CASE TITLE SHANTI DEVI (SINCE DECEASED) THROUGH LRS. GORAN VERSUS JAGAN DEVI & ORS.
The Supreme Court says that a sale deed executed without the payment of consideration is not a valid “sale” under Section 54 of the Transfer of Property Act, 1882 (“TPA”). Such a deed is void and non-use
“The sale of an immovable property would have to be for a price and such a payment of price is essential, even if it is payable in the future. If a sale deed is executed without the payment of the price, it is not a sale at all in the eyes of law, specifically, under Section 54 of the Transfer of Property Act. Such a sale without consideration would be void and would not affect the transfer of the immovable property” the Court with referring to its case of Kewal Krishnan v. Rajesh Kumar and Others, (2022) 18 SCC 489
A bench of Justice JB Pardiwala and Justice R Mahadevan ruled in favour of the plaintiff who challenged the sale deed executed in the defendant’s favor, upon noting that the defendant failed to prove the payment of consideration to the plaintiff, making the sale deed invalid.
Fact of the Case In this case, the sale deed stated that ₹9,000 had been paid earlier and another ₹6,000 was given to the plaintiff at the time of registration. However, the defendant could not prove that these payments were ever made. The person who was said to have made the final payment—the defendant’s husband—did not testify. Out of the two attesting witnesses, one had died and the other was the defendant’s brother, whose evidence was found unreliable. The original deed was also not produced, leading the Court to draw an adverse inference against the defendant. Since the essential requirement of payment of sale consideration was not proved, the Court held that the sale deed was void ab initio.
When a deed is void, there is no need to seek a prayer for its cancellation. In such cases, the limitation period for filing a suit to recover possession is governed by Section 65 of the Limitation Act. The Court clarified that, in the eyes of the law, the plaintiff could not be said to have executed the sale deed. Therefore, the plaintiff was entitled to seek possession of the property on the basis of her ownership and could file the suit within 12 years from the date she came to know that the defendant’s possession was adverse to hers.
FINAL VERDICT Since the essential element of payment of sale consideration was not proved, the Court held the sale deed was void ab initio. If the deed is void, there is no need to seek a prayer for its cancellation. Hence, the limitation period for suit to recover possession, when the sale is void, will be governed by Article 65 of the Limitation Act, the Court ruled.
“To put it simply, in the eyes of the law, the plaintiff could not be said to have executed the sale deed. Therefore, the plaintiff could indeed have maintained an action to obtain possession of the property on the basis of her title and filed the same within the period of 12 years from the date of knowledge that the possession of the defendant was adverse to that of the plaintiff,”
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