SUPREME COURT — 2023 RULING
Agreement to Sell ≠ Ownership: Supreme Court Reaffirms
A bench of Justice Vikram Nath and Justice Rajesh Bindal of the Supreme Court of India categorically reaffirmed in November 2023 that an Agreement to Sell does not confer title or transfer ownership. This is one of the most misunderstood principles in Delhi's property market.
Court: Supreme Court of India
Bench: Justice Vikram Nath and Justice Rajesh Bindal
Month/Year: November 2023
Key Legal Provision: Section 54, Transfer of Property Act, 1882
Reported in: Indian Express, November 2023
The Core Legal Principle
⚠ Exact Words of the Court:
"The agreement to sell is not a conveyance; it does not transfer ownership rights or confer any title."
— Supreme Court of India, November 2023
What This Means in Practice
❌ Agreement to Sell
- Only a promise/contract to sell in the future
- Does NOT transfer title or ownership
- Does not give buyer any right to property against the world
- Buyer cannot register the property based on it
- Buyer cannot get home loan using Agreement to Sell alone
✅ Registered Sale Deed
- Transfers legal title and ownership to the buyer
- Must be registered under Registration Act, 1908
- Gives buyer right to property against the world
- Required for home loan, mutation, and resale
- Only valid mode of property transfer per Section 54 TPA
Common Mistake in Delhi's Property Market
Many buyers in Delhi — particularly in unauthorised colonies, DDA flats, and resale transactions — pay the full consideration, obtain possession, and remain for years with only an Agreement to Sell. They assume this is sufficient. It is not.
💡 Real Risk:
The original owner (or their legal heirs) can sell the property to a third party who purchases it in good faith for value — and the second buyer, who obtains a registered sale deed, will have superior title over the first buyer who only had an Agreement to Sell. This is why registration is non-negotiable.
What to Do If You Have Only an Agreement to Sell
- File a Suit for Specific Performance in the competent civil court — this forces the seller to execute and register the sale deed.
- The limitation period to file a Specific Performance suit is 3 years from the date of refusal or date on which performance was stipulated — do not delay.
- Register an injunction order from the court in revenue records to prevent the seller from transferring to a third party.