2026 INSC 853

SLP (C) No.17699/2026 Page 1 of 16

REPORTABLE

IN THE SUPREME COURT OF INDIA

EXTRA-ORDINARY APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CIVIL) NO.1769 9 OF 2026

NAZIM SHAIKH HASAN …. PETITIONER

VERSUS

NASIR MUSHTAQ SHAIKH

AND OTHERS

…. RESPONDENTS

J U D G M E N T

PRASHANT KUMAR MISHRA, J.

1) The present Special Leave Petition calls in question the judgment

dated 01.04.2026 passed by the High Court of Judicature at Bombay in

Civil Revision Application No.280/2024, whereby the High Court dismissed

the revision application of the petitioner and upheld the judgment and order

of the First Appellate Court which affirmed the order of the Small Causes

Court whereby the petitioner was directed to vacate and handover the suit

premises to the respondents’ predecessor – Jainbi Mushtaq Shaikh.

2) For the proper disposal of the Special Leave Petition, the parties are

being referred by their position in Civil Suit No.384/2010.

FACTUAL MATRIX

3) Shorn of unnecessary details, the facts lay thus: the respondents’

predecessor - Jainbi Mushtaq Shaikh owned a shop on the ground floor of

the building admeasuring 200 sq.ft bearing House No.3031, S.No.51, Mitha

SLP (C) No.17699/2026 Page 2 of 16

Nagar, in front of Vishwakarma Building, Kondhwa Khurd, Pune

1

.

Admittedly, the suit premises was let to the petitioner/defendant at a

monthly rent of Rs.1500/-. While the tenancy was subsisting, the original

plaintiff agreed to sell the suit premises to the petitioner/defendant,

consequently, this culminated into an agreement to sell dated 21.09.2004.

Pursuant to the stipulations laid in the agreement to sell , the

petitioner/defendant paid Rs.40,000/- out of the total consideration of

Rs.1,90,000/- and the residual consideration of Rs.1,50,000/- was to be

paid within three months.

4) As per the original plaintiff’s assertion, the petitioner/defendant failed

to comply with the stipulations inhering from the agreement to sell, leading

to non-fruition of the sale. As a corollary, the petitioner/defendant

continued as a tenant in the suit premises.

5) Subsequently, the original plaintiff alleging default of rent by the

petitioner/defendant, change in the use of the suit premises, coupled with

an express bona fide need, filed a civil suit being Civil Suit No.384/2010

seeking possession of the suit premises. The petitioner/defendant resisted

the suit inter alia on the ground that the landlord-tenant relationship ended

upon the execution of the agreement to sell. Further, it was pled by the

petitioner/defendant that he paid Rs.90,000/- out of the total consideration

and was ready to pay the balance consideration to the original plaintiff.

1

Hereinafter referred to as the “Suit premises”

SLP (C) No.17699/2026 Page 3 of 16

6) The Small Causes Court after examination of oral and documentary

evidence, vide judgment dated 19.09.2015, upheld the bona fide

requirement of the original plaintiff and held that the landlord and tenant

relation subsisted even after the execution of the agreement to sell .

Predicating upon the aforesaid reasoning, the suit was decreed in favour of

the original plaintiff, and the petitioner/defendant was directed to handover

the possession of the suit premises. The petitioner/defendant’s appeal

challenging the Small Causes Court’s decision was also dismissed by the

First Appellate Court vide judgment dated 24.11.2023.

7) Being aggrieved, the petitioner/defendant filed Civil Revision

Application No.280/2024 challenging the decisions of the Small Causes

Court and the First Appellate Court. The High Court vide the impugned

judgement and order dated 01.04.2026 dismissed the revision application

preferred by the petitioner/defendant.

8) Taking exception to the judgement passed by the High Court, the

petitioner/defendant is now seeking refuge of this Court in reversing the

concurrent findings rendered.

ANALYSIS

9) Heard the learned counsel for the petitioner/defendant and perused

the material on record.

10) The question inhering from the present lis is whether on the execution

of the agreement to sell by the landlord in favour of the tenant, upon

SLP (C) No.17699/2026 Page 4 of 16

receiving part consideration, the inter se relationship of landlord-tenant

ceases and fresh rights and obligations flow from the agreement to sell.

11) Contending in affirmative to the question posed, the learned counsel

for the petitioner/defendant placed reliance on a judgment rendered by this

Court in R. Kanthimathi and Another v. Beatrice Xavier (Mrs.)

2

, wherein

this Court was dealing with a similar question concerning the inter se rights

and jural relationship between the landlord and the tenant after an

agreement to sell has been executed and a substantial amount of

consideration was paid by the tenant. The germane observations elucidated

therein read thus:

“4. As aforesaid, the question for consideration is, whether the

status of tenant as such changes on the execution of an

agreement of sale with the landlord. It is relevant at this

junction first to examine the terms of the agreement of sale.

The relevant portions of the agreement of sale record the

following:

“I, the aforesaid, Mrs Beatrice Xavier hereby agree

out of my own free will, to sell, convey and transfer

the property to you Mrs R. Kanthimathi, wife of Mr

S. Ramaswami, 435 Trichy Road, Coimbatore for a

mutually agreed sale consideration of Rs. 25,000.

I shall be proceeding to Coimbatore and shall

execute the sale deed and present the same for

admission and registration before the registration

authority, accepting and acknowledge payment of

the balance of consideration of Rs. 5000 (Rupees

five thousand only) at the time of registration and

shall complete the transaction of sale and

conveyance as the property demised has

already been surrendered to your possession. ”

5. Submission for the tenant is after entering into the

agreement, the landlady accepted Rs. 20,000 confirming

delivery of possession in this context which already constitutes

the clear intent of the landlady of entering into a new

relationship with the tenant under it. On the other hand,

learned counsel for the respondent submits that the words

“already been surrendered” therein, only refer to the existing

possession of the tenant and nothing more. So far as this

submission for the respondent is concerned we have no

2

(2000) 9 SCC 339

SLP (C) No.17699/2026 Page 5 of 16

hesitation to reject the same. The reference of the words

“already been surrendered” has been incorporated with

consciousness. This is to be construed in the background of

the landlady having received a major amount of sale

consideration and as normally, if a substantial sum is received

by the seller, the purchaser is put in possession of the property

hence to fall in the same lines the said words were used to

confirm this possession in this context. There could be no other

reason to record therein as such. Even if it be said to refer to

the possession as a tenant the reassertion in the agreement of

sale is only for the purpose of denoting possession given in

pursuance of this agreement of sale.

6. Any jural relationship between two persons could be created

through agreement and similarly could be changed through

agreement subject to the limitations under the law. Earlier

when the appellants were inducted into tenancy it only means

both agreed that their relationship was to be that of landlord

and tenant. Later when the landlord decided to sell this

property to the tenant and the tenant agreed by entering into

agreement, they by their positive act changed their relationship

as purchaser and seller. When the seller-landlord accepts the

sum he actually acts under this agreement. This acceptance

preceded by agreement of sale changes their relationship. This

is how they intended. Once accepting such a change, their

relationship of landlord-tenant ceases.”

(emphasis supplied)

12) On a careful perusal of the above adjudication, it is evident that the

agreement to sell executed therein contained an express stipulation that the

demised property had already been surrendered to the possession of the

tenant, which was consciously incorporated to indicate the willingness of the

landlord to effect a change in the jural relationship. The intention of the

parties was clearly discernible from the terms of the agreement to sell itself.

It is equally significant that such willingness flowed from the fact that a

substantial part of the consideration Rs.20,000/- out of Rs.25,000/- had

already been paid by the tenant, leaving only a balance of Rs.5,000/- to be

paid at the time of registration. The decision in R. Kanthimathi (supra) was

thus one rendered entirely on its own peculiar facts, turning on the specific

SLP (C) No.17699/2026 Page 6 of 16

language employed in the agreement to sell and the near-complete payment

of consideration thereunder.

13) However, the instant lis presents us with a materially different stand

with respect to the agreement to sell executed herein. The relevant recitals of

the agreement to sell read thus :

“1. The Seller has agreed to sale the above Shop to the

Purchasers for the price of Rs.1,90,000/- (Rupees One Lakh

and Ninety Thousand only) and today the Purchasers paid an

amount of Rs.40,000/- in cash to the Seller and the Seller

hereby acknowledges the receipt thereof.

2. The Purchasers promised that the balance amounts of

Rs.1,50,000/- (Rupees one Lakh and Fifty Thousand only) will

be paid within the period of three months from today.

3. The Purchasers has agreed to give the balance Loan amount

as soon as the loan will be sanctioned by his Banks.

4. The Purchasers hereby confirms that if the said loan will not

be sanctioned within the above period then this agreement

stands cancelled and the Seller will refund Rs.40,000/- to the

Purchasers and the Purchasers will have to handover the

possession of the Shop back to the Purchasers as it was in the

previous condition.”

14) A plain reading of the aforesaid recitals makes it evident that the

agreement to sell executed in the present case contains no stipulation

indicating that the possession of the petitioner/defendant thereafter would

be referable to the agreement to sell, nor does it provide for cessation of the

obligation to pay rent or otherwise evince an intention to alter the subsisting

landlord-tenant relationship. The marked distinction between the terms of

the present agreement to sell and those considered in R. Kanthimathi

(supra) necessitates an examination of whether the tenancy stood

SLP (C) No.17699/2026 Page 7 of 16

determined in law by way of either express or implied surrender under

Section 111 of the Transfer of Property Act, 1882

3

.

15) It is relevant to note that Section 111 of the TP Act contemplates

different modes by which a lease may be determined. Section 111(e) deals

with express surrender, whereas Section 111(f) deals with implied

surrender.

16) The concept of surrender, as contemplated under Sections 111(e) and

111(f) of the TP Act was succinctly explained by this Court in Shah

Mathuradas Maganlal & Co. v. Nagappa Shankarappa Malage and

Others

4

, wherein it was observed that surrender involves yielding up of the

lessee’s interest to the lessor by mutual agreement. In case of implied

surrender, the intention of the parties has to be gathered from the

circumstances and conduct which demonstrate that the earlier relationship

could no longer subsist. The relevant observation reads as follows:

“19. A surrender under clauses (e) and (f) of Section 111 of the

Transfer of Property Act, is an yielding up of the term of the

lessee's interest to him who has the immediate reversion or the

lessor's interest. It takes effect like a contract by mutual

consent on the lessor's acceptance of the act of the lessee. The

lessee cannot, therefore, surrender unless the term is vested in

him; and the surrender must be to a person in whom the

immediate reversion expectant on the term is vested. Implied

surrender by operation of law occurs by the creation of a new

relationship, or by relinquishment of possession. If the lessee

accepts a new lease that in itself is a surrender. Surrender can

also be implied from the consent of the parties or from such

facts as the relinquishment of possession by the lessee and

taking over possession by the lessor. Relinquishment of

possession operates as an implied surrender. There must be a

taking of possession, not necessarily a physical taking, but

something amounting to a virtual taking of possession.

Whether this has occurred is a question of fact. In the present

case if the mortgagor was not able to redeem the appellant

3

For short, ‘TP Act’

4

(1976) 3 SCC 660

SLP (C) No.17699/2026 Page 8 of 16

mortgagee was to enjoy the property in accordance with the

terms of the mortgage and also to sell the property for recovery

of debts. This feature shows that the appellant surrendered the

tenancy from November 7, 1953.”

17) A similar view on the enunciation of law on surrender as crystallised

in Shah Mathuradas Maganlal & Co. (supra) was elaborated by this

Court in Vayyaeti Srinivasarao v. Gaineedi Jagajyothi

5

, wherein, while

considering an analogous question concerning an agreement to sell executed

between a landlord and tenant, this Court undertook a comprehensive

examination of the concepts of express surrender, implied surrender and the

consequences flowing therefrom under Section 111 of the TP Act. The

relevant observations read thus:

“5.3. The expression “express surrender” means the lessee

yields his interest under the lease to the lessor by mutual

agreement between them. In other words, express surrender

means giving up of the interest in the premises under the lease

to the lessor by mutual agreement between the lessor and the

lessee. Express surrender necessitates that the lessee has

given up possession of the holding. Surrender need not be in

writing nor by a registered deed. However, if there is an

abatement of rent, it should be only by a registered instrument

for it effects a variation in the contract of tenancy. The effect of

surrender under clause (e) of Section 111 of the Act is the

determination of the lease.

5.4. Clause (f) of Section 111 of the Act deals with the rule of

implied surrender. Implied surrender is by operation of law and

it can occur by - i) the creation of a new relationship of

lease, or ii) relinquishment of possession i.e., there is

yielding of possession by the lessee and taking over of

possession by the lessor. It is created by the acceptance of,

and not by the mere agreement for a new relation which, in

effect, estops the lessee from setting up the old one.

Implied surrender of tenancy can be established by the

conduct of the parties and from attending circumstances .

Implied surrender is by the operation of law and takes place in

spite of the intention of the parties. It may come into being in a

number of ways, e.g., by acceptance of a new lease, or by

unequivocal giving up of possession by the lessee as a lessee,

or by re-letting to another person by the landlord, or by

accepting of a sub-tenant as his tenant by the landlord.

5.5. Where the agreement to sell entered into by the

parties clearly states that from the date mentioned in the

5

2026 SCC OnLine SC 84

SLP (C) No.17699/2026 Page 9 of 16

agreement, the tenant in possession of the property

intended to be sold under the agreement shall not be liable

to pay any rent and shall alone be in charge of any damage

caused to the property in question, it would imply a

surrender of rights as a tenant vide B. Paramashivaiah v.

M.K. Shankar Prasad, AIR 2009 Kar 88 .

5.6. A surrender by operation of law determines the lease

and extinguishes the rights of the lessee in respect of the

property surrendered, from the date of the surrender and

the estate vests immediately in the lessor. The term

“surrender by operation of law” is used to describe all

those cases where the law implies a surrender from

unequivocal conduct of both the parties which is

inconsistent with the continuance of the existing tenancy.

5.7. There is a distinction between an express and implied

surrender inasmuch as while express surrender is a matter of

intention of the parties, implied surrender is by implication of

the law. An implied surrender is the act of the law and takes

place independently of and in some cases even in spite of the

intention of the parties.”

(emphasis supplied)

18) This Court in Vayyaeti Srinivasarao (supra) further considered the

interplay between Section 53A of the TP Act and the continuance of tenancy

subsequent to the agreement to sell. It was observed that Section 53A

operates as a shield for a transferee who has taken possession pursuant to a

contract of transfer, or who continues in possession in part performance

thereof and has done some act in furtherance of the contract, thereby

debarring the transferor from enforcing any right in respect of such

property. Significantly, this Court categorically held that the continuous

possession of a tenant in the suit property even after entering into an

agreement to sell would not by itself amount to part performance so as to

put the tenant in possession pursuant to the agreement to sell. It is only

where the tenant is inducted into possession for the first time subsequent to

the contract that it would constitute strong evidence of possession changing

hands pursuant to the contract.

SLP (C) No.17699/2026 Page 10 of 16

19) It is also trite law that an agreement to sell, by itself, does not confer

any title or interest in the property in favour of the purchaser, and a

beneficial reference in this regard may be made to the judgment of this

Court in Suraj Lamp and Industries Private Limited (2) Through

Director v. State of Haryana and Another

6

wherein this Court held as

follows :

“16. Section 54 of the TP Act makes it clear that a contract of

sale, that is, an agreement of sale does not, of itself, create any

interest in or charge on such property. This Court in Narandas

Karsondas v. S.A. Kamtam [(1977) 3 SCC 247] observed: (SCC

pp. 254-55, paras 32-33 & 37)

“32. A contract of sale does not of itself create any

interest in, or charge on, the property. This is

expressly declared in Section 54 of the Transfer of

Property Act. (See Ram Baran Prasad v. Ram Mohit

Hazra [AIR 1967 SC 744 : (1967) 1 SCR 293] .) The

fiduciary character of the personal obligation

created by a contract for sale is recognised in

Section 3 of the Specific Relief Act, 1963, and in

Section 91 of the Trusts Act. The personal

obligation created by a contract of sale is described

in Section 40 of the Transfer of Property Act as an

obligation arising out of contract and annexed to

the ownership of property, but not amounting to an

interest or easement therein.

33. In India, the word ‘transfer’ is defined with

reference to the word ‘convey’. … The word ‘conveys’

in Section 5 of the Transfer of Property Act is used

in the wider sense of conveying ownership.

37. … that only on execution of conveyance,

ownership passes from one party to another….”

17. In Rambhau Namdeo Gajre v. Narayan Bapuji

Dhotra [(2004) 8 SCC 614] this Court held: (SCC p. 619, para

10)

“10. Protection provided under Section 53-A of the Act

to the proposed transferee is a shield only against the

transferor. It disentitles the transferor from disturbing

the possession of the proposed transferee who is put

in possession in pursuance to such an agreement .

It has nothing to do with the ownership of the

proposed transferor who remains full owner of the

property till it is legally conveyed by executing a

registered sale deed in favour of the transferee. Such a

6

(2012) 1 SCC 656

SLP (C) No.17699/2026 Page 11 of 16

right to protect possession against the proposed

vendor cannot be pressed into service against a third

party.”

18. It is thus clear that a transfer of immovable property

by way of sale can only be by a deed of conveyance (sale

deed). In the absence of a deed of conveyance (duly

stamped and registered as required by law), no right, title

or interest in an immovable property can be transferred.

19. Any contract of sale (agreement to sell) which is not a

registered deed of conveyance (deed of sale) would fall short of

the requirements of Sections 54 and 55 of the TP Act and will

not confer any title nor transfer any interest in an immovable

property (except to the limited right granted under Section 53-A

of the TP Act). According to the TP Act, an agreement of

sale, whether with possession or without possession, is not

a conveyance. Section 54 of the TP Act enacts that sale of

immovable property can be made only by a registered

instrument and an agreement of sale does not create any

interest or charge on its subject-matter.”

(emphasis supplied)

20) The ratio flowing from the aforesaid pronouncements, read conjointly,

can be distilled to the following propositions:

(i) the mere execution of an agreement to sell between a landlord and

tenant does not ipso facto bring about a determination of the

subsisting tenancy;

(ii) it is only when the terms of the agreement or the unequivocal

conduct of the parties, inconsistent with the continuance of the

existing tenancy, disclose either an express or implied surrender

within the meaning of Section 111(e) or (f) of the TP Act, that the

lease can be said to have been determined;

(iii) the continuous possession of a tenant even after the execution of

an agreement to sell does not amount to part performance under

Section 53A of the TP Act unless such possession is shown to be

directly relatable to and flowing from the agreement to sell; and

SLP (C) No.17699/2026 Page 12 of 16

(iv) any agreement to sell, not being a registered deed of conveyance,

does not by itself confer any title or interest in the property.

21) Applying the aforesaid principles to the lis at hand, neither the terms

of the agreement to sell nor the conduct of the parties disclose any express

or implied surrender within the meaning of Section 111(e) or (f) of the TP

Act. The mere execution of the agreement to sell coupled with payment of

Rs.40,000/- out of the agreed consideration of Rs.1,90,000/-, cannot be

treated as determining the tenancy.

22) The terms of the agreement to sell itself lend further reinforcement to

this conclusion. Clause 4 of the agreement to sell expressly stipulates that

in the event the loan of the petitioner/defendant is not sanctioned within the

stipulated period, the agreement would stand cancelled and the

petitioner/defendant would be required to hand over possession of the shop

back "as it was in the previous condition." This recital is wholly consistent

with the continuance of the tenancy and, in fact, proceeds on the clear

premise that the existing possession of the petitioner/defendant was

referable to the tenancy and not to the agreement to sell . Far from

evidencing a change in the jural relationship, this demonstrates that the

parties themselves contemplated a reversion to the status quo ante upon the

failure of the sale.

23) Also, the reliance placed by the petitioner/defendant on Arjunlal

Bhatt Mall Gothani and Others v. Girish Chandra Dutta and Another

7

7

(1973) 2 SCC 197

SLP (C) No.17699/2026 Page 13 of 16

is equally misplaced. In that case, upon execution of the agreement to sell,

the earlier eviction proceedings were withdrawn and the agreement itself

exclusively governed the parties’ rights and obligations, there being no

stipulation for payment of rent or interest during the subsistence of the

agreement. The present agreement to sell contains no comparable indication

that the tenancy stood substituted by a new jural relationship. On the

contrary, Clause 4 of the agreement to sell provides for cancellation of the

agreement and restoration of possession in accordance with the existing

arrangement.

24) At this juncture, it is also apposite to turn to the contention of the

petitioner/defendant, that his possession subsequent to the agreement to

sell was that of a prospective purchaser under Section 53A of the TP Act.

This submission, however, is sans merit. This Court in D.S. Parvathamma

v. A. Srinivasan

8

laid down the foundational principle governing such a

situation, holding that when a person already in possession of the property

in some other capacity enters into a contract to purchase the property, to

confer the benefit of protecting possession under the plea of part

performance, his act effective from that day must be consistent with the

contract alleged and cannot be referred to the preceding title, and that

having entered into possession as a tenant and having continued to remain

in possession in that capacity, a tenant cannot be heard to say that by

reason of the agreement to sell his possession was no longer that of a

tenant. Tested on the t ouchstone of the aforesaid principle, the

8

(2003) 4 SCC 705

SLP (C) No.17699/2026 Page 14 of 16

petitioner/defendant having been in possession as a tenant prior to the

execution of the agreement to sell and having neither alleged nor established

that his possession as lessee ceased, and commenced as that of a transferee

under the agreement to sell, his conduct throughout including continued

occupation without any disavowal of his character as a tenant is wholly

inconsistent with the plea of part performance.

25) Even assuming arguendo that the factual requirements for invoking

Section 53A stood satisfied, the petitioner/defendant's plea is independently

foreclosed by the statutory mandate contained in Section 17(1A) of the

Registration Act, 1908

9

. Section 17 of the Registration Act was amended

with effect from 24.09.2001 by the introduction of sub-section (1A) therein,

which provides that documents containing contracts to transfer for

consideration any immovable property for the purpose of Section 53A of the

TP Act shall be registered if they have been executed on or after the

commencement of the Registration and Other Related Laws (Amendment)

Act, 2001, and if such documents are not so registered, they shall have no

effect for the purposes of Section 53A. The agreement to sell in the present

case was executed on 21.09.2004, i.e., well after the coming into force of the

said amendment. The agreement to sell, being admittedly unregistered, can

have no effect for the purposes of Section 53A by virtue of the express

mandate of Section 17(1A) of the Registration Act, as reaffirmed by this

Court in Ameer Minhaj v. Dierdre Elizabeth (Wright) Issar and Others

10

.

The petitioner/defendant is, therefore, disentitled from claiming the

9

For short, ‘the Registration Act’

10

(2018) 7 SCC 639.

SLP (C) No.17699/2026 Page 15 of 16

protection of Section 53A on this ground as well. The High Court was thus

entirely correct in holding that the benefit of Section 53A is unavailable to

the petitioner/defendant.

26) We also can’t be oblivious of the fact that the petitioner/defendant has

chosen not to institute a suit for specific performance. This conduct on the

part of the petitioner/defendant further militates against the plea that the

jural relationship between the parties had transformed from that of

landlord-tenant to vendor-vendee upon the execution of the agreement to

sell.

27) Lastly, the learned counsel for the petitioner/defendant advanced two

submissions before this Court. First, it was contended that upon execution

of the agreement to sell, the jural relationship between the parties stood

altered from that of landlord and tenant to that of vendor and vendee,

thereby excluding the jurisdiction of the Small Causes Court. Secondly, it

was urged that the agreement to sell ought to have been impounded on

account of insufficient stamp duty and non -registration before being

considered by the Court. In our opinion, neither submission merits

acceptance. The first contention proceeds on an erroneous assumption that

the mere execution of the agreement to sell determined the tenancy, a

contention which already stands negatived as discussed in the preceding

paragraphs hereinabove. Equally, the second contention is of no avail since

even assuming that the agreement to sell were to be impounded and

rendered admissible in evidence upon payment of the requisite duty and

penalty, such exercise would not cure the absence of registration nor enable

SLP (C) No.17699/2026 Page 16 of 16

the petitioner/defendant to invoke Section 53A of the TP Act in view of

Section 17(1A) of the Registration Act.

28) In view of the foregoing, we find no infirmity in the impugned

judgments of the Courts below warranting interference.

29) The present Special Leave Petition is sans merit and, accordingly, the

same stands dismissed.

…………………..........................J.

(PRASHANT KUMAR MISHRA)

.………………............................J.

(N.V. ANJARIA)

NEW DELHI;

AUGUST 13, 2026.