Registered Sale Deed Has Strong Presumption Of Genuineness, Cannot Be Lightly Called 'Sham': Supreme Court

The Supreme Court held that a registered sale deed carries a greater presumption of validity and genuineness, and therefore cannot be lightly declared as 'sham' to oppose the sale transaction.

“It is a settled position of law that a registered Sale Deed carries with it a formidable presumption of validity and genuineness. Registration is not a mere procedural formality but a solemn act that imparts high degree of sanctity to the document. Consequently, a Court must not lightly or casually declare a registered instrument as a “sham”, observed a bench of Justices Rajesh Bindal and Manmohan, while allowing the buyer's plea where the registered sale deed executed in her favour was disputed later on by the seller, terming it to be 'sham', without credible evidence.

It was the case where the Respondent mortgaged his house with the Appellant to pay off his debt. When the Respondent failed to redeem the mortgage on the Appellant's demand, a registered sale agreement was entered, making the Appellant an exclusive owner of the house. However, the Respondent, already being in possession of the property, became the tenant of the Appellan,t and a rent agreement was executed.

For 14 months, the Respondent paid rent and acknowledged this liability in 1974. However, when eviction proceedings began in 1975, he filed a suit in 1977, contending the sale was a sham, as it was actually a mortgage to secure a loan.

The Trial and First Appellate Courts upheld the sale as genuine, but the High Court reversed this, treating it as a mortgage. The appellant then appealed to the Supreme Court.

Setting aside the High Court judgment, the judgment authored by Justice Manmohan restored the First Appellate Court's decision and upheld the sale deed as a genuine transaction. It emphasised that registered documents carry a strong presumption of validity and cannot be lightly declared sham without cogent pleadings and convincing evidence.

“…as both the Sale Deed and Rental Agreement in question are registered, there is a very strong presumption about the validity and genuineness of the documents in question.”, the court said.

“...as all the recitals and the covenants in the Sale Deed are clear, categorial and admit of no ambiguity, this Court has no doubt that the intent of the parties while entering into the said Deed dated 12th November 1971 was to conduct an outright sale of suit house in favour of Appellant-Defendant No.1 for a valuable consideration of ₹10,000/- (Rupees Ten Thousand only).”, the court held.

Accordingly, the appeal was allowed, and the First Appellate Court's decision was restored, which upheld the trial court's decision to treat sale deed as genuine.

Cause Title: HEMALATHA (D) BY LRS. VERSUS TUKARAM (D) BY LRS. & ORS.

Citation : 2026 LiveLaw (SC) 79

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