SALE-TRANSFER OF
PROPERTY ACT,1882
WHAT IS A SALE? ( SEC-54)
◆ Generally a property can be transferred through different modes, that is
through sale, mortgage, lease, gift, exchange etc. Under the Transfer of
Property Act 1882, section 54 states that sale is defined as the transfer of
ownership of a property in exchange for a price paid or promised or partly
paid or part promised.
Transfer of ownership of property
Consideration
Paid or promised or partly paid or partly promised.
HOW A SALE IS MADE?
◆ In case of tangible immovable property of value rupees hundred and upwards or
in case of reversion or any other intangible thing, a sale can be made only by a
registered instrument.
◆ When the tangible immovable property is of value less than rupees hundred the
sale can be made by a registered instrument or by the delivery of the property.
◆ The delivery of a tangible immovable property is said to have taken place when
the seller places the buyer or another person on the direction given by the buyer,
in possession of the property.
ESSENTIALS OF A VALID SALE UNDER THE ACT
◆ The seller must be a person competent to transfer. The seller should be either the
owner of the property or should have the authority to dispose of it.
◆ The buyer must be a person competent to the transferee.
◆ The subject matter must be a transferable immovable property which can be
tangible or intangible.
◆ There must be a transfer of ownership
◆ The transfer must be in exchange for a price. ‘Price’ in the ordinary sense
connotes money consideration for the sale of the property. The price must be paid
or promised or partly paid.
RIGHTS AND LIABILITIES OF BUYERS AND SELLERS:
SEC-55
Liabililities of Seller BeforeSale
◆ The seller is bound to disclose all the material defects to the buyer of the property which the buyer is not
aware of and cannot find in ordinary course of action.
◆ In the Case Ganpat Ranglal V/s Mangilal Hiralal (1961), Court held that the seller is not bound to disclose
such faults which is really known by buyer or otherwise he is in know of the information.
◆ The seller is bound to produce all documents relating to property to the buyer if he ask for those
documents which are in the possession or power of seller.
◆ The seller is bound to give answer of all the question to the best of his knowledge which are put before
him by the buyer in respect to property,in the case of Laxmidas & Company V/s D.J. Tata (2019) it has
been held by the Mumbai high court that if the seller does not answer for such questions then the contract
may be rescinded by the buyer.
◆ The seller is bound between the date of the contract of sale and the delivery of the property, to take as
much care of the property and all documents of title relating thereto, which are in his possession as an
owner of ordinary prudence would take of such property and documents.
◆ The seller is bound to pay all the charges and rent, dues or government fees up to the date of sale.
Liablilities of seller after sale
◆ After completion of the sale, it is the seller’s duty to give possession to the buyer. The seller is
bound to give, on being so required, the buyer or such person as he directs, such possession of
the property
◆ The seller shall be deemed to contract with the buyer that the interest which the seller professes
to transfer to the buyer subsists and that he has power to transfer the same.
◆ Where the whole of the purchase money has been paid by the buyer, Seller is bound to deliver
to the buyer all documents of title relating to the property which are in the seller’s possession or
power;
◆ In the case Darpan V/s Kedar Nath(1969), it has been held that if Seller does mistakes in
delivering up to possession the buyer can file a suit against seller.
Seller’s Rights before Sale
◆ Section 55 (4) (a) - Seller has right to receive all the rents and profits out of
property.
Seller’s right after sale
◆ Seller has the right to Lien or charge on the property , if any amount is unpaid
by the buyer. According to Section 55(4) (b) if price remains unpaid, the seller
cannot refuse delivery of possession or can claim back the possession if
already given to buyer, but he (seller) is given a right to recover unpaid
purchase money from and out of the property.
Liabilities of Buyer before Sale:
◆ The buyer bound to disclose, facts which materially increases the value of property, Section 55(5)(a) of the
Act provides that, “the buyer is bound to disclose to the seller any fact as to the nature or extent of the
seller’s interest in the property of which the buyer is aware, but of which he has reason to believe that the
seller is not aware, and which materially increases the value of such interest”
◆ In the case of Hazi isha V/s Daya Bhai (1896), it has been held that it is the duty of the buyer that he should
provide all information related to ownership which he is in know, to the seller. This arrangement is based on
the principle of equity and relations of belief between buyer and seller.
◆ Section 55(5) (b).- Buyer is bound to pay the price of property to Seller
◆ Liablilities of buyer after Sale :
◆ Section 55 (5) (c) - The buyer is bound to bear any loss arising from the destruction, injury or decrease in
value of the property not caused by the seller where the ownership of the property has passed to the buyer.
◆ Section 55(5) (d) - The buyer is liable to pay the outgoings, e.g., Government dues, rents, revenue or taxes
Buyer’s right before sale-
◆ Section 55(6) (a) - Buyer is entitled to
A charge on the property for the purchase money properly paid by him in anticipation not the delivery.
Interest on such purchase money.
The earnest , and cost awarded to him in a suit to compel specific performance of the contract or to obtain a
decree for its recession in case he properly declines to accept delivery.
Buyer’s right after Sale-
◆ Section 55 (6) (a) - Buyer is entitled to receive any benefit of any appreciation of the property or increase in
its value and to the rents and profits thereof.
◆ Achtak V/s Parmeshwar it was decided that the buyer is entitled to get benefits of the maintenance done by
seller.
