VAYYAETI SRINIVASARAO v. GAINEEDI JAGAJYOTHI
Agreement to Sell vs. Deemed Conveyance: Stamp Duty Implications When a Tenant Agrees to Purchase the Leased Property - Analysis of A.P. Stamp Act.
Court: Supreme Court of India
Citation: 2026 INSC 59
Decision Date: 15-01-2026
List of Laws
Andhra Pradesh Stamp Act, 1922; Explanation I to Article 47A of Schedule I-A of the Andhra Pradesh Stamp Act, 1922; Transfer of Property Act, 1882; Section 53A of the Transfer of Property Act, 1882; Registration Act, 1908; Bombay Stamp Act, 1958; Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960; Specific Performance
- Facts: The appellant, a tenant of the respondent for over 50 years, entered into an agreement to sell with the respondent for the suit property. The appellant filed a suit for specific performance when the respondent denied the agreement's existence and refused to execute the sale deed. The respondent also filed a suit for eviction against the appellant. The Trial Court directed the appellant to pay stamp duty and penalty on the agreement to sell, deeming it a conveyance deed. The High Court upheld this order.
- Procedural Posture: The appellant challenged the High Court's order in the Supreme Court via civil appeals arising out of a Special Leave Petition, after the High Court dismissed the appellant's Civil Revision Petition and a subsequent review application.
- Issue: Whether an agreement to sell between a landlord and a long-term tenant, where the tenant continues in possession as a tenant, can be construed as a "deemed conveyance" under Explanation I to Article 47A of Schedule I-A of the Andhra Pradesh Stamp Act, 1922, thereby attracting stamp duty as a sale?
- Holding: No, the agreement to sell in this case cannot be construed as a "deemed conveyance" under the A.P. Stamp Act. The Supreme Court set aside the orders of the High Court and the Trial Court.
- Reasoning: The Court reasoned that the crucial factor is whether possession was handed over to the appellant in relation to the agreement to sell. Since the appellant was already in possession as a tenant for five decades, and the tenancy continued (evidenced by the eviction order), the possession was not transferred pursuant to the agreement. The Court distinguished this case from Ramesh Mishrimal Jain vs. Avinash Vishwanath Patne, emphasizing that Section 53A of the Transfer of Property Act (protection of possession after part performance) was not applicable here. The Court also noted the difference in wording between the A.P. Stamp Act and the Bombay Stamp Act regarding agreements to sell and delivery of possession. The Court stated that there was no express or implied surrender of tenancy, and therefore no deemed conveyance. The Trial Court was directed to mark the agreement to sell as an exhibit and proceed with the suit for specific performance.
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