Nazim Shaikh Hasan v. Nasir Mushtaq Shaikh and Others | SLP (C) No. 17699 of 2026 | 2026 INSC 853 | 13 August 2026
What the case was about
The dispute that reached the Supreme Court began in Pune, where a tenant who had signed an agreement to buy the shop he rented found himself facing eviction. Nazim Shaikh Hasan paid part of the purchase price but defaulted on the balance. When the landlord’s successors sued to evict him, Hasan argued that signing the sale agreement had transformed him from a tenant into a prospective buyer, ending the landlord-tenant relationship and shielding him from eviction. The Supreme Court was asked to decide whether an incomplete, unregistered sale bargain could override a subsisting lease and block the landlord’s right to recover possession.
The key facts
Jainbi Mushtaq Shaikh, the predecessor of the respondents, owned a 200-square-foot ground-floor shop at House No. 3031, Mitha Nagar, Kondhwa Khurd, Pune. She had let it to Nazim Shaikh Hasan at a monthly rent of ₹1,500 (para 3). While the tenancy was ongoing, the parties executed an agreement to sell dated 21 September 2004, fixing the total consideration at ₹1,90,000. Hasan paid ₹40,000 upfront and agreed to pay the remaining ₹1,50,000 within three months (para 3). When the balance was not paid, the sale never fructified, yet Hasan continued to occupy the shop as a tenant (para 4).
Subsequently, alleging rent default, change of user, and a bona fide need for the property, Jainbi’s successors filed Civil Suit No. 384 of 2010 before the Small Causes Court seeking possession (para 5). The trial court decreed the suit and directed Hasan to vacate. The First Appellate Court dismissed his challenge, and the Bombay High Court rejected his revision application by its judgment dated 1 April 2026 (paras 6–7). Hasan then moved the Supreme Court, contending that the concurrent findings ignored the change in his legal status wrought by the agreement to sell.
The questions before the Court
The Bench of Justices Prashant Kumar Mishra and N.V. Anjaria framed four questions for determination. First, does an agreement to sell executed by a landlord in favour of a tenant automatically extinguish the tenancy and replace it with a vendor-vendee relationship? Second, does the tenant’s continued occupation after such an agreement amount to “part performance” under Section 53A of the Transfer of Property Act, 1882? Third, did the agreement to sell rob the Small Causes Court of its jurisdiction to entertain the eviction suit? And fourth, should the agreement have been impounded for insufficient stamp duty and non-registration before being considered at all?
What the Court decided and why
The Supreme Court dismissed the tenant’s plea and upheld the eviction, holding that the Special Leave Petition was “sans merit” (para 29). In doing so, it laid down a clear marker on the interplay between lease law and incomplete sale contracts.
The Court began by noting that “the mere execution of an agreement to sell between a landlord and tenant does not ipso facto bring about a determination of the subsisting tenancy” (para 20). A lease can end only through an express or implied surrender under Section 111(e) or (f) of the Transfer of Property Act, 1882, evidenced either by the terms of the agreement or by unequivocal conduct inconsistent with the continuation of the tenancy (para 20).
Examining the agreement in this case, the Court found no stipulation indicating that possession was referable to the sale bargain or that rent obligations ceased. On the contrary, Clause 4 expressly provided that if the tenant’s bank loan was not sanctioned, the agreement would be cancelled and he would have to hand over possession back “as it was in the previous condition” (para 22). The Court read this as a clear indication that the parties themselves contemplated a reversion to the status quo ante, reinforcing—not ending—the tenancy (para 22).
The Court next rejected the argument that Hasan’s continued possession was protected by the doctrine of part performance under Section 53A. It held that “the continuous possession of a tenant even after the execution of an agreement to sell does not amount to part performance under Section 53A… unless such possession is shown to be directly relatable to and flowing from the agreement to sell” (para 20). Relying on D.S. Parvathamma v. A. Srinivasan, the Bench observed that when a person already in possession of the property in some other capacity enters into a contract to purchase the property, his act effective from that day must be consistent with the contract alleged and cannot be referred to the preceding title, and that having entered into possession as a tenant and having continued to remain in possession in that capacity, a tenant cannot be heard to say that by reason of the agreement to sell his possession was no longer that of a tenant (para 24). Hasan had neither disavowed his tenancy nor established that his possession had switched character; he simply continued to occupy the shop as before.
A decisive statutory barrier also stood in his way. Section 17(1A) of the Registration Act, 1908, mandates that any agreement to sell executed on or after 24 September 2001 must be registered if it is to be used for the purpose of claiming protection under Section 53A. The agreement dated 21 September 2004 was admittedly unregistered. The Court therefore held that it “can have no effect for the purposes of Section 53A by virtue of the express mandate of Section 17(1A) of the Registration Act” (para 25).
The Court also noted that Hasan had never filed a suit for specific performance of the agreement (para 26), a silence that further militated against the plea that the jural relationship had transformed from landlord-tenant to vendor-vendee. Finally, the Bench rejected both the jurisdictional objection and the plea for impoundment as unsustainable (para 27), noting that the concurrent findings of the courts below did not warrant interference (para 28).
Why it matters
For the ordinary tenant or landlord, the judgment is a sharp reminder that a promise to sell is not the same as a sale. The Supreme Court has reinforced that an unregistered agreement to sell does not confer title, does not automatically destroy a lease, and cannot be used as a shield against eviction once the underlying deal collapses. By insisting on a registered deed of conveyance and an express or implied surrender to terminate a tenancy, the ruling protects property owners from indefinite occupation by tenants who invoke half-complete bargains. At the same time, it signals to purchasers-in-occupation that they must formally and unequivocally shift the legal basis of their possession—from tenant to prospective owner—and complete the registration formalities if they wish to claim statutory protection. In a market that often relies on informal understandings, the decision reiterates that paper promises cannot replace properly registered deeds when it comes to immovable property.