New Delhi | June 17, 2025
In a crucial clarification on property transactions, the Supreme Court of India has ruled that an agreement to sell even if signed by both parties does not amount to a transfer of ownership. To claim any legal right over the property, the buyer must seek specific performance through a civil court, the Court stated.
The bench, led by Justice J.B. Pardiwala and Justice R. Mahadevan, emphasized that unless a registered sale deed is executed, no legal title can pass to the purchaser, regardless of possession or payments made.
Key Takeaways from the Judgment
• Registered Deed Is Essential: Ownership can only pass through a duly registered sale deed under the Registration Act, 1908 and the Transfer of Property Act, 1882.
• Specific Performance is the Only Remedy: If the seller refuses to execute the deed after signing an agreement to sell, the buyer’s only legal recourse is to file a civil suit for specific performance. Until then, the buyer has no legal claim to the property.
“Unless a decree for specific performance is passed and sale deed executed, no ownership or enforceable right in property can be claimed,” the Court observed.
Background of the Case
The ruling came in a civil dispute involving a land transaction in which the buyer relied on an agreement to sell and claimed ownership. The seller had revoked the Power of Attorney, and no registered deed had ever been executed.
Despite payment and partial possession, the Court ruled that no property right could arise from such documents in the absence of a court-decreed sale.
Legal Significance
This ruling is expected to curb widespread misuse of sale agreements and POAs in property disputes and informal transactions. It reaffirms the legal principle that:
• No matter the circumstances, legal title cannot transfer without a registered document.
• Buyers must take steps through the court to enforce property contracts if sellers refuse to comply.
This decision also strengthens the security of property titles and discourages undocumented or semi-formal transfers.
