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Sale Deed Case : Dahiben versus Arvindbhai Kalyanji Bhanushali

(Arising out of SLP (Civil) No.11618 of 2017)

Date Decided: 9th July, 2020
Bench: Justice Indu Malhotra, Justice L. Nageswara Rao


Plaintiffs had a plot of agricultural land situated in village Mota Varachha, Sub-District Surat. The land was under restrictive tenure as per Section 73AA of the Land Revenue Code. The Plaintiffs filed an application before the collector to sell the property to Respondent 1.
The collector permitted the sale of the property and fixed the sale price of the suit property as per the jantri issued by the State Government. It was stipulated that the purchaser shall make the payment by cheque, and reference of the payment shall be made in the Sale Deed. After obtaining all the required permission, the plaintiffs sold the property to respondent 1.
Respondent 1 issued 36 cheques for the payment of the property to the plaintiff. The details were registered in the Sale Deed dated 02/07/2009. Respondent 1 subsequently sold the suit property to Respondent 2 and 3 herein vide registered Sale Deed dated 01/04/2013.

On 15/12/2014, the Plaintiffs filed Special Civil Suit No. 718/2014 before the Principal Civil Judge, Surat against the original purchaser i.e. Respondent 1, and also impleaded the subsequent purchasers i.e. Respondent 2 and 3 as defendants. It was inter alia prayed that the Sale Deed dated 02/07/2009 be cancelled and declared as being illegal, void, ineffective and not binding on them, on the ground that the sale consideration fixed by the Collector, had not been paid in entirety by Respondent 1.


Whether non-payment of part of sale consideration is a ground for cancellation of registered sale deed?


The court referred to its own judgment in Vidyadhar v. Manikrao & Anr. (1999) 3 SCC 573, that the words “price paid or promised or part paid and part promised” indicates that actual payment of the whole of the price at the time of the execution of the Sale Deed is not a sine qua non for completion of the sale.

Even if the whole of the price is not paid, but the document is executed, and thereafter registered, the sale would be complete, and the title would pass on to the transferee under the transaction. The non-payment of a part of the sale price would not affect the validity of the sale. Once the title in the property has already passed, even if the balance sale consideration is not paid, the sale could not be invalidated on this ground. In order to constitute a “sale”, the parties must intend to transfer the ownership of the property, on the agreement to pay the price either in praesenti, or in future. The intention is to be gathered from the recitals of the sale deed, the conduct of the parties, and the evidence on record. In view of the law laid down by this Court, even if the averments of the Plaintiffs are taken to be true, that the entire sale consideration had not in fact been paid, it could not be a ground for cancellation of the Sale Deed. The Plaintiffs may have other remedies in law for recovery of the balance consideration, but could not be granted the relief of cancellation of the registered Sale Deed.”

The Court further held that the Plaintiffs have averred in the plaint that the period of limitation commenced on 21/11/2014, when they obtained a copy of the index of the Sale Deed dated 02/07/2009.

The plea taken in the plaint that they learnt of the alleged fraud in 2014, on receipt of the index of the Sale Deed, is wholly misconceived, since the receipt of the index would not constitute the cause of action for filing the suit. On a reading of the plaint, it is clear that the cause of action arose on the non-payment of the bulk of the sale consideration, which event occurred in the year 2009. The plea taken by the Plaintiffs is to create an illusory cause of 27 action, so as to overcome the period of limitation. The plea raised is rejected as being meritless and devoid of any truth. The conduct of the Plaintiffs in not taking recourse to legal action for over a period of 5 and ½ years from the execution of the Sale Deed in 2009, for payment of the balance sale consideration, also reflects that the institution of the present suit is an after-thought. The Plaintiffs apparently filed the suit after the property was further sold by Respondent 1 to Respondent 2 and 3, to cast a doubt on the title of Respondent No.1 to the suit property.”

In view of the aforesaid discussion, the present Civil Appeal is dismissed with costs of Rs. 1,00,000/- payable by the Appellant to Respondent 2 and 3, within a period of twelve weeks from the date of this Judgment. Pending applications, if any, are accordingly disposed of.


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