Libertatem Magazine

Delhi HC: Oral Agreement to Sell Lease Property Not Valid Under Section 53A of TOPA

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The plaintiff filed the application under Order 12 Rule 6 CPC to pass a decree for possession of the property bearing no. W- 6/19, situated in New Delhi, and to direct the defendant to pay arrears in rent.

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Facts of the Case 

The plaintiff is the owner of the above-mentioned property. The plaintiff and his wife are senior citizens and are suffering from various medical complications. They depend on the rental income from the suit property. 

The plaintiff leased the suit property to the defendant by an unregistered lease deed for 3 years. The plaintiff agreed to extend the lease further for 13 months and enhance the rent from Rs.2 lakh per month to Rs.2,30,000/- per month. The defendant had agreed to pay the electricity bills, maintain the septic tank periodically at his costs and expenses for the period of the property in his possession. However, the defendant made default payments of rent from April 2020 to October 2020 at the rate of Rs.2,30,000/- per month with a total balance of Rs.14,10,000/-. 

The plaintiff issued a notice to the defendant to vacate the property by 31.10.2020 and for termination of the lease under Section 106 and Section 111 (a) and (g)(1) of the Transfer of Property Act. The plaintiff also sought for mesne profit after the termination of the lease at the rate of Rs.12,000/- per day for illegal and unlawful possession of the premises. It was also alleged that both the parties have entered into an oral agreement to sell the suit property.

Arguments by the Parties

Arguments by the Plaintiff

The counsel for the plaintiff relied upon the judgment of Arun Kumar Tandon vs. Akash Telecom Private Ltd. & Anr., ILR (2010) 2 Del 727. He contended that this court rejected the plea of an oral agreement to sell under similar facts and circumstances. 

He further added that the defendant had admitted the lease deed dated 25.08.2016, in the written statement. He has also admitted that the receipt of a notice under Section 106 of the Transfer of Property Act is for the termination of lease. 

Arguments by the Defendant

The counsel for the defendant stated that he had filed the suit in the District Court for the permanent injunction on 17.10.2020 before the present suit. Thus, the present suit must stay. It was further submitted that the defendant was seeking rights under Section 53A of the Transfer of Property Act for the part performance of the agreement to sell. 

Court’s Observation

The court observed that the defendant has not paid the rent and defaulted and thus, the defense of the defendant will be struck off under Order XV-A of CPC. To seek relief under Section 53A of the Transfer of Property Act, the documents of an Agreement to Sell must be registered. However, the receipts relied upon by the defendant to claim an agreement to sell are unregistered documents. Thus. the defendant cannot rely upon the same to take advantage of Section 53A of the Transfer of Property Act. 

Court’s Decision

The court passed a decree in the favour of the plaintiff and against the defendant for possession of the suit property and arrears of rent of Rs.14,10,000/-. The plaintiff will also be entitled to simple interest at the rate of 18% per annum from the date of filing till recovery of the amount. 

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