1. OF SALE OF IMMOVABLE
PROPERTY (S. 54)
The Transfer of
Property Act, 1882
Under the Guidance of
Submitted by
Jagannath R Ramapur
2. FAQ’S
Define sale. Distinguish between ‘sale’ and
‘contract of sale’ of immovable property.
Define sale. Distinguish it with contract for sale.
Short Note : Sale and contract for sale.
Discuss the rights and liabilities of seller.
Define Sale. What are the liabilities of the seller
before and after completion of sale ? Explain.
Discuss the rights and liabilities of seller and
buyer.
3. OF SALES OF IMMOVABLE PROPERTY
This chapter consists of four sections
which can be divided into two groups-
Group A - ‘Sale’ defined (Ss. 54, 55, &
56)
Group B – Discharge on
encumbrances on sale (S. 57)
4. GROUP A – SALE(S. 54)
“Sale” defined – “Sale” is a transfer of ownership
in exchange for a price paid or promised or part-
paid and part-promised.
Sale how made- Such transfer, in the case of
tangible immovable property of the value of one
hundred rupees and upwards, or in the case of a
reversion or other intangible thing, can be made
only by a registered instrument.
Contract for Sale - A contract for the sale of
immoveable property is a contract that a sale of
such property shall take place on terms settled
between the parties.
5. ESSENTIALS OF A SALE
Parties
Subject-matter
Money-consideration
Conveyance
6. PARTIES
There must be at least two parties in sale.
The person who transfers the property is
known as transferor or seller or vendor.
The person purchasing the property is
known as transferee, purchaser or vendee.
For constituting a valid sale, both the seller
and purchaser must be competent on the
date of sale.
The seller must be the owner of the
property which he is going to sell.
7. PARTIES
The seller must have a legal title to is only then
he can sell the property.
Ex. A tenant does not have the power to sell
the tenanted property.
The purchaser must not be disqualified by any
law for the time being in force from purchasing
a property. Ex. U/s 136 of this Act, a judge, a
legal petitioner or an official of court is
inconsistent to purchase actionable claims.
The seller and buyer may be natural persons or
juristic persons, for ex. Corporations or other
legal persons.
8. PARTIES
SC has emphasized that the execution and
registration of sale deed are mechanical acts and
therefore not sufficient in themselves for passing
title and ownership. All this must be done with the
intention of transferring title. The intention of the
parties has to be ascertained such intention has to
be gathered form the recitals of the sale-deed.
(Kaliaperumal v. Rajagopal) (AIR 2009 SC 2122).
Sale through Power-of-Attorney. (U/s 92(1),
proviso to S. 92, Evidence Act, 1872.
Sale through development agreement.
(Conditional sale – S. 14(3)(c) The Specific Relief
Act, 1963)
9. SUBJECT-MATTER
The Transfer of Property Act, deals with the
transfer of immovable properties only.
Therefore, the transfer or ownership must
be in some immovable property only.(The
Sale of Goods Act, 1930 deals with sale of
moveable properties).
Immoveable property includes land, the
benefits arising out of land and the things
attached to the earth except standing
timber, growing crops and grass.
10. MONEY-CONSIDERATION
The price is the essential element of sale. At the time
of contract of sale the price must be ascertained for
which the property is going to be transferred. The price
may be paid at the time of execution of sale, before it
in advance or after the sale.
“In all sales it is evident that price is an essential
ingredient, and that where it is neither ascertained nor
rendered ascertainable, the contract is void for
incompleteness, and incapable of enforcement; it is
not, however, necessary that the contract should in the
first instance determine the price. It may either appoint
a way in which it is to be determined or it may stipulate
for a fair price” – Fry.
11. MONEY-CONSIDERATION
Transfer without Consideration is gift.
As per the gift deed, a Bhumidhari land
was gifted to the donee. The gift deed
mentioned that the property was worth Rs.
40,000 and that the valuation was mentioned
for the purpose of payment of stamp duty and
not as consideration. The Court held that the
transaction was that of gift of immovable
property and not a sale. (Chaudhary
Ramesar V. Prabhawati Phool Chand – AIR
2012 All 173).
12. CONVEYANCE
S. 54 has provided two modes of transfer of
immovable property:-
(i) Delivery of Possession, and
(ii) Registration of sale-deed.
13. CONVEYANCE
DELIVERY OF POSSESSION
Where the property is tangible immovable
property of the value of one hundred rupees
and upwards or in the case of a reversion or
other intangible thing, transfer can be made
only by a registered instrument.
Where the property is tangible immovable of
a value less than one hundred rupees, its
transfer may be made either by a registered
instrument or by delivery of the property.
14. CONVEYANCE
DELIVERY OF POSSESSION
Where the market value of the property is less than
hundred rupees, the oral sale of immovable property
is completed merely by possession.
The court, however, satisfied itself that the entire
consideration had been paid. Delivery of possession
means transferring of physical control of the property
to the buyer.
Mohiuddin V. President, Municipal Corporation,(AIR
1993 MP 5) Khargone – piece of land – sold – less
than Rs.10 – unregistered sale deed.
Ex. Handing over keys of a house of the transferee-
purchaser is sufficient to indicate delivery of
possession.
15. Where the value of tangible immovable property is
Rs. 100 or more, the sale of such property requires
registration of the deed. Where the property is
intangible immovable property of any valuation, it will
require registration for completion of sale.
The transfer of an immovable property can only be
effected by executing a registered document, mere
making of agreement of sale or executing of power of
attorney would not transfer the right, title or interest is
an immovable property. (G. Ram V. Delhi
Development Authority – AIR 2003 Del 120)
Registration of Sale Deed cannot be done just only
by a sale agreement, general power of attorney or a
Will.
CONVEYANCE
REGISTRATION OF SALE DEED
16. The SC held that a combined reading of
section 8 and 54 of the Transfer of Property Act
suggests that through an execution and
registration of sale-deed, the ownership and all
interests in the property pass to the transferee,
yet that would be on terms and conditions
embodied in the deed indicating the intention of
the parties.
The intention of the parties can be gathered
from the averments in the sale-deed itself or by
other attending circumstances. (Bishundeo
Narain Rai V. Anmol Devi – AIR 1998 SC 3006)
CONVEYANCE
REGISTRATION OF SALE DEED
17. ALTERATION OF SALE DEED
Words for reconveyance were entered into the
sale deed after its execution but before
registration.
Alteration of Sale Deed was done without
knowledge or consent of the buyer.
The court held him to be not bound by such
words. He did not know that he was signing
an altered deed.(Rathnamruthy (Dr.) V.
Ramappa – (2011) 1 SCC 158)
18. CONTRACT FOR SALE
S. 54 says that a contract for the sale of
immovable property or an agreement its sell
is a contract that a sale of such property
shall take place on terms settled between
the parties. It does not of itself create any
interest in, or charge on such property.
(Raheja Universal Ltd. V. NAC Ltd. (2012) 4
SCC 148)
19. CONTRACT FOR SALE
A contract for sale does not confer any title in
immovable property. If a person entered into
possession of immovable property under contract of
sale and is in peaceful and settled possession of
property with the consent of the person in whom the
title vests, he is entitled to protect his possession
against the whole world except a person having a
better title than what he or his vendor possesses.
If he is in possession of property in part-performance
of contract of sale and requirement of section 53A are
satisfied, he may protect his interest even against the
true owner. (Ramesh Chand Ardawatiya v. Anil
Panjwani, 2003 (2) RCR (Civil) 829 (SC)).
20. SALE IN VIOLATION OF CONTRACT
A portion of the land in a residential colony
was earmarked as a park.
The contract between the vendor and
residents of the colony was that the land
would remain reserved for beneficial
enjoyment of all residents of the colony.
Even so the vendor transferred the land to a
third person. The transfer was held to be
voidable. (Tara Devi v. Raj Shekhar, AIR
2007 (NOC) 143 (All).
21. SALE OF UNDIVIDED ESTATE
The Karta (Manager) of a family sold the family property
with knowledge and consent of his minor son.
The latter filed a suit for partition of the property and
separated possession of his share.
It was not dispute that the Karta and his son were entitled
to an equal share.
Hence, on partition taking place, the portion of the property
sold by the Karta would apply to his share in the property.
The sale did not cause any prejudice to the share of the
son.
The court said that the decision of court below to the effect
that the sale was valid required no interference. (P.
Murugasamy v. C. Palanisamy Gounder, AIR 2007 (NOC)
61 (Mad))
22. SUIT ON THE BASIS OF ORAL SALE
A suit was filed u/s 54 of the Specific Relief Act,
1963 for declaration of possession and
ownership.
The plaintiff claimed her possession on the basis
of an oral sale.
The court said that an oral sale is not recognized
under the law.
Law recognizes only two modes of transfer and
sale, namely registered instrument; delivery of
possession.
The plaintiff was not entitled to declaration even
assuming that there was some evidence to show
that he was in settled possession.
23. CANCELLATION OF SALE DEED
A transfer by way of sale was effected by a
registered deed of transfer.
The court said that it became an absolute transfer
from vendor to purchaser. The vendor became
divested of this ownership. He retained no control
or right over the property.
Transfer could not be annulled as cancelled
unilaterally by the vendor by executing a deed of
cancellation.
Deed cannot be accepted for registration.
Cancellation of a sale deed can be ordered only u/s
31 of Specific Relief Act (Rakminibai V. Vankoba
Rao).
24. WILL
Where recitals in a document did not show any
special features provided for an agreement of sale
which are quid pro quo (something that is given to a
person in return for something they have done) and
phraseology and tenor of to take effect after death,
it was executed in capacity of testatrix and not of
seller having regard to the consideration and close
relationship between the parties, it was held that
such document should be constructed as a Will.
(Rakminibai V. Vankoba Rao).
25. PREFERENTIAL RIGHT TO ACQUIRE JOINT
FAMILY PROPERTY
S. 22 of the Hindu Succession Act, 1956 puts a
restriction on the exercise of the right to transfer
property as available under S.54 of the Transfer of
Property Act.
A co-sharer can thus prevent transfer of property in
favour of a third person.
The property in this case had fallen to the share of a
member on usual family partition.
The member acquired an independent right in respect of
that property. He transferred it to a third purchaser. It
was held that the co-sharer was not entitled to claim any
preferential right over such property.
The court said that existence of an element of jointness
is a pre-condition for S.22 to operate (Haren Sarma v.
Renu Borthakur).
26. AGREEMENT FOR RECONVEYANCE
It has been held that an agreement for
reconveyance does not create any new right or title
in the property.
It is only in the nature of a concession or privilege
to the beneficiary of reconveyance. Such deed
does not require registration.
S. 54 of TPA is also not applicable. The registration
Act does not bar cancellation of such deed (Ram
sagar Devi v. Ghuturi Devi).
27. DISTINCTION BETWEEN “CONTRACT OF SALE”
AND “CONTRACT FOR SALE”
A Contract of sale is a completed contract in
its terms. On such terms the transfer of
property is to take place.
In contract for sale, the parties are not in a
position to execute the sale deed at present.
In order to create a permanent proof of their
intention they enter into an agreement that
the property would be sold to the contracting
party and none else.
28. DIFFERENCE BETWEEN CONTACT OF SALE
AND SALE
Absolute interest in the
property is not
transferred from the
seller to buyer.
Property is not
transferred from the
seller to buyer.
Creates a right in
personam
Title is not transferred.
Absolute interest in the
property is transferred
from the seller to buyer.
Property is transferred
from the seller to buyer.
Creates a right in rem
Title is transferred.
Contract for sale Sale
29. DISTINCTION BETWEEN SALE AND EXCHANGE
Sale is transfer of ownership in a property in
exchange of price which is the money consideration.
On the other hand, exchange is transfer of ownership
in a property in exchange of ownership of another
property.
Both are transfer of absolute interest in the property
but, in sale the consideration is money whereas in
exchange, it is another property or, anything of value.
“When two persons mutually transfer the ownership
of one thing for the ownership of another, neither thing
nor both things being money only, the transaction is
called an exchange”. (S. 118)
30. DISTINCTION BETWEEN SALE AND GIFT
In sale and gift both, there is transfer of
ownership of an immovable property. But in
sale the ownership is transferred in
exchange for a price i.e. the consideration is
money. In gift, the ownership of an
immovable property is transferred without
any kind of consideration. The consideration
in gift is neither money nor any thing of
value.
31. DISTINCTION BETWEEN SALE AND
LEASE / MORTGAGE / EXCHANGE
In sale, the title of the property is transferred to the
buyer for an agreed price.
In ‘exchange’, there is a transfer of property in
exchange for something that is not money. For example:
Mutu transferes the ownership of his land to Aikhil. In
exchange, Aikhil transfers the ownership of his pent
house to Mutu.
In, a mortgage, only the “right to sell the property” in
event of non payment of loan is given to the mortgagee.
In a lease, the lessee gets the right “only” to enjoy the
property for certain period. The lessee in no
circumstance gets the right to alienate (dispose) the
property.
