of the said order.
2.9 Hence, the instant civil appeals.
6
Submissions:
3. We have heard learned counsel for the appellant and
learned counsel for the respondent, at length. We have perused
the material on record.
3.1 Learned counsel for the appellant submitted that the High
Court was not right in sustaining the order of the Trial Court by
which the document, namely, the agreement to sell dated
14.10.2009 was directed to be impounded for the purpose of
assessment of stamp duty and penalty and the same was not
permitted to be marked in evidence. Elaborating the said
contention, learned counsel for the appellant submitted that
Explanation I to Article 47A of Schedule I-A of the Stamp (Andhra
Pradesh Amendment) Act, 1922 (“A.P. Stamp Act”, for the sake
of convenience) states that an agreement to sell followed by or
evidencing delivery of possession of the property agreed to be
sold shall be chargeable as a “sale” under the said Article. The
emphasis is on the words “followed by” or “evidencing delivery of
possession” of the property agreed to be sold under the
agreement to sell. Therefore, the delivery of possession must be
7
related to the agreement to sell, which could be either prior or
subsequent thereto. If the delivery of possession of the property
is prior to the agreement to sell then it may be evidenced in the
document or, the delivery of possession of the property to be sold
could be subsequent to the agreement to sell. In both the
instances, the agreement to sell is the basic denominator which
has a direct bearing on the stamp duty to be paid depending
upon, whether, the agreement to sell is chargeable as a “sale” or
deemed conveyance under the said Article of the A.P. Stamp Act.
3.2 That, in the instant case, the appellant herein was the
tenant of the schedule property for almost five decades and the
respondent-landlady agreed to sell the said property to the
appellant. This fact is recorded in the said agreement to sell
dated 14.10.2009. Therefore, the possession of the schedule
property was already with the appellant on the date of the
agreement to sell, as a tenant and he did not enter into
possession of the same as a purchaser or a vendee under the
agreement to sell. Further, the tenancy did not come to an end
despite the agreement to sell being entered into between the
8
parties. The appellant continued to be a tenant even after the
execution of the agreement to sell by the respondent – landlady
and there was no determination of the lease or tenancy by any
express or implied surrender of tenancy or lease or coming into
possession as a vendee. This fact is proved on account of the
eviction decree that was passed against the appellant herein at
the instance of the respondent who had approached the Rent
Controller for eviction of the appellant-tenant and was also
successful in this regard. Therefore, the agreement to sell in the
instant case could not have been construed as facilitating a sale
within the meaning of Explanation I to Article 47A of Schedule I-
A of the A.P. Stamp Act.
3.3 Learned counsel for the appellant therefore contended that
the impugned orders may be set aside and a direction may be
issued to the Trial Court to mark the agreement to sell as an Exhibit
in the suit for specific performance filed by the appellant herein
against the respondent – landlady by allowing these appeals.
3.4 Per contra , learned counsel for the respondent – landlady
supported the impugned orders and placed reliance on a recent
9
judgment of this Court in the case of Ramesh Mishrimal Jain
vs. Avinash Vishwanath Patne, 2025 SCC OnLine SC 329
(“Ramesh Mishrimal”) wherein this Court while considering a
similar provision under Explanation I to Article 25 of the Bombay
Stamp Act, 1958 held that the agreement to sell was in fact a
sale deed and hence, stamp duty would be chargeable. He also
submitted that in the said judgment reference has been made to
Ratnamala, wherein a Division Bench of the Andhra Pradesh
High Court had interpreted the provision under consideration
and had opined that the document of agreement to sell was in
fact a sale deed and therefore subject to stamp duty as a
document of sale. That, in the said judgment the Division bench
of the Andhra Pradesh High Court overruled the earlier judgment
of the said Court in M.A. Gafoor vs. Mohd. Jani, 1998 SCC
Online AP 848 (“Gafoor”) . Therefore, there is no merit in these
appeals and the same may be dismissed.
4. Before we move forward, it is necessary to recall the
relevant facts of the present case. The appellant herein is a
tenant of the respondent in respect of the suit schedule property
10
and according to the appellant, the respondent entered into an
agreement to sell the said property on 14.10.2009. Suit for
specific performance of the said agreement has been filed by the
appellant herein in O.S. No.188/2013 which is pending before
the Trial Court. In the said suit, the appellant sought to mark
the agreement to sell dated 14.10.2009 as it is on the basis of
the said agreement that the suit for specific performance has
been filed by the appellant herein. An objection for marking of
the said document was raised by the respondent’s counsel on
the ground that it is insufficiently stamped and that Explanation
I to Article 47A of Schedule I-A of the A.P. Stamp Act would apply.
The said objection was sustained by the Trial Court which
ordered that duty and penalty has to be paid by the appellant on
the said document before it could be marked in evidence. The
High Court has sustained the said order in Civil Revision Petition
No.551/2017. Hence, these appeals.
4.1 It is also necessary to bear in mind the fact that the
respondent has been successful in seeking an order of eviction
11
of the appellant tenant by filing R.C.C. No.4/2013 dated
03.01.2017 under the A.P. Rent Act, 1960.
4.2 In the agreement to sell dated 14.10.2009 which is
produced as Annexure P-I, it is noted that two non-judicial
stamps, each valued at Rs.50/- i.e., totalling Rs.100/- as stamp
duty has been paid. Further, in the said agreement to sell
entered into by the respondent in favour of the appellant, it is
stated as under:
“… In view of changes of time and circumstances and
since I am unable to supervise the said property in future
and further decided and confirmed to develop my
property situate at Visakhapatnam and in view of
purchaser’s request previously made to sell and since
the Schedule property is in your possession since
around 50 years and enjoying the same. I, the seller
hereby thought it fit to sell the Schedule property to you,
I seller and agreed to sell the same for Rs.9,00,000/- and
received an amount of Rs.6,50,000/- (Rupees Six Lakhs
Fifty thousand only) on this day from the purchaser
towards advance and I further agreed to receive the
remaining balance sale consideration from your and the
Seller has agreed to receive the same before and in the
presence of the Sub-Registrar at the time of registration
and after duly engraving the Sale Deed on the stamps
purchased to effect the registration at Purchaser’s
expense and I, the seller hereby further agreed to do so
on my (self) assurance and guarantee and do execute the
Sale deed on proper stamps whenever the Purchaser
called upon to execute the sale deed. Further, I the seller
12
hereby agreed and assured to execute regular sale deed
without stipulation of time or referring to time……”
(underlining by us)
On a reading of the aforesaid clause, it is evident that – (i)
the appellant has been in possession of the suit schedule
property as a tenant for around fifty years, and (ii) the landlady-
respondent herein has agreed to sell the suit schedule property
to the appellant-tenant. The fact that the appellant has been in
possession of the property for the last fifty years as noted in the
said agreement to sell dated 14.10.2009 is significant and a
critical fact in the instant case. It means that the appellant-
tenant was not given possession of the suit property in the
backdrop of the agreement to sell, either prior thereto or
subsequently.
4.3 Further, the appellant has also suffered an eviction order
vis-à-vis the suit schedule property as a tenant. This was
because the respondent herein had preferred the petition seeking
eviction of the appellant under the A.P. Rent Act, 1960. The
relevant portion of the order of eviction dated 03.01.2017 passed
13
by the Rent Controller-cum-Principal Junior Civil Judge,
Rajamahendravaram in RCC No.4 of 2013 reads as under:
“1. This is a petition filed by the petitioner under Section
10 of A.P. Buildings (Lease, Rent and Eviction) Control
Act, 1960 against the respondent for eviction of the
respondent from the schedule property by directing him
to vacate and handover the vacant possession of the
premises to her and to award costs and such other
reliefs.
xxx
2. The petitioner submitted that she is the absolute
owner of the petition schedule property. In the first
instance, the respondent filed a suit in OS 1050/1999
against the petitioner and her husband for Permanent
Injunction restraining the petitioner and her husband
not to dispossess the respondent from the schedule
property except under due process of law on the file of
Prl. Junior Civil Judge Court, Rajahmundry. The
respondent averred in the plaint in O.S. 1050 of 1999
that he took the schedule premises on lease from the
petitioner on monthly rent of Rs.1200/-, thus the
respondent admitted the ownership of the petitioner and
also admitted that he is only a tenant under the
petitioner. Subsequently, the petitioner filed a suit in
O.S.611/2002 on the file of I Additional Junior Civil
Judge, Rajahmundry against the respondent seeking a
permanent injunction against the respondent
restraining him respondent from the schedule property
on the file of I Additional Junior Civil Judge,
Rajahmundry.
xxx
13. The respondent submitted that once the petitioner
and her husband expressed their willingness to sell away
the petition schedule property for reasonable price and
14
then he reserved his right to exercise the obligation
under presumption clause under tenancy whenever
occasion arises, subsequently during the year 1999 the
petitioner and her husband changed their mind and they
developed ill-will at the provocation of some local people
with a view to sell away the schedule property for higher
price and attempted to dispossess him from the schedule
property and attempted to use force to evict him on
intervention of elders by name Chekka Satyanarayana,
Sri Bhalla Varambabu of Dowaliswaram and others, the
respondent resisted the illegal attempts of the petitioner
and her husband, the petitioner and her husband openly
proclaimed that the will evict him from the schedule
property at any cost, apprehending danger in the hands
of the petitioner and husband, he was constrained to file
a suit for perpetual injunction against the petitioner in
O.S.1050/1999, in the said suit the petitioner filed a
memo stating that the suit may be decreed subject to the
result of the other suits filed by her in O.S.611/2002 and
2/2004, consequently the suit was decreed accordingly.
xxx
19. The respondent submitted that as per the advice of
the petitioner until the outcome of the registered sale
deed duly executed by her, the petitioner advised to him
to deposit the rental in her bank account as usual @
Rs.1200/- per annum and also to pay house tax to
Grampanchayat, Dowlaiswaram, accordingly he used to
deposit rents, but subsequently because of ill advices,
the petitioner refused to receive rents, consequently he
has been depositing the rents in the petitioner's bank
account bearing No.01190037135 of State Bank of India,
Dowlaiswaram since 2005, he has no objection to
deposit the entire accrued rent and the rental that
accrues hereinafter before this Tribunal illegible.
xxx
15
30. On a careful perusal of pleadings and evidence, it
can be safely concluded that there is a landlady and
tenant relationship between the petitioner and
respondent, hence point no.1 is answered in favour of
the petitioner.
xxx
39. …Thus, the contention of the petitioner that she is
the absolute owner of the property and she is having
necessity to recover the property is proved. Hence, I hold
that the respondent is liable to evict the petition
schedule property and deliver the possession to the
petitioner.
xxx
In the result, this petition is allowed with costs,
eviction ordered, granting one month time for the
respondent to vacate and deliver vacant possession of
the schedule property to the petitioner, failing which the
petitioner is at liberty to get the order executed by filing
E.P. in accordance with law.”
(underlining by us)
The aforesaid eviction order was passed on 03.01.2017
subsequent to the agreement to sell which is dated 14.10.2009.
Jural Relationship in the Instant Case:
5. In this case, the appellant was a tenant of the respondent-
landlady on the date of execution of the agreement to sell dated
14.10.2009, and the jural relationship between the parties was
that of lessor and lessee/landlady and tenant and the tenancy
16
was within the scope and ambit of the A.P. Rent Act, 1960 for
about fifty years. The question is whether the said jural
relationship was converted to one of vendor and vendee upon the
execution of the agreement to sell. In other words, whether the
possession of the schedule property by the appellant herein
continued in the capacity of a tenant or as a vendee on the
execution of the agreement to sell. If the possession of the suit
schedule property continued to be held by the appellant as a
tenant even upon the execution of the agreement to sell, there
would be no conveyance/sale within the meaning of the
Explanation I to Article 47A of Schedule I-A of the A.P. Stamp
Act. On the other hand, if the relationship in relation to the
agreement to sell became that of a vendor and vendee, then the
aforesaid Explanation I would apply and it would be in the
nature of a deemed conveyance. In order to ascertain this aspect
of the matter, it is necessary to discuss the relevant provisions
of the Transfer of Property Act, 1882 (“the Act” for short).
5.1 Section 105 of the Act defines a lease and the relationship
of a lessor and lessee is the relationship which exists between
17
the parties to a lease. The rate of rent, duration of lease, purpose
of lease, etc. are all governed by the terms of the contract entered
into between the parties. Thus, a lease is the transfer of a right
to enjoy immovable property for a certain period of time. The
said relationship is also of a landlord and a tenant i.e., a tenancy
where lease of a premises is recognised under a statute.
5.2 If a tenancy is covered under a statute, the eviction of a
tenant is under the particular statute. Irrespective of the same,
Section 111 of the Act speaks of determination of lease. There
are eight ways in which a lease can be determined i.e. when it
comes to an end and there is no order of eviction of a tenant
under a statute. Clauses (e) and (f) deal with express surrender
and implied surrender. For ease of reference, Section 111 (e) and
(f) of the Act are extracted as under:
“111. Determination of lease.— A lease of immoveable
property determines—
xxx
(e) by express surrender; that is to say, in case the lessee
yields up his interest under the lease to the lessor, by
mutual agreement between them;
(f) by implied surrender;”
18
5.3 The expression “express surrender” means the lessee
yields his interest under the lease to the lessor by mutual
agreement between them. In other words, express surrender
means giving up of the interest in the premises under the lease
to the lessor by mutual agreement between the lessor and the
lessee. Express surrender necessitates that the lessee has given
up possession of the holding. Surrender need not be in writing
nor by a registered deed. However, if there is an abatement of
rent, it should be only by a registered instrument for it effects a
variation in the contract of tenancy. The effect of surrender
under clause (e) of Section 111 of the Act is the determination of
the lease.
5.4 Clause (f) of Section 111 of the Act deals with the rule of
implied surrender. Implied surrender is by operation of law and
it can occur by - i) the creation of a new relationship of lease, or
ii) relinquishment of possession i.e., there is yielding of
possession by the lessee and taking over of possession by the
lessor. It is created by the acceptance of, and not by the mere
agreement for a new relation which, in effect, estops the lessee
19
from setting up the old one. Implied surrender of tenancy can be
established by the conduct of the parties and from attending
circumstances. Implied surrender is by the operation of law and
takes place in spite of the intention of the parties. It may come
into being in a number of ways, e.g., by acceptance of a new
lease, or by unequivocal giving up of possession by the lessee as
a lessee, or by re-letting to another person by the landlord, or by
accepting of a sub-tenant as his tenant by the landlord.
5.5 Where the agreement to sell entered into by the parties
clearly states that from the date mentioned in the agreement, the
tenant in possession of the property intended to be sold under
the agreement shall not be liable to pay any rent and shall alone
be in charge of any damage caused to the property in question,
it would imply a surrender of rights as a tenant vide B.
Paramashivaiah vs. M.K. Shankar Prasad, AIR 2009 Kar
88.
5.6 A surrender by operation of law determines the lease and
extinguishes the rights of the lessee in respect of the property
surrendered, from the date of the surrender and the estate vests
20
immediately in the lessor. The term “surrender by operation of
law” is used to describe all those cases where the law implies a
surrender from unequivocal conduct of both the parties which is
inconsistent with the continuance of the existing tenancy.
5.7 There is a distinction between an express and implied
surrender inasmuch as while express surrender is a matter of
intention of the parties, implied surrender is by implication of
the law. An implied surrender is the act of the law and takes
place independently of and in some cases even in spite of the
intention of the parties.
5.8 Further, Section 54 of the Act defines sale of immovable
property as a transfer of ownership in exchange for a price paid
or promised or part paid or part promised. A contract for sale or
an agreement to sell of immovable property is a contract that sale
of such property shall take place on terms settled between the
parties. It does not, of itself, create any interest in or charge on
such property. By virtue of Section 47 of the Registration Act,
1908, a mere agreement to sell immovable property, which
creates only a right to obtain another document conveying
21
property, is not compulsorily registrable under Section 17 of the
Registration Act, 1908. An averment of the existence of a
contract for sale, whether with or without an averment of
possession following upon the contract by itself, is not a relevant
defence to an action for ejectment. The reason is that a mere
agreement for sale does not create any interest in immovable
property. If an agreement to sell or an agreement for sale does
not create any interest in it, there can be no transfer of interest
in the property by such a mere contract for sale. A contract for
sale gives only a right to compel the other party to execute a sale
deed in respect of the property. An agreement to sell confers no
title and is not a transfer of any rights in an immovable property.
Therefore, an agreement to sell per se cannot be construed as a
“conveyance”, which is restricted to delivery of possession or
execution of a sale deed.
5.9 In Suraj Lamp and Industries Private Limited (2) vs.
State of Haryana, (2012) 1 SCC 656 , this Court speaking
through Raveendran, J. referred to the scheme of the Act, the
Registration Act, 1908 as well as the Indian Stamp Act, 1899
22
(Central Act, though the provisions may be similar to those in
the State Acts). Section 5 of the Act which defines transfer of
property, Section 54 which defines sale and Section 53A of the
Act which defines part performance as well as contract for sale
as defined in Section 54 of the Act were examined. Similarly,
Sections 17(1)(b) and 17(1A) of the Registration Act, 1908 and
the relevant provisions and Section 27 of the Indian Stamp Act,
1899 were considered. While referring to Section 54 of the Act,
the scope of an agreement to sell was considered to hold that
only when there is a transfer which means to convey ownership
and would entail the transfer of title, would there be a
requirement of registration of the document as a non-
testamentary instrument within the meaning of Section 17(1)(b)
of the Registration Act, 1908? Thus, only when there is a sale
deed, would there be any creation of an interest in the property
including transfer of title and the same would imply a
conveyance? In paragraphs 18 and 19 of the said judgment, it
was observed as under:
23
“18. It is thus clear that a transfer of immovable property
by way of sale can only be by a deed of conveyance (sale
deed). In the absence of a deed of conveyance (duly
stamped and registered as required by law), no right, title
or interest in an immovable property can be transferred.
19. Any contract of sale (agreement to sell) which is not
a registered deed of conveyance (deed of sale) would fall
short of the requirements of Sections 54 and 55 of the
TP Act and will not confer any title nor transfer any
interest in an immovable property (except to the limited
right granted under Section 53-A of the TP Act).
According to the TP Act, an agreement of sale, whether
with possession or without possession, is not a
conveyance. Section 54 of the TP Act enacts that sale of
immovable property can be made only by a registered
instrument and an agreement of sale does not create any
interest or charge on its subject-matter.”
5.10 Therefore, a contract for sale (agreement to sell) would not
confer any title nor transfer any interest in an immovable
property (except to the limited right granted under Section 53A
of the Act). Thus, an agreement to sell or a contract for sale with
or without possession is not a conveyance deed. Therefore, a sale
of immovable property can only be made by a registered
instrument and that an agreement of sale does not create any
interest or charge on its subject matter.
24
5.11 Section 53A of the Act reads as under:
“53A. Part performance.— Where any person contracts
to transfer for consideration any immoveable property by
writing signed by him or on his behalf from which the
terms necessary to constitute the transfer can be
ascertained with reasonable certainty,
and the transferee has, in part performance of the
contract, taken possession of the property or any part
thereof, or the transferee, being already in possession,
continues in possession in part performance of the
contract and has done some act in furtherance of the
contract,
and the transferee has performed or is willing to
perform his part of the contract,
then, notwithstanding that where there is an
instrument of transfer, that the transfer has not been
completed in the manner prescribed therefore by the law
for the time being in force, the transferor or any person
claiming under him shall be debarred from enforcing
against the transferee and persons claiming under him
any right in respect of the property of which the
transferee has taken or continued in possession, other
than a right expressly provided by the terms of the
contract:
Provided that nothing in this section shall affect the
rights of a transferee for consideration who has no notice
of the contract or of the part performance thereof.”
5.12 Section 53A applies to a person who contracts to transfer
immovable property in writing. If the proposed transferee in the
agreement has taken possession of the property or he continues
in possession thereof being already in possession in part
25
performance of the contract and has done some act in
furtherance of the contract and transferee has performed or is
willing to perform his part of the contract, the transferor shall be
debarred from enforcing any right in respect of the property vide
Shashi Kapila vs. RP Ashwin, (2002) 1 SCC 583.
5.13 In a case where a person claims benefit of part
performance, evidence that he was inducted into possession for
the first time subsequent to the contract, would be a strong piece
of evidence regarding the contract and of possession changing
hands pursuant to the contract. Continuous possession of a
tenant in the suit property even after entering into the sale
agreements would not by itself amount to a part-performance,
putting the tenant in possession of the suit properties pursuant
to the sale agreements vide Chinnaraj vs. Sheik Davood
Nachair, AIR 2003 Mad 89.
6. However, just like in many states, amendments were made
to the A.P. Stamp Act whereby agreements to sell acknowledging
delivery of possession or power of attorneys authorising the
attorney “to sell any immovable property” along with delivery of
26
possession were charged with the same duty as leviable on a
conveyance deed. In the instant case, Article 47A of Schedule I-
A of the A.P. Stamp Act reads as under:
“47A. Sale as defined in Section 54
of the Transfer of Property
Act, 1882 -
(a) in respect of property situated in
any local area comprised in a
Municipal Corporation-
(i) where the amount or value of
the consideration for such sale
as set forth in the instrument or
the market value of the property
which is the subject matter of
the sale whichever is higher but
does not exceed Rs.1,000.
*Eight rupees for
every one hundred
rupees or part thereof.
(ii) where it exceeds Rs.1,000. The same duty as
under clause (i) for the
first Rs.1,000 and for
every Rs.500 or part
thereof in excess of
Rs.1,000, forty
rupees.
(b) In respect of property situated
in any local area comprised in
the Selection Grade or in Special
Grade Municipality-
(i) where the amount or value of
the consideration for such sale
as set forth in the instrument or
the market value of the property
which is the subject matter of
the sake, whichever is higher,
but does not exceed Rs.1,000;
Seven rupees for every
one hundred rupees
for part thereof.
(ii) where if exceeds Rs.1,000. The same duty as
under clause (i) for the
first Rs.1,000 and for
27
every Rs.500 or part
thereof in excess of
Rs.1,000, Thirty five
rupees.
(c) Where the property is situated
in any area other than those
mentioned in clauses (a) and
(b)–
(i) where the amount or value of
the consideration for such sale
as set forth in the instrument or
the market value of the property
which is the subject matter of
the sale, whichever is higher,
but does not exceed Rs.1,000/-
*Six rupees for every
one hundred rupees
or part thereof.
(ii) where it exceeds Rs.1,000. The same duty as
under clause (i) for the
first Rs.1,000 and for
every Rs.500 or part
thereof in excess of
Rs.1,000, Thirty
rupees.
(d) If relating to a multi-unit house
or unit of apartment/flat/
portion of a multi-storied
building or part of such
structure to which the
provisions of Andhra Pradesh
Apartments (Promotion of
Construction and Ownership)
Act, 1987, apply :
(i) where the value does not
exceed Rs.2,00,000/-
Rupees Twelve
Thousand.
(ii) where it exceeds
Rs.2,00,000/- but does not
exceed Rs.3,50,000/-
Rupees Twelve
Thousand plus 4% on
the value above
Rs.2,00,000/-
28
(iii) where it exceeds
Rs.3,50,000/- but does not
exceed Rs.7,00,000/-
Rupees Eighteen
Thousand plus 6% on
the value above
Rs.3,50,000/-
(iv) where it exceeds
Rs.7,00,000/-
Rupees Thirty Nine
Thousand plus 8% on
the value above
Rs.7,00,000/-
Explanation I:- An agreement to
sell followed by or evidencing
delivery of possession of the
property agreed to be sold shall
be chargeable as a “sale” under
this Article:
Provided that, where
subsequently a sale deed is
executed in pursuance of an
agreement of sale as aforesaid
or in pursuance of an agreement
referred to in clause (b) of Article
6, the stamp duty, if any,
already paid or recovered on the
agreement of sale shall be
adjusted towards to total duty
leviable on the sale deed.
xxx
(underlining by us)
6.1 Explanation I to Article 47A is relevant to the instant case.
The said Explanation states that if an agreement to sell is
followed by or evidences delivery of possession of the property
agreed to be sold, then the same shall be chargeable as “sale”
under the said Article. The proviso states that where,
29
subsequently a sale deed is executed in pursuance of an
agreement of sale, the stamp duty if any already paid or
recovered on the agreement of sale shall be adjusted towards the
total duty leviable on the sale deed. Therefore, it is necessary to
interpret the agreement to sell in the instant case in light of the
aforesaid Explanation I to Article 47A of Schedule I-A of the A.P.
Stamp Act.
7. In Gafoor, an agreement to sell was executed with the
tenant in possession of the schedule property therein, wherein it
was contemplated that the purchaser (the tenant) can retain the
possession and further was authorised to collect rents for
himself by subletting the premises. It was held that in view of
the aforesaid express term in the agreement to sell, the jural
relationship between the parties had changed from that of
landlord-tenant to one of vendor and vendee. Even though the
parties remained in the same position vis-à-vis the schedule
property therein, the nature of their relationship was altered.
The tenant had transformed into a purchaser even though there
was no delivery of possession to the landlord and again re-
30
delivery to the same tenant as a purchaser. The factum of change
of relationship led to an inference of change in the nature of
possession. This is a case whereby through an implied
surrender, there was determination of the lease or tenancy.
Therefore, the relationship of landlord and tenant had ended and
the creation of a relationship of vendor and purchaser had
commenced on the execution of the agreement to sell. But, the
High Court held that the Explanation I to Article 47A of Schedule
I-A of the A.P. Stamp Act was not applicable.
8. In Ratnamala, a Division Bench of the High Court of
Andhra Pradesh interpreted Explanation I to Article 47A of
Schedule I-A of the A.P. Stamp Act on a reference made to it by
a learned Single Judge of that Court, differing with the view
taken by another learned Single Judge in Gafoor. In paragraph
9 of the judgment in Ratnamala while considering Explanation
I to Article 47A of Schedule I-A of the A.P. Stamp Act, it was
observed as under:
“… These expressions cannot be read in isolation and
one has to find the true meaning by reading the entire
Explanation and more so in conjunction with the earlier
expression i.e., “agreement”. Even if these two
31
expressions are looked independently, it means an
agreement to sell followed by delivery of possession and
an agreement to sell evidencing delivery of possession.
In the first case, i.e., “followed by delivery”, possession
cannot be disjuncted from the basic source i.e.,
agreement to sell. Therefore, the expression followed by
delivery of possession should have a direct nexus to the
agreement and should be read in juxtaposition to the
word ‘agreement’ and it cannot be independent or
outside the agreement. Therefore, the delivery of
possession should follow the agreement i.e., through the
agreement. It takes in its sweep the recital in the
agreement itself that delivery of possession is being
handed over. It will also cover cases of delivery of
possession contemporaneous with the execution of
agreement, even if there is no specific recital in the
agreement. In other words, the delivery of possession
should be intimately and inextricably connected with the
agreement. And in the second type, i.e., agreements
evidencing delivery of possession, if the document
contains evidence of delivery of possession by a recital in
that behalf, that is sufficient. Such delivery of possession
can be prior to the date of agreement and need not be
under the agreement. If the agreement records the fact
that the possession was delivered earlier and such recital
serves as evidence of delivery of possession, though prior
to the Agreement, it falls under the second limb.
Therefore, on a proper interpretation of the said
expressions, it would follow that an agreement
containing specific recital of delivery of possession or
indicating delivery of possession even in the past is liable
for stamp duty as a ‘sale’ under the said Explanation.”
(underlining by us)
8.1 In Ratnamala , it was observed that the judgment in
Gafoor was not the correct law by observing as follows:
32
“14. In the case on hand, there is a variation in the
expressions used viz., “followed by” and “evidencing
delivery of possession”. As discussed above, the
expression “followed by” should be read in conjunction
with the earlier expression “agreement” and in the latter
case, any agreement recording delivery of possession
should invite the stamp duty as a sale deed, even though
the possession had been delivered in the past. The
expression “evidencing delivery of possession” applies to
the situation with which we are concerned in the present
case.”
8.2 In our view, the Division Bench of the High Court was
right in overruling the judgment in Gafoor . This is because the
facts of the case and the recitals of the agreement therein in the
latter judgment were not appreciated in their proper perspective.
8.3 To recollect the facts in Gafoor , the agreement to sell had
a clause which stated that the purchaser who was the lessee can
retain and collect rent from the schedule property after the
agreement of sale of the property and the vendor will, in no way,
interfere or object to the same even if the purchaser sub-lets the
premises and collects rent. This recital meant that, (i) the tenant
of the building was specifically permitted to retain possession
and collect rent from the schedule property subsequent to the
execution of the agreement and (ii) he was also authorised to
33
sub-let the premises. (iii) Apart from that it was specifically
mentioned in the agreement that the vendee, who was the tenant
of the building, would not have to pay monthly rent subsequent
to the agreement of sale. Thus, the position of the tenant and his
relationship with his landlord had metamorphosed into that of
vendee and vendor. The possession of the property continued
with the tenant or lessee but not in that capacity but as a vendee
who had got possession pursuant to the agreement to sell.
Therefore, there was deemed conveyance and it was interpreted
to come within the scope and ambit of the Explanation I to Article
47A of Schedule I-A of the A.P. Stamp Act. In our view, this
interpretation in Ratnamala about Gafoor was just and proper
inasmuch as there was an implied surrender of the tenancy and
a cessation of the landlord-tenant relationship and pursuant to
the agreement therein, the relationship was one of vendor and
vendee. These recitals in the agreement by the vendor revealed
that the plaintiff therein i.e., the vendee who had filed the suit
for specific performance was already in possession of the
building as a tenant and as such the question of delivering of
34
physical possession of the property under the agreement did not
arise. It was held that the delivery of possession after the
execution of the agreement was notional on an implied surrender
of tenancy as the plaintiff therein was in actual possession of the
property as a tenant even prior to the agreement. Hence,
Explanation I to Article 47A of Schedule I-A of the A.P. Stamp
Act was rightly applicable.
9. Ramesh Mishrimal is a judgment of this Court. The facts
of the said case were that the Trial Court by its order had allowed
the application filed by the respondent therein and impounded
the document (Ex. 30) i.e. Agreement to Sell dated 03.09.2003 in
respect of a house property and an adjoining room and directed
the same to be sent to the Registrar of Stamps for recovery of
deficit stamp duty and penalty on it, as per law. This order was
passed in a suit for specific performance of the agreement to sell
dated 03.09.2003 and other reliefs. The respondents therein had
filed the application under Section 34 of the Bombay Stamp Act,
1958 for impounding the document stating that the agreement
in question was executed on a stamp paper of Rs.50/- and the
35
suit property was situated within the limits of a place called Khed
and hence stamp duty of Rs.44,000/- was required to be paid
besides penalty of Rs.1,31,850/-. The said application was
resisted by the appellant therein by contending that the
agreement to sell was not an agreement of conveyance and
hence, no stamp duty was payable on the same as a conveyance.
Reference was made to Explanation I to Article 25 of the Bombay
Stamp Act, 1958. The said Explanation presupposes an
immediate or agreed transfer of possession under the agreement
to sell itself but when the possession remains with the seller until
the sale deed is executed, the agreement to sell cannot be
equated with the conveyance and no stamp duty can be levied as
such. In the said case, the agreement to sell dated 03.09.2003
explicitly stated that the suit property was in the possession of
the appellant therein in the capacity of a tenant and this
possession was independent of the sale transaction. The
extension agreement dated 28.7.2004 entered into between the
parties also reiterated the same position.
36
9.1 The appellant therein had contended that three conditions
were not satisfied and hence Explanation I to Article 25 of the
Schedule I to the Bombay Stamp Act, 1958 did not apply. They
were namely, (i) no possession was transferred under the
agreement to sell; (ii) no agreement to transfer possession existed
until the sale deed was executed; and (iii) the possession of the
appellant remained that of a tenant, which was legally distinct
and independent. Hence, no stamp duty could be levied on the
agreement to sell dated 03.09.2003 as a conveyance.
9.2 Per contra , the respondent therein had submitted that the
said Explanation was applicable and the agreement to sell was
to be treated as a conveyance. In support of the same, reliance
was placed on two decisions of this Court in Veena Hasmukh
Jain vs. State of Maharashtra, (1999) 5 SCC 725, (“Veena
Hasmukh”) and Shyamsundar Radheshyam Agrawal vs.
Pushpabai Nilkanth Patil, (2024) 10 SCC 324
(“Shyamsundar Radheshyam”) wherein it was held by this
Court that the stamp duty is leviable only on the document and
not on the transaction.
37
9.3 At this stage itself, it could be observed that having regard
to the specific nature of recitals in the respective agreements to
sell considered by this Court in the aforesaid two cases, it was
held that there was in fact a deemed conveyance and hence, the
requisite stamp duty in terms of Explanation I to Article 25 of
Schedule I to the Bombay Stamp Act, 1958 was applicable.
9.4 The significant facts in Ramesh Mishrimal were that
there was a civil suit filed by the landlord against the tenant-
vendee seeking eviction and possession of the schedule
premises. This Court considered the question, whether, the
appellant was liable to pay the stamp duty and penalty on the
agreement to sell dated 03.09.2003 allegedly executed between
the appellant and mother of respondent no.1 therein in respect
of the suit property. It was the specific case of the appellant
therein that the agreement to sell clearly stated that the
possession of the appellant was on rental basis and the same
would not form part of the sale transaction. Therefore, the
question of treating the agreement a deemed conveyance did not
arise. This Court held that the suit property was occupied by
38
the appellant therein on a rental basis and there was a clause
that the transaction was to take place later by execution of the
sale deed. This Court noted the following clause in the
agreement, namely, “ this property is in their occupation on rental
basis and it will not be part of the sale transaction. After
completion of sale transaction, the possession of the said property
will be given to you on the ownership basis .”
9.5 This Court observed that the agreement to sell included a
clause stating that the physical possession had already been
handed over to the appellant. Regardless of the basis of such
possession, by applying the Explanation to Article 25 of Schedule
I of the Bombay Stamp Act, 1958 this Court held that there was
a conveyance within its meaning and hence dismissed the appeal
and directed that until duty and penalty was satisfied under
Section 34 of the Bombay Stamp Act, 1958, the document
impounded could not be used in evidence. This Court invoked
Section 53A of the Act to hold that the tenant therein had
acquired the possessory right and therefore there was a
conveyance or sale within the meaning of Explanation I to Article
39
25 to Schedule I of the Bombay Stamp Act, 1958. This Court
observed that the vendee therein was already in possession of
the property to be sold to him and continued to do so in part
performance of the contract as the said possession was
recognised under the agreement and therefore there was a sale
or conveyance.
9.6 The judgment of this Court in Ramesh Mishrimal has to
be distinguished on two aspects. Firstly , on the basis of the text
of Explanation I under the A.P. Stamp Act and Bombay Stamp
Act, 1958. Secondly , in Ramesh Mishrimal this Court has
invoked Section 53A of the Act which is not being done so in the
instant case.
10. Explanation I to Article 25 of Schedule I of the Bombay
Stamp Act, 1958 reads as under:
“ Explanation 1 .— For the purposes of this article, where
in the case of agreement to sell an immovable property,
the possession of any immovable property is transferred
or agreed to be transferred to the purchaser before the
execution, or at the time of execution, or after the
execution of such agreement without executing the
conveyance in respect thereof, then such agreement to
sell shall be deemed to be a conveyance and stamp duty
thereon shall be leviable accordingly:
40
Provided that, the provisions of Section 32-A shall
apply mutatis mutandis to such agreement which is
deemed to be a conveyance as aforesaid, as they apply to
a conveyance under that Section:
Provided further that, where subsequently a
conveyance is executed in pursuance of such agreement
of sale, the stamp duty, if any, already paid and
recovered on the agreement of sale which is deemed to
be a conveyance, shall be adjusted towards the total duty
leviable on the conveyance.”
However, in the present case, Explanation I to Article 47A
of Schedule I-A to the A.P. Stamp Act reads as under:
“An Agreement to Sell followed by or evidencing delivery
of possession of the property agreed to be sold shall be
chargeable as a sale under this Article.”
10.1 The phrases in the aforesaid two Explanations could be
highlighted. Under Explanation I to Article 47A of Schedule I-A
to the A.P. Stamp Act, the words used are “ followed by or
evidencing delivery of possession of the property agreed to be sold ”
whereas in Explanation I of the Bombay Stamp Act, 1958, the
words are “ the possession of any movable property is transferred
or agreed to be transferred to the purchaser before the execution,
or at any time of execution, or after execution of such instrument ”.
The differentiation in the wordings of the two Explanations reveal
41
that they are not identical and the intention of the respective
legislations are dissimilar. Under the A.P. Stamp Act, the delivery
of possession of the property must follow the execution of the
agreement to sell or if delivery of property has been made prior
to the agreement to sell then it should be evidenced in the
agreement to sell by a recital to that effect. However, if the
possession of the property by the vendee does not have any nexus
to the agreement to sell, as in the present case where the
possession of the property was with the appellant as a tenant for
nearly five decades and the respondent vendor has decided to sell
the same to the appellant vendee then, the said possession is not
relatable to the agreement to sell. In such a case, neither is the
sale within the meaning of Explanation I to Article 47A of
Schedule I-A to the A.P. Stamp Act nor is it a case of deemed
conveyance.
10.2 It is also necessary to observe that where pursuant to an
agreement to sell, possession is handed over to the vendee then
the protection under Section 53A of the Act would apply and the
possession of the vendee would be protected subject to the
42
conditions mentioned in the said provision including registration
of the instrument and therefore, the necessity to pay the requisite
stamp duty. However, in the present case, Section 53A of the Act
does not apply as the possession was not handed over to the
appellant herein in relation to the agreement to sell dated
14.10.2009. In fact, the appellant was in possession of the
subject property for almost fifty years prior to the said agreement
to sell. This is in fact recorded in the agreement to sell.
10.3 In the circumstances, it is necessary to distinguish the
ratio of the judgment in Ramesh Mishrimal as in the present
case, Section 53A will not apply as has been invoked in the
aforesaid case. Though in both the cases, the vendee on the date
of the agreement was in possession of the property as a tenant,
since Section 53A of the Act has been applied by this Court in
Ramesh Mishrimal , we restrict the said judgment only to the
facts of that case. This is because in the instant case, there is an
order of eviction against the appellant here subsequent to the
execution of agreement to sell which clearly proves that the
tenancy continued in respect of the suit schedule property in the
43
present case even subsequent to the execution of the agreement
to sell dated 14.10.2009. Therefore, Section 53A of the Act is not
applicable in the present case.
10.4 In Veena Hasmukh, the question raised for
consideration was as to the duty payable under the Bombay
Stamp Act, 1958 on an agreement for sale of flats covered by the
Maharashtra Ownership Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Act, 1963
(hereinafter referred to as “the MOF Act”) and the Maharashtra
Apartment Ownership Act, 1971. The contention of the appellant
therein was that she was not liable for payment of duty under
Entry 25 of Schedule I of the Bombay Stamp Act, 1958; that the
agreement for sale had been executed under Section 4 of the
MOF Act and in terms of the said provision, it was mandatory to
register the same under Section 17(1) of the Indian Registration
Act, 1908; that the provisions of the Bombay Stamp Act, 1958
were not applicable and consequently, proceedings under
Section 32-A of the Bombay Stamp Act, 1958 could not have
been initiated. Hence, it was contended that the action of
44
impounding the document was illegal. This Court noticed that in
paragraph 7 of the agreement, it was stated that subject to the
purchaser making full payment of all amounts due and payable
by him under the agreement and subject to a force majeure,
possession of the said premises was expected to be delivered by
the builders to the purchasers on or before 30.11.1987. The
agreement was dated 08.10.1987 and the possession was to
handed over by 30.11.1987. Paras 14 and 15 of the agreement
read as follows:
“14. Nothing contained in these presents is intended to
be nor shall it be deemed to be a grant, demise,
conveyance, assignment or transfer in law of the said
property premises or the building thereon, or any part
thereof to the purchaser by the builders.
15. The purchaser shall not let, sub-let, sell, transfer,
assign or otherwise deal with or dispose of the said
premises or his interest or benefit under this agreement
till all the dues payable by him to the builders under this
agreement have been fully paid up and until previous
consent in writing of the builders in that behalf is
obtained by him.”
The aforesaid terms were construed by this Court to hold
that the agreement entered into merely provided for sale of an
immovable property and there was also a specific time within
45
which possession had to be delivered (which was a few days after
the execution of the agreement to sell). It was therefore held that
the document in question fell within the scope of Explanation I
to Article 25 of Schedule I to the Bombay Stamp Act, 1958 and
the appeal filed by the appellant therein was dismissed.
10.5 In Shyamsundar Radheshyam , there were six
documents or instruments which were held to be different
transactions between different vendors and different purchasers.
The question involved was whether the appellant therein was
liable to pay stamp duty or penalty on the agreements to sell
executed prior to the sale deed executed in their favour in respect
of two properties. This Court observed that in order to determine
the stamp duty that is chargeable upon an instrument, the legal
rule is that the real and true meaning of the instrument is to be
determined by ascertaining the intention of the parties from the
contents and the language employed in the whole instrument
and the description or the nomenclature given to the instrument
by the parties is immaterial. This Court noted that the agreement
to sell consisted of a clause whereby the possession was handed
46
over to the purchaser satisfying the requirement to treat the
instrument as a conveyance and what remained was only the
formality of execution of the sale deed. Therefore, it was
concluded that the agreement to sell necessitated payment of
stamp duty as per the Explanation I of Article 25 of Schedule I
of Bombay Stamp Act, 1958. It was further held that the
subsequent sale deed executed could not be construed as the
principal transaction and that the agreement to sell was the
principal conveyance as per the aforesaid provision.
10.6 Therefore, the judgments of this Court in Veena
Hasmukh and Shyamsundar Radheshyam have no bearing
having regard to the facts of the present case.
11. On a conspectus reading of the recital in the agreement to
sell dated 14.10.2009 with the order dated 03.01.2017 passed in
RCC No.4 of 2013, it becomes clear that the appellant herein was
a tenant and as a tenant, he entered into an agreement to buy
the schedule property from the landlord. The respondent-
landlord did not treat the possession of the suit schedule
property by the appellant-tenant pursuant to the agreement to
47
sell dated 14.10.2009 as a vendee. In fact, long prior to that
agreement to sell (around fifty years), the appellant came into
possession of the suit schedule property as a tenant. Therefore,
this is not a case where pursuant to the agreement to sell dated
14.10.2009 or in relation to it, or prior to the agreement to sell
possession of the suit schedule property has been handed over
to the appellant herein as a vendee.
11.1 Thus, there is no express or implied surrender of the
tenancy by the appellant in favour of the landlord vendor. The
tenancy in fact continued and the appellant has also suffered an
order of eviction as a tenant vide order dated 03.01.2017.
Consequently, it is held that there is no “deemed conveyance”
within the meaning of Explanation I to Article 47A of the A.P.
Stamp Act, as the agreement to sell in the instant case does not
come within the scope and ambit of the Explanation thereto.
Therefore, neither there being transfer of title in the suit
schedule property nor there being any deemed conveyance from
the respondent to the appellant herein, the stamp duty payable
48
on the nature of the transaction being an agreement to sell
simplicitor is just and proper.
11.2 The facts of the case in Gafoor can be compared to the
present case, as it was rightly overruled by the Division Bench of
the Andhra Pradesh High Court in Ratnamala, as the findings
in the said case were incorrect wherein, it had been expressly
mentioned in the agreement to sell that the possession of the
schedule property was with the appellant therein as a tenant.
Therefore, the appellant therein also did not come into
possession of the property in relation to the agreement to sell but
was already in possession of the property as a tenant. But, there
was surrender within the meaning of Section 111 of the Act so
as to determine the lease or tenancy. On the other hand,
pursuant to the agreement to sell in the present case, there was
no change in the status of the appellant herein inasmuch as he
continued to be a tenant and did not acquire possession under
the agreement to sell. The appellant herein also suffered an
eviction order as a tenant of the schedule property. Therefore,
the appellant did not acquire possession of the property prior to
49
the agreement to sell dated 14.10.2009 in relation thereto or at
the time of its execution or subsequent thereto. In other words,
the possession of the schedule property by the appellant herein
was not following the agreement to sell nor was delivery of
possession pursuant to the execution of agreement to sell as
stipulated under the A.P. Stamp Act. It is only when the
possession is acquired in relation to the execution of the
agreement to sell, that it would be a deemed conveyance and
stamp duty has to be levied as conveyance.
12. However, in the instant case, the agreement to sell dated
14.10.2009 expressly states that the appellant was in possession
of the schedule property as a tenant for fifty years and in fact an
order of eviction was also passed against the appellant.
Therefore, the appellant did not come into possession of the
schedule property in relation to the execution of the agreement
to sell dated 14.10.2009 but almost fifty years prior thereto as a
tenant and not as a vendee. In fact, the existing tenant sought
to purchase the schedule property but there was no express or
implied surrender of tenancy so as to bring about determination
50
of the tenancy or lease by the appellant herein. Hence, the
judgment of this Court in Ramesh Mishrimal is not applicable
to the facts of the present case.
12.1 The Trial Court failed to notice this aspect of the matter
and simply directed the appellant herein to pay the stamp duty
as if it were a conveyance or sale and there was a transfer of title
from the respondent to the appellant herein. The High Court in
fact misdirected itself in assuming that there was in fact a
deemed conveyance between the respondent and the appellant
herein. The appellant herein is not liable to pay any additional
duty and penalty on the said instrument and neither is the said
instrument liable to be impounded for the purpose of payment
of duty and penalty. Hence, we find that the High Court was not
right in sustaining the order of the Trial Court. Consequently,
both the impugned orders of the High Court as well as the order
of the Trial Court are set aside. The appeals are allowed in the
aforesaid terms.
12.2 The Trial Court shall mark the agreement to sell dated
14.10.2009 as an Exhibit and proceed to dispose the suit as
51
expeditiously as possible and preferably within a period of six
months from the date of the next hearing before the Trial Court.
No costs.
….….……..………………….J.
(B.V. NAGARATHNA)
….….……..………………….J.
(R. MAHADEVAN)
NEW DELHI;
JANUARY 15, 2026.
52