Execution of an Agreement to Sell Does Not Automatically Terminate Tenancy

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This civil appeal arose from eviction proceedings initiated by landlords against a tenant occupying a shop premises who subsequently entered into an agreement to sell for the purchase of the property. While the tenant resisted eviction by arguing that the execution of the agreement to sell and payment of part consideration altered the jural relationship from landlord-tenant to vendor-vendee and protected his possession under Section 53A of the Transfer of Property Act, the Small Causes Court, Appellate Court, and the High Court concurrently ruled against him and ordered his eviction. Dismissing the special leave petition, the Supreme Court affirmed the concurrent findings, holding that the mere execution of an agreement to sell does not ipso facto terminate a tenancy or amount to part performance unless express or implied surrender is established and the continuous possession is directly referable to the agreement to sell rather than the original lease.

Core Issue: Whether the execution of an agreement to sell between a landlord and tenant—accompanied by a part payment of consideration—automatically terminates the landlord-tenant relationship and shields the tenant from eviction under Section 53A of the Transfer of Property Act.
Distinction Between Tenancy and Agreement to Sell: The Supreme Court clarified that an agreement to sell does not automatically extinguish a pre-existing lease. For a tenancy to be determined, there must be a clear expression of surrender under Section 111(e) or 111(f) of the Transfer of Property Act, or unequivocal conduct demonstrating that the parties intended to abandon the lease.
Interpretation of Possession and Part Performance: The Bench held that a tenant already in possession must explicitly prove that their continuous occupation shifted from being a lessee to a transferee under the contract. Since the clauses in the agreement specified that possession would be handed back to the seller if the transaction failed, the possession remained strictly referable to the original tenancy.
Mandate of Registration: The Court underscored that by virtue of Section 17(1A) of the Registration Act, an unregistered agreement to sell executed after September 24, 2001, cannot be invoked to claim protection of part performance under Section 53A of the Transfer of Property Act.
Final Order: Finding no legal infirmity in the concurrent rulings of the courts below, the Supreme Court dismissed the petition, upholding the direction for the tenant to vacate and hand over peaceful possession of the premises to the landlords.

2026 INSC 853
Nazim Shaikh Hasan v. Nasir Mushtaq Shaikh & Ors. (D.O.J. 13.08.2026)

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Service Law: State Cannot Extract Work While Withholding Grant-in-Aid

August 21, 2026 No Comments

The High Court of Himachal Pradesh addressed a writ petition concerning the denial of Grant-in-Aid to a Physical Education Teacher (PET) engaged by a School Management Committee (SMC). The Court ruled that the State cannot approbate and reprobate by continuously extracting work from an incumbent against a sanctioned post while denying admissible Grant-in-Aid on the plea of procedural infirmities or backdoor engagement, without choosing to remove the incumbent. While the Court did not legitimize irregular appointments, it mandated the release of Grant-in-Aid under the rules, restricting monetary arrears to a period of three years preceding the filing of the petition.
• Background and Dispute: The petitioner was engaged as a Physical Education Teacher (PET) by the School Management Committee (SMC) at a government school in District Sirmaur and had been serving continuously since 2013. The State resisted the release of Grant-in-Aid by contending that the appointment bypassed regular selection procedures, lacked advertisement, and was made via a backdoor resolution without proper interviews.
• State Cannot Approbate and Reprobate: The Court held that although it is not legitimizing an irregular appointment, the State cannot extract work from the petitioner against a sanctioned post and simultaneously deny admissible Grant-in-Aid on the pretext of flawed engagement. If procedural infirmities existed, the State was free to remove the petitioner, but having utilized his services, it cannot shy away from its obligation to pay Grant-in-Aid.
• Limitation on Monetary Arrears: While allowing the petition and directing the respondents to release the Grant-in-Aid admissible under the rules, the Court restricted the consequential financial arrears to a period of three years preceding the filing of the writ petition.
• Final Order: The writ petition was allowed, and the respondents were directed to release the admissible Grant-in-Aid to the petitioner with arrears restricted to three years prior to the petition’s filing.

STPL (Web) 2026 HP 605
Sandeep Kumar v. State of H.P. & Ors. (D.O.J. 14.08.2026)

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Section 60(1)(ccc) CPC Protection Is Personal to the Judgment-Debtor

August 21, 2026 No Comments

The Supreme Court allowed the appeals and set aside the High Court’s judgment that had protected a residential property from attachment during the execution of a recovery decree. A bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe held that the exemption from attachment of a residential house under Section 60(1)(ccc) of the Code of Civil Procedure (CPC) is a personal privilege meant exclusively for the judgment-debtor and does not extend to or benefit the legal representatives after the debtor’s demise. The Court further clarified the proper interplay and procedural transition of execution proceedings from civil courts to the Debts Recovery Tribunal (DRT) under the Recovery of Debts and Bankruptcy Act, 1993, reversing unjustified interference by the High Court.

Factual Background & Compromise Decree: M/s. Sterling Malt & Foods Pvt. Ltd. defaulted on credit facilities availed from Punjab & Sind Bank, leading to a civil suit and a subsequent compromise decree in October 1991. While a trust and its trustees took over management to revive the company, the original managing director (the guarantor/judgment-debtor) retained personal liability. Following his death in November 1994, execution proceedings were initiated against his legal heirs (respondents).
Transfer to DRT: Pursuant to Section 31 of the Recovery of Debts and Bankruptcy Act, 1993, the execution case was transferred to the Debts Recovery Tribunal (DRT) in Jabalpur. The Recovery Officer initiated steps to attach and sell the residential property situated in Panchsheel Park, New Delhi.
High Court’s Intervention: The legal heirs of the judgment-debtor approached the High Court of Madhya Pradesh via a writ petition, claiming protection under Section 60(1)(ccc) CPC (which exempts one main residential house from attachment under specific regional amendments). The High Court ruled in favor of the legal heirs, prompting the bank and auction purchasers to appeal to the Supreme Court.
Core Legal Ruling on Section 60(1)(ccc) CPC: The Supreme Court authoritatively ruled that the statutory protection shielding a residential house from attachment is a personal benefit extended specifically to the judgment-debtor to prevent destitution. Once the judgment-debtor passes away, the protection does not automatically transmute as an inheritable right for legal representatives.
Final Order: Finding the High Court’s interference with the DRT execution proceedings legally flawed and unsupported by any factual foundation established by the respondents before the Recovery Officer, the Supreme Court set aside the High Court’s judgment and upheld the recovery process.

2026 INSC 863

Sheela Gehlot v. Mohini Hardayal Singh & Ors. (D.O.J. 14.08.2026)

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Service Law: Seniority Gridlock – Direct Recruits, Promotees, and Protected Finality

August 21, 2026 No Comments

The High Court of Himachal Pradesh addressed a prolonged inter se seniority dispute between direct recruits and promotees within the H.P. State Electricity Board Ltd. for the post of Assistant Engineers (Civil/Mechanical). The Court ruled that a provisional seniority list finalized after rejecting objections attains finality for all practical purposes and is fully protected under the savings clause (paragraph 39) of K. Meghachandra Singh, regardless of pending litigation. Furthermore, the Court censured the administrative haste of finalizing a redundant seniority list during the pendency of a remanded court proceeding, setting aside both the finalized list and consequential promotions.
• Background and Dispute: Direct recruits and promotees engaged in a protracted seniority conflict within the H.P. State Electricity Board Ltd. (HPSEBL). A provisional seniority list circulated on August 19, 2017, placed direct recruits above promotees based on the principles of N.R. Parmar and matching government office memorandums. Objections to this list were rejected on February 15, 2018, and the list was subsequently acted upon for promotions. Following subsequent judicial developments including K. Meghachandra Singh and various writ and review proceedings, a new provisional list was drawn on January 22, 2021, reversing the positions. After a Division Bench set aside previous judgments and remanded the matter for a fresh hearing, HPSEBL hurriedly finalized this redundant list on December 16, 2021, and pushed through promotions on December 23, 2021, just days before the scheduled court hearing.
• Finality and Protection under K. Meghachandra Singh: The Court held that even though labeled as “provisional,” the seniority list dated August 19, 2017, attained finality on February 15, 2018, upon the rejection of representations, and was fully protected by the savings clause in paragraph 39 of K. Meghachandra Singh which shields existing inter se seniority fixed under N.R. Parmar. A mere legal challenge does not strip a seniority list of its final character.
• Quashing of Redundant List and Arbitrary Promotions: The Court severely criticized HPSEBL’s administrative rush to finalize the redundant January 22, 2021 list on December 16, 2021, and execute promotions on December 23, 2021, right before the matter was slated for fresh hearing. The Court ruled this action arbitrary, illegal, and contrary to binding judicial precedents.
• Challenges to Policy Office Memorandums: The promotees’ challenge to the validity of the overarching policy office memorandums issued by the Central Government, State Government, and HPSEBL in 2014 and 2021 was rejected by the Court.
• Final Order: CWP No. 262 of 2022 filed by the direct recruits was allowed, quashing and setting aside the seniority list dated December 16, 2021, along with all consequential promotions. The seniority list dated August 19, 2017 (finalized on February 15, 2018) was restored as the governing list. Conversely, CWP No. 5879 of 2022 filed by the promotees was dismissed, with directions to complete the necessary review exercise within four weeks.

STPL (Web) 2026 HP 604
Er. Rattan Jeet & Ors. v. H.P. State Electricity Board Ltd. & Ors. (D.O.J. 14.08.2026)

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Evidentiary Boundaries: Supreme Court Dismisses RIL Appeal in NTPC Gas Suit

August 21, 2026 No Comments

The Supreme Court dismissed an appeal filed by Reliance Industries Limited (RIL) challenging a Bombay High Court order that had redacted portions of witness evidence affidavits in a long-standing commercial dispute. A bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe upheld the redaction of oral testimony attempting to indirectly bring on record internal correspondence and documents that had already been held irrelevant to determine whether a concluded contract existed. Expressing strong disapproval over the two-decade-long pendency of the suit at the evidence stage, the Apex Court dismissed the appeal and imposed costs of ₹10 lakh on RIL for repetitive and obstructive procedural litigation.

Factual Matrix: NTPC Limited published a Request for Qualification (RFQ) for natural gas supply, following which a Letter of Intent (LOI) dated June 16, 2004, was issued to RIL. When disputes arose regarding whether the LOI constituted a binding contract for supplying 132 trillion BTU of natural gas over 17 years, NTPC filed a commercial suit for specific performance and declaration in 2005.
Issue of Internal Documents: During trial proceedings, RIL sought to introduce its internal emails, notings, and correspondence. Courts repeatedly ruled that unilaterally prepared internal documents not shared between parties were irrelevant for determining the common intention or existence of a concluded contract.
The 2019 Precedent & Finality: The Supreme Court noted that in a previous round of litigation in 2019, it had already settled that contents of excluded internal documents could not be brought on record indirectly through oral testimony, and that ruling had attained finality under the principles of res judicata.
High Court’s Redaction Upheld: The Bombay High Court meticulously examined the first and second evidence affidavits of the RIL witness (B.K. Ganguly) and correctly redacted only those portions that attempted to circumvent the prior ruling by introducing excluded internal communications, while retaining admissible perceptions of the witness.
Judicial Censure and Costs: Criticizing the endless procedural wrangling enabled by abundant financial resources to obstruct trial progress, the Supreme Court dismissed the appeal, directed the trial court to expedite the two-decade-old suit, and imposed costs of ₹10 lakh on RIL payable to the Supreme Court Advocates-on-Record Association.

2026 INSC 862

Reliance Industries Limited v. NTPC Limited (D.O.J. 14.08.2026)

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