Section 54 TPA | Possession of Property Based on Agreement to Sell Does Not Confer Ownership; Registration Mandatory: Supreme Court

Section 54 TPA | Possession of Property Based on Agreement to Sell Does Not Confer Ownership; Registration Mandatory: Supreme Court

Supreme court of india has held that warranty deed to sell property provides no right to the possessor unless they have a registered sale deed through the `Indian Registration Act 1908’. The court explaining the provisions of Section 54 of the Transfer of Property Act, 1882 pointed out that an agreement to sell does not convey any title or any interest in the property; sale of immovable property for a consideration amounting to Rs. One hundred or more can be passed only by a registered sale deed. The facts in the case arose out of a dispute between the appellant and respondent in relation to property belonging to Shri M.A. Shanmugam where possession of the property was handed over to a company as part of a sale consideration. But after his demise, a legal heir of the party sold the property to the third party through a registered sale deed. The hon’ble Supreme Court overruled the NCLAT which was beneficial to the company holding that the company could not establish title for possession as the sale deed in respect of the disputed property was not registered, Shanmugam continued to be the record owner. The court reiterated this truth in the effect of registration in the continuity of ownership’s transfer while at the same time differentiating between ’’possession under an agreement to sell’’ and legal ownership as per the provision of Section 54 which defines a sale as passing of a title through a registered instrument in consideration of money paid.

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