Vayyaeti Srinivasarao Vs Gaineedi Jagajyothi (Supreme Court of India)
Agreement to Sell with Existing Tenant Is Not a Deemed Conveyance: Supreme Court Overrules Stamp Duty Demand
The Supreme Court (Judgment dated 15 January 2026) allowed the appeals and held that an agreement to sell executed with an existing tenant, who was already in possession long prior to the agreement, does not attract stamp duty as a “sale” or deemed conveyance under Explanation I to Article 47A of Schedule I-A of the Andhra Pradesh Stamp Act, 1922.
The Court clarified that for an agreement to sell to be treated as a deemed conveyance, delivery of possession must be pursuant to, or in relation to, the agreement to sell. Where possession is independent of the agreement—such as possession held for decades as a tenant—the Explanation does not apply. Mere recital that the purchaser is already in possession is not sufficient, unless such possession is shown to have a direct nexus with the agreement to sell.
In the present case, the appellant had been a tenant for over 50 years, continued as a tenant even after execution of the agreement, and was subsequently evicted under rent control proceedings, conclusively establishing that there was no express or implied surrender of tenancy and no change in the jural relationship to that of vendor–vendee. Consequently, Section 53A of the Transfer of Property Act was held inapplicable, and the agreement to sell remained an agreement simpliciter, chargeable only to nominal stamp duty.
The Supreme Court set aside the orders of the Trial Court and High Court, distinguished its earlier ruling in Ramesh Mishrimal Jain (2025), and directed that the agreement to sell be admitted in evidence without payment of additional stamp duty or penalty. The Trial Court was directed to proceed with the specific performance suit expeditiously.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
