Supreme Court Judgement On Sale Agreement

The Apex Court in Dahiben vs Arvindbhai Kalyanji Bhanusali (Gajra) (D) Thr Lrs ruled on July 9, 2020 that the non-payment of part of the counter-performance of the sale does not render the registered deed of sale « void » and does not constitute a valid reason for its cancellation. It is common knowledge that, in the case of real estate transactions, cheques are awarded as part of the sale transaction at the time of execution of the deed of sale mentioned in the said deed of sale. The seller feels safe, because he is convinced that the deed of sale he executes is subject to conditions, subject to the cashing of the aforementioned checks and, in case of forfeiture of the checks, the deed of sale would automatically become « invalid » and sterile, but the legal situation does not correspond to his conviction. The case was settled before the various High Courts and the Apex Court, which categorically decided that, in such a case, the seller must bring an action for recovery of its residual underperformance, but cannot claim the aforementioned deed of sale as invalid and cannot bring an action for annulment of the deed of sale in question for this reason. It is also stated that, in accordance with the contract of sale of 27.3.1979 between defendants 1 to 5 and defendant 6, two acts of purchase of 22.10.1981 and alternative certificates of 19.10.1981 and 22.10.1981 were executed. Defendants 1 to 5 requested paragraph 20,000/ – on the price agreed in the sales contract of 27.3.1979 and at the intervention of Panchayatdars, they received documents 10,000 / – and executed in favor of defendants 6 and 7. It is also alleged that the action brought by the first applicant is an action for collusion and that the first applicant and defendants 1 to 5 are closely linked, and that, in order to undo the rights of defendants 6 and 7, the present action was brought. The contract of sale of 16.7.1980 was also not authentic and the particulars on the contract were also falsified and established for the purposes of his case, and no part of the property was handed over to the first applicant on 7.11.1980 and the applicants had no means of paying the remaining performance in accordance with the contract of sale and, therefore, the appeal is responsible for the rejection. « The applicants set out a case of alleged non-payment of part of the counter-performance of the sale in the action and requested to facilitate the annulment of the deed of sale for that reason. Section 54 of the Transfer of Property Act 1882 provides that the 54th `sale` is defined.

– The sale is a transfer of ownership in exchange for a price paid, promised or partially paid and partly promised. The definition of « sale » states that there must be a transfer of ownership from one person to another, that is, the transfer to the transferee of all rights and shares in the property that he held. The assignor cannot retain part of the share or right of the property, otherwise it would not be a sale. The definition also states that the transfer of ownership must be for a « price paid or promised or partially paid and partially promised ». The price is therefore an essential element of the sales activity. In Vidyadhar v. Manikrao & Anr (1999) 3 SCC 573 held that the words « price paid or partially paid or partially paid and partially promised » indicate that the actual payment of the full price at the time of execution of the deed of sale is not a sine qua non condition for the conclusion of the sale. Even if the full price was not paid, but the document was executed and then recorded, the sale would be concluded and the title would be transferred to the buyer as part of the transaction. Failure to pay part of the sale price would not affect the validity of the sale.

Once the title to the property was acquired, the sale could not be cancelled for this reason, even if the remaining counter-performance is not paid.. . . .

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