In a recent order, the Supreme Court reaffirmed that an agreement to sell does not transfer ownership or confer any title to the intended purchaser. The ruling came in response to a plea regarding the execution of a property agreement dating back to May 1990.
Justices Vikram Nath and Rajesh Bindal stated, “The agreement to sell does not transfer ownership rights or confer any title; it is not a conveyance.” This statement was made in the court’s order earlier this month.
The case involved an intended purchaser who had agreed to buy a property and paid the full amount, with possession also handed over. When the seller refused to execute the agreement, the intended purchaser filed a suit for specific performance in October 2001.
The trial court dismissed the suit in September 2004, citing doubts about the execution of the agreement. The first appellate court later ruled in favor of the intended purchaser, stating that the execution of the agreement had been proven.
However, the Karnataka High Court ruled in 2010 that the agreement violated the Karnataka Prevention of Fragmentation and Consolidation of Holdings Act, 1996. The intended purchaser then appealed to the Supreme Court, which noted that the issue of the Fragmentation Act had not been raised before the trial court by either party.
The Supreme Court allowed the appeal, stating that the High Court had erred in holding that the agreement was in violation of the Fragmentation Act. The apex court also pointed out that the respondents had received full consideration and transferred possession of the property.
