If sale deed of immovable property is executed without payment of price & if it does not provide for payment of price at future date, it is not sale in eyes of law: SC

Read Judgment: Kewal Krishan vs. Rajesh Kumar & Others

Pankaj Bajpai

New Delhi, November 23, 2021: The Supreme Court has stated that if a sale deed in respect of an immovable property is executed without payment of price and if it does not provide for the payment of price at a future date, it is not a sale at all in the eyes of law. It is of no legal effect. Therefore, such a sale will be void. It will not effect the transfer of the immovable property.

A Division Bench of Justice Ajay Rastogi and Justice Abhay S. Oka observed that a document which is void need not be challenged by claiming a declaration as the said plea can be set up and proved even in collateral proceedings.

The background of the case was that Kewal Ram (Appellant) executed a power of attorney in favour of Sudarshan Kumar (Respondent), acting on the basis of which two sale deeds were executed by Sudarshan Kumar. By way of the sale deed, Sudarshan Kumar intended to sell part of suit properties to his minor sons as well as his wife.  

Accordingly, two suits were filed by Appellant seeking injunction restraining Respondent from interfering with his possession and from alienating his share in the suit property. The Appellant also sought for passing a decree for possession. Although the Trial Court dismissed the suit, the District Court partly decreed the suit. 

When the matter travelled to the High Court, it was held that suits for declaration of invalidity of the sale deeds were barred by limitation, as such prayers were made belatedly. 

The Bench opined that a sale of an immovable property has to be for a price. The price may be payable in future. It may be partly paid and the remaining part can be made payable in future. The payment of price is an essential part of a sale covered by section 54 of the Transfer of Property Act, 1882.

The issue of bar of limitation of the prayers for declaration incorporated by way of an amendment does not arise at all, when the document impugned under the plaint is itself void, noted the Bench.

After considering the evidence, the Top Court observed that undisputed factual position is that the respondents failed to adduce any evidence to prove that the minor sons had any source of income and that they had paid the consideration payable under the sale deed. 

They did not adduce any evidence to show that Sudarshan Kumar’s wife was earning anything and that she had actually paid the consideration as mentioned in the sale deed, added the Court. 

Therefore, as no title was transferred under the sale deeds, the Top Court held that appellant continued to have undivided half share in the suit properties. 

Accordingly, the decree passed by the District Court holding that the appellant is entitled to joint possession of the suit properties along with Sudarshan Kumar, stood restored.