Dispute Over Sale Consideration Doesn't Invalidate Registered Sale Deed: Allahabad High Court

The Allahabad High Court has held that a registered sale deed cannot be declared void under Section 54 of the Transfer of Property Act, 1882 merely on a dispute over payment of sale consideration by the purchaser.

It held that a seller who complains of non-payment must sue to recover the money, and cannot have the sale deed cancelled on that ground.

Section 54 of the Transfer of Property Act, 1882 defines sale as a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.

Justice Abdul Shahid held,

“it is clear that regarding said sale deed, the entire sale consideration has been paid by the purchaser to the plaintiff/appellant. If there is any dispute of money, the appellant/plaintiff is having right to file appropriate civil proceedings for recovery of money. The present sale deed could not be declared as void in view of Section 54 of the Transfer of Property Act, 1882.”

Appellant-plaintiff sold about 3.34 hectares in village Hasanpur Lodha, Tehsil Dhaulana, District Hapur to the respondent company by registered sale deed dated 10.12.2008. He pleaded that the agreed rate was Rs. 44,25,000/- per bigha, the total Rs. 5,84,24,750/- payable in 20 monthly instalments, with possession to follow only on payment in full.

He pleaded that the cheques given towards the price were dishonoured and that he had received only Rs. 2,13,20,000/-, leaving Rs. 3,71,04,750/- outstanding. He sued for cancellation, pleading that a deed without payment of consideration and obtained by fraud conferred no ownership.

The company denied the pleaded rate and total, stating that the land was sold at Rs. 800/- per square metre for Rs. 2,13,76,000/-, that possession was delivered on the day the deed was executed, and that the entire price had been received. It contended that the suit for cancellation was not maintainable.

The Trial Court dismissed the suit and the first appellate Court affirmed, bringing the plaintiff to the High Court in second appeal.

The Court noted that the deed itself recorded receipt of the whole of the price and delivery of possession on the spot. It observed that the plaintiff had admitted in cross-examination that whatever was written in the deed was correct, mutation was effected in the company's name without objection, and the dispute was one of money alone and not of the sale deed.

Referring to Section 91 of the Indian Evidence Act, 1872, the Court held that where cancellation of a registered sale deed is sought, it is the contents of the deed that must be looked at.

“The averments recorded by the plaintiff/appellant in his plaint and the statement, which are absolutely stranger to the contents of sale deed could not be considered in the present civil suit.”

Relying on Dahiben v. Arvindbhai Kalyanji Bhanusali and Raziya Begum v. Nafisa Begum Abdul Hamid, the Court noted the Supreme Court's holding that title passes once the deed is executed and registered, and that non-payment of part of the price leaves the sale valid, the seller's remedy being recovery of the balance.

Noting that a registered document carries a presumption of correctness displaceable only by strong evidence, and that mutation had stood in the company's name for two and a half years without objection, the Court held that the plaintiff had failed to discharge his burden of proof.

Accordingly, answering the substantial question of law against the appellant, the Court dismissed the second appeal and confirmed the decrees of both courts below.