MP High Court: an agreement to sell land never transfers title, only a registered sale deed does

The Madhya Pradesh High Court at Gwalior has set aside two lower-court decrees that had declared a buyer under an unregistered agreement to sell as entitled to stop the seller from transferring the land to anyone else. The plaintiff claimed ownership of agricultural land in Gohad, Bhind, based only on a 1989 agreement to sell under which he had paid part of the price and taken possession; he never sued for specific performance of that agreement, only for a declaration and a permanent injunction. The trial court and the first appellate court had decreed his suit, treating the agreement as giving him title good against a later sale deed executed by the seller in favour of a third party. Justice Ashish Shroti held this was wrong in law.

Relying on the Supreme Court's rulings in Suraj Lamp & Industries v. State of Haryana and later decisions, the High Court explained that under Section 54 of the Transfer of Property Act, 1882, a contract of sale does not by itself create any interest in or convey title to immovable property; only a registered sale deed can do that. Section 53-A of the Act protects a buyer in possession only against the seller who signed the agreement, not against third parties, and only if the buyer is willing to perform their own part of the bargain. Since the plaintiff had neither title nor a decree for specific performance, no injunction could be granted. The appeal was allowed and the plaintiff's suit was dismissed.