i= _\ : 2

S.9
ny SALE,
SALE, EXCHANGE
EXCHANGE

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& GIFT
GIFT Pallavi
Pallavi Goel
Goel
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S99
MODULE 6
MODULE 6
Zz
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 SALE
SALE OF
OF IMMOVABLE
IMMOVABLE PROPERTY
PROPERTY

◦© Negotiation
Negotiation andand Agreement:
Agreement: The The seller
seller (transferor)
(transferor) and
and the
the buyer
buyer (transferee)
(transferee) negotiate
negotiate w.r.t
w.r.t the
the terms
terms and
and
conditions
conditions of
of the
the sale,
sale, including
including price,
price, the
the date
date of
of transfer,
transfer, and
and other
other terms.
terms. When
When both
both parties
parties agree
agree they
they
enter
enter into
into a
a sale
sale agreement.
agreement.
◦ Agreement
Agreement to Sell →
to Sell > payment
payment of
of stamp
stamp duty
duty and
and purchase
purchase of
of non
non judicial
judicial stamp paper →
stamp paper > recording
recording
terms
terms of
of sale
sale
◦ Registration
Registration ofof Sale
Sale Deed:
Deed: The
The sale
sale deed
deed must
must be
be registered
registered with
with the
the appropriate
appropriate local
local authority
authority or
or atat the
the
sub-registrar's
sub-registrar's office.
office. Registration
Registration is
is aa legal
legal requirement
requirement to to make
make the
the sale
sale deed
deed valid.
valid. The
The sale
sale deed
deed should
should
be
be executed
executed onon non-judicial
non-judicial stamp
stamp paper
paper ofof the
the appropriate
appropriate value
value asas per
per the
the Stamp
Stamp Act
Act applicable
applicable inin the
the
respective
respective jurisdiction.
jurisdiction.
◦ Execution
Execution and
and Possession:
Possession: After
After the
the sale
sale deed
deed is
is executed
executed and
and registered,
registered, and
and all
all payments
payments are
are made,
made, the
the
possession
possession of
of the
the property
property is
is handed
handed over
over from
from the
the seller
seller to
to the
the buyer.
buyer. This
This signifies
signifies the
the completion
completion of
of the
the
sale.
sale.
◦ Mutation
Mutation ofof Property:
Property: The
The buyer
buyer should
should apply
apply for
for the
the mutation
mutation of
of property
property records
records to
to have
have the
the property's
property's
title
title and
and ownership
ownership transferred
transferred inin their
their name
name in
in the
the official
official records.
records. This
This step
step is
is important
important for
for legal
legal
recognition
recognition of
of the
the buyer's
buyer's ownership.
ownership.
 ao NAG a NAG

SALE
◦© Sale
Sale is
is the
the transfer
transfer of
of ownership
ownership of
of property
property from
from one
one
person
person (seller)
(seller) to
to another
another person
person (buyer)
(buyer) for
for a
a price.
price.
◦© Sale
Sale is
is complete
complete when
when the
the buyer
buyer pays
pays the
the full
full consideration
consideration
and
and the
the seller
seller delivers
delivers the
the property.
property.
◦© The
The seller
seller must
must be
be the
the owner
owner of
of the
the property
property or
or be
be
authorized
authorized to
to sell
sell the
the property
property byby the
the owner.
owner.
◦© The
The transfer
transfer of
of ownership
ownership must
must take
take place
place immediately,
immediately, or
or at
at
aa future
future date
date specified
specified in
in the
the sale
sale agreement.
agreement.

5 Oe oF O@ G
=".
S.54,
8.54, SALE
SALE defined
defined --
ates
"Sale”
promised.
isc
is transfer
a transfer of
of ownership
ownership injexchenge!
in exchange for for ci iiis=siilale
a price paid orillite ltlis=elen
promised enn alenenenaenn
or part-paid and part-

Sale
Sale how how made.—
made.—
◦© Such
Such transfer,
transfer, in in the
the case
case ofof tangible
tangible immovable
immovable property property ofof the
the value of one hundred rupees and
upwards,, or or inin the
the case
case of of aa reversion
reversion or
or other
other intangible
intangible thing,
thing, can
can bebe made
made onlyonly by
by aa registered
registered
instrument.
instrument.
◦© In
In the
the case
case of of tangible
tangible immoveable
immoveable property
property of of a value less
a value less than
than one
one hundred rupees, such
hundred rupees, such transfer
transfer may
may
be
be made
made either
either by by a a registered
registered instrument
instrument_oror byby delivery
delivery of
of the
the property.
property.
◦° paar
Delivery ofa tangible renee immoveablerecess property aatakes place place when
when thethe seller places the
seller places buyer, or
the buyer, or such
such person
person
as he directs, in possession of the property.
◦© Contract
Contract for for sale.—
sale.—
◦© A
A contract
contract forfor thethe sale
sale of of immoveable
immoveable property
property iscontract
is a@ contract that
that aa sale
sale ofof such
such property
property shall
Shalltakerplecer
take place
on terms settled between the parties.
◦- ItIt does
does not,
not, of of itself, create any
itself, create any interest in oror charge
interest in charge on on such
such property.
property.
 Sale of
Immovable
Property

Value more than

Rs. 100 Less than Rs. 100

Eitherby
Only by
registered
registered lease
instrument

Delivery
 REQUIREMENTS
REQUIREMENTS
◦© Sale
Sale == act
act of
of selling
selling == effect
effect is
is transfer
transfer of
of ownership
ownership and
and title
title of
of property
property from
from one
one
person
person toto another
another for for price.
price. This
This payment
payment ofof price
price can
can be
be price
price paid
paid or
or promised
promised OR
OR
part
part paid
paid oror part
part promised.
promised.

22 Elements:
Elements:
Transfer
Transfer of
of Ownership
Ownership (means
(means will
will not
not cover
cover transfer
transfer of
of limited
limited interest
interest i.e.,
i.e., lease,
lease, mortgage
mortgage
Money
Money Consideration:
Consideration: adequacy
adequacy is is not
not relevant,
relevant, but
but money
money consideration
consideration must
must be
be there
there

◦© Execution
Execution of
of Sale:
Sale:
◦© For
For tangible
tangible immovable
immovable property
property of
of value
value Rs.
Rs. 100
100 and
and above
above =
= through
through registered
registered
document
document
◦© For
For less
less that
that 100;
100; by
by delivery
delivery or
or registered
registered document
document
 REQUIREMENTS
REQUIREMENTS
1. Parties
Parties must
must bebe competent
competent to to contract
contract
2. Subject
Subject matter
matter = = must
must bebe transferable
transferable immovable
immovable property,
property, cancan be
be tangible
tangible (e.g,(e.g, land,
land, house)
house) or or
intangible
intangible (that
(that cannot
cannot be be touched
touched e.g.,
e.g., aa right
right ofof fishery).
fishery).
3. Consideration:
Consideration: The The price
price must
must bebe paid
paid oror promised,
promised, or or partly
partly paid
paid and
and party
party promised.
promised. ItIt is
is not
not
mandatory
mandatory thatthat payment
payment of of the
the price
price should
should bebe at at the
the time
time of
of the
the execution
execution of of the
the sale.
sale. Price
Price can
can be
be
paid
paid even
even before,
before, atat the
the time
time oror even
even subsequent
subsequent to to the
the completion
completion of of the
the sale.
sale.
4. Transfer
Transfer ofof ownership
ownership
For
For Property Worth ₹100
Property Worth £100 or or More:
More: Should
Should the
the Property
Property be be valued
valued at at ₹100 100 oror more,
more, oror reversion*
reversion*
or
or other
other intangible
intangible thing
thing the
the transaction
transaction must
must bebe conducted
conducted usingusing aa registered
registered instrument—a
instrument—a sale sale
deed.
deed.

For
For Property
Property Worth
Worth Less Than ₹100:
Less Than £100: Should
Should the
the Property
Property bebe worth
worth less than ₹100,
less than %100, delivery
delivery of
of
possession
possession completes
completes the
the sale,
sale, although
although registration
registration can
can also
also be
be done.
done.

Registration
Registration Requirements:
Requirements: Since
Since itit guarantees
guarantees legally
legally legitimate
legitimate and
and enforceable
enforceable transactions,
transactions,
registration
registration of
of the
the sale
sale deed
deed isis very
very vital.
vital. Once
Once registered,
registered, the
the sale
sale enters
enters the
the public
public record
record and
and helps
helps
stop
stop dishonest
dishonest activity
activity and
and ownership
ownership conflicts.
conflicts.
REQUIREMENTS:
REQUIREMENTS: competent
competent to
to transfer
transfer
1. The
The seller
seller andand buyer
buyer mustmust bebe a a person
person competent
competent to to transfer.
transfer.
2. Seller
Seller must
must be be a a major,
major, of of sound
sound mind,
mind, andand should
should not not be
be legally
legally disqualified
disqualified to to
transfer
transfer the
the property.
property. E.g., E.g., aa judgement
judgement debtordebtor is is not
not capable
capable of of selling
selling his
his
property
property thatthat is is to
to bebe sold
sold inin execution
execution under
under the the court’s
court’s order.
order.
3. The
The seller
seller should
should eithereither be be the
the owner
owner of of the
the property
property or or should
should have
have thethe
authority
authority to to dispose
dispose of of it.
it. Karta
Karta of of aa joint
joint family
family property,
property, a a court
court appointed
appointed
guardian
guardian of of the
the property
property of of a a minor,
minor, an
an agent
agent having
having a a power
power of of attorney
attorney to to
sell
sell the
the property,
property, etc etc
4. The
The buyer
buyer mustmust be be a a person
person competent
competent to to be
be a a transferee.
transferee. He He may
may be be any
any
person
person who
who is is not
not disqualified
disqualified to to be
be transferee
transferee underunder Sec.Sec. 6.6. Thus,
Thus, anan officer
officer
performing
performing an an official
official duty
duty in in connection
connection withwith the
the sale
sale ofof the
the property
property cannot
cannot
purchase
purchase the the same.
same.
 REMEMBER:
REMEMBER: competent
competent to
fo transfer
transfer
◦© Seller
Seller and
and the
the buyer
buyer –
— Natural
Natural or
or Juristic
Juristic Persons
Persons
◦© Seller
Seller must
must be
be aa person
person competent
competent toto contract,
contract, i.e.,
i.e., he
he must
must be
be major
major and
and of
of sound
sound mind,
mind, and
and should
should not
not be
be legally
legally
disqualified
disqualified to
to transfer
transfer the
the property.
property.
◦© A
A minor
minor or
or a
a person
person of
of unsound
unsound mind
mind is
is incompetent
incompetent toto transfer
transfer his
his own
own property
property despite
despite being
being its
its owner,
owner, but
but a
a
transfer
transfer by
by aa mentally
mentally challenged
challenged person
person during
during lucid
lucid intervals
intervals is
is valid.
valid.
◦© Statutory
Statutory incompetency
incompetency refers
refers toto an
an incompetency
incompetency imposed
imposed under
under law
law or
or a
a statute.
statute. When
When a a person
person is
is declared
declared as
as an
an
insolvent,
insolvent, his
his property
property vests
vests in
in the
the official
official receiver,
receiver, and
and he
he is
is incompetent
incompetent toto transfer
transfer thethe same.
same. AA judgment
judgment debtor
debtor is
is
not
not capable
capable toto sell
sell his
his property
property thatthat isis to
to be
be sold
sold in
in execution
execution under
under the
the order
order ofof the
the court.
court.
◦© The
The property
property cannot
cannot be
be sold
sold when
when it
it is
is under
under the
the management
management of
of the
the Court
Court of
of Wards.
Wards.
◦© Seller
Seller should
should be
be the
the owner
owner of
of the
the property
property or
or have
have the
the authority
authority to
to dispose
dispose it.
it.
◦© A
A sale
sale deed
deed executed
executed by
by any
any other
other person
person in
in presence
presence of
of the
the owner
owner would
would not
not be
be valid
valid
◦© A
A Karta
Karta of
of a
a joint
joint family
family property
property is
is authorised
authorised to
to transfer
transfer the
the property
property under
under certain
certain specified
specified circumstances.
circumstances.
◦© A
A guardian
guardian of
of the
the property
property of
of aa minor
minor is
is empowered
empowered to
to sell
sell it
it with
with the
the permission
permission of
of the
the court,
court, and
and without
without such
such
permission
permission the
the sale
sale would
would be
be invalid.
invalid.
 SACHIDANAND SHARMA
SACHIDANAND SHARMA V.
V.
STATE OF
STATE OF BIHAR
BIHAR

◦ The
The property
property belonged
belonged to to A A butbut was
was soldsold four
four years
years after
after his
his
disappearance
disappearance by by his
his brother
brother as as the
the guardian
guardian of of the
the minor
minor sonson
during
during the the life
life time
time of of the
the natural
natural guardian,
guardian, i.e.,i.e., the
the mother.
mother.
◦ The
The mother
mother waswas of of sound
sound mindmind and and there
there waswas no no evidence
evidence that that the the
sale
sale waswas for
for the
the benefit
benefit of of the
the minor.
minor.
◦ Held
Held thatthat the
the sale
sale would
would be be void
void as as having
having been
been executed
executed by by a a
person
person who who had
had no no right
right oror title
title toto the
the property.
property.
◦ An
An agent
agent having
having a a power
power of of attorney
attorney to to sell
sell the
the property
property can can also also
sell
sell it
it without
without being
being the the owner
owner of of the
the property.
property. WhereWhere the the sale
sale was was
executed
executed after after getting
getting a a general
general power power of of attorney,
attorney, without
without
obtaining
obtaining the the requisite
requisite permission
permission of of the
the court,
court, the
the sale
sale deed
deed is is
invalid
invalid and and would
would not not confer
confer any any title
title onon the
the transferee.
transferee. But But ifif the
the
Power
Power of of Attorney
Attorney executed
executed in in favour
favour of of the
the holder
holder by by the
the owner
owner
expressly
expressly authorizes
authorizes him him toto transfer
transfer the the property
property he he would
would be be a a
competent
competent seller.
A minor
A minor is
is a
a competent
competent transferee
transferee in
in a
a '
transaction of
transaction of aa sale (guardian).
sale (guardian).
A
A gift
gift can
can be
be executed
executed in
in favour
favour ofof aa minor,
minor,
but
but aa minor
minor cannot
cannot take
take aa lease
lease in
in his
his favour,
favour,
as
as aa lease
lease has
has to
to be
be executed
executed by by both
both the
the
parties.
parties.
A
A lease
lease in
in favour
favour of
of a
a minor
minor is
is therefore,
therefore, void.
_\je

Sy
KS
_

Price
Price is
is the
the essence
essence of of the
the contract
contract of of sale
sale but
but the
the time
time for
for

@
payment
payment of of it
it is
is not
not the
the essence
essence ofof the
the sale,
sale, unless
unless the
the contract
; UT

contract
a stipulates
stipulates so.
so.
Adequacy
Adequacy of of price
price isis not
not mandatory;
mandatory; itit can
can be
be lower
lower oror higher
higher
|

Sy
than
than the
the market
market value.
value.
4

KS

-- Ranjana
Ranjana Nagpal
Nagpal v.
v. Devi
Devi Ram
Ram AIR
AIR 2002
2002 H.P.
H.P. 166
166
,

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\) UT,
 (2
; 2 / KS \,

Sy
4

IfIf there
there is
is no
no registration
registration of
of the
the sale
sale deed,
deed, no
no property
property passes
passes
,

@
as
as there
there isis no
no transfer.
transfer. An
An admission
admission that
that the
the land
land has
has been
been sold
sold
will
will not
not operate
operate asas an
an estoppel
estoppel soso as
as to
to do
do away
away with
with the
the
necessity
necessity for
for a
a registered
registered conveyance.
conveyance.
|

Sy
-- Maung
Maung Po
Po Yin
Yin v
v Mating
Mating Tel
Tel Tu
Tu AIR
AIR 1925
1925 Rang
Rang 68
68
4

/ KS
y,

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2 \;
 > d\¢

A
QUESTION
QUESTION

A and
A and BB enter
enter into
into aa sale
sale of
of land.
land. A
A promises
promises to
to BB that
that price
price will
will
be
be paid
paid within
within aa year
year but
but he
he does
does not
not do
do so.
so. What
What areare B’s
B’s
options:
options:

BB can
can set
set aside
aside the
the sale
sale or
or sue
sue for
for getting
getting the
the possession
possession back?
back?
OR
OR
BB sues
sues AA for
for the
the price?
price?
 ao NAG a NAG

REQUIREMENTS: CONTRACT
REQUIREMENTS: CONTRACT
FOR SALE
FOR SALE (CFS)
(CFS)
1.
1. A
A contract
contract forfor the
the sale
sale of
of immoveable
immoveable property
property MEANS
MEANS
aa contract
contract (an (an agreement)
agreement) that that the
the sale
sale ofof such
such
immovable
immovable property
property shallshall take
take place
place on on terms
terms settled
settled
between
between the the parties.
parties.
2.
2. CFS
CFS by by itself
itself will
will not
not create
create anyany interest
interest inin or
or charge
charge onon
such
such property.
property.
3.
3. ItIt is
is aa mere
mere agreement
agreement and and need
need not
not be
be registered.
registered.
4.
4. The
The transfer
transfer of of ownership
ownership is is subject
subject toto fulfillment
fulfillment ofof the
the
terms of
terms of the
the agreement
agreement b/w b/w parties.
parties.

s @OSOQ@e Fo OS ——.
Contract
Contract for
for sale
sale is is not
not the
the same
same as as a
a sale
sale and
and isis not
not required
required toto be
be
compulsorily
compulsorily registered
registered and and title
title remains
remains with
with the
the vendor,
vendor, butbut if
if an
an
agreement
agreement ofof sale
sale isis coupled
coupled with
with delivery
delivery of of possession
possession in in part
part
performance
performance of of conveyance,
conveyance, rights
rights created
created under
under thisthis document
document
requires
requires compulsory
compulsory registration
registration asas this
this agreement
agreement of of sale
sale partakes
partakes
the
the character
character ofof aa conveyance
conveyance and and would
would require
require both
both registration
registration
and
and stamp
stamp duty.
duty.

A
A contract
contract for
for sale
sale does
does notnot create
create aa title
title in
in immovable
immovable property,
property, but but
if
if in
in furtherance
furtherance of of this
this contract,
contract, possession
possession hashas been
been delivered
delivered toto the
the
transferee,
transferee, and
and ifif other
other conditions
conditions laid
laid down
down in in section
section 53A
53A are
are
satisfied,
satisfied, the
the transferee
transferee is is entitled
entitled to
to protect
protect his
his possession
possession and
and is is
also
also empowered
empowered to to restrain
restrain a a trespasser
trespasser from
from interfering
interfering with
with his
his
peaceful
peaceful possession
possession ofof the
the property.
 SALE DEED
SALE DEED CONTRACT FOR
CONTRACT FOR SALE(AGREEMENT
SALE(AGREEMENT TO
TO SALE)
SALE)

Transfer
Transfer of
of Ownership
Ownership mere agreement
mere agreement on on which
which future
future terms
terms of
of sale are settled
sale are settled
between
between the the parties.
parties.
does
does not,
not, of
of itself,
itself, create
create any
any interest
interest in
in or
or charge
charge onon such
such
property.
property. Even
Even after
after the
the contract
contract for
for sale,
sale, the
the ownership
ownership remains
remains
in
in the
the vendor.
vendor.

Executed
Executed contract
contract Executory
Executory contract
contract –
— promise
promise to
to transfer
transfer the
the property
property

Passing
Passing of
of Property
Property -- A
A sale
sale passes
passes an
an absolute
absolute ItIt does
does not
not create
create any
any interest,
interest, charge
charge upon
upon the
the property,
property, in
in
interest
interest in
in the
the property.
property. It
It conveys
conveys aa legal
legal title
title favour
favour of of the
the buyer.
buyer. It
It does
does not
not convey
convey any
any title
title to
to the
the
to
to the
the purchaser
purchaser purchaser.
purchaser.

Right
Right in
in rem
rem Right
Right in
in personam
personam i.e.,
i.e., only
only the
the promisee
promisee can
can compel
compel thethe
promisor
promisor (as
(as well
well as
as a a subsequent
subsequent purchaser
purchaser with
with notice)
notice) to
to
execute
execute the
the promised
promised conveyance.
conveyance.

Registration— is
Registration— is must
must in
in case
case of
of subject
subject to
to S.54
$.54 Need
Need not
not be
be registered
registered at
at all.
all.
requirements
requirements
CAN
CAN YOU
YOU SELL
SELL YOUR
YOUR IMMOVABLE
IMMOVABLE
PROPERTY
PROPERTY AT
AT ANY
ANY PRICE
PRICE YOU
YOU
WANT
WANT UNDER
UNDER SECTION
SECTION 54?
54?
 DO HIRE
DO HIRE AND
AND PURCHASE
PURCHASE
AGREEMENTS
AGREEMENTS CONSTITUTE
CONSTITUTE SALE?
SALE?
LEASE,
LEASE, MORTGAGE
MORTGAGE &
& HIRE
HIRE AND
AND PURCHASE
PURCHASE
Lease and
Lease and Mortgage
Mortgage are
are transfer
transfer of
of a
a right
right in
in the
the property,
property, but
but not
not absolute
absolute transfers.
transfers.

LEASE:
LEASE:
there
there is
is aa transfer
transfer of
of aa right
right to
to possess
possess and
and enjoy
enjoy the
the property,
property, but
but the
the title
title and
and a a right
right of
of alienation
alienation remain
remain with
with the
the
owner.
owner. There
There is
is a
a partial
partial transfer
transfer and
and the
the right
right of
of reversion
reversion remains
remains with
with the
the lessor
lessor
IN
IN SALE:
SALE: there
there must
must be
be an
an absolute
absolute transfer
transfer of
of ownership
ownership and
and not
not some
some rights
rights only
only as
as in
in the
the case
case of
of a
a lease.
lease.

MORTGAGE:
MORTGAGE:
What
What isis transferred
transferred is
is a
a right
right to
to cause
cause the
the property
property to
to be
be sold
sold in
in the
the event
event of
of non-payment
non-payment of
of loan
loan by
by the
the mortgagor
mortgagor in
in
favour
favour ofof the
the mortgagee.
mortgagee.

HIRE AND
HIRE AND PURCHASE
PURCHASE
A
A hire
hire purchase
purchase agreement
agreement may
may culminate
culminate in
in a
a sale,
sale, but
but till
till it
it does
does so,
so, there
there exists
exists a
a right
right in
in favour
favour of
of the
the transferor
transferor to
to rescind
rescind
the
the agreement
agreement and
and take
take back
back the
the possession
possession of
of his
his property.
property.
While
While payment
payment through
through instalment
instalment is
is an
an accepted
accepted feature
feature of
of a
a hire
hire purchase
purchase agreement,
agreement,
The
The terms
terms of
of payment
payment of
of consideration
consideration in
in a
a sale
sale are
are purely
purely dependent
dependent upon
upon the
the agreement
agreement between
between the
the parties
parties
 S.55,
8.55, RIGHTS
RIGHTS AND
AND LIABILITIES
LIABILITIES OF
OF BUYER
BUYER
AND
AND SELLER
SELLER --
In the
In the absence
absence of of aa contract
contract to to the
the contrary,
contrary, the the buyer
buyer andGnd thethe seller
seller of of immovable
immovable property respectively are
property respectively are subject
subject to to the
the
liabilities,
liabilities, andand havehave the the rights,
rights, mentioned
mentioned in in the
the rules
rules next
next following,
following, or or such
such ofof them
them as as are
are applicable
applicable to to the
the property
property sold:—
sold:—
(1)
(1) TheThe seller
seller is is bound—
bound—

(a) toIBUBISEISSEFSNhe
(a) disclose to the | buyer bUYerenyimarerial
any material defect detecninthel property or
in the property Oninimelsellersmitlelthereto
in the seller’s title thereto of of which
which the the seller
seller is,
is, and
and the the buyer
buyer
is
is not,
not, aware,
aware, and and which
which the the buyer
buyer could
could not not with
with ordinary
ordinary care care discover;
discover;

(b) to
(b) to SRSEUSSTSRTEISOVESnnisheeUesOnexcminenomelNSeUMeMialof
produce to the buyer on his request for examination all documents of title title relating
relating to to the
the property
property which which are are inin the
the seller’s
seller's
possession
possession or or power;
power;

(c) to
(c) to SSWSATSRREISESHSMnisinfotnanonellineleventeuestions
answer to the best of his information all relevant questions put put toto him
him byby the
the buyer
buyer inin respect
respect to to the
the property
property or or the
the title
title
thereto;
thereto;
(d) on
(d) on payment
payment or or tender
tender of of the
the amount
amount due due in in respect
respect of of the
the price,
price, toto execute
execute a a proper
proper conveyance
conveyance of of the
the property
property when when the the
buyer
buyer tenders
tenders it it to
to him
him for
for execution
execution at at a a proper
proper timetime and
and place;
place;
(e)
(e) between
between the the datedate of of the
the contract
contract of of sale
sale and
and thethe delivery
delivery of of the
the property,
property, to to take
take as as much
much care
care of of the
the property
property and and allall
documents
documents of of title
title relating
relating thereto
thereto which
which are are inin his
his possession
possession as as anan owner
owner of of ordinary
ordinary prudence
prudence wouldwould take take of of such
such property
property and and
documents;
documents;

(f) toto give,

(f) give, onon being
being soso required,
required, the the buyer,
buyer, oror such
such person
person asas hehe directs,
directs, suchsuch possession
possession ofof the the property
property as as its
its nature
nature admits;
admits;
(g)
(g) toto pay
pay all
all public
public charges
charges and and rent
rent accrued
accrued due due inin respect
respect of of the
the property
property up up to
to the
the date
date ofof the
the sale,
sale, the the interest
interest onon all
all
encumbrances
encumbrances on on such
such property
property due due on on such
such date,
date, and,
and, except
except where
where the the property
property is is sold
sold subject
subject toto encumbrances,
encumbrances, to to discharge
discharge
all
all encumbrances
encumbrances on on the
the property
property then then existing.
existing.
 S.55,
$.55, RIGHTS
RIGHTS AND
AND LIABILITIES
LIABILITIES OF
OF BUYER
BUYER
AND
AND SELLER
SELLER --
(2) The
(2) The seller shall be
seller shall be deemed
deemed toto contract with the
contract with the buyer
buyer that the interest
that the Which the’
interest which seller!
the seller
professes to transfer to the buyer subsists and that he has power to transfer the same:
Provided that,
Provided that, where
where the
the sale is made
sale is made byby aa person
person inin a
a fiduciary character, he
fiduciary character, shall
he shall be
be
deemed to contract with the buyer that the seller has done no act whereby the property is
encumbered or whereby he is hindered from transferring it.
The
The benefit
benefit ofof the
the contract
contract mentioned
mentioned inin this
this rule
rule shall
shall be
be annexed
annexed to,
to, and
and shall
shall go
go with,
with, the
the
interest
interest of
of the
the transferee
transferee asas such,
such, and
and may
may bebe enforced
enforced byby every
every person
person in
in whom
whom that
that
interest
interest is
is for
for the
the whole
whole or
or any
any part
part thereof
thereof from
from time
time to
to time
time vested.
vested.
 S.55,
$.55, RIGHTS
RIGHTS AND
AND LIABILITIES
LIABILITIES OF
OF BUYER
BUYER
AND
AND SELLER
SELLER --
(3)
(3) Where
Where the the whole
whole of of the
the purchase-money
purchase-money has has been
been paid
paid to to the
the seller,
seller, he
he isis also
also bound
bound to to deliver
deliver
to
to the
the buyer
buyer all all documents
documents of of title
title relating
relating to to the
the property
property whichwhich areare inin the
the seller’s
seller’s possession
possession or or
power ::
power
BRSVIGER that,
Provided that,
(a)
(a) where
where thethe seller
seller retains
retains anyany part
part of of thethe property
property comprised
comprised in in such
such documents,
documents, he he isis entitled
entitled toto
retain
retain them
them all, all, and,
and,
(b)
(b) where
where thethe whole
whole of of such
such property
property is is sold
sold toto different
different buyers,
buyers, thethe buyer
buyer of of the
the lot
lot of
of greatest
greatest
value
value is
is entitled
entitled to to such
such documents.
documents.
But
But in
in case
case (a)(a) the
the seller,
seller, and
and in in case
case (b)(b) thethe buyer,
buyer, of of the
the lot
lot of
of greatest
greatest value,
value, is is bound,
bound, upon upon every
every
reasonable
reasonable request
request by by thethe buyer,
buyer, or or byby anyany ofof the
the other
other buyers,
buyers, as as the
the case
case maymay be,be, andand at at the
the cost
cost
of
of the
the person
person making
making the the request,
request, to to produce
produce the the said
said documents
documents and and furnish
furnish such
such true
true copies
copies thereof
thereof
or
or extracts
extracts therefrom
therefrom as as he
he may
may require;
require; and and in in the
the meantime,
meantime, the the seller,
seller, or
or the
the buyer
buyer of of the
the lot
lot of
of
greatest
greatest value,
value, as as the
the case
case may
may be, be, shall
shall keep
keep the the said
said documents
documents safe, safe, uncancelled
uncancelled and and undefaced,
undefaced,
unless
unless prevented
prevented from from so so doing
doing by by fire
fire or or other
other inevitable
inevitable accident.
accident.
S.55,
$.55, RIGHTS
RIGHTS AND
AND LIABILITIES
LIABILITIES OF
OF BUYER
BUYER
AND
AND SELLER
SELLER --
(4)
(4) The
The seller
seller is
is entitled—
entitled—
(a)
(a) to
to the
the rents
rents and
and profits
profits of
of the
the property
property till
till the
the ownership
ownership thereof
thereof passes
passes to
to the
the buyer;
buyer;
(b)
(b) where
where the
the ownership
ownership of
of the
the property
property has
has passed
passed to
to the
the buyer
buyer before
before payment
payment of
of the
the
whole
whole of
of the
the purchase-money,
purchase-money, toto a
a charge
charge upon
upon the
the property
property in
in the
the hands
hands of
of the
the buyer,
buyer,
any
any transferee
transferee without
without consideration
consideration or
or any
any transferee
transferee with
with notice
notice of
of the
the non-payment,
non-payment,
for
for the
the amount
amount ofof the
the purchase-money,
purchase-money, oror any
any part
part thereof
thereof remaining
remaining unpaid,
unpaid, and
and for
for
interest
interest on
on such
such amount
amount or
or part
part from
from the
the date
date on
on which
which possession
possession has
has been
been delivered.
delivered.
S.55,
8.55, RIGHTS
RIGHTS AND
AND LIABILITIES
LIABILITIES OF
OF BUYER
BUYER
AND
AND SELLER
SELLER --
(5)
(5) The
The buyer
buyer is is bound—
bound—
(a)
(a) to
to disclose
disclose to to the
the seller
seller anyany fact
fact as
as toto the
the nature
nature or or extent
extent of of the
the seller’s
seller’s interest
interest inin the
the
property
property of of which
which the the buyer
buyer is is aware,
aware, but but of of which
which he he has
has reason
reason to to believe
believe that that the
the seller
seller is is
not
not aware,
aware, and and which
which materially
materially increases
increases the the value
value of of such
such interest;
interest;
(b)
(b) to
to pay
pay or or tender,
tender, at at the
the time
time andand place
place of of completing
completing the the sale,
sale, thethe purchase-money
purchase-money to to the
the
seller
seller oror such
such person
person as as hehe directs:
directs: provided
provided that, that, where
where the the property
property is is sold
sold free
free from
from
encumbrances,
encumbrances, the the buyer
buyer may may retain
retain out
out ofof thethe purchase-money
purchase-money the the amount
amount of of any
any
encumbrances
encumbrances on on the
the property
property existing
existing at at the
the date
date ofof the
the sale,
sale, and
and shall
shall paypay thethe amount
amount so so
retained
retained to to the
the persons
persons entitled
entitled thereto;
thereto;
(c)
(c) where
where the the ownership
ownership of of the
the property
property has has passed
passed to to the
the buyer,
buyer, to to bear
bear any any loss
loss arising
arising fromfrom
the
the destruction,
destruction, injury injury oror decrease
decrease in in value
value of of the
the property
property not not caused
caused by by the
the seller;
seller;
(d)
(d) where
where the the ownership
ownership of of the
the property
property has has passed
passed to to the
the buyer,
buyer, as as between
between himself
himself andand the the
seller,
seller, toto pay
pay all all public
public charges
charges and and rent
rent which
which may may become
become payablepayable in in respect
respect of of the
the
property,
property, the the principal
principal moneys
moneys due due onon any
any encumbrances
encumbrances subject subject to to which
which the the property
property is is sold,
sold,
and
and thethe interest
interest thereon
thereon afterwards
afterwards accruing
accruing due. due.
S.55,
$.55, RIGHTS
RIGHTS AND
AND LIABILITIES
LIABILITIES OF
OF BUYER
BUYER
AND
AND SELLER
SELLER --
(6)
(6) The
The buyer
buyer is is entitled—
entitled—
(a)
(a) where
where the the ownership
ownership of of the
the property
property has has passed
passed to to him,
him, to to the
the benefit
benefit of of any
any
improvement
improvement in, in, oror increase
increase in in value
value of, of, the
the property,
property, andand to to the
the rents
rents andand profits
profits thereof;
thereof;
(b)
(b) unless
unless hehe has
has improperly
improperly declined
declined to to accept
accept delivery
delivery of of the
the property,
property, to to aa charge
charge on on
the
the property,
property, as as against
against the the seller
seller andand all all persons
persons claiming
claiming under
under him, him, toto the
the extent
extent of of
the
the seller’s
seller’s interest
interest in in the
the property,
property, for for the
the amount
amount of of any
any purchase-money
purchase-money properly properly paid paid
by
by the
the buyer
buyer in in anticipation
anticipation of of the
the delivery
delivery and and for
for interest
interest on on such
such amount;
amount; and, and, when
when
he
he properly
properly declines
declines to to accept
accept the the delivery,
delivery, also also for
for the
the earnest
earnest (if (if any)
any) andand forfor the
the costs
costs
(if
(if any)
any) awarded
awarded to to him
him of of aa suit
suit to
to compel
compel specific
specific performance
performance of of the
the contract
contract or or to
to
obtain
obtain a a decree
decree for for its
its rescission.
rescission.
An
An omission
omission to to make
make suchsuch disclosures
disclosures as as are
are mentioned
mentioned in in this
this section,
section, paragraph
paragraph (1), (1),
clause
clause (a),
(a), and
and paragraph
paragraph (5), (5), clause
clause (a),(a), isis fraudulent.
fraudulent.
 Seller’s
Seller’s Liabilities
Liabilities Before
Before Completion
Completion of
of Sale;
Sale; u/S.55
u/S.55

1. To
To disclose
disclose material
material defects
defects in in the
the property
property or or in
in his
his own
own title,
title, if
if any,
any, [Section
[Section 55(1)(a)]
55(1)(a)]
2. To
To produce
produce the the title-deeds
title-deeds for for inspection
inspection [Section
[Section 55(1)(b)],
55(1)(b)], upon upon the the buyer’s
buyer’s request.
request.
3. To
To answer
answer relevant
relevant questions
questions as as to
to title
title [Section
[Section 55(1)(c)]
55(1 )(c)]
4. Duty
Duty toto execute
execute Conveyance
Conveyance [Section[Section 55(1)(d)];
55(1)(d)]; i.e.,
i.e., he
he must
must effect
effect the the transfer
transfer of of
ownership
ownership by by signing
signing oror affixing
affixing thumb
thumb impression
impression on on the
the sale
sale deed
deed by by the
the seller.
seller.
5. Care
Care of of title
title deed
deed andand Property
Property [Section
[Section 55(1)(e)].
55(1)(e)]. AfterAfter execution
execution of of the
the conveyance,
conveyance,
the
the seller
seller must
must take
take care
care ofof the
the property
property and and thethe documents
documents of of title.
title. They
They are are to to be be
handed
handed over over to to the
the buyer
buyer after
after thethe sale.
sale.
6. Payment
Payment of of the
the out
out goings
goings [Section
[Section 55(1)(g)].
55(1)(g)]. Before
Before completion
completion of of the
the sale,
sale, the
the seller
seller
continues
continues to to be
be the
the owner
owner of of the
the property,
property, thus.thus. the
the government
government dues dues etc.
etc. are
are to to be be paid
paid
by
by him.
him. The
The seller's
seller's last
last duty
duty before
before completion
completion of of the
the sale
sale isis to
to pay
pay all all the
the outgoings.
outgoings.
Seller’s Liabilities
Seller’s Liabilities After
After Completion
Completion of
of Sale;
Sale; u/S.55
u/S.55

1. To
To give
give possession
possession to
to the
the buyer
buyer [Section
[Section 55(1)(f)],
55(1)(f)], it
it is
is an
an implied
implied duty.
duty.
2. To
To covenant
covenant forfor title
title [Section
[Section 55(2)],
55(2)], in
in every
every sale
sale the
the seller
seller impliedly
impliedly undertakes
undertakes that
that
the
the interest
interest which
which hehe is
is transferring
transferring subsists
subsists and
and he
he has
has authority
authority to
to transfer
transfer the
the same.
same.
Again
Again implied.
implied.
3. To
To deliver
deliver title
title deeds
deeds on
on receipt
receipt ofof the
the price
price [[ Section
Section 55(3)].
55(3)]. After
After sale,
sale, the
the title
title
deeds
deeds are
are to
to be
be passed
passed on
on to
to the
the buyer
buyer as
as a
a natural
natural consequence
consequence of of the
the transfer
transfer of
of
ownership.
ownership.
4. The
The seller
seller is
is liable
liable to
to hand
hand over
over not
not only
only those
those documents
documents which
which are
are in
in his
his possession
possession
but
but also
also those
those which
which are
are important
important and
and within
within his
his power.
power.
Seller’s Right
Seller’s Right Before
Before &
& After
After Completion
Completion of
of Sale;
Sale; u/S.55
u/S.55
Before
Before the
the completion
completion of of the
the Sale
Sale
1. The
1. The seller
seller is
is entitled
entitled toto all
all the
the rents,
rents, profits,
profits, or
or other
other beneficial
beneficial interests
interests ofof the
the property.
property. Until
Until
ownership
ownership is is transferred,
transferred, thethe seller
seller continues
continues to to be
be owner
owner and
and as
as such
such he
he has
has every
every right
right to
to
enjoy
enjoy the
the profits
profits ofof the
the property.
property.
2. The
The contract
contract of of sale
sale does
does not
not create
create any
any proprietary
proprietary interest
interest in
in favour
favour of of the
the buyer.
buyer.

Seller’s
Seller’s Right
Right After
After Completion
Completion of of Sale
Sale
1. After
1. After thethe completion
completion of of sale,
sale, if if the
the price
price or
or any
any part
part ofof it
it remains
remains unpaid,
unpaid, the
the seller
seller acquires
acquires a a
lien
lien or
or charges
charges on on the
the property.
property.
2. TheThe completion
completion of of sale
sale of of anan immovable
immovable property
property does
does notnot depend
depend on on the
the payment
payment of of price,
price,
the
the price
price oror part
part of
of itit may
may alsoalso bebe paid
paid after
after the
the sale.
sale. Therefore,
Therefore, u/S u/S 55(4)(b)
55(4)(b) the
the seller
seller is
is
given
given a a right
right to
to recover
recover the the unpaid
unpaid purchase
purchase money
money fromfrom outout of
of the
the property.
property. This
This is
is called
called asas
aa statutory
statutory charge
charge of of the
the seller
seller for
for unpaid
unpaid price.
price.
Buyer’s
Buyer’s Liabilities
Liabilities Before
Before Completion
Completion of
of Sale;
Sale; u/S.55
u/S.55

1.. To
To disclose
disclose facts
facts which
which materially
materially increases
increases the the value
value ofof property
property [Section
[Section
55(5)(a)]
55(5)(a)] -- The
The buyer
buyer isis liable
liable to
to disclose
disclose to
to the
the seller
seller the
the facts
facts (Kind
(Kind of
of Property,
Property, its
its
location
location etc.)
etc.) which
which materially
materially increases
increases the
the value
value of of property.
property. This
This liability
liability is
is limited
limited to
to
disclosure
disclosure ofof only
only those
those facts
facts which
which relate
relate to
to title
title or
or interest
interest of
of the
the buyer.
buyer.

2. Payment
Payment of of price
price [Section
[Section 55(5)(b)]
55(5)(b)] -- The
The completion
completion ofof sale
sale in
in favour
favour of
of buyer,
buyer, the
the
seller
seller has
has the
the duty
duty of
of execution
execution of
of deed
deed and
and buyer
buyer has
has corresponding
corresponding duty
duty of
of
payment
payment of of price.
price. But,
But, the
the buyer
buyer isis not
not bound
bound to
to pay
pay the
the full
full amount
amount before
before transfer
transfer of
of
ownership.
ownership.
Buyer’s
Buyer's Liabilities
Liabilities After
After Completion
Completion of
of Sale;
Sale;
under
under S.55
$.55

1.
1. To
To bear
bear the
the loss
loss to
to property,
property, if if any,
any, [Section
[Section 55(5)
55(5) (c)]
(c)] -- If
If there
there is
is any
any loss
loss to
to
property
property subsequent
subsequent to to sale,
sale, the
the buyer
buyer shall
shall suffer
suffer that
that loss
loss as
as owner
owner of of property.
property.
He
He cannot
cannot hold
hold the
the seller
seller liabile
liabile for
for the
the loss
loss unless
unless it
it is
is proved
proved thatthat loss
loss was
was caused
caused
by
by seller
seller himself.
himself.

2. To
2. To pay
pay the
the out
out goings
goings [Section
[Section 55(5)
55(5) (d)]
(d)] -- After
After completion
completion of
of Sale,
Sale, since
since the
the buyer
buyer
becomes
becomes owner
owner ofof the
the property,
property, he
he is
is liable
liable to
to pay
pay the
the outgoings
outgoings e.g.,
e.g., Government
Government
dues,
dues, rents,
rents, revenue
revenue oror taxes.
taxes.
 Buyer’s
Buyer’s Rights,
Rights, under
under S.55
$.55
Buyer's
Buyer's Right
Right Before
Before Completion
Completion of of Sale
Sale [Sec.
[Sec. 55(6)]
55(6)]
1.
1. This
This right
right occurs
occurs when
when the
the seller
seller refuses
refuses toto sell,
sell, and
and the
the buyer
buyer already
already paid
paid some
some amount
amount inin
advance.
advance. Then Then thethe buyer
buyer is is entitled
entitled to to get
get his
his money
money back
back with
with interest
interest on
on it,
it, and
and interest
interest
will
will be
be paid
paid from
from the
the date
date of of transfer
transfer ofof money
money from
from the
the date
date ofof delivery
delivery ofof possession.
possession.
2. But
But if
if due
due toto the
the fault
fault of
of the
the buyer,
buyer, thethe sale
sale doesn’t
doesn’t execute,
execute, then
then the
the buyer
buyer doesn’t
doesn’t have
have aa
charge
charge on on it
it and
and can’t
can’t claim
claim hishis money
money back.
back.

Buyer’s
Buyer’s Right
Right After
After Completion
Completion of of Sale
Sale [Section
[Section 55 55 (6)
(6) (a)]
(a)]
1.
1. The
The buyer
buyer isis entitled
entitled to
to get
get all
all the
the rights
rights over
over the
the property
property inclusive
inclusive of
of all
all rents,
rents, profits,
profits, and
and
also
also any
any other
other benefits
benefits over
over thethe property.
property.
2.
2. The
The buyer
buyer becomes
becomes the the property
property owner owner after
after completion
completion of of the
the sale,
sale, i.e.,
i.e., upon
upon the
the transfer
transfer
of ownership,
of ownership, andand he/she
he/she isis entitled
entitled toto all
all the
the benefits
benefits from
from the
the date
date ofof transfer
transfer of of
ownership.
ownership.
 MATERIAL DEFECT
MATERIAL DEFECT IN
IN PROPERTY
PROPERTY
The
The Seller
Seller must
must disclose
disclose any
any material
material defect
defect in
in the
the property,
property, which
which the
the buyer
buyer could
could not
not have
have detected
detected with
with ordinary
ordinary
care.
care.
Tindall CJ,
Tindall CJ, "the
"the material
material defect
defect must
must be
be of
of such
such aa nature
nature that
that it
it might
might bebe reasonably
reasonably supposed that ifif the
supposed that the buyer
buyer
had been
had been aware
aware ofof it
if he
he might
might not
not have
have entered
entered into
into the
the contract
contract at
at all,
all, for
for he
he would
would be
be getting
getting something
something
different from
different from what
what he
he contracted
contracted toto buy."
buy.”
EXAMPLE:
EXAMPLE:
A
A hashas a a house
house that that he he professes
professes to to sell
sell toto B.B. The
The house
house has has anan underground
underground drain, drain, which
which makes
makes the the foundations
foundations weak. weak.
ItIt would
would be be a a material
material defect,defect, and and if if the
the seller
seller fails
fails to
to disclose
disclose it it to
to the
the buyer,
buyer, the the buyer
buyer has has a a right
right to
to rescind
rescind the the
contract.
contract.
A
A hashas the
the title
title to
to a a house
house X, X, but
but only
only as as a a trustee.
trustee. He He professes
professes to to sell
sell the
the property
property to to B.
B. A
A isis under
under a a duty
duty to to disclose
disclose
the
the fact
fact that
that thethe property
property that that he he isis trying
trying to to sell,
sell, though
though is is in
in his
his name,
name, is is in
in fact,
fact, the
the property
property of of aa trust.
trust. ItIt is
is aa
material
material defect defect in in the
the title
title and
and mustmust be be disclosed
disclosed to to the
the buyer.
buyer. A A failure
failure to to do
do that
that would
would be be fraudulent.
fraudulent.
The
The buyer’s
buyer’s omission
omission to to ask
ask questions
questions does does not not relieve
relieve thethe seller
seller of of his
his liability.
liability. If If the
the seller
seller fails
fails to
to do
do so,
so, it
it would
would
entitle
entitle the the buyer
buyer to to refuse
refuse to to complete
complete the the sale.
sale.
Non
Non disclosure
disclosure of of a a street
street alignment,
alignment, or or non
non existence
existence of of independent
independent passage passage to to the
the property,
property, or or aa right
right of of way
way ofof
public
public on on the
the property
property that that is is not
not visible
visible from from a a mere
mere inspection,
inspection, the the fact
fact that
that rooms
rooms and and flats
flats constructed
constructed were were not not
authorized
authorized and and werewere illegal,
illegal, Pending
Pending litigation.
 Radheyshyam
Radheyshyam & & Ors.
Ors. v.
v. State
State of
of Rajasthan
Rajasthan &
& Anr;
Anr; SLP
SLP
(Crl.)
(Cri.) No.
No. 13675
13675 of
of 2023
2023
Mere
Mere non-performance
non-performance of of an
an Agreement
Agreement toto Sell
Sell by
by itself
itself does
does not
not amount
amount toto the
the offences
offences of
of cheating
cheating and
and criminal
criminal
breach
breach ofof trust.
trust. Quashing
Quashing a a criminal
criminal case
case against
against three
three persons
persons for
for failing
failing to
to execute
execute aa sale
sale despite
despite an
an agreement
agreement toto
sell
sell a
a property,
property, the
the SC
SC observed
observed ::

"Mere
"Mere non-performance
non-performance of of anan Agreement
Agreement to to Sell
Sell by
by itself
itself does
does not
not amount
amount toto cheating
cheating and and breach
breach ofof trust.
trust. Respondent
Respondent
no.2
no.2 has
has adequate
adequate remedy
remedy of of filing
filing a a Civil
Civil Suit
Suit for
for relief
relief of of specific
specific performance
performance of of a a contract
contract which
which hehe has
has already
already
availed
availed and
and the
the suit
suit is
is still
still pending.
pending. The The FIR
FIR only
only appears
appears to to be
be an
an arm-twisting
arm-twisting mechanism
mechanism to to pressurise
pressurise thethe appellants
appellants toto
execute
execute the
the Sale
Sale Deed
Deed or or to to extract
extract money.
money. Every
Every civil
civil wrong
wrong cannot
cannot bebe converted
converted into
into aa criminal
criminal wrong.
wrong. As As we
we find
find in
in
the
the present
present case,
case, respondent
respondent no.2 no.2 is is trying
trying toto abuse
abuse the the criminal
criminal machinery
machinery for
for ulterior
ulterior motives",
motives”, the
the court
court observed.
observed.

The
The case
case stems
stems from
from an
an Agreement
Agreement to to Sell
Sell dated
dated June
June 29,
29, 2020,
2020, between
between the
the appellants
appellants andand complainant
complainant forfor the
the sale
sale of
of
aa property
property inin Rajgarh,
Rajgarh, Rajasthan
Rajasthan for
for Rs.
Rs. 5.11
5.11 crores.
crores. The
The complainant
complainant made
made an an advance
advance payment
payment of of Rs.
Rs. 11
11 lakh,
lakh, with
with Rs.
Rs.
55 lakh
lakh paid inin cash
cash and
and Rs.
Rs. 6
6 lakh
lakh through
through a a cheque.
cheque. The
The payment
payment schedule
schedule agreed
agreed upon upon included
included a a payment
payment of of Rs.
Rs. 11
crore
crore by
by September
September 30, 30, 2020,
2020, with
with the
the remaining
remaining Rs.
Rs. 44 crore
crore to
to be
be paid
paid over
over the
the following
following fifteen
fifteen months,
months, all
all within
within
eighteen
eighteen months
months of of the agreement's execution.
the agreement's execution.

“The
“The amount
amount paid
paid towards
towards consideration
consideration cannot
cannot be
be said
said to
to have
have been
been entrusted
entrusted with
with the
the appellants
appellants by
by respondent
respondent no.
no. 2
2
(complainant).
(complainant). Additionally,
Additionally, merely
merely because
because the
the appellants
appellants are
are refusing
refusing to
to register
register the
the sale,
sale, it
it does
does not
not amount
amount to
to
misappropriation
misappropriation ofof the
the advance
advance payment”,
payment”, the
the court
court said.
said.

The
The payment
payment made
made was
was part
part of
of the
the agreed
agreed consideration
consideration under
under the
the contract,
contract, and
and the
the refusal
refusal to
to register
register the
the sale
sale did
did not
not
constitute
constitute misappropriation,
misappropriation, the
the court
court concluded.
 Kanwar
Kanwar Raj
Raj Singh
Singh (D)
(D) Th.
Th. Lrs.
Lrs. vv Gejo.
Gejo. (D)
(D) Th.Lrs
Th.Lrs &
& Ors.;
Ors.;
2024
2024 LiveLaw
LiveLaw (SC)
(SC) 44

W.R.T
W.R.T S. S. 47
47 of of the
the Registration
Registration Act, Act, 1908
1908 states
states that that a a registered
registered document
document shall shall be be effective
effective from from thethe
time
time itit would
would have have commenced
commenced operating operating if if registration
registration were were not not mandatory.
mandatory.
The
The Court
Court held, held, “If,
“If, in
in a a given
given case,
case, a a sale
sale deed
deed is is executed
executed and and the the entire
entire agreed
agreed consideration
consideration is is paid
paid on on
or
or before
before execution
execution of of thethe sale
sale deed,
deed, after
after it it is
is registered,
registered, it it will
will operate
operate fromfrom the the date
date of of its its execution.
execution.
The
The reason
reason is is that
that if if itsits registration
registration was was not not required,
required, it it would
would have have operated
operated from from the the date date of of its its
execution.”
execution.”
Quoting
Quoting Ram Saran Lall
Ram Saran Lall v. v. Domini
Domini Kuer Kuer AIRAIR 1961
1961 SC SC 1747:
1747: S.47
S.47 states
states that
that upon
upon registration
registration of of a a document,
document, it it
will
will be
be effective
effective from from an an earlier
earlier date.date.
S.54
S.54 of of TPATPA states
states thatthat “Every
“Every sale sale deed
deed in in respect
respect of of property
property worth worth more
more thanthan Rs.Rs. 100/-
100/- is is compulsorily
compulsorily
registerable.
registerable. Thus, Thus, aa sale sale deed deed executed
executed by by thethe vendor
vendor becomes
becomes an an instrument
instrument of of salesale onlyonly afterafter it it isis
registered.
registered. The The case
case deals
deals with with thethe question
question of of when
when the the sale
sale isis complete;
complete; it it does
does notnot deal
deal with with thethe issue
issue of
of the the
date
date from
from whichwhich the the sale
sale deed deed would
would operate,
operate, which which is is dealt
dealt byby Section
Section 47 47 ofof the
the Registration.
Registration.
Since
Since the
the consideration
consideration amount amount was was paid
paid entirely
entirely on on the
the date
date ofof thethe execution
execution of of the
the sale
sale deed,
deed, “In “In terms
terms of of
S.47
S.47 ofof thethe Registration
Registration Act, Act, a a registered
registered sale sale deeddeed wherewhere entire
entire consideration
consideration is is paid
paid would
would operate
operate from from the the
date
date ofof itsits execution.
execution. Thus, Thus, the the sale
sale deed
deed as as originally
originally executed
executed will will operate.
operate. The The corrections
corrections unilaterally
unilaterally made made
by
by the
the first
first defendant
defendant after after the the execution
execution of of the
the sale
sale deed
deed without
without the the knowledge
knowledge and and consent
consent of of thethe
purchaser
purchaser will will have
have to to be be ignored”.
 Effect
Effect of
of Non-Registration
Non-Registration of
of Sale
Sale Deed
Deed
Registration
Registration ensures
ensures transparency,
transparency, protection
protection fromfrom fraud,
fraud, and
and public
public notice
notice of
of property
property transactions.
transactions.
S.
S. 17
17 of
of the
the Registration
Registration Act
Act lists
lists the
the documents
documents that that are
are compulsorily
compulsorily required
required to
to be
be registered.
registered. These
These
include:
include:
1.
1. Instruments
Instruments of
of gift
gift of
of immovable
immovable property.
property.
2.
2. Non-testamentary
Non-testamentary instruments
instruments that
that create,
create, declare,
declare, assign,
assign, limit,
limit, or
or extinguish
extinguish any
any right,
right, title,
title, or
or interest
interest in
in
immovable
immovable property
property worth
worth more
more than
than Rs.
Rs. 100/-
100/-
3.
3. Leases
Leases of
of immovable
immovable property
property forfor aa term
term exceeding
exceeding oneone year.
year.
4.
4. Non-testamentary
Non-testamentary instruments
instruments transferring
transferring or or assigning
assigning any
any decree
decree oror award
award related
related to to immovable
immovable property.
property.

S.49,
$.49, of of Registration
Registration Act
Act outlines
outlines thethe consequences
consequences of of not
not registering
registering a a document
document of of the
the above
above S.17
S.17
documents.
documents.
1.
1. AnAn unregistered
unregistered sale
sale deed
deed would
would not
not pass
pass the the ownership
ownership inin the
the property
property to to the
the buyer,
buyer, irrespective
irrespective ofof the
the fact
fact
that
that the the consideration
consideration hashas been
been paid;
paid; i.e.,
i.e., no
no benefit
benefit would
would accrue
accrue inin favour
favour ofof the
the buyer.
buyer.
2.
2. ItIt cannot
cannot be
be received
received asas evidence
evidence in in any
any legal
legal proceeding
proceeding forfor establishing
establishing anyany transaction
transaction w.r.t
w.r.t such
such property,
property,
except
except when when such
such document
document is is submitted
submitted to to prove
prove aa collateral
collateral transaction
transaction or or for
for suits
suits of
of specific
specific performance.
performance.
 REMEMBER
REMEMBER
The
The doctrine
doctrine of
of part
part performance,
performance, which
which protects
protects a
a transferee
transferee who
who has
has taken
taken
possession
possession ofof immovable
immovable property
property under
under an
an unregistered
unregistered contract
contract for
for sale.
sale.

Under
Under Section
Section 53A,53A, the the transferor
transferor isis prohibited
prohibited from from seeking
seeking to to reclaim
reclaim possession
possession from from
the
the transferee
transferee if if the
the latter
latter has:
has:
◦© Entered
Entered into
into a a written
written agreement
agreement for for the
the transfer
transfer ofof immovable
immovable property.
property.
◦© Taken
Taken possession
possession of of the
the property
property oror continues
continues in in possession.
possession.
◦© Performed
Performed or or is
is willing
willing to to perform
perform hishis part
part ofof the
the contract.
contract.
The
The doctrine
doctrine of of part
part performance
performance provides
provides equitable
equitable reliefrelief to
to transferees
transferees who who have
have
acted
acted in in good
good faith
faith andand fulfilled
fulfilled their
their contractual
contractual obligations,
obligations, even even ifif the
the sale
sale deed
deed oror
transfer
transfer document
document remains remains unregistered.
unregistered. However,
However, it it is
is crucial
crucial toto note
note that
that this
this
protection
protection only only applies
applies in in defence
defence andand doesdoes notnot give
give thethe transferee
transferee the the right
right toto
enforce
enforce the the unregistered
unregistered contract contract for
for sale.
sale.
K.B.
K.B. Saha
Saha and
and Sons
Sons Pvt.
Pvt. Ltd.
Ltd. vs.
vs. Development
Development
Consultant
Consultant Ltd.
Ltd. (2008)
(2008)

Supreme
Supreme CourtCourt addressed
addressed the the question
question of of whether
whether an an unregistered
unregistered
lease deed
lease deed could
could bebe admitted
admitted as as evidence.
evidence. The The court
court held
held that
that
while
while anan unregistered
unregistered lease
lease deed
deed is is inadmissible
inadmissible for for the
the purpose
purpose of of
proving
proving thethe transfer
transfer of
of any
any interest
interest inin immovable
immovable property,
property, it
it could
could
still
still be
be admitted
admitted forfor collateral
collateral purposes,
purposes, suchsuch as
as proving
proving the
the nature
nature
of
of possession
possession oror the
the relationship
relationship between
between the the parties.
parties.
EXCHANGE
EXCHANGE

Ss.
Ss. 118
118 -- 121
121
 S.118,
$.118, “Exchange”
“Exchange” defined.—
defined.—

When two persons fURISIVIRERSEE the Gwiership GF one thing for the ownership of
When two persons mutually transfer the ownership of one thing for the ownership of
another, [EiSSRMGISRBSHTRMESSEIENEREWEH, the transaction is called an
another, neither thing or both things being money only, the transaction is called an
“exchange”.
“exchange”.
A
A transfer
transfer of
of property
property inin completion
completion of
of an
an exchange
exchange can
can be
be made
made only
only in
in manner
manner
provided
provided for
for the
the transfer
transfer of
of such
such property
property by
by sale.
sale.

****
2K KK

When
When we
we consider
consider the
the exchange
exchange ofof Immovable
Immovable property
property falling
falling within
within the
the definition
definition of
of
“exchange”
“exchange” in
in S.
S. 118,
118, both
both properties
properties should
should be
be situated
situated in
in India.
India.
 REQUIREMENTS
REQUIREMENTS
◦© There
There must
must be be a a minimum
minimum of of two
two parties
parties andand two
two properties,
properties, oneone belonging
belonging to to each
each oneone ofof
them.
them.
◦© Their
Their intention
intention to to transfer
transfer the
the things
things must
must bebe with
with mutual
mutual consent.
consent. IfIf either
either ofof them
them has
has not
not given
given
consent,
consent, then
then itit is
is not
not exchange.
exchange.
◦© No
No other
other form
form of of consideration
consideration should should be be involved
involved besides
besides the
the properties.
properties.
◦© There
There must
must be be a a transfer
transfer ofof aa thing
thing forfor another
another thingthing and
and both
both or
or either
either of of these
these things
things may
may be be
movable
movable or or immovable.
immovable.
◦© The
The object
object of of exchange
exchange must must not
not bebe unlawful.
unlawful.
◦© The
The definition
definition doesdoes not not exclude
exclude the the payment
payment of of money
money altogether.
altogether. If If one
one of
of the
the two
two properties
properties
which
which areare toto be
be exchanged
exchanged exceeds
exceeds the the other
other in in value,
value, the
the transfer
transfer would
would nonetheless
nonetheless be be an
an
exchange,
exchange, even even if if some
some money
money is is paid
paid by by the
the owner
owner of of the
the property
property in in addition
addition inin order
order toto
equalize
equalize the the value
value of of both
both properties.
properties.
 REQUIREMENTS
REQUIREMENTS
◦© An
An exchange
exchange deed
deed where
where the
the market
market value
value is
is Rs.
Rs. 100
100 and
and above,
above, would
would require
require to
to be
be
executed
executed in
in writing
writing and
and further
further registered
registered in
in accordance
accordance with
with the
the Indian
Indian Registration
Registration Act.
Act.

◦© In
In the
the case
case of
of tangible
tangible immovable
immovable property,
property, of
of a
a value
value less
less than
than Rs.
Rs. 100,
100, exchange
exchange can
can
be
be effected
effected by
by aa registered
registered instrument
instrument or
or by
by delivery
delivery of
of the
the property.
property.
 EXCHANGE OR
EXCHANGE OR NOT?
NOT?
◦© Iflf A
A and
and BB are
are joint
joint owners
owners ofof X,
X, and
and B B the
the sole
sole owner
owner of
of Y,
Y, and
and AA transfers
transfers his
his shares
shares in
in X
X to
to BB in
in
consideration of
consideration of BB transferring
transferring YY to
to A?
A?

◦© A
A transfer
transfer by
by a
a husband
husband to
to a
a wife
wife in
in discharge
discharge of
of her
her claim
claim to
to maintenance?
maintenance?

◦© Where
Where parties
parties decided
decided to
to transfer
transfer their
their rights
rights in
in the
the respective
respective plots
plots situated
situated in
in two
two villages,
villages,
apparently
apparently for
for convenience
convenience inin cultivating?
cultivating?

◦© A
A transferred
transferred to
to B B aa house
house worth
worth Rs.1,50,000
Rs.1,50,000 and
and BB transferred
transferred to
to A
A field
field worth
worth Rs.
Rs. 1,00,000
1,00,000
and
and Rs,
Rs, 50,000
50,000 inin cash.
cash. (Ismail
(Ismail vv Saleh
Saleh Muhammed)
Muhammed)

◦© Government
Government of of India,
India, as
as owners
owners ofof the
the G.I.P.
G.I.P. rly.,
rly., exchanged
exchanged lands
lands valued
valued at
at 89
89 lacs
lacs for
for lands
lands
belonging
belonging to
to the
the Bombay
Bombay Port
Port Trust
Trust valued
valued at at 86
86 lacs
lacs of
of rupees
rupees and
and rupees
rupees 33 lacs
lacs paid
paid inin cash
cash
by
by the
the Port
Port Trust.
Trust.
S.119,
5.119, Right
Right of
of party
party deprived
deprived of
of thing
thing received
received
in
in exchange
exchange ——
Iflf any
any party
party to to an
an exchange
exchange or or any
any person
person claiming
claiming through
through oror under
under such
such
party is
party is by
by reason
reason of of any
any defect
defect inin the
the title of the
title of the other
other party
party deprived
deprived of of
the thing
the thing or or any
any partpart of
of the
the thing
thing Feési
received by by himlin
him ved exchange, then,
in exchange, fhen, unless
Unlessiela
ESnieninieniomeppeeis
contrary intention appears from from thethe terms
terms of of the
the exchange,
exchange, suchsuch other
other party
party,
isis liable
liable toto him
him or or any
any person
person claiming
claiming through
through or or under
under him
him for
for loss
loss caused
caused
thereby, or
thereby, or atat the
the option
option ofof the person so
the person so deprived,
deprived, for for the
the return
[Eis ofiiieihings
the thing
transferred, if still in the possession of such other party or his legal
representative or a transferee from him without consideration.
 REQUIREMENTS
REQUIREMENTS
◦© Section
Section 119
119 of
of TPA
TPA deals
deals with
with the
the right
right of
of a
a party
party deprived
deprived of
of a
a thing
thing received
received in
in
exchange.
exchange.
◦© Where
Where a a person
person fails
fails to
to obtain
obtain possession
possession of
of the
the property
property that
that he
he is
is entitled
entitled to
to receive
receive in
in
exchange,
exchange, then
then (remedy)
(remedy)
◦© claim
claim losses
losses incurred
incurred by
by such
such person
person deprived
deprived unless
unless anything
anything contrary
contrary is
is agreed
agreed between
between the
the
parties
parties
◦° at
at such
such deprived
deprived transferees'
transferees option
option have
have such
such property
property transferred
transferred to
to him,
him, if
if the
the property
property is
is
still
still in
in possession
possession ofof the
the other
other party,
party, or
or his
his legal
legal representatives,
representatives, or
or a
a transferee
transferee from
from him
him
without
without consideration
consideration

◦© Mutual
Mutual Transfer:
Transfer: S.119
$.119 states
states that
that for
for the
the exchange
exchange to
to be
be valid
valid there
there must
must be
be aa mutual
mutual
transfer
transfer of
of ownership
ownership of
of one
one property
property for
for another
another between
between the
the parties
parties involved.
involved.
A
A person
person X X surrendered
surrendered a a plot
plot ofof land
land overover which
which he he had
had no
no title,
title,
to
to the
the Kanpur
Kanpur Development
Development Authority
Authority (KDA),
(KDA), inin exchange
exchange for for
another
another plot.
plot. KDA KDA accepted
accepted the the surrendered
surrendered plot plot but
but refused
refused toto
give
give himhim the
the plot
plot demanded
demanded by by him
him in in exchange
exchange on on the
the ground
ground thatthat
X
X had
had no no title
title toto the
the original
original plot,
plot, and
and therefore
therefore he he could
could not
not get
get
anything
anything in in exchange.
exchange.
On
On thethe refusal
refusal by by KDA,
KDA, X X filed
filed a a suit.
suit. Held
Held that
that KDA
KDA was was REMEMBER
empowered
empowered to to retain
retain the
the possession
possession of of the
the plot,
plot, as
as toto begin
begin with,
with, X X
had
had no no title
title toto the
the property
property which
which he he wanted
wanted to to exchange.
exchange.

****
EK K

Where
Where an an exchange
exchange isis complete
complete and
and thereafter,
thereafter, one
one party
party is
is
dispossessed
dispossessed byby a
a trespasser,
trespasser, such
such party
party cannot
cannot seek
seek the
the return
return of
of
his
his property
property given
given to
to the
the other
other party
party under
under an
an exchange.
exchange.
S.120,
$.120, Rights
Rights and
and liabilities
liabilities of
of parties —
parties —
Save
Save asas otherwise
otherwise provided
provided in in this
this Chapter,
Chapter, eacheach party
party has has the
the rights
rights and
and is
is
subject to
subject to the
the liabilities
liabilities of
of a@ seller
seller asas to
to that
that which
which he
he gives,
gives, and
and has
has the
the
rights and
rights and isis subject
subject toto the
the liabilities
liabilities ofof aa buyer
buyer as
as toto that
that which
which he
he takes.
takes.
S.121,
5.121, Exchange
Exchange of
of money —
money —
On
On an
an exchange
exchange of
of money,
money, each
each party
party thereby
thereby warrants
warrants the
the genuineness
genuineness of
of
the
the money
money given
given by
by him.
him.
 REQUIREMENTS
REQUIREMENTS —– 120
120 &
& 121
121
◦© Consideration:
Consideration: Section
Section 120
120 specifies
specifies in
in an
an exchange
exchange consideration
consideration is
is presumed
presumed toto be
be present.
present.
Each
Each party's
party's property
property is
is considered
considered asas consideration
consideration for
for the
the other
other party's
party's property.
property.
◦© Save
Save as
as otherwise
otherwise provided,
provided, each
each party
party has
has the
the rights
rights and
and isis subject
subject to
to the
the liabilities
liabilities of
of aa seller
seller
as
as to
to that
that which
which he
he gives
gives and
and is
is subject
subject to
to the
the liabilities
liabilities of
of aa buyer
buyer as
as to
to that
that which
which he he takes.
takes.
◦© In
In exchange
exchange each
each party
party is
is subject
subject to
to the
the rights
rights of
of the
the buyer
buyer and
and seller
seller in
in relation
relation to
to the
the property
property
that
that he
he receives
receives and
and gives
gives respectively.
respectively.
◦© if
if money
money isis exchanged
exchanged between
between the
the parties,
parties, then
then the
the parties
parties must
must assure
assure the
the other
other party
party
regarding
regarding the the genuineness
genuineness ofof money
money he
he has
has given
given to
to the
the other.
other. The
The proving
proving ofof the
the genuineness
genuineness of
of
money is
money is essential,
essential, if
if exchanged.
exchanged.
◦© Example:
Example: AA person
person visiting
visiting the
the U.K
U.K requires
requires the
the currency
currency of
of UK,
UK, so
so he
he exchanges
exchanges his
his money
money in
in
rupee
rupee to
to get
get money
money in
in pounds,
pounds, it
it is
is an
an exchange
exchange ofof money
money for
for the
the purpose
purpose of
of S.
S. 121,
121, TPA.
TPA.
GIFT
GIFT

Ss.
Ss. 122
122 -- 126
S.122,
$.122, Gift
Gift Defined —
Defined —

“Gift”
“Gift” is
is the
the transfer
transfer of
of certain
certain existing
existing moveable
moveable or or immoveable
immoveable property
property
made
voluntarily
made and without
voluntarily and without consideration,
consideration, byby one
Gnelpersen, called the
person, called doner,
the donor,
fo another,
to another, called
called the
the donee,
donee, and
and behelfofiheldones.
§&€sBlsd BYby lfor on
accepted en behalf of the donee.
Acceptance when
Acceptance when to
to be
be made.—
made.—

Such acceptance
Such acceptance must be made
must be made ‘during
during the
the lifetime of the
lifetime of the donor
donor and
and while
while he
he
is still
is still capable
capable of
of giving.
giving.
If the donee dies before acceptance, the gift is void.
Requirements
Requirements
◦© There
There isis transfer
transfer ofof ownership
ownership
◦© The
The person
person transferring
transferring thethe interest
interest = = ‘donor’
‘donor’ and and
◦© The
The person
person to to whom
whom thethe interest
interest isis transferred
transferred = = ‘donee’.
‘donee’.
◦©The
The donor
donor must
must bebe competent
competent to to contract;
contract; he he must
must be be major
major as as well
well as
as ofof sound
sound
mind.
mind.
◦©The
The donee
donee need
need notnot be
be competent
competent to to contract;
contract; a a minor
minor or or aa person
person ofof unsound
unsound
mind
mind though
though disqualified
disqualified from
from entering
entering into into a a contract
contract is is capable
capable of of receiving
receiving the the
property.
property.
◦©The
The gifted
gifted property
property mustmust bebe in
in existence
existence at at the
the time
time ofof making
making the
the gift,
gift, although
although
its
its conveyance
conveyance may may take
take place
place either
either inin the
the future
future or or in
in present.
present.
◦© Both
Both immovable
immovable and and movable
movable property
property may may be be gifted.
gifted.
Requirements
Requirements
◦© Gift
Gift must
must be
be gratuitous;
gratuitous; without
without any
any consideration.
consideration.
◦©The
The gift
gift must
must be
be made
made by
by the
the donor
donor voluntarily,
voluntarily, that
that is
is with
with his
his free
free will
will and
and
consent.
consent.
◦© Gifts
Gifts w/o
w/o free
free consent
consent or
or given
given due
due to
to coercion
coercion or
or undue
undue influence
influence will
will not
not
be
be aa valid
valid gift.
gift.
◦© Acceptance
Acceptance of
of the
the gift
gift by
by the
the donee
donee is
is necessary
necessary and
and the
the acceptance
acceptance may
may
be
be expressed
expressed oror implied;
implied; and
and during
during the
the lifetime
lifetime and
and capacity
capacity of
of the
the donor.
donor.
◦© When
When the
the donee
donee isis a
a minor
minor or
or of
of unsound
unsound mind,
mind, then
then the
the gift
gift must
must be
be
accepted
accepted onon his
his behalf
behalf by
by aa competent
competent person.
person.
S.123,
$.123, Transfer
Transfer how
how effected —
effected —

For
For the
the purpose
purpose of of making
making a a gift
gift of
of immovable
immovable property,
property, the the transfer
transfer must
must
be effected
be effected byby a a registered
registered instrument
instrument Signed by or
signed by or on
on behalf
behalf ofof the
the donor,
donor,
and attested
and by atat least
attested by least two
two witnesses.
witnesses.
For
For the
the purpose
purpose of of making
making a a gift
gift of
of moveable
moveable property,
property, the
the transfer may be
effected
effected either
either byby aa registered
registered instrument
instrument signed as aforesaid
signed as aforesaid or by delivery..
Such
Such delivery
delivery may
may be be made
made in in the
the same
same way
way asas goods
goods soldsold may
may be be
delivered.
delivered.
Explanation. -- The
Explanation. The word
word "attest"
"attest" has
has the
the same
same meaning
meaning in in this
this section
section asas in
in
section
section 59.
59.
S.123,
$.123, Transfer
Transfer how
how effected —
effected —

Registration
Registration is
is
IMMOVABLE
IMMOVABLE compulsory
compulsory
Property
Property

attested
attested by
by atleast
atleast 2
2
witnesses
WwITnesses
GIFT

Gift
Gift is
is completed
completed by by
MOVABLE
MOVABLE delivery of
delivery of possession
possession
Property
Property Registration isis optional
Registration optional
124.
124. Gift
Gift of
of existing
existing and
and future
future property.—
property.—
A
A gift
gift comprising
comprising both
both existing
existing and
and future
future property
property is
is void
void as
as to
to the
the latter.
latter.

****
EKK EK

MEANING:
MEANING:
◦© A
A future
future property
property or or the
the chances
chances of of succeeding
succeeding to to aa property
property at at a
a future
future date
date is is not
not
capable
capable of of gift,
gift, and
and thus,
thus, the
the gift
gift of
of such
such properties
properties willwill not
not be be aa valid
valid transaction.
transaction.
◦© Where
Where a a gift
gift deed
deed purports
purports to to transfer
transfer both
both existing
existing andand future
future property
property by by way
way of of aa
common
common instrument,
instrument, it it shall
shall bebe valid
valid toto the
the extent
extent ofof existing
existing document
document and and shall
shall bebe
invalid
invalid for
for the
the future
future document.
document.
◦© EXAMPLE:
EXAMPLE: The The donor,
donor, whowho maintained
maintained an an account
account in in aa company,
company, made made aa gift
gift ofof a a certain
certain
sum,
sum, by
by directing
directing the the company
company to to debit
debit hishis account
account with
with that
that sumsum and
and toto credit
credit thethe amount
amount
in
in the
the name
name of of the
the donee.
donee. However,
However, on on the
the date
date ofof the
the gift,
gift, the
the company
company did did not
not have
have
sufficient
sufficient cash
cash balance
balance and and did did notnot have
have any any overdraft
overdraft facilities
facilities with
with any
any bank,
bank, nor nor did
did
the
the company
company itselfitself carry
carry on on banking
banking business
business held
held that
that the
the gift
gift made
made by by donor,
donor, eveneven
though
though accepted
accepted by by the
the donee,
donee, was was not
not valid.
valid.
Remember
Remember --

◦©The
The share
share obtained
obtained after
after partition
partition of
of the
the joint
joint family
family property
property can
can be
be
gifted,
gifted, but
but not
not where
where thethe coparceners
coparceners are
are joint,
joint, as
as in
in that
that case
case their
their interests
interests
would
would bebe fluctuating.
fluctuating.
◦°©AA gift
gift of
of property
property that
that is
is obtained
obtained after
after a
a preliminary
preliminary decree
decree of
of partition
partition is
is
passed
passed byby the
the court
court is
is valid.
valid.
◦°©AA gift
gift deed
deed was
was executed
executed byby aa widow
widow but
but before
before partition
partition and
and without
without
determining
determining her
her share.
share. Such
Such gift
gift deed
deed based
based on on hypothetical
hypothetical partition
partition or
or
hypothetical
hypothetical property
property was
was held
held toto be
be invalid.
invalid.
◦°Release
Release ofof a
a debt?
debt? Release
Release of
of a
a debt
debt is
is not
not aa gift
gift as
as it
it does
does not
not involve
involve
transfer but
transfer but it
it is
is merely
merely aa renunciation
renunciation of
of aa right
right ofof action.
action.
Remember
Remember --

◦© Gifts
Gifts inin lieu
lieu ofof expectation
expectation of of spiritual
spiritual and and moral
moral benefit,
benefit, or or aa promise
promise to to
look
look after
after thethe donor
donor in in her
her old
old age
age or or throughout
throughout life, life, are
are transactions
transactions
without
without anyany consideration
consideration
◦© A
A transfer
transfer executed
executed for for consideration
consideration of of a a donee
donee undertaking
undertaking the the liability
liability of
of
the
the donor
donor is is not
not gratuitous,
gratuitous, and and isis not
not a a gift.
gift.
◦© A
A transfer
transfer for for services
services rendered
rendered may may be be aa gift,
gift, if
if the
the services
services areare the
the motive
motive
(gratuitous
(gratuitous or or appreciation),
appreciation), and and notnot the
the consideration,
consideration, for for the
the transfer.
transfer.
◦°©There
There should
should not not be
be a a reward
reward or or promise
promise of of reward
reward (incentive)
(incentive) forfor executing
executing
the
the transaction
transaction of of gift.
gift.
◦©The
The passing
passing of of money
money as as aa consideration,
consideration, howsoever
howsoever small small itit may
may be,
be, would
would
destroy
destroy the the nature
nature of of thethe transfer
transfer as as ofof gift.
gift.
 Remember
Remember --
◦© Money
Money spent
spent for for purchase
purchase of of stamp
stamp dutyduty does
does not not amount
amount to to consideration.
consideration. Where Where in in
a
a transfer
transfer document,
document, bhumidari
bhumidari lands lands were
were said
said to to be
be gifted
gifted to to the
the donee
donee withwith a a
mention of
mention of Rs
Rs 40,000/-
40,000/- as as the
the valuation
valuation of of the
the land
land andand not
not the
the consideration,
consideration, for for
the
the purposes
purposes of of payment
payment of of stamp
stamp duty,
duty, the
the transaction
transaction wouldwould be be a a gift
gift and
and notnot a a
sale.
sale.
◦© A
A gift
gift requires
requires no no consideration,
consideration, and and past
past illicit
illicit cohabitation
cohabitation can can be be a a motive
motive for for a a
gift,
gift, but
but not
not its
its object
object oror consideration,
consideration, and and a a gift
gift in
in consideration
consideration of of past
past
cohabitation
cohabitation is is immoral
immoral and
and invalid.
invalid.
◦©The
The donor
donor isis competent
competent to to create
create either
either an
an absolute
absolute interest
interest in
in the
the property
property in in favour
favour
of
of the
the donee
donee or or even
even aa limited
limited interest.
interest.
◦© A
A gifts
gifts his
his immovable
immovable property
property in in favour
favour of of BB for
for B’s
B’s exclusive
exclusive enjoyment.
enjoyment. This
This is
is an
an
absolute
absolute interest
interest
◦© But
But if
if the
the gift
gift says
says that
that B B must
must enjoy
enjoy thethe property
property only only for
for his
his life
life time
time and
and after
after his
his
death,
death, thethe property
property will
will revert
revert back
back to to AA or
or his
his heirs,
heirs, it
it would
would bebe the
the creation
creation ofof aa limited
limited
estate
estate oror a a life
life estate
estate inin favour
favour ofof B.
B.
 Remember
Remember —– gift
gift by
by minor
minor
◦© Gift
Gift by by a a minor
minor would
would be be void.
void. It It was
was upon
upon thethe donor
donor to to prove
prove that
that he he was
was
minor
minor at at the
the time
time of of execution
execution of of gift,
gift, and
and not
not upon
upon the
the donee.
donee.
◦© Where
Where the the gift
gift is
is byby several
several donors
donors and and one
one ofof them,
them, although
although waswas a a minor
minor
but,
but, had had represented
represented himself himself to to bebe 22 22 years
years old,
old, the
the gift
gift would
would be be valid
valid unless
unless
itit is
is proved
proved that that his
his admission
admission with with respect
respect to to his
his majority
majority was was under
under duress,
duress,
coercion
coercion or or undue
undue influence.
influence.
◦© AA guardian
guardian of of the
the property
property of of a a minor
minor cannot
cannot make
make a a transfer
transfer ofof the
the property
property
without
without the the permission
permission of of the
the court
court and and if if he
he exceeds
exceeds his his powers
powers and and executes
executes
aa gift,
gift, the
the same
same would
would be be void.
void.
◦© But
But thethe guardian
guardian can can accept
accept a a gift
gift onon behalf
behalf minor
minor onon a a condition
condition that
that the
the
person
person nominated
nominated in in the
the gift
gift deed
deed shallshall act
act as
as aa manager
manager of of the
the gifted
gifted
property.
property.
 Remember
Remember --
◦© Gifts
Gifts toto an
an idol,
idol, which
which though
though isis a
a juristic
juristic person
person andand capable
capable of of holding
holding property,
property, is
is not
not aa
gift
gift within
within the
the meaning
meaning of of section
section 122
122 as as an
an idol
idol is
is not
not a
a living
living person
person but
but property
property can
can be
be
gifted
gifted to to religious
religious oror charitable
charitable institutions
institutions with
with conditions.
conditions. A A gift
gift to
to an
an idol
idol not
not yet
yet instituted
instituted
is
is invalid
invalid unless
unless the
the transfer
transfer is
is to
to pujaris
pujaris on on trust
trust to
to establish
establish anan idol.
idol.
-- Champa
Champa Bibi
Bibi vs
vs Panchiram
Panchiram Nahata
Nahata Siva
Siva Bigraha
Bigraha And
And Ors.
Ors. 1963
1963
oO Merely
o Merely because
because the
the donor
donor and
and the
the donee
donee were
were residing
residing in
in the
the same
same place,
place, itit does
does not
not give
give
rise
rise to
to a
a presumption
presumption that
that the
the gift
gift was
was accepted
accepted by
by the
the donee
donee during
during the
the life
life time
time of
of the
the
donor.
donor.
O Once
o Once the
the gift
gift is
is accepted
accepted and
and acted
acted upon
upon it
it is
is valid
valid and
and complete
complete and
and cannot
cannot be
be
cancelled.
cancelled.
OMere silence
oMere silence may
may sometimes
sometimes bebe indicative
indicative of
of acceptance
acceptance provided
provided itit is
is shown
shown that
that the
the
donee
donee knew
knew about
about the
the gift.
gift. No
No express
express acceptance
acceptance is
is necessary
necessary for
for completing
completing aa gift.
gift.
 125.
125. Gift
Gift to
to several
several of
of whom
whom one
one does
does not
not
accept.—
accept.—

A gift
A gift of
of aa thing
thing to
to two
two or
or more
more donees,
donees, of
of whom
whom one
one does
does not
not accept
accept it,
it, is
is
void
void asas to
to the
the interest
interest which
which he
he would
would have
have taken
taken had
had he
he accepted.
accepted.
126.
126. When
When gift
gift may
may be
be suspended
suspended or
or revoked.—
revoked.—
The
The donor
donor andand donee
donee may may agree
agree that
that onon the
the happening
happening of of any
any specified
specified event
event
which does
which does notnot depend
depend on on the
the will
will ofof the
the donor
donor suspended
a@igift
gift shall’
shall bebe suspended or or
revoked; but
revoked; but a a gift
gift which
which the
the parties
parties agree
agree shall
shall be
be revocable
revocable wholly
wholly or
or in
in
part,
part, at
at the
the mere
mere will
will of
of the
the donor,
donor, isis void
void wholly
wholly or
or in
in part,
part, as
as the
the case
case may
may
be.
be.
A gift
A gift may
may also
also bebe revoked
revoked in in any
any of
of the
the cases
cases (save
(save want
want or
or failure
failure of
of
consideration)
consideration) inin which,
which, if
if it
it were
were a a contract,
contract, it
it might
might be
be rescinded.
rescinded.
Save
Save as
as aforesaid,
aforesaid, a
a gift
gift cannot
cannot be
be revoked.
revoked.
Nothing contained
Nothing contained inin this
this section
section shall
shall be
be deemed
deemed to
to affect
affect the
the rights
rights of
of
transferees for
transferees for consideration
consideration without
without notice.
notice.
Illustrations:
Illustrations:

(a)
(a) A
A gives
gives aa field
field toto B,
B, reserving
reserving to to himself,
himself, with
with B’s
B’s assent,
assent, the
the right
right to
to take
take
back
back the
the field
field inin case
case B B and
and his
his descendants
descendants diedie before
before A.
A. B
B dies
dies without
without
descendants
descendants in in A’s
A’s lifetime.
lifetime. AA may
may take
take back
back the
the field.
field.

(b)
(b) A
A gives
gives a a lakh
lakh of
of rupees
rupees to
to B,
B, reserving
reserving toto himself,
himself, with
with B’s
B’s assent,
assent, the
the
right to
right to take
take back
back at
at pleasure
pleasure Rs.Rs. 10,000/-
10,000/- out out of
of the
the lakh.
lakh. The
The gift
gift holds
holds
goods
goods as as to
to Rs.
Rs. 90,000,
90,000, but
but is
is void
void as
as to
to Rs.
Rs. 10,000,
10,000, which
which continue
continue toto
belong
belong to to A.
A.
REMEMBER:
REMEMBER:
(a)
(a) a
a gift
gift which
which under
under an an agreement
agreement betweenbetween the the parties
parties is is revocable
revocable wholly
wholly
or
or partially
partially atat the
the mere
mere willwill ofof the
the donor
donor is is void.
void.
(b)
(b) If
If the
the donor
donor andand the
the donee
donee have have agreed
agreed thatthat on
on the
the happening
happening of of aa
specified
specified event
event (not
(not depending
depending upon upon the
the will
will of
of the
the donor),
donor), the
the gift
gift should
should
be
be revoked
revoked or or suspended.
suspended. Such Such condition
condition is is valid.
valid.
(c)
(c) A
A gift
gift will
will be
be revoked
revoked if if it
it was
was notnot made
made withwith the
the free
free consent
consent of
of the
the
donor.
donor.
(d)
(d) A
A gift
gift may
may also
also bebe revoked
revoked in in any
any cases
cases inin which
which ifif it
it were
were a a contract,
contract, itit
might
might bebe rescinded;
rescinded; e.g.,
e.g., Section
Section 19 19 of
of ICA,
ICA, a a contract
contract may may be
be rescinded
rescinded
in case
in case ofof coercion,
coercion, undue
undue influence,
influence, fraud
fraud andand misrepresentation.
misrepresentation.
(e)
(e) As
As such
such a a gift
gift cannot
cannot be be revoked.
revoked.
 ao NAG a NAG

QUESTIONS
QUESTIONS
A executes
A executes a a gift
gift in
in favour
favour of
of B.B. The
The given
given land
land is
is worth
worth Rs.
Rs. 90.
90. The
The
deed
deed is
is not
not registered
registered but
but B
B is
is put
put in
in possession.
possession. IsIs the
the gift
gift valid?
valid?

***
*K KK

A
A deed
deed ofof gift
gift is
is executed
executed attested
attested and
and delivered
delivered to to the
the donee.
donee. The
The
donee
donee accepts
accepts the
the gift.
gift. Before
Before registration
registration of
of the
the Deed,
Deed, the
the donor
donor
seeks
seeks to
to revoke
revoke thethe gift,
gift, contending
contending that
that the
the gift
gift is
is not
not complete
complete until
until
registration.
registration. Advise
Advise the the donee.
donee.

KF BR
Ba BP BR
ay,
 S.9
ABSOLUTE
ABSOLUTE GIFT
GIFT is
is a
a gift
gift w/o
w/o condition
condition (irrevocable),
(irrevocable), but
but can
can be
be cancelled
cancelled only
only by
by mutual
mutual
consent.
consent.

When
When a a person
person purports
purports to to make
make a
a gift
gift and
and at
at the
the same
same time
time reserves
reserves the
the liberty
liberty of
of

o
revoking
revoking itit the
the gift
gift is
is void.
void.

A
A condition
condition inin the
the gift
gift absolutely
absolutely restraining
restraining the
the donee
donee from
from alienating
alienating his
his interest
interest in
in the
the
property
property isis void.
void. But
But such
such a
a gift
gift is
is valid
valid as
as the
the donee
donee is
is entitled
entitled to
to ignore
ignore this
this condition.
condition.

S99
A
A condition
condition of
of residence
residence in
in a
a gift
gift of
of a
a house
house in
in an
an absolute
absolute gift
gift is
is invalid
invalid and
and cannot
cannot be
be
enforced.
enforced.

Where
Where no no specific
specific condition
condition for
for revocation
revocation has
has been
been made
made in
in the
the deed
deed itself,
itself, in
in the
the event
event of
of

o@
the
the failure
failure of
of the
the donee
donee to
to render
render services
services to
to the
the donor
donor or
or maintain
maintain the
the donor,
donor, thethe gift
gift
a.

cannot
cannot bebe revoked.
revoked.
\)
(2

mne
\, ‘ews,

Kinds
Kinds of
of Gifts:
Gifts: Void
Void gifts
gifts may
may be
be divided
divided into
into two
two types:
types:
_

_ \ ryb=, bis

Void
Void Gifts
Gifts
Onerous
Onerous Gifts
Gifts »
VA

Void
Void Gift:
Gift: The
The following
following gifts
gifts are
are included
included inin the
the category
category ofof void
void gifts:
gifts: Sf

é
Gifts
Gifts depending
depending on on unlawful
unlawful purposes.
purposes.
Gifts
Gifts made
made uponupon a a condition,
condition, the
the fulfillment
fulfillment of
of which
which is
is impossible
impossible or or forbidden
forbidden by by law.
law.
Gifts
Gifts byby aa person
person incompetent
incompetent to to contract.
contract.
bax ‘ew

Where
Where the the donee
donee ofof the
the gift
gift dies
dies before
before acceptance.
acceptance.
_

A
A gift
gift comprising
comprising of of both
both the
the existing
existing and
and future
future property
property isis void
void as
as to
to the
the future
future property.
property.
»
A
\l/a
_\i

Onerous Gifts:
Onerous Gifts: S.127
$.127
A
A gift
gift is
is said
said to
to be
be onerous
onerous when
when itit is
is accompanied
accompanied by
by a
a burden
burden or
or obligation.
obligation.
ryp< lim
-_

“he
“he who
who receives
receives advantage
advantage must must also
also bear
bear the the burden.”
burden.” Where
Where aa gift gift is
is in
in the
the form
form ofof a a
single
single transfer
transfer to to the
the same
same person
person of of several
several things
things of
of which
which oneone is,
is, and
and the
the others
others are
are not
not
A

burdened
burdened by by anan obligation,
obligation, the
the donee
donee cancan take
take nothing
nothing by by the
the gift
gift unless
unless hehe accepts
accepts itit fully.
fully.
a Where
Where aa gift
gift is
is in
in the
the form
form of
of two
two oror more
more separate
separate and and independent
independent transfers
transfers toto the
the
| same
same person
others,
person of
others, although
of several
although the
several things,
things, the
the former
former may
the donee
may be
donee is is at
be beneficial
at liberty
beneficial and
liberty to
and the
to accept
accept one
the latter
one of
latter onerous.
onerous.
of them
them andand refuse
refuse thethe
‘ee’
<—_

Onerous
Onerous Gift
Gift to
to Disqualified
Disqualified Person
Person -- AA donee
donee not
not competent
competent toto contract
contract and
and accept
accept a a
_

\/pa bic

property
property which,
which, burdened
burdened by by any
any obligation,
obligation, is
is not
not bound
bound by
by his
his acceptance.
acceptance. ButBut if,
if, after
after
becoming
becoming competent
competent to to contract
contract and
and being
being aware
aware of of the
the obligation,
obligation, he
he retains
retains the
the
J

property
property given,
given, he
he becomes
becomes soso bound.
bound.
 S.9
REGISTRATION &
REGISTRATION &
STAMP DUTY
STAMP DUTY

o
Pallavi
Pallavi Goel
:

Goel
MODULE
MODULE 6.2
6.2

S99
o@
 S.17,
$.17, IRA.
IRA. Documents
Documents of
of which
which registration
registration is
is
compulsory.—
compulsory.—
(1)The
(1)The following
following documents
documents shall
shall be be registered:
registered:
(a)instruments of
(a)instruments gift of
of gift property;
immovable property;
of immovable
(b)other
(b)other non-testamentary
non-testamentary instruments
instruments which
which purport
purport or or operate
operate to to create,
create, declare,
declare,
assign,
assign, limit
limit or
or extinguish,
extinguish, whether
whether in in present
present or
or in
in future,
future, any
any right,
right, title
title or
or interest,
interest,
whether
whether vested
vested oror contingent,
contingent, of
of the
the value
value of
of one
one hundred
hundred rupees
rupees and and upwards,
upwards, to to or
or
in
in immovable
immovable property;
property;
(c)
(c) non-testamentary
non-testamentary instruments
instruments which
which acknowledge the receipt or payment of any
consideration on account of the creation, declaration, assignment, limitation or
extinction of any such right, title or interest; and
(d) leases
(d) leases ofof immovable property from from year
year to
to year,
year, oror for
for any
any term
term exceeding
exceeding oneone
year, or reserving a yearly rent;
 S.17,
$.17, IRA.
IRA. Documents
Documents of
of which
which registration
registration is
is
compulsory.—
compulsory.—
(e)[ non-testamentary
(e)[ non-testamentary instrumentsinstruments fRGRSfenring
transferring |OnGssigning
or assigning any any decree
decree or onorder
order of ofe)|Couronany)
a Court or any
Gaeeiwhen
award when such such decree
decree or or order
order or or award
award purports
purports or or operates
operates to to create,
create, declare,
declare, assign,
assign, limitlimit
or extinguish,
or extinguish, whether
whether in in present
present or or inin future,
future, anyany right,
right, title
title or
or interest,
interest, whether
whether vested
vested or or
contingent, of
contingent, of the
the value
value ofof one
one hundred
hundred rupees rupees andand upwards,
upwards, toto or in immovable
or in immovable property:] [Inserted
property:] [Inserted
by
by Act
Act 21
21 of of 1929,
1929, Section
Section 10.]Provided
10.]Provided that that the
the [State
[State Government]
Government] [Substituted
[Substituted by by A.O.1950,
A.O.1950, for for
"Provincial Government"
"Provincial Government” .].] may, may, by by order
order published
published in in the
the [Official
[Official Gazette]
Gazette] [Substituted
[Substituted by by
A.0.1937, for
A.O.1937, for "Local
"Local Official
Official Gazette"
Gazette" .], .], exempt
exempt fromfrom thethe operation
operation of of this
this sub-section
sub-section any any leases
leases
executed
executed in in any
any district,
district, or
or part
part ofof aa district,
district, thethe terms
terms granted
granted by by which
which do do notnot exceed
exceed five
five years
years
and
and the
the annual
annual rentsrents reserved
reserved by by which
which do do notnot exceed
exceed fiftyfifty rupees.[(1-A)
rupees.[(1-A) The The documents
documents containing
containing
contracts
contracts toto transfer
transfer for for consideration,
consideration, any any immovable
immovable property
property for for the
the purpose
purpose of of section
section 53-A
53-A of of
the
the Transfer
Transfer of of Property
Property Act, Act, 1882,
1882, shallshall be be registered
registered if if they
they have
have been
been executed
executed on on or
or after
after the
the
commencement
commencement of of the
the Registration
Registration and and Other
Other Related
Related LawsLaws (Amendment)
(Amendment) Act, Act, 2001,
2001, andand ifif such
such
documents
documents are are not
not registered
registered on on or
or after
after such such commencement
commencement then, then, they
they shall
shall have
have nono effect
effect forfor the
the
purposes
purposes of of thethe said
said section
section 53-A.]
53-A.] [Inserted
[Inserted by by Act
Act 48
48 of of 2001,
2001, Section
Section 3 3 (w.e.f.
(w.e.f. 24.9.2001).]
24.9.2001).]
 S.17,
$.17, IRA.
IRA. Documents
Documents of
of which
which registration
registration is
is
compulsory.—
compulsory.—
(2)Nothing
(2)Nothing in
in clauses
clauses (b)
(b) and
and (c)
(c) of
of sub-section
sub-section (1)
(1) applies
applies to
to
(i)
(i) any
any composition
composition deed;
deed; or
or
(ii)
(ii) any
any instrument
instrument relating
relating to
to shares
shares in
in a
a joint
joint stock
stock company,
company, notwithstanding
notwithstanding that
that the
the
assets
assets of
of such
such company
company consist
consist in
in whole
whole or
or in
in part
part of
of immovable
immovable property;
property; or
or
(iii)
(iii) any
any debenture
debenture issuedissued byby any
any such
such company
company and and not
not creating,
creating, declaring,
declaring, assigning,
assigning,
limiting
limiting or
or extinguishing
extinguishing any any right,
right, title
title or
or interest,
interest, to
to or
or inin immovable
immovable property
property except
except
insofar
insofar asas it it entitles
entitles the
the holder
holder toto the
the security
security afforded
afforded by by aa registered
registered instrument
instrument
whereby
whereby the the company
company has has mortgaged,
mortgaged, conveyed
conveyed or or otherwise
otherwise transferred
transferred thethe whole
whole oror
part
part ofof its
its immovable
immovable property
property or or any
any interest
interest therein
therein toto trustees
trustees upon
upon trust
trust for
for the
the
benefit
benefit ofof thethe holders
holders of
of such
such debentures;
debentures; or or
 S.17,
$.17, IRA.
IRA. Documents
Documents of
of which
which registration
registration is
is
compulsory.—
compulsory.—
(iv)
(iv) any
any endorsement
endorsement upon upon or or transfer
transfer of
of any
any debenture
debenture issued issued byby any
any such
such company;
company; or or
(v)
(v) [any
[any document
document other other than
than the the documents
documents specified
specified in in sub-section
sub-section (1-A)]
(1-A)] [Substituted
[Substituted by by Act
Act
A8 of
48 of 2001,
2001, Section
Section 3, 3, for
for "any
“any document"
document" (w.e.f.
(w.e.f. 24.9.2001).]
24.9.2001).] not not itself
itself creating,
creating, declaring,
declaring,
assigning,
assigning, limiting
limiting or or extinguishing
extinguishing any any right,
right, title
title oror interest
interest of of the
the value
value of of one
one hundred
hundred
rupees
rupees and and upwards
upwards to to or
or in in immovable
immovable property,
property, but but merely
merely creating
creating a a right
right to
to obtain
obtain
another
another document
document which which will,
will, when
when executed,
executed, create,
create, declare,
declare, assign,
assign, limitlimit or or extinguish
extinguish anyany
such
such right,
right, title
title oror interest;
interest; or or
(vi)
(vi) any
any decree
decree or or order
order of of a a Court
Court [except
[except a a decree
decree or or order
order expressed
expressed to to be be made
made on on aa
compromise
compromise and and comprising
comprising immovable
immovable property
property other other than
than that
that which
which is is the
the subject-matter
subject-matter of of
the suit
the suit or
or proceeding]
proceeding] [Substituted
[Substituted by by A.O.1937,
A.O.1937, for for "and
"and any any award"
award" .]; .]; or
or
(vii)any
(viijany grant
grant of of immovable
immovable property property by by the
the [Government]
[Government] [Substituted
[Substituted by by A.O.1950,
A.O.1950, for for
"Crown" .];
"Crown" .]; or
or
 S.17,
$.17, IRA.
IRA. Documents
Documents of
of which
which registration
registration is
is
compulsory.—
compulsory.—
(viii)any
(viii)any instrument
instrument of of partition
partition made made by by a a Revenue
Revenue Officer;
Officer; or or
(ix)any
(ix)any order
order granting
granting a a loan
loan or or instrument
instrument of of collateral
collateral security
security granted
granted under
under the the Land
Land Improvement
Improvement Act, Act, 1871,
1871, oror
the
the Land
Land Improvement
Improvement Loans Loans Act,Act, 1883;
1883; or or
(x)any
(x)any order
order granting
granting a a loan
loan under
under the the Agriculturists
Agriculturists Loans Loans Act,
Act, 1884,
1884, or or instrument
instrument for for securing
securing the the repayment
repayment of of aa
loan
loan made
made underunder thatthat Act;
Act; or or
[(x-a)
[(x-a) any
any order
order mademade under under the the Charitable
Charitable Endowments
Endowments Act, Act, 1890,
1890, vesting
vesting anyany property
property in in aa Treasurer
Treasurer of of
Charitable
Charitable Endowments
Endowments or or divesting
divesting any any such
such Treasurer
Treasurer of of any
any property;
property; or] or] [Inserted
[Inserted by by Act
Act 3939 of of 1948,
1948, Section
Section 2 2
(w.e.f.
(w.e.f. 3.9.1948).]
3.9.1948).]
(xi)any
(xi)any endorsement
endorsement on on a a mortgage-deed
mortgage-deed acknowledging
acknowledging the the payment
payment of of the
the whole
whole or or any
any part
part of of the
the mortgage-
mortgage-
money,
money, and and any
any other
other receipt
receipt for for payment
payment of of money
money due due under
under a a mortgage
mortgage when when the the receipt
receipt doesdoes not not purport
purport to to
extinguish
extinguish the the mortgage;
mortgage; or(xii)any
or(xii)any certificate
certificate of of sale
sale granted
granted to to the
the purchaser
purchaser of of any
any property
property sold sold by by public
public auction
auction
by
by a a Civil
Civil or
or Revenue
Revenue Officer.[Explanation
Officer.[Explanation [Inserted [Inserted by by Act
Act 2 2 of
of 1927,
1927, Section
Section 2.].a
2.].a document
document purporting
purporting or or operating
operating
to
to effect
effect a a contract
contract for for thethe sale
sale of of immovable
immovable propertyproperty shall
shall not
not be
be deemed
deemed to to require
require or or ever
ever to to have
have required
required
registration
registration by by reason
reason only only of of the
the fact
fact that
that such
such document
document contains
contains a a recital
recital ofof the
the payment
payment of of anyany earnest
earnest money
money or or
of
of the
the whole
whole or or any
any part
part of of the
the purchase
purchase money.](3)Authorities
money.](3)Authorities to to adopt
adopt a a son,
son, executed
executed after after thethe first
first day
day ofof
January,
January, 1872,1872, and and notnot conferred
conferred by by aa will,
will, shall
shall also
also bebe registered.
registered.
Key
Key documents
documents requiring
requiring registration —
registration —
1. Sale
Sale Deed:
Deed: If If aa document
document transfers
transfers the
the ownership
ownership of of immovable
immovable property,
property, itit must
must be be
registered
registered underunder Section
Section 17,17, in
in case
case ofof gift
gift its
its irrespective
irrespective of of amount.
amount.
2. Lease
Lease Agreements:
Agreements: Leases Leases exceeding
exceeding 1 1] year
year or or those
those with
with an
an annual
annual rent
rent reservation
reservation must must be
be
registered.
registered. However,
However, state state governments
governments can can issue
issue exemptions
exemptions for for leases
leases under
under five
five years
years with
with
aa rent
rent of
of less
less than
than 50 50 Rs.
Rs.
3. Non-Testamentary
Non-Testamentary Instruments: Instruments: Court
Court orders
orders or or awards
awards thatthat create
create a a new
new interest
interest inin an
an
immovable
immovable property,
property, affecting
affecting property
property valuedvalued at at Rs.
Rs. 100
100 and
and above,
above, require
require registration.
registration.
These
These include
include instruments
instruments thatthat assign
assign oror alter
alter rights
rights inin immovable
immovable property.
property.
4. Partition
Partition Deeds:
Deeds: Any Any document
document dividing
dividing immovable
immovable property property among
among multiple
multiple owners,
owners, such
such as
as
family
family members
members or or co-owners,
co-owners, mustmust bebe registered.
registered.
5. Instruments
Instruments of of Gift:
Gift: Gifting
Gifting immovable
immovable propertyproperty requires
requires registration
registration toto ensure
ensure the the transfer
transfer isis
legally valid
legally valid andand enforceable.
enforceable.
6. Documents
Documents that that extinguish
extinguish any any right,
right, interest
interest or or title
title in
in the
the property
property
7. Documents
Documents accepting
accepting acknowledging
acknowledging the the receipt
receipt of of payment
payment or or payment
payment of of consideration
consideration
for
for immovable
immovable propertyproperty valuing
valuing Rs.Rs. 100
100 or or above
above
 S.17,
$.17, IRA.
IRA. Documents
Documents of
of which
which registration
registration is
is
compulsory.—
compulsory.—
1. Gift
Gift Deeds
Deeds relating
relating to
to immovable
immovable property
property must
must compulsorily
compulsorily be
be registered.
registered.
2. non-testamentary
non-testamentary instruments
instruments that
that purport
purport to
to create,
create, declare,
declare, assign,
assign, limit
limit or
or extinguish,
extinguish, whether
whether in
in present
present
or
or in
in future,
future, any
any right,
right, title
title or
or interest,
interest, whether
whether vested
vested or
or contingent,
contingent, of
of the
the value
value of
of Rs.
Rs. 100/-
100/- and
and upwards,
upwards,
to
to or
or in
in immovable
immovable property.
property.
3. All
All forms
forms of
of immovable
immovable property
property with
with a a value
value greater
greater than
than Rs.
Rs. 100/-
100/- transferred
transferred through
through a
a non-
non-
testamentary
testamentary instrument,
instrument, apart
apart from
from wills.
wills.
4. All
All non-testamentary
non-testamentary instruments
instruments that
that acknowledge
acknowledge the the receipt
receipt or
or payment
payment of
of any
any consideration
consideration on on account
account
of
of the
the creation,
creation, declaration,
declaration, assignment,
assignment, limitation
limitation or
or extinction
extinction of
of any
any such
such right,
right, title
title or
or interest.
interest. Basically,
Basically,
deeds
deeds that
that acknowledge
acknowledge that
that the
the consideration
consideration hashas been
been paid.
paid.
5. Leases
Leases of
of immovable
immovable property
property that
that last
last for
for longer
longer than
than a
a year
year or
or are
are established
established from
from year
year to
to year.
year.
What
What Documents
Documents Are
Are Exempt?
Exempt?

Section
Section 17(2)
17(2) of
of the
the Registration
Registration Act
Act lists
lists certain
certain documents
documents that
that are
are exempt
exempt from
from
mandatory
mandatory registration:
registration:
1.
1. Court
Court Decrees:
Decrees: Documents
Documents such
such as
as court
court orders
orders or
or decrees
decrees that
that do
do not
not create
create new
new
interests
interests in
in property
property are
are not
not required
required to
to be
be registered.
registered.
e.g.,
e.g., aa compromise
compromise decree
decree setting
setting each
each family
family member’s
member’s claim
claim on
on property
property

2.
2. Testamentary
Testamentary Instruments:
Instruments: Wills
Wills and
and codicils
codicils do
do not
not require
require registration
registration under
under this
this
section,
section, as
as they
they are
are intended
intended to
to take
take effect
effect after
after the
the death
death of
of the
the individual.
individual.
3. Transfer
Transfer of
of shares
shares
4. Document
Document that
that gives
gives right
right to
to obtain
obtain other
other documents
documents
5. Adoption
Adoption authority
authority via
via will
will requires
requires no
no registration.
registration.
 S.18,
$.18, IRA.
IRA. Documents
Documents of
of which
which registration
registration is
Is
optional.—
optional.—
Any
Any ofof the
the following
following documents
documents may may be be registered
registered under
under this
this Act,
Act, namely,
namely,
(a)
(a) instruments
instruments (other
(other than
than instruments
instruments ofof gifts
gifts and
and wills)
wills) which
which purport
purport oror operate
operate toto create,
create, declare,
declare, assign,
assign, limit
limit or
or extinguish,
extinguish,
whether
whether in in present
present oror in
in future,
future, any
any right,
right, title
title or
or interest
interest whether
whether vested
vested oror contingent,
contingent, of
of aa value
value less
less than
than one
one hundred
hundred rupees,
rupees, to
to
or
or in
in immovable
immovable property;
property;

(b)
(b) instruments
instruments acknowledging
acknowledging thethe receipt
receipt ofof payment
payment of of any
any consideration
consideration on
on account
account of
of the
the creation,
creation, declaration,
declaration, assignment,
assignment,
limitation
limitation or
or extinction
extinction of
of any
any such
such right,
right, title
title or
or interest;
interest;
(c)
(c) leases
leases of
of immovable
immovable property
property for
for any
any term
term not
not exceeding
exceeding one
one year,
year, and
and leases
leases exempted
exempted under
under section
section 17;
17;

(cc)
(cc) [[ instruments
instruments transferring
transferring or or assigning
assigning any any decree
decree or or order
order ofof aa Court
Court or
or any
any award
award whenwhen such
such decree
decree or or order
order oror award
award
purports
purports or or operates
operates to
to create,
create, declare,
declare, assign,
assign, limit
limit or
or extinguish,
extinguish, whether
whether in in present
present oror in
in future,
future, any
any right,
right, title
title or
or interest,
interest, whether
whether
vested or
vested or contingent,
contingent, of
of a a value
value less
less than
than one
one hundred
hundred rupees,
rupees, toto or
or in
in immovable
immovable property;]
property;] [Inserted
[Inserted by
by Act
Act 3333 of
of 1940,
1940, Section
Section
2.]
2.]
(d)
(d) instruments
instruments (other
(other than
than wills)
wills) which
which purport
purport or or operate
operate to to create,
create, declare,
declare, assign,
assign, limit
limit or
or extinguish
extinguish any
any right,
right, title
title or
or interest
interest to
to
or
or in
in movable
movable property;
property;
(e)
(e) wills;
wills; and
and
(f)
(f) all
all other
other documents
documents notnot required
required by by section
section 17 17 to
to be
be registered.
registered.
Optional Registrations
Optional Registrations u/S.18
u/S.18 IRA
IRA
1. Instruments
Instruments which
which purport
purport or or create,
create, assign,
assign, extinguish
extinguish right
right title
title or
or interest
interest of of value
value ofof Rs.
Rs. 100
100 or
or less
less
2. Leases
Leases ofof immovable
immovable property
property or or less
less that
that 11 yearyear and
and leases
leases exempt
exempt under under S.17
S.17
3. Intrumernts
Intrumernts that
that create,
create, declare,
declare, assign,
assign, limitlimit or
or extinguish
extinguish thethe right
right title
title interest
interest to
to aa movable
movable property
property
4. Wills
Wills
5. Documents
Documents not not requiring
requiring compulsory
compulsory registration
registration underunder S.17
S.17
6. Power
Power ofof Attorney
Attorney
7. Partnership
Partnership Deeds
Deeds – — though
though it it depends
depends on on the
the nature
nature of of the
the business,
business, but but aa partnership
partnership deed
deed merely
merely
declaring
declaring an an already
already existing
existing right
right inin an
an immovable
immovable property
property falls falls under
under optional
optional registration
registration
8. Memorandum
Memorandum of of past
past transaction:
transaction: document
document merely merely reciting
reciting a a transaction
transaction that that has
has already
already taken
taken place
place or
or
admits
admits a a past
past transaction
transaction is is optionally
optionally registrable.
registrable.
9. Promissory
Promissory notes
notes
10. Document
Document appointing
appointing a a person
person as as a a guardian
guardian of of the
the minor
minor as as its
its not
not a a transfer/
transfer/ assignment
assignment ofof minor’s
minor’s
property
property
11.
11. Family
Family arrangements
arrangements unless unless there
there isis relinquishment
relinquishment —– which which will
will need
need registration
registration
12.
12. Agreement
Agreement to to enter
enter into
into aa mutation
mutation or or toto create
create a a lease
lease
 = SAY >NY 2

WHAT
WHAT HAPPENS
HAPPENS WHEN
WHEN II SELL
SELL MY
MY
PROPERTY
PROPERTY USING
USING ANAN
IRREVOCABLE
IRREVOCABLE POWER
POWER OF OF
ATTORNEY?
ATTORNEY? CAN
CAN II DO
DO THAT?
THAT?

Zi =
y 4
WHAT
WHAT IS
IS AN
AN IRREVOCABLE
IRREVOCABLE POA?
POA?
ItIt gives
gives someone
someone the
the authority
authority to
to act
act on
on your
your behalf
behalf (the
(the "attorney")
"attorney') for
for property
property matters.
matters.
“Irrevocable”
“Irrevocable” just
just means
means it
it can’t
can’t be
be canceled
canceled easily,
easily, often
often because
because it's
it's tied
tied to
to some
some consideration
consideration (e.g.,
(e.g., money
money
already
already paid).
paid).
BUT
BUT it
it does
does not
not transfer
transfer ownership
ownership of
of the
the property.
property.

Selling
Selling property
property using
using an
an Irrevocable
Irrevocable POA
POA may
may seem
seem like
like aa shortcut,
shortcut, but
but legally
legally (after
(after Suraj
Suraj Lamp
Lamp &
& Industries
Industries v.
v.
State
State of
of Haryana
Haryana case)
case) such
such POA
POA sales
sales are
are not
not valid
valid as
as a a substitute
substitute for
for a
a registered
registered sale
sale deed.
deed.

CANCELLING
CANCELLING AN
AN IRREVOCABLE
IRREVOCABLE POA
POA
Despite
Despite the
the name,
name, a
a irrevocable
irrevocable POA
POA can
can be
be cancelled
cancelled under
under following
following situations:
situations:
◦© POA
POA is
is being
being misused/abused
misused /abused
◦ Purpose
Purpose of
of POA
POA is
is fulfilled
fulfilled
◦ Agent/attorney
Agent/attorney dies
dies or
or becomes
becomes incapable
incapable
◦ No
No consideration
consideration was
was paid
paid making
making it
it legally
legally revocable.
revocable.
◦ But,
But, where
where irrevocable
irrevocable POA
POA is
is for
for consideration
consideration then
then it
it cannot
cannot be
be canceled
canceled unilaterally
unilaterally &
& w/o
w/o cour
cour intervention
intervention
Even if
Even if it's
it's irrevocable:
irrevocable:
◦© ItIt does
does not
not give
give the
the buyer
buyer legal
legal ownership
ownership
◦© ItIt does
does not
not stand
stand in
in for
for a
a registered
registered sale
sale deed.
deed.
◦© ItIt will
will not
not be
be accepted
accepted for
for mutation
mutation or
or registration
registration in
in most
most municipal
municipal or
or revenue
revenue records.
records.
◦© ItIt could
could be
be challenged
challenged in
in court,
court, especially
especially during
during inheritance
inheritance disputes
disputes or
or legal
legal scrutiny.
scrutiny.
◦© Seller
Seller remains
remains legally
legally liable
liable for
for the
the property
property (taxes,
(taxes, legal
legal issues).
issues).
◦© IfIf the
the buyer
buyer misuses
misuses the
the land
land or
or defaults
defaults on
on any
any obligations,
obligations, it
it could
could come
come back
back to
to the
the seller.
seller.

How
How to
to proceed?
proceed?
◦© Execute
Execute a
a registered
registered sale
sale deed.
deed.
◦© Pay
Pay the
the applicable
applicable stamp
stamp duty.
duty.
◦© Register
Register the
the deed
deed at
at the
the sub-registrar's
sub-registrar's office.
office.
◦© If|f you're
you're temporarily
temporarily giving
giving someone
someone authority
authority (e.g.,
(e.g., to
to execute
execute the
the sale
sale while
while you're
you're abroad),
abroad), then
then a
a
PoA
PoA can can be
be used
used to
to facilitate
facilitate the
the transaction—but
transaction—but should
should not
not be
be used
used for
for sale.
sale.
QUESTION:
QUESTION:
The
The Owner
Owner (O) (O) agrees
agrees toto sell
sell his
his property
property to to Ravikant
Ravikant forfor ₹1
<1
crore
crore 50
50 lakhs.
lakhs. Ravikant
Ravikant pays
pays O O ₹ 2% 11 crore
crore upfront.
upfront. O O agrees
agrees he’ll
he’ll
pay
pay the remaining ₹50
the remaining %50 lakhs
lakhs later
later and and will
will get
get the
the sale
sale deed
deed
registered
registered in in his
his name.
name. ToTo help
help him him do do this
this O O gave
gave Ravikant
Ravikant an an
Irrevocable
Irrevocable POA, POA, allowing
allowing him him to:to:
◦© Represent
Represent O O
◦© Sign
Sign sale
sale documents
documents
◦° Deal
Deal with
with thethe property
property as as ifif he
he was was the
the owner
owner
◦° even
even sell
sell the
the property
property to to himself
himself or or someone
someone else else
Can
Can such
such an an Irrevocable
Irrevocable POA POA be be cancelled?
cancelled?
QUESTION:
QUESTION:
Pooja
Pooja moves
moves to to Australia
Australia for for her
her PhD,
PhD, she
she also
also owns
owns aa flat
flat inin
Delhi.
Delhi. While
While living
living in
in Australia
Australia sheshe cannot
cannot handle
handle day-to-day
day-to-day
maintenance
maintenance or or paperwork
paperwork for for the
the property
property so so she
she gives
gives a a
special
special POAPOA to to her
her friend
friend Aman,
Aman, which
which states:
states:
“This Power
“This Power of of Attorney
Attorney is is irrevocable
irrevocable and
and allows
allows Aman
Aman toto manage
manage
the
the flat,
flat, rent
rent it
it out,
out, pay
pay property
property taxes,
taxes, collect
collect rent,
rent, and
and sign
sign on on my
my
behalf
behalf forfor society-related
society-related matters.”
matters.”
Can
Can such
such a a POA
POA be be cancelled?
cancelled?
 LEGALITY
LEGALITY OF
OF TRANSFERRING
TRANSFERRING
IMMOVABLE
IMMOVABLE PROPERTIES
PROPERTIES ON
ON
IRREVOCABLE
IRREVOCABLE OR
OR GENERAL
GENERAL POA?
POA?
SURAJ
SURAJ LAMPS
LAMPS && INDUSTRIES
INDUSTRIES PVT
PVT LTD.
LTD. V.
V.
STATE
STATE OF
OF HARYANA
HARYANA

SC
SC has
has declared
declared thatthat there
there cannot
cannot be
be a
a
transfer of
transfer of title
title by
by GPA/SA/wills
GPA/SA/wills
transactions.
transactions. Only
Only a a registered
registered sale
sale deed
deed
/conveyance is
/conveyance is a
a valid
valid mode
mode ofof transfer
transfer of
of
title
title in
in immovable
immovable property.
property.
S.3,
$.3, TPA
TPA Interpretation
Interpretation Clause — attested
Clause — attested

“attested”,
“attested”, inin relation
relation toto anan instrument,
instrument, means
means andand shall
shall be
be deemed
deemed always
always
to
to have
have meant
meant attested
attested by by two
two oror more
more witnesses
witnesses each
each ofof whom
whom has
has seen
seen
the
the executant
executant signsign or
or affix
affix his
his mark
mark toto the
the instrument,
instrument, or or has seen some
other person sign the instrument in the presence and by the direction of the
executant, or has received from the executant a personal
acknowledgement of his signature or mark, or of the signature of such
other person, and each of whom has signed the instrument in the presence
of the executant; but but it
it shall
shall not
not be
be necessary
necessary that
that more
more than
than one
one ofof such
such
witnesses shall
witnesses shall have
have been
been present
present at at the
the same
same time,
time, and
and nono particular form
particular form
ofattestation shall be
of attestation shall be necessary;
necessary;
 S.3,
$.3, TPA
TPA Interpretation
Interpretation Clause — attested
Clause — attested

For
For a a document
document to to bebe considered
considered attested:
attested:
◦© At
At least
least two
two witnesses
witnesses mustmust be be involved.
involved.
◦© Each
Each witness
witness must
must have
have seen
seen thethe person
person (executant)
(executant) sign
sign the
the document,
document, oror
◦© Have
Have seenseen someone
someone else else sign
sign it it on
on the
the executant's
executant's behalf,
behalf, inin the
the presence
presence and
and with
with
the
the consent
consent of of the
the executant,
executant, or or
◦© Have
Have received
received a a personal
personal acknowledgment
acknowledgment from from the
the executant
executant that
that the
the signature
signature
or
or mark
mark isis theirs
theirs oror was
was made
made on on their
their behalf.
behalf.
◦© Each
Each witness
witness must
must then
then sign
sign the
the document
document in in the
the executant's
executant's presence.
presence.
◦© It’s
It’s not
not necessary
necessary for for both
both witnesses
witnesses to to be
be present
present atat the
the same
same time.
time.
◦© No
No fixed
fixed format
format or or wording
wording is is required
required forfor attestation.
attestation.
NEXT MODULE 7