The Allahabad High Court has affirmed that a purchaser who has fully paid consideration and taken lawful possession under an agreement to sell acquires a protectable possessory title under Section 53A of the Transfer of Property Act, 1882 - even if the agreement’s fixed term has expired. This ruling reinforces that possession, not mere contractual validity, is the cornerstone of equitable protection in immovable property disputes.
Background & Facts
The Dispute
The plaintiff-appellant, Satya Homes Pvt. Ltd., entered into a registered agreement to sell with the defendants-respondents on 02.05.2014 for the purchase of 34,600 square meters of land spread across Khasra Nos. 793 and 795 in Gautam Buddh Nagar. The total consideration was Rs. 15,21,37,274, which the appellant paid in full by 02.03.2015. The agreement stipulated a performance period until 10.03.2015, after which the sale deed was to be executed. Despite the expiry of this term, the appellant remained in continuous, uninterrupted possession of the entire property since 02.05.2014.
Key Facts
- The agreement to sell was registered and explicitly provided for delivery of possession upon payment.
- The entire consideration of Rs. 15,21,37,274 was paid by 02.03.2015.
- Possession of the entire 34,600 sq. m. property was delivered to the appellant on 02.05.2014 and has remained undisturbed since.
- On 20.06.2015, a sale deed was executed for 0.4215 hectares (4,215 sq. m.) of Khasra No. 793, with Rs. 148,78,655 paid and Rs. 36,64,700 adjusted from the original consideration.
- On 14.12.2015, another sale deed was executed for 3,372 sq. m. of Khasra No. 795, with Rs. 166,00,000 paid and Rs. 32,00,000 adjusted.
- No sale deed was executed for the remaining 14,363 sq. m. (1.4363 hectares).
- On 18.07.2022, the respondents produced an unregistered alleged compromise agreement signed by one Arvind Kumar Singh, claiming the appellant had relinquished rights to the remaining land. The appellant denied any knowledge or authorization of this document.
- The appellant filed Civil Suit No. 1183 of 2023 on 10.10.2023 seeking permanent injunction, declaration of possessory title, and mandatory injunction for execution of sale deeds.
- The trial court rejected the appellant’s application under Order 39 Rules 1 and 2 CPC for interim injunction on 05.09.2025, holding the agreement had lapsed on 10.03.2015.
Procedural History
- 02.05.2014: Registered agreement to sell executed with delivery of possession.
- 02.03.2015: Full payment of Rs. 15,21,37,274 completed.
- 10.03.2015: Fixed term of agreement expired.
- 20.06.2015: Sale deed executed for 4,215 sq. m. of Khasra No. 793.
- 14.12.2015: Sale deed executed for 3,372 sq. m. of Khasra No. 795.
- 18.07.2022: Unregistered compromise agreement allegedly executed (denied by appellant).
- 10.10.2023: Civil Suit No. 1183 of 2023 filed.
- 10.10.2023: Ex parte interim injunction granted by trial court.
- 05.09.2025: Trial court vacated injunction, rejecting application under Order 39 Rules 1 and 2 CPC.
- 05.05.2026: First Appeal from Order No. 2364 of 2025 heard.
- 11.05.2026: Judgment delivered by the Allahabad High Court.
The Parties' Positions
Appellant (Satya Homes Pvt. Ltd.):
- Contended that full payment and continuous possession since 2014 triggered protection under Section 53A TP Act.
- Argued that the agreement’s expiry did not extinguish possessory rights.
- Denied the validity of the unregistered 18.07.2022 agreement, citing lack of authorization and registration.
- Relied on Ghanshyam v. Yogendra Rathi (2023 INSC 575) and Gunwantbhai Mulchand Shah v. Anton Elis Farel (2006) 3 SCC 634.
Respondents (Fundan & Others):
- Claimed the agreement lapsed on 10.03.2015 and no further obligations arose.
- Asserted that subsequent sale deeds constituted new contracts, severing the original agreement.
- Relied on Suraj Lamp v. State of Haryana (2011) and Shakeel Ahmed v. Syed Akhaq Hussain (2023 INSC 1016) to argue unregistered documents confer no rights.
- Contended the appellant was not in possession of the remaining land and lacked readiness/willingness.
Relief Sought
The appellant sought:
- Restoration of the interim injunction granted on 10.10.2023.
- A permanent injunction restraining respondents from interfering with possession.
- A declaration of possessory title under Section 53A TP Act.
- A mandatory injunction directing execution of sale deeds for the remaining 14,363 sq. m.
The Legal Issue
Can a transferee who has fully paid consideration and taken lawful possession under an agreement to sell claim protection under Section 53A of the Transfer of Property Act, 1882, even after the fixed performance period in the agreement has expired, and without a registered sale deed?
Arguments Presented
For the Appellant
The appellant relied on Ghanshyam v. Yogendra Rathi (2023 INSC 575), where the Supreme Court held that a prospective purchaser who has performed his part of the contract and is in lawful possession acquires a possessory title protected under Section 53A TP Act, which cannot be invaded by the transferor or anyone claiming under him. The appellant emphasized that possession was delivered on 02.05.2014 and has remained undisturbed for over a decade. The execution of two partial sale deeds in 2015 was not a termination but a partial performance, indicating continuation of the original agreement’s terms. The unregistered 18.07.2022 agreement was challenged as inadmissible under Section 49 of the Registration Act and lacking authorization. The appellant argued that the cause of action for specific performance accrues only upon refusal to perform, which occurred on 30.09.2023, making the suit timely under Article 54 of the Limitation Act.
For the Respondent
The respondents contended that the agreement’s fixed term expired on 10.03.2015, extinguishing all obligations. They argued that subsequent sale deeds were independent transactions with new terms and rates, severing the original agreement. They relied on Shakeel Ahmed and Suraj Lamp to assert that unregistered agreements confer no title or enforceable rights. They claimed the appellant was not in possession of the remaining land and had not demonstrated readiness or willingness to complete the transaction. They further argued that the interim injunction was wrongly granted and that the suit was barred by limitation, as the cause of action arose on 10.03.2015. They also cited Padhiyar Prahladji and Sucha Singh Sodhi to argue that injunction is a consequential relief and cannot survive without a substantive claim.
The Court's Analysis
The Court undertook a detailed analysis of Section 53A of the Transfer of Property Act, 1882, and the Supreme Court’s jurisprudence on possessory rights. It observed that the doctrine of part-performance under Section 53A is not contingent upon the contractual term’s expiry but on the actual fulfillment of conditions: (1) a written contract for consideration, (2) part performance by taking possession, (3) acts in furtherance of the contract, and (4) willingness to perform.
"Legally an agreement to sell may not be regarded as a transaction of sale or a document transferring the proprietary rights in an immovable property, but the prospective purchaser having performed his part of the contract and lawfully in possession acquires possessory title which is liable to be protected in view of Section 53A of the Transfer of Property Act, 1882. The said possessory rights of the prospective purchaser cannot be invaded by the transferor or any person claiming under him."
The Court noted that the appellant had paid the entire consideration and taken possession of the entire property on 02.05.2014, satisfying all conditions under Section 53A. The subsequent sale deeds for partial areas did not nullify the original agreement but evidenced partial performance and continuation of the contractual relationship. The respondents failed to produce any registered document showing re-possession of the land after 2014. The unregistered 18.07.2022 agreement was held inadmissible under Section 49 of the Registration Act and could not override the appellant’s possessory rights.
The Court distinguished Ramesh Chand v. Suresh Chand (2025 INSC 1059), where possession was not established, from the present case where possession was admitted and continuous. It also rejected the respondents’ argument that the suit was barred by limitation, holding that where no fixed date for performance is enforceable after partial performance, the limitation period begins only upon refusal to perform, which occurred on 30.09.2023.
The Court further held that the trial court erred in rejecting the interim injunction application under Order 39 Rules 1 and 2 CPC without properly evaluating the prima facie case, balance of convenience, and irreparable injury. The appellant’s possession, backed by full payment and Section 53A protection, constituted a strong prima facie right. The respondents’ failure to show how they regained possession rendered their claim speculative.
The Verdict
The appeal was allowed. The Allahabad High Court set aside the trial court’s order dated 05.09.2025 and restored the interim injunction granted on 10.10.2023. The respondents are restrained from interfering with the appellant’s peaceful possession of the 34,600 sq. m. property subject to the registered agreement dated 02.05.2014. The respondents are further restrained from altering the nature of the property during the pendency of the suit. The impleadment application by the third party is disposed of with liberty to file before the trial court. The suit remains pending for final adjudication.
What This Means For Similar Cases
Possessory Title Survives Contract Expiry
- Practitioners must argue that Section 53A protection arises from possession and payment, not contractual duration.
- Even if an agreement to sell expires, continuous possession and full payment preserve the purchaser’s equitable rights.
- Courts must distinguish between contractual obligations and statutory possessory rights under Section 53A.
Unregistered Agreements Cannot Override Possession
- Unregistered documents, even if signed, cannot extinguish possessory rights established under Section 53A.
- Courts must scrutinize authenticity, authorization, and registration before admitting such documents.
- The burden shifts to the transferor to prove lawful re-possession after delivery under a registered agreement.
Interim Injunction Standard Clarified
- In suits involving possession under Section 53A, a prima facie case is established by proof of payment and continuous possession.
- The balance of convenience favors the possessor when the status quo has remained undisturbed for over a decade.
- Courts must not dismiss interim applications on technicalities of limitation or contract expiry at the interim stage.
