No Title Without a Registered Sale Deed, and When Land Acquisition Lapses: Two Settled Rules in Property Law

This article is for educational and legal awareness purposes only. It does not constitute legal advice or solicitation. Please consult a qualified advocate for advice on specific legal matters.

Overview

Two questions recur constantly in property disputes in Uttar Pradesh: does an unregistered agreement to sell, backed by a power of attorney, make the buyer the owner? And when does a decades-old land acquisition simply lapse for want of possession or payment? Both questions now have settled answers from the Supreme Court of India, and the second has been applied directly by the Allahabad High Court to an acquisition in Uttar Pradesh. This article sets out the current law on both, and flags a related conflict in the case law that has since been resolved — so readers are not misled by an older ruling that no longer holds the field.

Part I — An Agreement to Sell Conveys No Title

The Statutory Framework

Ownership of immovable property in India passes only through specific, prescribed modes. Section 54 of the Transfer of Property Act, 1882 (TPA) defines “sale” as a transfer of ownership in exchange for a price, and — critically — states that a mere contract for sale does not, by itself, create any interest in or charge on the property. Section 17 of the Registration Act, 1908 separately makes registration compulsory for non-testamentary instruments that purport to create, declare, assign, limit or extinguish a right, title or interest of the value of one hundred rupees or more in immovable property. Read together, these two provisions mean that ownership of immovable property changes hands only through a registered instrument of conveyance — not through an agreement, a power of attorney, or a will executed during the transferor’s lifetime for that purpose.

Suraj Lamp & Industries v. State of Haryana

For decades a practice grew in many parts of India — including Uttar Pradesh — of transferring land through a bundle of documents: an agreement to sell, an irrevocable general power of attorney (GPA) authorising the “attorney” to deal with the property as if an owner, and sometimes a will. This “SA/GPA/WILL” method was used to avoid stamp duty, registration fees, and disclosure of the true sale consideration.

The Supreme Court examined this practice in Suraj Lamp & Industries (P) Ltd. (2) v. State of Haryana & Anr., decided on 11 October 2011 by a bench of Justices R.V. Raveendran, A.K. Patnaik and H.L. Gokhale.

What the Court held:

SA/GPA/WILL transactions do not convey title. The Court held that such arrangements are not recognised modes of transfer of immovable property and do not, by themselves, confer ownership on the purported transferee.
A contract of sale creates no interest in the property. Reaffirming Section 54 of the TPA, the Court observed that “a contract of sale does not of itself create any interest in, or charge on, the property,” and that only a registered deed of conveyance transfers title.
Registration is not a mere formality. The Court underscored that Section 17 of the Registration Act exists to give public notice of transactions affecting immovable property and to prevent fraud — an objective defeated by informal SA/GPA/WILL transfers that never enter the public record.
Limited effect under Section 53A, TPA. The Court did not hold such agreements to be worthless. A person in possession under a part-performed contract of sale (satisfying Section 53A of the TPA) may resist dispossession, but this is a shield against eviction — it is not ownership, and it does not permit the “buyer” to further sell, mortgage, gift, or lease the property as if titled owner.

The Court accordingly directed that GPA sales, and sales through an agreement to sell coupled with a will, should not be accepted or acted upon by revenue and municipal authorities for mutation, and that valid sale would occur only through a registered deed of conveyance followed by payment of proper stamp duty.

Why This Matters in Uttar Pradesh

Unregistered agreements to sell remain common in property transactions across Uttar Pradesh, sometimes because parties intend to complete the sale through a registered deed later, and sometimes as an informal — and legally deficient — substitute for one. The Allahabad High Court has repeatedly encountered this pattern in mutation proceedings before revenue courts, where a party seeks to have their name recorded in the khatauni on the strength of an agreement to sell. Mutation proceedings before revenue authorities are fiscal/administrative in nature; an entry made in revenue records on the basis of an agreement to sell does not settle title, and the underlying question of ownership can still be litigated in a competent civil court. A prospective buyer relying on an agreement to sell — without a registered sale deed — does not become the owner, however long possession continues or however many installments of consideration have been paid.

Part II — When Does a Land Acquisition Lapse?

The Statutory Provision

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act) replaced the colonial-era Land Acquisition Act, 1894. Section 24 of the 2013 Act is a transitional provision dealing with acquisitions that were already underway under the 1894 Act when the new Act commenced (1 January 2014). Section 24(1) preserves certain pending proceedings under the 1894 Act’s compensation scheme where no Section 11 award had yet been made, or applies the new Act’s compensation determination where an award existed but compensation had not been paid. Section 24(2) goes further: where an award was made five years or more before the 2013 Act’s commencement, and physical possession of the land has not been taken or compensation has not been paid, the acquisition proceedings are deemed to have lapsed, and — if the appropriate government chooses — the land may be acquired afresh under the 2013 Act, with its higher compensation.

This single sub-section — turning on the words “possession” and “paid” — generated years of conflicting rulings before the Supreme Court finally settled it.

The Conflict, and How It Was Resolved

In Pune Municipal Corporation v. Harakchand Misirimal Solanki, (2014) 3 SCC 183, a three-judge bench of the Supreme Court took a landowner-favourable view: it held that mere tender of compensation was not enough — the amount had to actually be deposited in court under Section 31(2) of the 1894 Act for it to count as “paid,” failing which the acquisition would lapse even where possession had already been taken.

That view was displaced by a five-judge Constitution Bench in Indore Development Authority v. Manoharlal & Ors., (2020) 8 SCC 129, decided on 6 March 2020. The Constitution Bench:

Held the two conditions are conjunctive, not disjunctive. Lapse under Section 24(2) occurs only where both possession has not been taken and compensation has not been paid — not either one alone. If possession was taken, the acquisition survives even if compensation remains unpaid (the landowner’s remedy in that situation is to claim the compensation, including under the more generous 2013 Act formula where applicable, not to have the acquisition undone).
Clarified what “paid” means. Tender of compensation that the landowner refuses to accept still amounts to “paid.” Deposit in the government treasury, where the landowner refuses payment or the land is under acquisition-related litigation, also satisfies the requirement — a court deposit under Section 31(2) is not the only route.
Clarified what “possession” means. Physical possession includes possession taken by recognised means such as drawing up a panchnama (memorandum of possession) with attesting witnesses; it is not limited to visible, continuous physical occupation.
Expressly overruled Pune Municipal Corporation. The Constitution Bench, having construed Section 24 afresh, recorded in terms that Pune Municipal Corporation “is hereby overruled” — it is no longer good law. Any argument for lapse built on the “compensation must be deposited in court, not merely tendered” reasoning of Pune Municipal Corporation does not survive Indore Development Authority.

Readers relying on older commentary or lower-court orders that predate March 2020 should treat any reliance on Pune Municipal Corporation with caution — that line of authority stands overruled.

The Allahabad High Court Applies the Test — Kalawati Devi v. State of U.P.

The Allahabad High Court applied the Indore Development Authority framework in Smt. Kalawati Devi v. State of U.P. and 3 Others, decided on 12 March 2021 (Neutral Citation AIRONLINE 2021 ALL 289), by a bench of Justices Mahesh Chandra Tripathi and Sanjay Kumar Pachori.

Facts. The petitioner claimed ownership of land in Village Jhunsi Kohna, Prayagraj, acquired under the U.P. Avas Evam Vikas Parishad Adhiniyam, 1965 through notifications dated 8 March 1979 (Section 28) and 27 October 1980 (Section 32). Possession was recorded as taken on 27 June 1986, and an award followed on 22 September 1986. The petitioner had already unsuccessfully challenged the acquisition once, in a writ petition dismissed in 2007. Decades later, following the Constitution Bench’s ruling on Section 24(2), the petitioner returned to court arguing the acquisition should be treated as lapsed.

What the Court held.

Section 24(2) of the 2013 Act does not automatically extend to acquisitions under the U.P. Avas Evam Vikas Parishad Adhiniyam, 1965. The Court held that the “benefit of deemed lapse … cannot be impliedly treated to be incorporated” into a separate state enactment unless that enactment itself contemplates such a fiction; a deemed-lapse provision cannot be read into the 1965 Adhiniyam without a specific amendment to that effect.
On the facts, the possession-and-payment test was not met in the petitioner’s favour in any event. The Court found that possession had been taken as far back as 1986, an award existed from 1986, and compensation had been deposited by the acquiring authority — so even applying the Indore Development Authority test, the “neither possession nor compensation” foundation for a lapse claim was absent.
Stale claims are not revived by a change in the case law. The Court held that Section 24 “cannot be used to revive dead and stale claims and concluded cases,” and that a landowner cannot use the pendency or resolution of the Section 24(2) controversy as a pretext to reopen an acquisition settled decades earlier and already unsuccessfully challenged once.

The writ petition was dismissed, with the Court noting the petitioner remained free to pursue compensation-related remedies, if any, through appropriate channels — but not to unwind a finalised, decades-old acquisition.

Practical Points

An agreement to sell, GPA, or will used as a transfer device does not make the recipient the owner of immovable property. Only a registered deed of conveyance, with proper stamp duty, transfers title under Section 54 of the TPA and Section 17 of the Registration Act.
A mutation entry made in revenue records — including in Uttar Pradesh’s khatauni — on the strength of an agreement to sell does not settle ownership; mutation proceedings are fiscal in character, and a civil court’s finding on title prevails over a revenue entry.
For acquisitions under the 1894 Act carried forward past 2014, lapse under Section 24(2) requires both the absence of possession and the absence of payment — not either alone — per the Constitution Bench in Indore Development Authority.
The Pune Municipal Corporation line of reasoning stands overruled; a lapse argument built solely on “compensation was tendered but never deposited in court” no longer succeeds on its own.
Whether Section 24(2) extends beyond the 1894 Act to a state acquisition statute (such as the U.P. Avas Evam Vikas Parishad Adhiniyam, 1965) is not automatic — the Allahabad High Court has held it requires the state enactment to itself provide for such a fiction.
Courts have shown limited patience for reviving decades-old, already-litigated acquisitions on the strength of a subsequent change in Section 24(2) jurisprudence, particularly where possession and payment both occurred long ago.

Takeaway

Two distinct but related lessons emerge for property owners and buyers in Uttar Pradesh. First, an agreement to sell — however detailed, however long-standing the possession under it — is not a substitute for a registered sale deed; the Supreme Court’s ruling in Suraj Lamp closed the door on treating SA/GPA/WILL arrangements as ownership. Second, the once-uncertain question of when an old land acquisition lapses has been authoritatively settled by the Constitution Bench in Indore Development Authority, which requires both absent possession and absent payment, and which the Allahabad High Court has since applied — with the added caution that a state acquisition statute does not automatically inherit the 2013 Act’s lapse fiction, and that stale, once-litigated acquisitions are not easily reopened.

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