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Can Possession and an Agreement to Sell Make You a Property Owner?

Let’s talk about a situation that’s all too common. Someone has bought a house through an Agreement to Sell and a General Power of Attorney (GPA) to possess the property. The buyer moves into the property and takes full possession. Everything looks sorted—until a bank shows up to recover dues from the original owner and suddenly, the new "owner" is facing eviction. Legally speaking, the story is more complex.
Supreme Court's View: Possession ≠ Ownership
In Sanjay Sharma v. Kotak Mahindra Bank Ltd. & Ors.(2024), the Supreme Court clears the air on this very issue. In this case, Pushpa Morey (Respondent No. 2) held property possession based on an Agreement to Sell and a General Power of Attorney (GPA). However, none of the documents were registered.
The Apex Court firmly held that such possession, supported only by unregistered documents, does not translate into ownership in the eyes of the law.
Why Registration Matters?
Under Section 17 of the Registration Act, 1908, any transaction that seeks to transfer the title of immovable property must be registered. A notarised Agreement to Sell or even a Memorandum of Understanding (MoU) may reflect intention, but they don’t create a legal title.
The Court in this case reiterated what was already laid down in earlier rulings. In fact, in Babasheb Dhondiba Kute vs. Radhu Vithoba Barde [SLP(C) No.29462 of 2019], it was held by the Supreme Court:
"The conveyance by way of sale would take place only at the time of registration of a sale deed under Section 17 of the Registration Act, 1908. Till then, there is no conveyance in the eyes of law."
The Bank's role:
In the Sanjay Sharma case, the bank had initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) to take possession of the mortgaged property because the original borrower (the registered owner) had defaulted on a loan. Pushpa Morey, who was living in the property, tried to stop the bank by claiming ownership.
But the Court pointed out that Pushpa Morey had no registered title and therefore no locus to challenge the bank's action. The SARFAESI proceedings were perfectly valid.
What's in it for us to learn?
If you're buying a property, please do not rely only on an Agreement to Sell or a GPA. Make sure the Sale Deed is executed and duly registered. Possession without registration might feel like ownership, but legally, it’s not.
Also, keep in mind: Unregistered documents cannot protect your rights in court, especially against banks, financial institutions, or even future buyers who register their interests.
🙋‍♀️ In Summary:
- Notarised agreements and possession don't create legal ownership.
- Registration of the sale deed is mandatory under the law.

If you’re dealing with a similar situation or just want to make sure your property documents are in order, this case is a useful guide.

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