Back
: Agreement to Sell Doesn't Automatically End Tenancy or Alter Possession Character
The has ruled that a tenant's possession does not automatically convert into of a sale agreement merely because an agreement to sell is executed between the parties. The court affirmed that the pre-existing landlord-tenant relationship continues unless the tenant proves an of the tenancy.
Justice Dr. Yogendra Kumar Srivastava, presiding over a revision under , dismissed a challenge by defendants Rajesh Kumar Chaurasia and others against an passed by the in Kanpur Nagar. The decree had been sought by plaintiff Suresh Kapoor (later substituted by legal heirs) on grounds of rent default from to and termination of tenancy via a notice dated .
The Tenant's Defence: An Agreement to Sell
The defendants, who were tenants in a shop, claimed that on , they entered into a registered agreement to sell the property with the landlord. They argued that the entire sale consideration of ₹1,10,000 was paid, and a separate letter of possession of the same date recorded that they were put in possession in of the agreement. Consequently, they contended that the relationship of landlord and tenant ceased to exist, and the eviction suit based on a was not maintainable.
The trial court, however, rejected this defence, finding that the registered agreement itself stated that possession was to be handed over only at the time of execution of the sale deed. The alleged possession letter was disputed, unregistered, and its attesting witnesses were never examined. The court also noted that the defendants had continued to deposit rent from 2016 onwards, a conduct inconsistent with their claim of having ceased to be tenants.
High Court's Legal Analysis: Possession Must Flow From the Agreement
Upholding the trial court's findings, the High Court delved into the legal effect of an agreement to sell on an existing tenancy. The court drew a sharp distinction between a person who obtains possession under an agreement to sell and a tenant who was already in possession under a separate .
"Physical possession remained continuous before and after the agreement. What is required to be established is a change in the
of that possession,"
the court observed. It held that unless such a change is proved, the continuance of possession must ordinarily be attributed to the original tenancy.
The court relied on the 's decision in to reiterate that an agreement to sell between a landlord and tenant does not determine the . The tenancy ends only when the terms of the agreement or the unequivocal conduct of the parties disclose an under .
Applying this principle, the court found that the registered agreement explicitly stated that possession was to be delivered at the time of the sale deed, a term directly contradicting the defendants' claim. The unregistered possession letter was not satisfactorily proved, and the defendants' own subsequent conduct—including rent deposits and filing a suit for specific performance—indicated that they continued to treat themselves as tenants.
"Payment of consideration and mere continuation of physical possession, without more, are insufficient,"
the court declared, rejecting the argument that the tenancy automatically ended.
Notice Validity: Doesn't Invalidate Termination
The revisionists also challenged the validity of the termination notice, arguing that it demanded rent for a period partly barred by limitation. The High Court rejected this objection, distinguishing between the recoverability of arrears and the validity of the notice. Relying on and , the court held that limitation ordinarily bars the remedy without extinguishing the debt. The notice clearly conveyed the landlord's intention to terminate the tenancy, and the inclusion of a time-barred component did not render it invalid.
"The objection based on limitation may, therefore, have relevance while determining the quantum of arrears legally recoverable from the revisionists, but it does not, in the facts of the present case, furnish a ground for invalidating the notice dated 01.09.2019 in its entirety,"
the court observed.
Scope of Revision and Final Decision
Exercising its , the High Court found no in the trial court's findings. It held that the defendants had failed to establish any legally sustainable change in the character of their possession, and the was justified.
The revision was dismissed, and the judgment and decree of the dated , were affirmed. The court declined to impose costs.
Key Takeaway: The judgment clarifies that a tenant cannot unilaterally convert his possession into that of a purchaser merely by entering into an agreement to sell. The tenancy continues until it is lawfully surrendered or determined, and the to prove such surrender with .
