Vayyaeti Srinivasarao v. Gaineedi Jagajyothi

 • Citation: 2026 INSC 59

Decided on: 15 January 2026
Case Title: Vayyaeti Srinivasarao v. Gaineedi Jagajyothi
Court: Supreme Court of India
Bench: B.V. Nagarathna J. and R. Mahadevan J.
 

Background

The appellant was a tenant of the respondent for nearly fifty years. An agreement to sell dated 14.10.2009 was executed for the tenanted property. In a suit for specific performance, the trial court directed impounding of the agreement and payment of stamp duty and penalty by treating it as a deemed conveyance under Explanation I to Art. 47A, Sch. I-A, A.P. Stamp Act, 1922. The High Court affirmed. Meanwhile, the respondent obtained an eviction order against the appellant under the A.P. Rent Act, 1960.

 

Issues Framed

1. Whether the agreement to sell dated 14.10.2009 attracted stamp duty as a “sale” under Explanation I to Art. 47A, Sch. I-A, A.P. Stamp Act, 1922.
2. Whether the appellant’s possession as a tenant could be treated as delivery of possession pursuant to the agreement to sell.
 

Court’s Reasoning

Issue 1: Scope of Explanation I to Art. 47A

• Legal rule: An agreement to sell is chargeable as a “sale” only if it is followed by or evidences delivery of possession relatable to the agreement. Mere prior possession unrelated to the agreement does not suffice.
• Application: The agreement itself recorded that the appellant had been in possession for ~50 years as a tenant. No recital or circumstance showed delivery of possession pursuant to the agreement. Hence, Explanation I was inapplicable.

Issue 2: Nature of possession and jural relationship

• Legal rule: A contract for sale under s. 54 TPA does not create any interest in immovable property; tenancy continues unless determined by express or implied surrender under s. 111 TPA. Protection under s. 53A TPAapplies only where possession is taken or continued in part performance of the contract.
• Application: There was neither express nor implied surrender of tenancy. The subsequent eviction order conclusively showed that the tenancy subsisted even after the agreement. Possession was not referable to the agreement; therefore, no deemed conveyance arose.

Distinguishing precedent

• Ramesh Mishrimal Jain was distinguished as it invoked s. 53A TPA on facts where possession was treated as part performance. The wording of the Bombay Stamp Act differs materially from the A.P. Stamp Act, and s. 53A was inapplicable here.
 

Decision 

Appeals allowed. Orders of the High Court and Trial Court were set aside. The agreement to sell is not liable to stamp duty as a sale; it shall be marked in evidence, and the suit for specific performance is to be decided expeditiously

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