2026 INSC 59

1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. OF 2026

(Arising out of Special Leave Petition (C) Nos. 21976-21977 of 2023)

VAYYAETI SRINIVASARAO …APPELLANT

VERSUS

GAINEEDI JAGAJYOTHI …RESPONDENT

J U D G M E N T

NAGARATHNA, J.

Leave granted.

Factual Background:

2. Briefly stated, the facts of the case are that the respondent

in the suit is the absolute owner of the suit schedule property

admeasuring 955.11 square yards and bearing Door No.4-473,

situated at Dowlaiswaram Village, Rajahmundry Rural, Andhra

2

Pradesh. The appellant has been a tenant of the respondent for

a long period and the suit schedule property has been in the

appellant’s possession as a tenant for over fifty years.

2.1 On 14.10.2009, the appellant and respondent herein

entered into an agreement to sell the suit schedule property, with

the appellant agreeing to purchase the suit schedule property for

a total sale consideration of Rs.9,00,000/- (Rupees Nine Lakhs

Only). An advance amount of Rs.6,50,000/- (Rupees Six Lakhs

and Fifty Thousand Only) is said to have been paid by the

appellant to the respondent on 14.10.2009 i.e. the date of the

agreement to sell. It was further agreed that the appellant would

pay the balance sale consideration of Rs.2,50,000/- (Rupees Two

Lakhs and Fifty Thousand only) and that the respondent would

execute a sale deed in respect of the suit schedule property as

and when called upon to do so.

2.2 Thereafter, in the year 2013, the appellant received

summons in a suit filed by the respondent bearing O.S

No.6/2013 on the file of the Principal Junior Civil Judge,

Rajahmundry seeking perpetual injunction and in R.C.C

3

No.4/2013 on the file of the Rent Control-cum-Principal Junior

Civil Judge, Rajamahendravaram seeking eviction of the

appellant (tenant) from the suit schedule property. The said

proceeding was filed under Andhra Pradesh Buildings (Lease,

Rent and Eviction) Control Act, 1960 (for short, “A.P. Rent Act,

1960”).

2.3 On 08.04.2013, a legal notice was sent by the appellant to

the respondent offering to pay the balance sale consideration of

Rs.2,50,000/- (Rupees Two Lakhs and Fifty Thousand) of the

total sale consideration of Rs.9,00,000/- (Rupees Nine Lakhs) to

the respondent and calling upon the respondent to execute the

sale deed in favour of the appellant with regard to the suit

schedule property. On 04.05.2013, the respondent replied to the

legal notice denying the existence of the agreement to sell and

refusing to execute the sale deed.

2.4 Feeling aggrieved by the reply to his notice, the appellant

preferred O.S. No.188/2013 before the Court of the V Addl.

District Judge, East Godavari, Rajahmundry (“Trial Court”, for

short) seeking the relief of specific performance of the agreement

4

to sell dated 14.10.2009 on the part of the respondent or, in the

alternative, to direct the respondent to refund the advance

amount of Rs.6,50,000/- (Rupees Six Lakh and Fifty Thousand)

paid by the appellant along with interest from 14.10.2009, as

well as seeking a permanent injunction restraining the

respondent from alienating the suit schedule property till the

disposal of the suit. It was contended that the appellant had

made several requests to the respondent and her husband,

informing them of his willingness to pay the balance sale

consideration but the same was of no avail.

2.5 Thereafter in the suit filed for specific performance of the

agreement to sell, on 27.11.2015, the appellant as P.W. 1 filed

his affidavit in examination-in-chief before the Trial Court in O.S.

No.188/2013 along with the documents to be exhibited wherein

Exhibit A-1 was the agreement to sell dated 14.10.2009. The

respondent objected to the marking of Exhibit A-1 on the basis

that the said agreement to sell was in fact a conveyance deed and

thus the requisite stamp duty and penalty had to be paid by the

appellant before the said document could be adduced as

5

evidence. On 21.12.2016, the Trial Court held that the appellant

is liable to pay stamp duty and penalty for the agreement to sell

dated 14.10.2009, as it was a “conveyance deed”.

2.6 Subsequently, on 03.01.2017, the Court of Rent

Controller-cum-Principal Junior Civil Judge,

Rajahmahendravaram in R.C.C No.4/2013 allowed the rent

control case filed by the respondent herein and passed an order

of eviction against the appellant herein.

2.7 Being aggrieved by the order dated 21.12.2016 passed by

the Trial Court in O.S. No.188/2013 directing the appellant to

furnish the requisite stamp duty and penalty, the appellant

preferred Civil Revision Petition No.551 of 2017 before the High

Court of Andhra Pradesh at Amaravati. By order dated

20.12.2022, the High Court dismissed the said revision petition,

placing reliance upon various judgments of the High Court

including B. Ratnamala vs. G. Rudramma , (1999) SCC

OnLine AP 438 (“Ratnamala”), wherein it was held that

delivery of possession may be contemporaneous and could even

be prior to the date of the agreement, so long as the possession

6

was “intimately and inextricably connected” to the agreement,

even in the absence of a specific recital in the agreement to that

effect. Hence, it was held that the agreement to sell dated

14.10.2009, was, in fact, a conveyance deed and therefore, the

order of the Trial Court in O.S. No.188/2013 was sustained by

holding that the appellant is liable to pay stamp duty and penalty

on the said agreement to sell.

2.8 Feeling aggrieved by the said order dated 20.12.2022, the

appellant preferred an application bearing I.A No.1 of 2023 in

Civil Revision Petition No.551 of 2017 seeking review of the order

dated 20.12.2022 passed by the High Court. By the impugned

order dated 19.07.2023, the High Court dismissed I.A No.1 of

2023 on the basis that the appellant was disentitled to seek a

review of the order dated 20.12.2022 of the High Court as no

error existed apparent on the face of the record in view of the

detailed nature of the said order.

2.9 Hence, the instant civil appeals.

7

Submissions:

3. We have heard learned counsel for the appellant and

learned counsel for the respondent, at length. We have perused

the material on record.

3.1 Learned counsel for the appellant submitted that the High

Court was not right in sustaining the order of the Trial Court by

which the document, namely, the agreement to sell dated

14.10.2009 was directed to be impounded for the purpose of

assessment of stamp duty and penalty and the same was not

permitted to be marked in evidence. Elaborating the said

contention, learned counsel for the appellant submitted that

Explanation I to Article 47A of Schedule I-A of the Stamp (Andhra

Pradesh Amendment) Act, 1922 (“A.P. Stamp Act”, for the sake

of convenience) states that an agreement to sell followed by or

evidencing delivery of possession of the property agreed to be

sold shall be chargeable as a “sale” under the said Article. The

emphasis is on the words “followed by” or “evidencing delivery of

possession” of the property agreed to be sold under the

agreement to sell. Therefore, the delivery of possession must be

8

related to the agreement to sell, which could be either prior or

subsequent thereto. If the delivery of possession of the property

is prior to the agreement to sell then it may be evidenced in the

document or, the delivery of possession of the property to be sold

could be subsequent to the agreement to sell. In both the

instances, the agreement to sell is the basic denominator which

has a direct bearing on the stamp duty to be paid depending

upon, whether, the agreement to sell is chargeable as a “sale” or

deemed conveyance under the said Article of the A.P. Stamp Act.

3.2 That, in the instant case, the appellant herein was the

tenant of the schedule property for almost five decades and the

respondent-landlady agreed to sell the said property to the

appellant. This fact is recorded in the said agreement to sell

dated 14.10.2009. Therefore, the possession of the schedule

property was already with the appellant on the date of the

agreement to sell, as a tenant and he did not enter into

possession of the same as a purchaser or a vendee under the

agreement to sell. Further, the tenancy did not come to an end

despite the agreement to sell being entered into between the

9

parties. The appellant continued to be a tenant even after the

execution of the agreement to sell by the respondent – landlady

and there was no determination of the lease or tenancy by any

express or implied surrender of tenancy or lease or coming into

possession as a vendee. This fact is proved on account of the

eviction decree that was passed against the appellant herein at

the instance of the respondent who had approached the Rent

Controller for eviction of the appellant-tenant and was also

successful in this regard. Therefore, the agreement to sell in the

instant case could not have been construed as facilitating a sale

within the meaning of Explanation I to Article 47A of Schedule I-

A of the A.P. Stamp Act.

3.3 Learned counsel for the appellant therefore contended that

the impugned orders may be set aside and a direction may be

issued to the Trial Court to mark the agreement to sell as an Exhibit

in the suit for specific performance filed by the appellant herein

against the respondent – landlady by allowing these appeals.

3.4 Per contra, learned counsel for the respondent – landlady

supported the impugned orders and placed reliance on a recent

10

judgment of this Court in the case of Ramesh Mishrimal Jain

vs. Avinash Vishwanath Patne , 2025 SCC OnLine SC 329

(“Ramesh Mishrimal”) wherein this Court while considering a

similar provision under Explanation I to Article 25 of the Bombay

Stamp Act, 1958 held that the agreement to sell was in fact a

sale deed and hence, stamp duty would be chargeable. He also

submitted that in the said judgment reference has been made to

Ratnamala, wherein a Division Bench of the Andhra Pradesh

High Court had interpreted the provision under consideration

and had opined that the document of agreement to sell was in

fact a sale deed and therefore subject to stamp duty as a

document of sale. That, in the said judgment the Division bench

of the Andhra Pradesh High Court overruled the earlier judgment

of the said Court in M.A. Gafoor vs. Mohd. Jani, 1998 SCC

Online AP 848 (“Gafoor”). Therefore, there is no merit in these

appeals and the same may be dismissed.

4. Before we move forward, it is necessary to recall the

relevant facts of the present case. The appellant herein is a

tenant of the respondent in respect of the suit schedule property

11

and according to the appellant, the respondent entered into an

agreement to sell the said property on 14.10.2009. Suit for

specific performance of the said agreement has been filed by the

appellant herein in O.S. No.188/2013 which is pending before

the Trial Court. In the said suit, the appellant sought to mark

the agreement to sell dated 14.10.2009 as it is on the basis of

the said agreement that the suit for specific performance has

been filed by the appellant herein. An objection for marking of

the said document was raised by the respondent’s counsel on

the ground that it is insufficiently stamped and that Explanation

I to Article 47A of Schedule I-A of the A.P. Stamp Act would apply.

The said objection was sustained by the Trial Court which

ordered that duty and penalty has to be paid by the appellant on

the said document before it could be marked in evidence. The

High Court has sustained the said order in Civil Revision Petition

No.551/2017. Hence, these appeals.

4.1 It is also necessary to bear in mind the fact that the

respondent has been successful in seeking an order of eviction

12

of the appellant tenant by filing R.C.C. No.4/2013 dated

03.01.2017 under the A.P. Rent Act, 1960.

4.2 In the agreement to sell dated 14.10.2009 which is

produced as Annexure P-I, it is noted that two non-judicial

stamps, each valued at Rs.50/- i.e., totalling Rs.100/- as stamp

duty has been paid. Further, in the said agreement to sell

entered into by the respondent in favour of the appellant, it is

stated as under:

“… In view of changes of time and circumstances and

since I am unable to supervise the said property in future

and further decided and confirmed to develop my

property situate at Visakhapatnam and in view of

purchaser’s request previously made to sell and since

the Schedule property is in your possession since

around 50 years and enjoying the same. I, the seller

hereby thought it fit to sell the Schedule property to you,

I seller and agreed to sell the same for Rs.9,00,000/- and

received an amount of Rs.6,50,000/- (Rupees Six Lakhs

Fifty thousand only) on this day from the purchaser

towards advance and I further agreed to receive the

remaining balance sale consideration from your and the

Seller has agreed to receive the same before and in the

presence of the Sub-Registrar at the time of registration

and after duly engraving the Sale Deed on the stamps

purchased to effect the registration at Purchaser’s

expense and I, the seller hereby further agreed to do so

on my (self) assurance and guarantee and do execute the

Sale deed on proper stamps whenever the Purchaser

called upon to execute the sale deed. Further, I the seller

13

hereby agreed and assured to execute regular sale deed

without stipulation of time or referring to time……”

(underlining by us)

On a reading of the aforesaid clause, it is evident that – (i)

the appellant has been in possession of the suit schedule

property as a tenant for around fifty years, and (ii) the landlady-

respondent herein has agreed to sell the suit schedule property

to the appellant-tenant. The fact that the appellant has been in

possession of the property for the last fifty years as noted in the

said agreement to sell dated 14.10.2009 is significant and a

critical fact in the instant case. It means that the appellant-

tenant was not given possession of the suit property in the

backdrop of the agreement to sell, either prior thereto or

subsequently.

4.3 Further, the appellant has also suffered an eviction order

vis-à-vis the suit schedule property as a tenant. This was

because the respondent herein had preferred the petition seeking

eviction of the appellant under the A.P. Rent Act, 1960. The

relevant portion of the order of eviction dated 03.01.2017 passed

14

by the Rent Controller-cum-Principal Junior Civil Judge,

Rajamahendravaram in RCC No.4 of 2013 read s as under:

“1. This is a petition filed by the petitioner under Section

10 of A.P. Buildings (Lease, Rent and Eviction) Control

Act, 1960 against the respondent for eviction of the

respondent from the schedule property by directing him

to vacate and handover the vacant possession of the

premises to her and to award costs and such other

reliefs.

xxx

2. The petitioner submitted that she is the absolute

owner of the petition schedule property. In the first

instance, the respondent filed a suit in OS 1050/1999

against the petitioner and her husband for Permanent

Injunction restraining the petitioner and her husband

not to dispossess the respondent from the schedule

property except under due process of law on the file of

Prl. Junior Civil Judge Court, Rajahmundry. The

respondent averred in the plaint in O.S. 1050 of 1999

that he took the schedule premises on lease from the

petitioner on monthly rent of Rs.1200/ -, thus the

respondent admitted the ownership of the petitioner and

also admitted that he is only a tenant under the

petitioner. Subsequently, the petitioner filed a suit in

O.S.611/2002 on the file of I Additional Junior Civil

Judge, Rajahmundry against the respondent seeking a

permanent injunction against the respondent

restraining him respondent from the schedule property

on the file of I Additional Junior Civil Judge,

Rajahmundry.

xxx

13. The respondent submitted that once the petitioner

and her husband expressed their willingness to sell away

the petition schedule property for reasonable price and

15

then he reserved his right to exercise the obligation

under presumption clause under tenancy whenever

occasion arises, subsequently during the year 1999 the

petitioner and her husband changed their mind and they

developed ill-will at the provocation of some local people

with a view to sell away the schedule property for higher

price and attempted to dispossess him from the schedule

property and attempted to use force to evict him on

intervention of elders by name Chekka Satyanarayana,

Sri Bhalla Varambabu of Dowaliswaram and others, the

respondent resisted the illegal attempts of the petitioner

and her husband, the petitioner and her husband openly

proclaimed that the will evict him from the schedule

property at any cost, apprehending danger in the hands

of the petitioner and husband, he was constrained to file

a suit for perpetual injunction against the petitioner in

O.S.1050/1999, in the said suit the petitioner filed a

memo stating that the suit may be decreed subject to the

result of the other suits filed by her in O.S.611/2002 and

2/2004, consequently the suit was decreed accordingly.

xxx

19. The respondent submitted that as per the advice of

the petitioner until the outcome of the registered sale

deed duly executed by her, the petitioner advised to him

to deposit the rental in her bank account as usual @

Rs.1200/- per annum and also to pay hou se tax to

Grampanchayat, Dowlaiswaram, accordingly he used to

deposit rents, but subsequently because of ill advices,

the petitioner refused to receive rents, consequently he

has been depositing the rents in the petitioner's bank

account bearing No.01190037135 of State Bank of India,

Dowlaiswaram since 2005, he has no objection to

deposit the entire accrued rent and the rental that

accrues hereinafter before this Tribunal illegible.

xxx

16

30. On a careful perusal of pleadings and evidence, it

can be safely concluded that there is a landlady and

tenant relationship between the petitioner and

respondent, hence point no.1 is answered in favour of

the petitioner.

xxx

39. …Thus, the contention of the petitioner that she is

the absolute owner of the property and she is having

necessity to recover the property is proved. Hence, I hold

that the respondent is liable to evict the petition

schedule property and deliver the possession to the

petitioner.

xxx

In the result, this petition is allowed with costs,

eviction ordered, granting one month time for the

respondent to vacate and deliver vacant possession of

the schedule property to the petitioner, failing which the

petitioner is at liberty to get the order executed by filing

E.P. in accordance with law.”

(underlining by us)

The aforesaid eviction order was passed on 03.01.2017

subsequent to the agreement to sell which is dated 14.10.2009.

Jural Relationship in the Instant Case:

5. In this case, the appellant was a tenant of the respondent-

landlady on the date of execution of the agreement to sell dated

14.10.2009, and the jural relationship between the parties was

that of lessor and lessee/landlady and tenant and the tenancy

17

was within the scope and ambit of the A.P. Rent Act, 1960 for

about fifty years. The question is whether the said jural

relationship was converted to one of vendor and vendee upon the

execution of the agreement to sell. In other words, whether the

possession of the schedule property by the appellant herein

continued in the capacity of a tenant or as a vendee on the

execution of the agreement to sell. If the possession of the suit

schedule property continued to be held by the appellant as a

tenant even upon the execution of the agreement to sell, there

would be no conveyance/sale within the meaning of the

Explanation I to Article 47A of Schedule I-A of the A.P. Stamp

Act. On the other hand, if the relationship in relation to the

agreement to sell became that of a vendor and vendee, then the

aforesaid Explanation I would apply and it would be in the

nature of a deemed conveyance. In order to ascertain this aspect

of the matter, it is necessary to discuss the relevant provisions

of the Transfer of Property Act, 1882 (“the Act” for short).

5.1 Section 105 of the Act defines a lease and the relationship

of a lessor and lessee is the relationship which exists between

18

the parties to a lease. The rate of rent, duration of lease, purpose

of lease, etc. are all governed by the terms of the contract entered

into between the parties. Thus, a lease is the transfer of a right

to enjoy immovable property for a certain period of time. The

said relationship is also of a landlord and a tenant i.e., a tenancy

where lease of a premises is recognised under a statute.

5.2 If a tenancy is covered under a statute, the eviction of a

tenant is under the particular statute. Irrespective of the same,

Section 111 of the Act speaks of determination of lease. There

are eight ways in which a lease can be determined i.e. when it

comes to an end and there is no order of eviction of a tenant

under a statute. Clauses (e) and (f) deal with express surrender

and implied surrender. For ease of reference, Section 111 (e) and

(f) of the Act are extracted as under:

“111. Determination of lease.— A lease of immoveable

property determines—

xxx

(e) by express surrender; that is to say, in case the lessee

yields up his interest under the lease to the lessor, by

mutual agreement between them;

(f) by implied surrender;”

19

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

20

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 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 vs. 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

21

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.

5.8 Further, Section 54 of the Act defines sale of immovable

property as a transfer of ownership in exchange for a price paid

or promised or part paid or part promised. A contract for sale or

an agreement to sell of immovable property is a contract that sale

of such property shall take place on terms settled between the

parties. It does not, of itself, create any interest in or charge on

such property. By virtue of Section 47 of the Registration Act,

1908, a mere agreement to sell immovable property, which

creates only a right to obtain another document conveying

22

property, is not compulsorily registrable under Section 17 of the

Registration Act, 1908. An averment of the existence of a

contract for sale, whether with or without an averment of

possession following upon the contract by itself, is not a relevant

defence to an action for ejectment. The reason is that a mere

agreement for sale does not create any interest in immovable

property. If an agreement to sell or an agreement for sale does

not create any interest in it, there can be no transfer of interest

in the property by such a mere contract for sale. A contract for

sale gives only a right to compel the other party to execute a sale

deed in respect of the property. An agreement to sell confers no

title and is not a transfer of any rights in an immovable property.

Therefore, an agreement to sell per se cannot be construed as a

“conveyance”, which is restricted to delivery of possession or

execution of a sale deed.

5.9 In Suraj Lamp and Industries Private Limited (2) vs.

State of Haryana, (2012) 1 SCC 656 , this Court speaking

through Raveendran, J. referred to the scheme of the Act, the

Registration Act, 1908 as well as the Indian Stamp Act, 1899

23

(Central Act, though the provisions may be similar to those in

the State Acts). Section 5 of the Act which defines transfer of

property, Section 54 which defines sale and Section 53A of the

Act which defines part performance as well as contract for sale

as defined in Section 54 of the Act were examined. Similarly,

Sections 17(1)(b) and 17(1A) of the Registration Act, 1908 and

the relevant provisions and Section 27 of the Indian Stamp Act,

1899 were considered. While referring to Section 54 of the Act,

the scope of an agreement to sell was considered to hold that

only when there is a transfer which means to convey ownership

and would entail the transfer of title, would there be a

requirement of registration of the document as a non -

testamentary instrument within the meaning of Section 17(1)(b)

of the Registration Act, 1908? Thus, only when there is a sale

deed, would there be any creation of an interest in the property

including transfer of title and the same would imply a

conveyance? In paragraphs 18 and 19 of the said judgment, it

was observed as under:

24

“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.”

5.10 Therefore, a contract for sale (agreement to sell) would not

confer any title nor transfer any interest in an immovable

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

of the Act). Thus, an agreement to sell or a contract for sale with

or without possession is not a conveyance deed. Therefore, a sale

of immovable property can only be made by a registered

instrument and that an agreement of sale does not create any

interest or charge on its subject matter.

25

5.11 Section 53A of the Act reads as under:

“53A. Part performance.—Where any person contracts

to transfer for consideration any immoveable property by

writing signed by him or on his behalf from which the

terms necessary to constitute the transfer can be

ascertained with reasonable certainty,

and the transferee has, in part performance of the

contract, taken possession of the property or any part

thereof, or the transferee, being already in possession,

continues in possession in part performance of the

contract and has done some act in furtherance of the

contract,

and the transferee has performed or is willing to

perform his part of the contract,

then, notwithstanding that where there is an

instrument of transfer, that the transfer has not been

completed in the manner prescribed therefore by the law

for the time being in force, the transferor or any person

claiming under him shall be debarred from enforcing

against the transferee and persons claiming under him

any right in respect of the property of which the

transferee has taken or continued in possession, other

than a right expressly provided by the terms of the

contract:

Provided that nothing in this section shall affect the

rights of a transferee for consideration who has no notice

of the contract or of the part performance thereof.”

5.12 Section 53A applies to a person who contracts to transfer

immovable property in writing. If the proposed transferee in the

agreement has taken possession of the property or he continues

in possession thereof being already in possession in part

26

performance of the contract and has done some act in

furtherance of the contract and transferee has performed or is

willing to perform his part of the contract, the transferor shall be

debarred from enforcing any right in respect of the property vide

Shashi Kapila vs. RP Ashwin, (2002) 1 SCC 583.

5.13 In a case where a person claims benefit of part

performance, evidence that he was inducted into possession for

the first time subsequent to the contract, would be a strong piece

of evidence regarding the contract and of possession changing

hands pursuant to the contract. Continuous possession of a

tenant in the suit property even after entering into the sale

agreements would not by itself amount to a part-performance,

putting the tenant in possession of the suit properties pursuant

to the sale agreements vide Chinnaraj vs. Sheik Davood

Nachair, AIR 2003 Mad 89.

6. However, just like in many states, amendments were made

to the A.P. Stamp Act whereby agreements to sell acknowledging

delivery of possession or power of attorneys authorising the

attorney “to sell any immovable property” along with delivery of

27

possession were charged with the same duty as leviable on a

conveyance deed. In the instant case, Article 47A of Schedule I-

A of the A.P. Stamp Act reads as under:

“47A. Sale as defined in Section 54

of the Transfer of Property

Act, 1882 -

(a) in respect of property situated in

any local area comprised in a

Municipal Corporation-

(i) where the amount or value of

the consideration for such sale

as set forth in the instrument or

the market value of the property

which is the subject matter of

the sale whichever is higher but

does not exceed Rs.1,000.

*Eight rupees for

every one hundred

rupees or part thereof.

(ii) where it exceeds Rs.1,000. The same duty as

under clause (i) for the

first Rs.1,000 and for

every Rs.500 or part

thereof in excess of

Rs.1,000, forty

rupees.

(b) In respect of property situated

in any local area comprised in

the Selection Grade or in Special

Grade Municipality-

(i) where the amount or value of

the consideration for such sale

as set forth in the instrument or

the market value of the property

which is the subject matter of

the sake, whichever is higher,

but does not exceed Rs.1,000;

Seven rupees for every

one hundred rupees

for part thereof.

(ii) where if exceeds Rs.1,000. The same duty as

under clause (i) for the

first Rs.1,000 and for

28

every Rs.500 or part

thereof in excess of

Rs.1,000, Thirty five

rupees.

(c) Where the property is situated

in any area other than those

mentioned in clauses (a) and

(b)–

(i) where the amount or value of

the consideration for such sale

as set forth in the instrument or

the market value of the property

which is the subject matter of

the sale, whichever is higher,

but does not exceed Rs.1,000/-

*Six rupees for every

one hundred rupees

or part thereof.

(ii) where it exceeds Rs.1,000. The same duty as

under clause (i) for the

first Rs.1,000 and for

every Rs.500 or part

thereof in excess of

Rs.1,000, Thirty

rupees.

(d) If relating to a multi-unit house

or unit of apartment/flat/

portion of a multi -storied

building or part of such

structure to which the

provisions of Andhra Pradesh

Apartments (Promotion of

Construction and Ownership)

Act, 1987, apply :

(i) where the value does not

exceed Rs.2,00,000/-

Rupees Twelve

Thousand.

(ii) where it exceeds

Rs.2,00,000/- but does not

exceed Rs.3,50,000/-

Rupees Twelve

Thousand plus 4% on

the value above

Rs.2,00,000/-

29

(iii) where it exceeds

Rs.3,50,000/- but does not

exceed Rs.7,00,000/-

Rupees Eighteen

Thousand plus 6% on

the value above

Rs.3,50,000/-

(iv) where it exceeds

Rs.7,00,000/-

Rupees Thirty Nine

Thousand plus 8% on

the value above

Rs.7,00,000/-

Explanation I:- An agreement to

sell followed by or evidencing

delivery of possession of the

property agreed to be sold shall

be chargeable as a “sale” under

this Article:

Provided that, where

subsequently a sale deed is

executed in pursuance of an

agreement of sale as aforesaid

or in pursuance of an agreement

referred to in clause (b) of Article

6, the stamp duty, if any,

already paid or recovered on the

agreement of sale s hall be

adjusted towards to total duty

leviable on the sale deed.

xxx

(underlining by us)

6.1 Explanation I to Article 47A is relevant to the instant case.

The said Explanation states that if an agreement to sell is

followed by or evidences delivery of possession of the property

agreed to be sold, then the same shall be chargeable as “sale”

under the said Article. The proviso states that where ,

30

subsequently a sale deed is executed in pursuance of an

agreement of sale, the stamp duty if any already paid or

recovered on the agreement of sale shall be adjusted towards the

total duty leviable on the sale deed. Therefore, it is necessary to

interpret the agreement to sell in the instant case in light of the

aforesaid Explanation I to Article 47A of Schedule I-A of the A.P.

Stamp Act.

7. In Gafoor, an agreement to sell was executed with the

tenant in possession of the schedule property therein, wherein it

was contemplated that the purchaser (the tenant) can retain the

possession and further was authorised to collect rents for

himself by subletting the premises. It was held that in view of

the aforesaid express term in the agreement to sell, the jural

relationship between the parties had changed from that of

landlord-tenant to one of vendor and vendee. Even though the

parties remained in the same position vis-à-vis the schedule

property therein, the nature of their relationship was altered.

The tenant had transformed into a purchaser even though there

was no delivery of possession to the landlord and again re-

31

delivery to the same tenant as a purchaser. The factum of change

of relationship led to an inference of change in the nature of

possession. This is a case whereby through an implied

surrender, there was determination of the lease or tenancy.

Therefore, the relationship of landlord and tenant had ended and

the creation of a relationship of vendor and purchaser had

commenced on the execution of the agreement to sell. But, the

High Court held that the Explanation I to Article 47A of Schedule

I-A of the A.P. Stamp Act was not applicable.

8. In Ratnamala, a Division Bench of the High Court of

Andhra Pradesh interpreted Explanation I to Article 47A of

Schedule I-A of the A.P. Stamp Act on a reference made to it by

a learned Single Judge of that Court, differing with the view

taken by another learned Single Judge in Gafoor. In paragraph

9 of the judgment in Ratnamala while considering Explanation

I to Article 47A of Schedule I-A of the A.P. Stamp Act, it was

observed as under:

“… These expressions cannot be read in isolation and

one has to find the true meaning by reading the entire

Explanation and more so in conjunction with the earlier

expression i.e., “agreement”. Even if these two

32

expressions are looked independently, it means an

agreement to sell followed by delivery of possession and

an agreement to sell evidencing delivery of possession.

In the first case, i.e., “followed by delivery”, possession

cannot be disjuncted from the basic source i.e.,

agreement to sell. Therefore, the expression followed by

delivery of possession should have a direct nexus to the

agreement and should be read in juxtaposition to the

word ‘agreement’ and it cannot be independent or

outside the agreement. Therefore, the delivery of

possession should follow the agreement i.e., through the

agreement. It takes in its sweep the recital in the

agreement itself that delivery of possession is being

handed over. It will also cover cases of delivery of

possession contemporaneous with the execution of

agreement, even if there is no specific recital in the

agreement. In other words, the delivery of possession

should be intimately and inextricably connected with the

agreement. And in the second type, i.e., agreements

evidencing delivery of possession, if the document

contains evidence of delivery of possession by a recital in

that behalf, that is sufficient. Such delivery of possession

can be prior to the date of agreement and need not be

under the agreement. If the agreement records the fact

that the possession was delivered earlier and such recital

serves as evidence of delivery of possession, though prior

to the Agreement, it falls under the second limb.

Therefore, on a proper interpretation of the said

expressions, it would follow that an agreement

containing specific recital of delivery of possession or

indicating delivery of possession even in the past is liable

for stamp duty as a ‘sale’ under the said Explanation.”

(underlining by us)

8.1 In Ratnamala, it was observed that the judgment in

Gafoor was not the correct law by observing as follows:

33

“14. In the case on hand, there is a variation in the

expressions used viz., “followed by” and “evidencing

delivery of possession”. As discussed above, the

expression “followed by” should be read in conjunction

with the earlier expression “agreement” and in the latter

case, any agreement recording delivery of possession

should invite the stamp duty as a sale deed, even though

the possession had been delivered in the past. The

expression “evidencing delivery of possession” applies to

the situation with which we are concerned in the present

case.”

8.2 In our view, the Division Bench of the High Court was

right in overruling the judgment in Gafoor. This is because the

facts of the case and the recitals of the agreement therein in the

latter judgment were not appreciated in their proper perspective.

8.3 To recollect the facts in Gafoor, the agreement to sell had

a clause which stated that the purchaser who was the lessee can

retain and collect rent from the schedule property after the

agreement of sale of the property and the vendor will, in no way,

interfere or object to the same even if the purchaser sub-lets the

premises and collects rent. This recital meant that, (i) the tenant

of the building was specifically permitted to retain possession

and collect rent from the schedule property subsequent to the

execution of the agreement and (ii) he was also authorised to

34

sub-let the premises. (iii) Apart from that it was specifically

mentioned in the agreement that the vendee, who was the tenant

of the building, would not have to pay monthly rent subsequent

to the agreement of sale. Thus, the position of the tenant and his

relationship with his landlord had metamorphosed into that of

vendee and vendor. The possession of the property continued

with the tenant or lessee but not in that capacity but as a vendee

who had got possession pursuant to the agreement to sell.

Therefore, there was deemed conveyance and it was interpreted

to come within the scope and ambit of the Explanation I to Article

47A of Schedule I-A of the A.P. Stamp Act. In our view, this

interpretation in Ratnamala about Gafoor was just and proper

inasmuch as there was an implied surrender of the tenancy and

a cessation of the landlord-tenant relationship and pursuant to

the agreement therein, the relationship was one of vendor and

vendee. These recitals in the agreement by the vendor revealed

that the plaintiff therein i.e., the vendee who had filed the suit

for specific performance was already in possession of the

building as a tenant and as such the question of delivering of

35

physical possession of the property under the agreement did not

arise. It was held that the delivery of possession after the

execution of the agreement was notional on an implied surrender

of tenancy as the plaintiff therein was in actual possession of the

property as a tenant even prior to the agreement. Hence,

Explanation I to Article 47A of Schedule I-A of the A.P. Stamp

Act was rightly applicable.

9. Ramesh Mishrimal is a judgment of this Court. The facts

of the said case were that the Trial Court by its order had allowed

the application filed by the respondent therein and impounded

the document (Ex. 30) i.e. Agreement to Sell dated 03.09.2003 in

respect of a house property and an adjoining room and directed

the same to be sent to the Registrar of Stamps for recovery of

deficit stamp duty and penalty on it, as per law. This order was

passed in a suit for specific performance of the agreement to sell

dated 03.09.2003 and other reliefs. The respondents therein had

filed the application under Section 34 of the Bombay Stamp Act,

1958 for impounding the document stating that the agreement

in question was executed on a stamp paper of Rs.50/- and the

36

suit property was situated within the limits of a place called Khed

and hence stamp duty of Rs.44,000/- was required to be paid

besides penalty of Rs.1,31,850/-. The said application was

resisted by the appellant therein by contending that the

agreement to sell was not an agreement of conveyance and

hence, no stamp duty was payable on the same as a conveyance.

Reference was made to Explanation I to Article 25 of the Bombay

Stamp Act, 1958. The said Explanation presupposes an

immediate or agreed transfer of possession under the agreement

to sell itself but when the possession remains with the seller until

the sale deed is executed, the agreement to sell cannot be

equated with the conveyance and no stamp duty can be levied as

such. In the said case, the agreement to sell dated 03.09.2003

explicitly stated that the suit property was in the possession of

the appellant therein in the capacity of a tenant and this

possession was independent of the sale transaction. The

extension agreement dated 28.7.2004 entered into between the

parties also reiterated the same position.

37

9.1 The appellant therein had contended that three conditions

were not satisfied and hence Explanation I to Article 25 of the

Schedule I to the Bombay Stamp Act, 1958 did not apply. They

were namely, (i) no possession was transferred under the

agreement to sell; (ii) no agreement to transfer possession existed

until the sale deed was executed; and (iii) the possession of the

appellant remained that of a tenant, which was legally distinct

and independent. Hence, no stamp duty could be levied on the

agreement to sell dated 03.09.2003 as a conveyance.

9.2 Per contra, the respondent therein had submitted that the

said Explanation was applicable and the agreement to sell was

to be treated as a conveyance. In support of the same, reliance

was placed on two decisions of this Court in Veena Hasmukh

Jain vs. State of Maharashtra, (1999) 5 SCC 725, (“Veena

Hasmukh”) and Shyamsundar Radheshyam Agrawal vs.

Pushpabai Nilkanth Patil, (2024) 10 SCC 324

(“Shyamsundar Radheshyam”) wherein it was held by this

Court that the stamp duty is leviable only on the document and

not on the transaction.

38

9.3 At this stage itself, it could be observed that having regard

to the specific nature of recitals in the respective agreements to

sell considered by this Court in the aforesaid two cases, it was

held that there was in fact a deemed conveyance and hence, the

requisite stamp duty in terms of Explanation I to Article 25 of

Schedule I to the Bombay Stamp Act, 1958 was applicable.

9.4 The significant facts in Ramesh Mishrimal were that

there was a civil suit filed by the landlord against the tenant-

vendee seeking eviction and possession of the schedule

premises. This Court considered the question, whether, the

appellant was liable to pay the stamp duty and penalty on the

agreement to sell dated 03.09.2003 allegedly executed between

the appellant and mother of respondent no.1 therein in respect

of the suit property. It was the specific case of the appellant

therein that the agreement to sell clearly stated that the

possession of the appellant was on rental basis and the same

would not form part of the sale transaction. Therefore, the

question of treating the agreement a deemed conveyance did not

arise. This Court held that the suit property was occupied by

39

the appellant therein on a rental basis and there was a clause

that the transaction was to take place later by execution of the

sale deed. This Court noted the following clause in the

agreement, namely, “this property is in their occupation on rental

basis and it will not be part of the sale transaction. After

completion of sale transaction, the possession of the said property

will be given to you on the ownership basis.”

9.5 This Court observed that the agreement to sell included a

clause stating that the physical possession had already been

handed over to the appellant. Regardless of the basis of such

possession, by applying the Explanation to Article 25 of Schedule

I of the Bombay Stamp Act, 1958 this Court held that there was

a conveyance within its meaning and hence dismissed the appeal

and directed that until duty and penalty was satisfied under

Section 34 of the Bombay Stamp Act, 1958, the document

impounded could not be used in evidence. This Court invoked

Section 53A of the Act to hold that the tenant therein had

acquired the possessory right and therefore there was a

conveyance or sale within the meaning of Explanation I to Article

40

25 to Schedule I of the Bombay Stamp Act, 1958. This Court

observed that the vendee therein was already in possession of

the property to be sold to him and continued to do so in part

performance of the contract as the said possession was

recognised under the agreement and therefore there was a sale

or conveyance.

9.6 The judgment of this Court in Ramesh Mishrimal has to

be distinguished on two aspects. Firstly, on the basis of the text

of Explanation I under the A.P. Stamp Act and Bombay Stamp

Act, 1958. Secondly, in Ramesh Mishrimal this Court has

invoked Section 53A of the Act which is not being done so in the

instant case.

10. Explanation I to Article 25 of Schedule I of the Bombay

Stamp Act, 1958 reads as under:

“Explanation 1.— For the purposes of this article, where

in the case of agreement to sell an immovable property,

the possession of any immovable property is transferred

or agreed to be transferred to the purchaser before the

execution, or at the time of execution, or after the

execution of such agreement without executing the

conveyance in respect thereof, then such agreement to

sell shall be deemed to be a conveyance and stamp duty

thereon shall be leviable accordingly:

41

Provided that, the provisions of Section 32-A shall

apply mutatis mutandis to such agreement which is

deemed to be a conveyance as aforesaid, as they apply to

a conveyance under that Section:

Provided further that, where subsequently a

conveyance is executed in pursuance of such agreement

of sale, the stamp duty, if any, already paid and

recovered on the agreement of sale which is deemed to

be a conveyance, shall be adjusted towards the total duty

leviable on the conveyance.”

However, in the present case, Explanation I to Article 47A

of Schedule I-A to the A.P. Stamp Act reads as under:

“An Agreement to Sell followed by or evidencing delivery

of possession of the property agreed to be sold shall be

chargeable as a sale under this Article.”

10.1 The phrases in the aforesaid two Explanations could be

highlighted. Under Explanation I to Article 47A of Schedule I-A

to the A.P. Stamp Act, the words used are “followed by or

evidencing delivery of possession of the property agreed to be sold”

whereas in Explanation I of the Bombay Stamp Act, 1958, the

words are “the possession of any movable property is transferred

or agreed to be transferred to the purchaser before the execution,

or at any time of execution, or after execution of such instrument”.

The differentiation in the wordings of the two Explanations reveal

42

that they are not identical and the intention of the respective

legislations are dissimilar. Under the A.P. Stamp Act, the delivery

of possession of the property must follow the execution of the

agreement to sell or if delivery of property has been made prior

to the agreement to sell then it should be evidenced in the

agreement to sell by a recital to that effect. However, if the

possession of the property by the vendee does not have any nexus

to the agreement to sell, as in the present case where the

possession of the property was with the appellant as a tenant for

nearly five decades and the respondent vendor has decided to sell

the same to the appellant vendee then, the said possession is not

relatable to the agreement to sell. In such a case, neither is the

sale within the meaning of Explanation I to Article 47A of

Schedule I-A to the A.P. Stamp Act nor is it a case of deemed

conveyance.

10.2 It is also necessary to observe that where pursuant to an

agreement to sell, possession is handed over to the vendee then

the protection under Section 53A of the Act would apply and the

possession of the vendee would be protected subject to the

43

conditions mentioned in the said provision including registration

of the instrument and therefore, the necessity to pay the requisite

stamp duty. However, in the present case, Section 53A of the Act

does not apply as the possession was not handed over to the

appellant herein in relation to the agreement to sell dated

14.10.2009. In fact, the appellant was in possession of the

subject property for almost fifty years prior to the said agreement

to sell. This is in fact recorded in the agreement to sell.

10.3 In the circumstances, it is necessary to distinguish the

ratio of the judgment in Ramesh Mishrimal as in the present

case, Section 53A will not apply as has been invoked in the

aforesaid case. Though in both the cases, the vendee on the date

of the agreement was in possession of the property as a tenant,

since Section 53A of the Act has been applied by this Court in

Ramesh Mishrimal , we restrict the said judgment only to the

facts of that case. This is because in the instant case, there is an

order of eviction against the appellant here subsequent to the

execution of agreement to sell which clearly proves that the

tenancy continued in respect of the suit schedule property in the

44

present case even subsequent to the execution of the agreement

to sell dated 14.10.2009. Therefore, Section 53A of the Act is not

applicable in the present case.

10.4 In Veena Hasmukh, the question raised for

consideration was as to the duty payable under the Bombay

Stamp Act, 1958 on an agreement for sale of flats covered by the

Maharashtra Ownership Flats (Regulation of the Promotion of

Construction, Sale, Management and Transfer) Act , 1963

(hereinafter referred to as “the MOF Act”) and the Maharashtra

Apartment Ownership Act, 1971. The contention of the appellant

therein was that she was not liable for payment of duty under

Entry 25 of Schedule I of the Bombay Stamp Act, 1958; that the

agreement for sale had been executed under Section 4 of the

MOF Act and in terms of the said provision, it was mandatory to

register the same under Section 17(1) of the Indian Registration

Act, 1908; that the provisions of the Bombay Stamp Act, 1958

were not applicable and consequently, proceedings under

Section 32-A of the Bombay Stamp Act, 1958 could not have

been initiated. Hence, it was contended that the action of

45

impounding the document was illegal. This Court noticed that in

paragraph 7 of the agreement, it was stated that subject to the

purchaser making full payment of all amounts due and payable

by him under the agreement and subject to a force majeure,

possession of the said premises was expected to be delivered by

the builders to the purchasers on or before 30.11.1987. The

agreement was dated 08.10.1987 and the possession was to

handed over by 30.11.1987. Paras 14 and 15 of the agreement

read as follows:

“14. Nothing contained in these presents is intended to

be nor shall it be deemed to be a grant, demise,

conveyance, assignment or transfer in law of the said

property premises or the building thereon, or any part

thereof to the purchaser by the builders.

15. The purchaser shall not let, sub-let, sell, transfer,

assign or otherwise deal with or dispose of the said

premises or his interest or benefit under this agreement

till all the dues payable by him to the builders under this

agreement have been fully paid up and until previous

consent in writing of the builders in that behalf is

obtained by him.”

The aforesaid terms were construed by this Court to hold

that the agreement entered into merely provided for sale of an

immovable property and there was also a specific time within

46

which possession had to be delivered (which was a few days after

the execution of the agreement to sell). It was therefore held that

the document in question fell within the scope of Explanation I

to Article 25 of Schedule I to the Bombay Stamp Act, 1958 and

the appeal filed by the appellant therein was dismissed.

10.5 In Shyamsundar Radheshyam , there were six

documents or instruments which were held to be different

transactions between different vendors and different purchasers.

The question involved was whether the appellant therein was

liable to pay stamp duty or penalty on the agreements to sell

executed prior to the sale deed executed in their favour in respect

of two properties. This Court observed that in order to determine

the stamp duty that is chargeable upon an instrument, the legal

rule is that the real and true meaning of the instrument is to be

determined by ascertaining the intention of the parties from the

contents and the language employed in the whole instrument

and the description or the nomenclature given to the instrument

by the parties is immaterial. This Court noted that the agreement

to sell consisted of a clause whereby the possession was handed

47

over to the purchaser satisfying the requirement to treat the

instrument as a conveyance and what remained was only the

formality of execution of the sale deed. Therefore, it was

concluded that the agreement to sell necessitated payment of

stamp duty as per the Explanation I of Article 25 of Schedule I

of Bombay Stamp Act, 1958. It was further held that the

subsequent sale deed executed could not be construed as the

principal transaction and that the agreement to sell was the

principal conveyance as per the aforesaid provision.

10.6 Therefore, the judgments of this Court in Veena

Hasmukh and Shyamsundar Radheshyam have no bearing

having regard to the facts of the present case.

11. On a conspectus reading of the recital in the agreement to

sell dated 14.10.2009 with the order dated 03.01.2017 passed in

RCC No.4 of 2013, it becomes clear that the appellant herein was

a tenant and as a tenant, he entered into an agreement to buy

the schedule property from the landlord. The respondent-

landlord did not treat the possession of the suit schedule

property by the appellant-tenant pursuant to the agreement to

48

sell dated 14.10.2009 as a vendee. In fact, long prior to that

agreement to sell (around fifty years), the appellant came into

possession of the suit schedule property as a tenant. Therefore,

this is not a case where pursuant to the agreement to sell dated

14.10.2009 or in relation to it, or prior to the agreement to sell

possession of the suit schedule property has been handed over

to the appellant herein as a vendee.

11.1 Thus, there is no express or implied surrender of the

tenancy by the appellant in favour of the landlord vendor. The

tenancy in fact continued and the appellant has also suffered an

order of eviction as a tenant vide order dated 03.01.2017.

Consequently, it is held that there is no “deemed conveyance”

within the meaning of Explanation I to Article 47A of the A.P.

Stamp Act, as the agreement to sell in the instant case does not

come within the scope and ambit of the Explanation thereto.

Therefore, neither there being transfer of title in the suit

schedule property nor there being any deemed conveyance from

the respondent to the appellant herein, the stamp duty payable

49

on the nature of the transaction being an agreement to sell

simplicitor is just and proper.

11.2 The facts of the case in Gafoor can be compared to the

present case, as it was rightly overruled by the Division Bench of

the Andhra Pradesh High Court in Ratnamala, as the findings

in the said case were incorrect wherein, it had been expressly

mentioned in the agreement to sell that the possession of the

schedule property was with the appellant therein as a tenant.

Therefore, the appellant therein also did not come into

possession of the property in relation to the agreement to sell but

was already in possession of the property as a tenant. But, there

was surrender within the meaning of Section 111 of the Act so

as to determine the lease or tenancy. On the other hand,

pursuant to the agreement to sell in the present case, there was

no change in the status of the appellant herein inasmuch as he

continued to be a tenant and did not acquire possession under

the agreement to sell. The appellant herein also suffered an

eviction order as a tenant of the schedule property. Therefore,

the appellant did not acquire possession of the property prior to

50

the agreement to sell dated 14.10.2009 in relation thereto or at

the time of its execution or subsequent thereto. In other words,

the possession of the schedule property by the appellant herein

was not following the agreement to sell nor was delivery of

possession pursuant to the execution of agreement to sell as

stipulated under the A.P. Stamp Act. It is only when the

possession is acquired in relation to the execution of the

agreement to sell, that it would be a deemed conveyance and

stamp duty has to be levied as conveyance.

12. However, in the instant case, the agreement to sell dated

14.10.2009 expressly states that the appellant was in possession

of the schedule property as a tenant for fifty years and in fact an

order of eviction was also passed against the appellant.

Therefore, the appellant did not come into possession of the

schedule property in relation to the execution of the agreement

to sell dated 14.10.2009 but almost fifty years prior thereto as a

tenant and not as a vendee. In fact, the existing tenant sought

to purchase the schedule property but there was no express or

implied surrender of tenancy so as to bring about determination

51

of the tenancy or lease by the appellant herein. Hence, the

judgment of this Court in Ramesh Mishrimal is not applicable

to the facts of the present case.

12.1 The Trial Court failed to notice this aspect of the matter

and simply directed the appellant herein to pay the stamp duty

as if it were a conveyance or sale and there was a transfer of title

from the respondent to the appellant herein. The High Court in

fact misdirected itself in assuming that there was in fact a

deemed conveyance between the respondent and the appellant

herein. The appellant herein is not liable to pay any additional

duty and penalty on the said instrument and neither is the said

instrument liable to be impounded for the purpose of payment

of duty and penalty. Hence, we find that the High Court was not

right in sustaining the order of the Trial Court. Consequently,

both the impugned orders of the High Court as well as the order

of the Trial Court are set aside. The appeals are allowed in the

aforesaid terms.

12.2 The Trial Court shall mark the agreement to sell dated

14.10.2009 as an Exhibit and proceed to dispose the suit as

52

expeditiously as possible and preferably within a period of six

months from the date of the next hearing before the Trial Court.

No costs.

….….……..………………….J.

(B.V. NAGARATHNA)

….….……..………………….J.

(R. MAHADEVAN)

NEW DELHI;

JANUARY 15, 2026.