Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-000260-000261 – 2026 |
| Diary Number | 36675/2023 |
| Judge Name | HON’BLE MRS. JUSTICE B.V. NAGARATHNA |
| Bench | HON’BLE MRS. JUSTICE B.V. NAGARATHNA; HON’BLE MR. JUSTICE UJJAL BHUYAN |
| Precedent Value | Binding |
| Overrules / Affirms |
|
| Type of Law | Stamp duty on immovable property; property and contract law |
| Questions of Law |
|
| Ratio Decidendi |
The Supreme Court ruled that Explanation I to Article 47A applies only when possession is delivered pursuant to—or explicitly evidenced in—the instrument of sale, not when a vendee’s possession arises from a separate, pre-existing tenancy. There was no express or implied surrender of tenancy, as confirmed by a later eviction decree. Section 53A did not apply. Hence, no deemed conveyance. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon |
|
| Facts as Summarised by the Court |
A tenant in possession for ~50 years entered an agreement to buy the land; paid advance but landlord refused conveyance; tenant sued for specific performance; trial court and High Court treated the agreement as conveyance under Explanation I to Article 47A, impounded it for unpaid duty; tenant also faced eviction under A.P. Rent Act, 1960 |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All courts and tribunals in India |
| Persuasive For | High Courts considering state stamp-duty statutes |
| Overrules | M.A. Gafoor v. Mohd. Jani (1998 SCC OnLine AP 848) |
| Distinguishes |
|
| Follows | B. Ratnamala v. G. Rudramma (1999 SCC OnLine AP 438) |
What’s New / What Lawyers Should Note
- Clarifies that pre-existing tenancy possession, unrelated to the sale contract, does not attract “deemed conveyance” under Explanation I to Article 47A of the A.P. Stamp Act.
- Confirms that only possession transferred pursuant to—or evidenced by—a sale agreement triggers stamp duty as a conveyance.
- Holds Section 53A of the TP Act inapplicable where possession predates the agreement and is not part performance of that contract.
- Distinguishes recent Supreme Court authority (Ramesh Mishrimal) where Section 53A was applied.
- Lawyers can resist impoundment applications by demonstrating continued tenancy and absence of nexus between possession and the agreement.
Summary of Legal Reasoning
- Defined lease vs. sale under the Transfer of Property Act (Sections 54, 111).
- Explained express and implied surrender (Section 111(e),(f))—none occurred here.
- Analyzed that agreements to sell do not by themselves transfer title (TP Act, Sections 54 & 47(Registration Act)).
- Interpreted Explanation I to Article 47A A.P. Stamp Act: “followed by or evidencing delivery” requires nexus to the sale contract.
- Held Section 53A (part performance) irrelevant absent contract-based transfer of possession.
- Distinguished Gafoor (tenancy surrendered by conduct) and Ramesh Mishrimal (possession delivered by contract).
- Upheld Ratnamala’s construction of “followed by or evidencing delivery.”
- Concluded no deemed conveyance, set aside impoundment orders, and directed trial court to mark the agreement.
Arguments by the Parties
Petitioner (Appellant – Tenant / Purchaser)
- Agreement to sell was not a conveyance; Explanation I applies only to possession delivered in relation to the agreement.
- Continued tenancy and eviction order show possession was not transferred as part of sale.
- Section 53A does not apply because no part performance arose from the contract’s possession clause.
- Trial court and High Court erred in impounding and demanding duty and penalty.
Respondent (Landlord / Vendor)
- Agreement to sell followed by or evidencing delivery of possession falls under Explanation I to Article 47A.
- Reliance on Ramesh Mishrimal and Ratnamala to support deemed conveyance and duty liability.
- Contended absence of possession nexus is immaterial to the statutory test.
Factual Background
The appellant had been a tenant for approximately 50 years of a property the respondent owned. In October 2009 they executed an agreement to sell for ₹9 lakh, with ₹6.5 lakh advance. The respondent denied the contract and refused to execute a sale deed. The appellant sued for specific performance; during trial the respondent objected that the agreement was an unstamped conveyance. The trial court and the Andhra Pradesh High Court held that Explanation I to Article 47A made the agreement a deemed conveyance and impounded it for duty and penalty. The appellant also faced a 2017 eviction order under the A.P. Rent Act.
Statutory Analysis
- Transfer of Property Act, 1882:
- Section 54 (sale defined as registered conveyance).
- Section 111(e),(f) (express/implied surrender of lease).
- Section 53A (part performance—only protects contract-based possession).
- Registration Act, 1908 (Section 17: agreements to sell need not be registered conveyances).
- A.P. Stamp Act, 1922 – Schedule I-A, Article 47A & Explanation I: only agreements “followed by or evidencing delivery” to purchaser qualify as sales for duty.
Alert Indicators
- 🚨 Breaking Precedent – Overrules application in Gafoor v. Jani (1998 SCC OnLine AP 848)
- ✔ Precedent Followed – B. Ratnamala v. G. Rudramma (1999 SCC OnLine AP 438)
- 🔄 Conflicting Decisions – Distinguishes Ramesh Mishrimal Jain v. Avinash Vishwanath Patne (2025 SCC OnLine SC 329) and Shyamsundar Radheshyam Agrawal v. Pushpabai Nilkanth Patil (2024 10 SCC 324)