A recent Supreme Court judgment has delivered a crucial reminder to prospective property owners across India: merely possessing an unregistered agreement of sale, even if later validated, may not suffice to establish legal title to immovable property. The Apex Court underscored the mandatory nature of registering deeds of conveyance, drawing attention to the four-month timeline stipulated under Section 23 of the Registration Act, 1908 .
The ruling arose from a complex land dispute in Telangana, involving a 53-acre parcel of land in Survey No. 83/2 of Raidurg Panmaktha. The case, MAHNOOR FATIMA IMRAN & ORS. VERSUS M/S VISWESWARA INFRASTRUCTURE PVT. LTD & ORS., saw the Supreme Court restore an earlier Single Judge’s order that had dismissed a writ petition seeking to restrain dispossession.
At the heart of the dispute was the writ petitioners’ claim of possession and ownership based on registered title deeds. Their vendor, M/s Bhavana Co-operative Housing Society Ltd. (Bhavana Society), asserted its right through an agreement of sale dated March 19, 1982. However, this 1982 agreement was never formally registered.
The Supreme Court meticulously examined the legal standing of such unregistered transactions. Citing its own binding precedent in Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana & Anr. , the Court unequivocally stated: “immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance”. The judgment further clarified that transactions commonly known as “GPA sales” or “SA/GPA/will transfers” do not convey title, do not amount to transfer, and cannot be recognized as a valid mode of transfer of immovable property. These transactions, the Court emphasized, “cannot be recognized as deeds of title, except to the limited extent of Section 53-A of the TP Act”.
A critical point of contention was the “validation” of the 1982 agreement of sale in 2006. The Court noted that this validation was later deemed fraudulent by the District Registrar in 2015. Furthermore, the Bhavana Society had filed a suit for specific performance in 1991 (O.S.No.248 of 1991) based on this agreement, which was dismissed for default in 2001, and its application for restoration was also rejected in 2004.
The Supreme Court highlighted significant discrepancies between different versions of the 1982 agreement presented in court. Crucially, the Court observed that in 1982, when the agreement was executed, the land had already vested in the State Government under the Land Reforms Act in 1975. This prior vesting raised serious doubts about the vendor’s ability to sell the specified extent of land at that time.
“The agreement of 1982, the original one and the revalidated one, cannot result in a valid title, merely for reason that the subsequent instrument had been registered,” the Court stated. It found that the writ petitioners had not established a valid title and that their claim to rightful possession was not proven. The Court even pointed to “guile employed in making conflicting claims before the authorities under the Land Reforms Act and the Land Ceiling Act as also entering into multiple transactions to defeat the statutory vesting with successive litigations, all in vain”.
This judgment serves as a strong reminder that while an agreement to sell is a step in a property transaction, the legal transfer of ownership is finalized only through a registered deed of conveyance within the prescribed statutory timelines. Failure to do so can lead to prolonged legal battles and the ultimate denial of legal title, leaving property claims vulnerable to challenge. Property buyers are urged to ensure their deeds are promptly and properly registered to secure their investments and avoid future legal complexities.
Also Read: Supreme Court Clears Redevelopment of Bharat Nagar Slum in Bandra
