Summary
| 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 on all courts |
| Overrules / Affirms | Overrules the High Court’s stamp‐duty order; affirms Ratnamala v. Rudramma |
| Type of Law | Civil – Property / Stamp Act |
| Questions of Law | Whether an agreement to sell by a tenant with pre-existing possession attracts “deemed conveyance” duty under Explanation I to Article 47A when possession is not related to the sale agreement. |
| Ratio Decidendi |
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| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by Court |
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| Facts as Summarised by the Court |
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Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts |
| Persuasive For | Other High Courts |
| Overrules | Gafoor v. Jani (1998 OnLine AP 848) |
| Distinguishes | Ramesh Mishrimal Jain v. Patne, 2025 SCC OnLine SC 329 |
| Follows | Ratnamala v. Rudramma (1999 OnLine AP 438) |
What’s New / What Lawyers Should Note
- Clarifies that Explanation I to Article 47A applies only when possession “follows” or is “evidenced” by the sale agreement itself, not when it predates the pact as an independent tenancy.
- Confirms that mere long-standing tenancy, even if acknowledged in the agreement to sell, does not trigger “deemed conveyance” duty.
- Emphasises that eviction orders or continued rent-control proceedings post-agreement demonstrate the tenancy was not surrendered.
- Distinguishes the scope of Explanation I under the A.P. Stamp Act from the broader Bombay Stamp Act provision and the preconditions of Section 53A T.P. Act.
- Lawyers can resist impounding “agreements to sell” where plaintiff’s possession is independent of the sale agreement.
Summary of Legal Reasoning
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Nature of Lease vs. Conveyance
- Section 105 T.P. Act: lease confers right of possession for a term; no transfer of title.
- Section 111 T.P. Act: tenancy ends only by express or implied surrender; none here.
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Agreement to Sell vs. Sale Deed
Section 54 T.P. Act: sale transfers ownership; agreement to sell grants only specific performance rights.
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Part Performance (Section 53A)
Requires possession under the agreement; appellant’s possession predated and was unrelated to the 2009 sale pact.
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Explanation I, Article 47A A.P. Stamp Act
- Duty as “sale” only if possession follows or is evidenced by the agreement itself.
- Here, possession was as tenant for ~50 years; eviction order confirms no transfer of possession under the sale pact.
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Precedent Analysis
- Follows Ratnamala (interpretation of “followed by”/“evidencing”).
- Distinguishes broader Bombay Stamp Act cases (Ramesh Mishrimal) and Gafoor (overruled by Ratnamala).
Arguments by the Parties
Appellant (Tenant / Purchaser)
- Possession of property long pre-dates and is independent of the 2009 sale agreement.
- No express or implied surrender of tenancy under Section 111 T.P. Act; tenancy continued post-agreement.
- Explanation I to Article 47A A.P. Stamp Act not attracted; at most duty for an unstamped agreement to sell.
Respondent (Landlord / Vendor)
- Agreement recitals show transfer of ownership intent and delivery of possession, invoking deemed conveyance duty.
- Reliance on Ramesh Mishrimal and Ratnamala: agreements to sell with any link to possession are stamped as sale.
- Tenant status irrelevant once sale pact contemplates transfer of beneficial interest.
Factual Background
The respondent had leased a plot in Andhra Pradesh to the appellant for over fifty years. On 14 October 2009 they executed an agreement to sell for ₹9 lakh, of which ₹6.5 lakh was paid as advance. The appellant sued for specific performance and tendered the agreement in evidence; the respondent denied its validity. The Trial Court and Andhra Pradesh High Court held the pact was a “deemed conveyance” under Explanation I to Article 47A, directing payment of additional stamp duty and penalty. Separately, the appellant was evicted under the A.P. Rent Act in January 2017. The Supreme Court granted leave to appeal.
Statutory Analysis
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Transfer of Property Act 1882
- Section 54: sale requires registered conveyance; agreement to sell is not of itself a conveyance.
- Section 105: defines lease; no title transfer.
- Section 111(e)/(f): tenancy ends only by express or implied surrender.
- Section 53A: protects transferee in possession under an agreement, but only if possession is acquired under that agreement.
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A.P. Stamp Act 1922
- Article 47A, Schedule I-A: prescribes duty on “sale” as per Section 54 T.P. Act.
- Explanation I: an agreement to sell “followed by or evidencing delivery of possession” is treated as a sale for stamping.
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Registration Act 1908
- Section 17(1)(b): only conveyance deeds are compulsorily registrable; agreements to sell not compulsorily registrable absent conveyance.
Alert Indicators
- ✔ Precedent Followed – Ratnamala v. Rudramma (OnLine AP 438/1999)
- 🔄 Conflicting Decisions – Gafoor v. Jani (1998 OnLine AP 848) and Ramesh Mishrimal Jain v. Patne, 2025 SCC OnLine SC 329