Supreme Court Holds Agreement to Sell Does Not Automatically Terminate Landlord-Tenant Relationship

Case Snapshot

Case Name: Nazim Shaikh Hasan v. Nasir Mushtaq Shaikh & Ors.

Citation: 2026 INSC 853

Bench: Justice Prashant Kumar Mishra and Justice N.V. Anjaria

Date of Judgment: August 13, 2026

Area of Law: Property Law, Landlord-Tenant, Transfer of Property Act, Registration Act

The Judgment in One Line

Execution of an agreement to sell between landlord and tenant does not automatically determine tenancy unless express or implied surrender is established.

Why This Judgment Matters

This judgment clarifies the critical distinction between an agreement to sell and the determination of a landlord-tenant relationship. The Supreme Court held that merely entering into an agreement to sell does not ipso facto terminate the tenancy. The Court distinguished R. Kanthimathi v. Beatrice Xavier, emphasizing that the decision in that case turned on specific contractual terms indicating surrender of possession. The judgment also clarifies that Section 53A of the Transfer of Property Act cannot protect a tenant's possession under an unregistered agreement executed after September 24, 2001, due to Section 17(1A) of the Registration Act. This ensures that tenants cannot avoid eviction merely by entering into an agreement to sell.

Background

The respondent's predecessor owned a shop premises. The petitioner was a tenant in the shop. On September 21, 2004, an agreement to sell was executed between the landlord and tenant for a total consideration of ₹1,90,000. The tenant paid ₹40,000 as advance, with the balance of ₹1,50,000 to be paid within three months, subject to loan sanction. Clause 4 stipulated that if the loan was not sanctioned, the agreement would stand cancelled, the advance would be refunded, and the tenant would hand over possessio

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