Legal
Until Sale Deed Is Registered, Ownership Of Immovable Property Isn’t Transferred : Supreme Court

NEW DELHI: The Supreme Court of India in Sanjay Sharma v. Kotak Mahindra Bank Ltd [2024] has reaffirmed that ownership of immovable property cannot be transferred without the registration of a sale deed, even if possession is handed over and payment is made.
The ruling emphasizes the necessity of complying with Section 54 of the Transfer of Property Act, 1882, which mandates the registration of sale deeds for tangible immovable properties valued at Rs 100 or more.
A bench comprising Justice B.V. Nagarathna and Justice N.K. Singh observed that the term “only” in Section 54 underscores the legal requirement that property transfers must be executed through a registered instrument to be considered valid. The Court clarified that ownership does not pass to the buyer until the sale deed is registered, regardless of any informal agreements or payments made.
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The judgment also referred to the case of Babasheb Dhondiba Kute vs. Radhu Vithoba Barde [2024] where the Court held that conveyance of property by way of sale occurs only upon the registration of the sale deed, as stipulated under Section 17 of the Registration Act, 2008. Until such registration is completed, no legal transfer of ownership takes place.
This observation was made in the context of an auction sale under the SARFAESI Act. An objection was raised by a party claiming possession of a portion of the secured asset based on an unregistered agreement to sell and a General Power of Attorney. The Court dismissed the objection, noting that the absence of a registered sale deed rendered the claim legally untenable.
The bench highlighted that unregistered documents relied upon by the respondent failed to satisfy the statutory requirements for a valid sale under Section 54. Consequently, the respondent had no legal title to claim ownership of the property in question.
This ruling underscores the importance of ensuring proper registration of sale deeds to secure legal ownership of immovable property, providing clarity and reinforcing the legal framework for property transactions in India.