The Allahabad High Court, presided over by Justice Dr. Yogendra Kumar Srivastava, has ruled that an agreement to sell executed between a landlord and a tenant does not automatically determine the pre-existing tenancy or convert the nature of the tenant’s possession into part performance under Section 53-A of the Transfer of Property Act, 1882. Dismissing a revision petition filed by tenants challenging an eviction decree, the Court held that unless there is an express or implied surrender of the tenancy or cogent proof showing a change in the juridical character of possession, the landlord-tenant relationship continues to subsist, and a termination notice is not rendered invalid merely because it includes a demand for time-barred rent arrears.
Background of the Case
The dispute originated from S.C.C. Suit No. 109 of 2019 instituted by the landlord against the defendants-tenants for eviction and consequential reliefs regarding a commercial shop, asserting a default in rent payments from January 1, 2003, to August 31, 2019. The monthly rent was stated to be Rs. 3,000, placing the premises outside the protection of U.P. Act No. 13 of 1972. The landlord served a notice dated September 1, 2019, determining the tenancy. During the pendency of the suit, the original plaintiff passed away and was substituted by his legal heirs.
The defendants contested the suit by filing a written statement on September 26, 2022. They pleaded that the landlord-tenant relationship had ceased to exist following the execution of an agreement to sell dated December 24, 2002, for a total consideration of Rs. 1,10,000, which they claimed to have paid in full. The defendants asserted that a separate possession letter was executed on the same date, under which possession of the shop was delivered to them in part performance of the contract. On this basis, they argued that their possession was protected under Section 53-A of the Transfer of Property Act, rendering an eviction suit founded on a subsisting tenancy non-maintainable.
On May 14, 2026, the Small Causes Court/Additional District & Sessions Judge, Court No. 18, Kanpur Nagar decreed the suit in favour of the plaintiff. Aggrieved by this eviction decree, the defendants preferred a revision under Section 25 of the Provincial Small Cause Courts Act, 1887 before the High Court.
Arguments of the Parties
Appearing for the revisionists, learned Senior Advocate Atul Dayal, assisted by Advocate Padmaker Pandey, contended that the trial court failed to properly appreciate the cumulative effect of the registered agreement to sell, the contemporaneous possession letter, and the payment of the entire sale consideration. It was argued that the defendants’ possession ceased to be referable to the earlier tenancy and transformed into possession in part performance of the agreement. In support of this plea, reliance was placed on the High Court’s decision in Habib Khan vs. XIIth Additional District Judge and others.
The revisionists further challenged the validity of the notice determining tenancy dated September 1, 2019, submitting that it demanded rent for over sixteen years, a substantial portion of which was barred by limitation, thereby vitiating the notice and the cause of action. Lastly, it was contended that the defendants had deposited the requisite amount under protest before filing the written statement, which dislodged the finding of default.
Opposing the revision, learned counsel for the respondents, Kunal Shah, supported the trial court’s decree. He pointed out that the registered agreement to sell explicitly stipulated that possession had not been handed over and was to be delivered at the time of execution of the sale deed. Counsel argued that this express recital directly contradicted the defendants’ claim and could not be displaced by an unregistered, disputed possession letter whose attesting witnesses were never examined.
Citing Chandrakant Shankarao Machale vs. Parubai Bhairu Mohite and S. Saktivel vs. M. Venugopal Pillai, the respondents submitted that terms of a registered document cannot be overridden by an unregistered or oral arrangement. Relying on Supreme Court rulings in Nazim Shaikh Hasan vs. Nasir Mushtaq Shaikh and others, H.K. Sharma vs. Ram Lal, and Vayyaeti Srinivasarao vs. Gaineedi Jagajyothi, as well as this Court’s decision in Kashi Nath Mehrotra vs. Roop Narayan Chaudhari, it was contended that mere continuous possession by a tenant after entering into an agreement to sell does not confer statutory protection under Section 53-A.
On the question of notice, the respondents cited Khadi Gram Udyog Trust vs. Shri Ram Chandraji Virajman Mandir, L.M. Joshi vs. K.M. Parikh, Bhagabandas Agarwalla vs. Bhagwandas Kanu, and B.R. Trading Company v. Dharam Raj Sahu and Others to argue that including a demand for time-barred rent does not invalidate a notice determining tenancy, which must be construed in a practical, common-sense manner.
Court’s Analysis and Observations
Justice Dr. Yogendra Kumar Srivastava formulated the principal legal questions: whether a tenant in possession can, upon entering into an agreement to sell, alter the character of possession to one under Section 53-A of the Transfer of Property Act without an independent determination of tenancy; and whether demanding time-barred rent invalidates a notice to quit.
Examining the intersection of an agreement to sell and an ongoing tenancy, the Court held:
“Where a person is already in possession of immovable property as a tenant and subsequently enters into an agreement to purchase the property from the landlord, the agreement to sell does not, by its mere execution, determine the existing tenancy or convert the tenant’s possession into possession in part performance of the agreement. For such a change to be recognised, there must be cogent material showing that the possession thereafter became referable to the agreement to sell and that the pre-existing tenancy was expressly or impliedly surrendered or otherwise determined in accordance with law. Payment of consideration and mere continuation of physical possession, without more, are insufficient.”
The Court explained that physical possession was already continuous; what the law requires is proof of a change in the juridical basis of that possession:
“The existence of two transactions between the same parties, one creating a tenancy and the other contemplating a future sale, is not legally inconsistent. Both may coexist unless the latter transaction, by its terms or by the unequivocal conduct of the parties, demonstrates that the former has been surrendered or otherwise determined.”
The Bench analyzed the distinction illustrated in H.K. Sharma and R. Kanthimathi v. Beatrice Xavier, observing that unlike R. Kanthimathi, where the agreement expressly recorded surrender of possession, the registered agreement here specifically stipulated that possession would be delivered at the time of execution of the sale deed.
The Court further noted that the unregistered possession letter relied upon by the defendants was disputed and its attesting witnesses were not examined. Referring to Section 92 of the Evidence Act and S. Saktivel, the Court reiterated that the terms of a registered instrument cannot be varied by an unproven, unregistered document. Moreover, the Court observed that the defendants themselves had placed rent-deposit tenders on record from 2016 onwards, which was conduct irreconcilable with the claim that their tenancy had ended in 2002.
Addressing the challenge to the notice determining tenancy dated September 1, 2019, the Court drew a distinction between the legal recoverability of arrears and the communication of an intention to terminate tenancy:
“The principle that limitation ordinarily bars the remedy and does not extinguish the underlying right or debt has long been recognised.”
Citing Khadi Gram Udyog Trust, English decisions including Curwen v. Milburn and Sidebotham v. Holland, and the Supreme Court in Bombay Dyeing and Manufacturing Co. Ltd. v. State of Bombay and Bhagabandas Agarwalla, the Court observed:
“The notice has to be construed so as to give effect to the transaction in accordance with the principle ut res magis valeat quam pereat. The Court must, therefore, examine the notice in a common-sense manner and ascertain whether its substance sufficiently conveys the intention to determine the tenancy.”
Justice Srivastava held that including an amount barred by limitation might affect the quantum recoverable in a money suit, but does not invalidate the determination of tenancy itself:
“The fact that some part of the amount demanded may, upon application of the law of limitation, ultimately be found to be not legally recoverable cannot, by itself, obliterate the separate and otherwise intelligible act of determination of tenancy contained in the notice.”
Finally, dealing with the scope of Section 25 of the Provincial Small Cause Courts Act, 1887, the Court emphasized:
“The jurisdiction under Section 25 of the Provincial Small Cause Courts Act, 1887, is supervisory in character and is not intended to provide a second opportunity for a re-appraisal of the evidence as though the revisional court were exercising appellate jurisdiction.”
Decision
Finding no jurisdictional error, perversity, or material irregularity in the trial court’s assessment, the High Court held that the landlord-tenant relationship continued to subsist notwithstanding the agreement to sell, the tenancy was validly terminated, and default had been properly established.
Accordingly, the High Court dismissed the revision petition and affirmed the judgment and decree of eviction dated May 14, 2026, passed by the Small Causes Court/Additional District & Sessions Judge, Court No. 18, Kanpur Nagar, with no order as to costs.
Case Title: Rajesh Kumar Chaurasia and 2 others Versus Suresh Kapoor and 3 others
Case No.: S.C.C. REVISION No. – 85 of 2026
Bench: Justice Dr. Yogendra Kumar Srivastava
Date: September 07, 2026
