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Kewal Krishan Vs Rajesh Kumar: SC Observes That Sale Of Immovable Property Without Payment Of The Price Is Void And Has No Legal Effect

Gautam Badlani ,
  25 November 2021       Share Bookmark

Court :
Supreme Court of India
Brief :

Citation :
LL 2021 SC 670

DATE OF JUDGEMENT:
22nd November 2021

JUDGES:
Justices Ajay Rastogi and Abhay S. Oka

PARTIES:
Kewal Krishan (Appellant)
Rajesh Kumar & Ors. Etc (Respondent)

SUBJECT

This case deals with a case where the suit premises were allegedly transferred without any consideration. The case thereby falls under Section 54 of the Transfer of Property Act, 1888 which provides that a sale without any payment of the price is void.

AN OVERVIEW

  1. The case related to the properties which were acquired by Kewal Krishna (appellant) and his elder brother Sudarshan Kumar through sale deeds dated 12th August 1976 and 19th October 1976. The appellant had bestowed the power of attorney on his brother Sudarshan Kumar who had subsequently issued two sale deeds transferring part of the suit properties to his minor sons and the remaining part to his wife for Rs. 5,500 and 6,875 respectively.
  2. The appellant subsequently filed two suits. The first suit was filed against Sudarshan Kumar and his minor sons and the other was filed against Sudarshan Kumar and his wife. The appellant prayed for an injunction restraining the defendants from claiming possession of the suit premises and from alienating the premises. Furthermore, the appellant also pleaded that the power of attorney and the subsequent sale deeds must be declared null and void.
  3. The suits were dismissed by the trial court on the grounds that the suit premises were to be intended to be purchased by Sudarshan Kumar only and hence he was the exclusive owner of the premises while the appellant was merely a benamidar. Subsequently, the appellant made an appeal before the District Court and the Court held that since sufficient evidence was not adduced by Sudarshan Kumar to prove that they paid entirely for the suit premises, the appellant was the joint owner of the property. Hence, the District Court set aside the sale deeds issued by Sudarshan Kumar.
  4. The judgment of the District Court was upheld by the High Court. Furthermore, the High Court also held the power of attorney to be valid and directed the respondents to pay the appellant his share of the sale deeds. Subsequently, an appeal was filed before the Supreme Court.

IMPORTANT PROVISIONS

Transfer of Property Act, 1882:

  • Section 54: “Sale” defined.—“Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.

Sale how made.—Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.

In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.

Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

Contract for sale.—A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property.

ISSUES

The following are the major issues framed by the Supreme Court-

  • Whether Kewal Krishan (appellant) and Sudarshan Kumar are joint owners of the suit premises?
  • Whether the sale deeds executed on 10th April 1981 were valid?

ANALYSIS OF THE JUDGEMENT

  1. It was the plea of the appellant that there was no evidence that the sale deeds were executed for some consideration. There was no evidence to prove that Sudarshan Kumar's wife and sons had any source of income to pay for the suit premises. Furthermore, the premises were sold for an amount disproportionately lower than the market price. The appellant, therefore, contended that the transactions were sham transactions and the sale deeds were void. It was also pleased that the appellant continued to be the joint owner of the premises.
  2. The respondents pleaded that the appellant, through a letter, had acknowledged that the premises were purchased through the money that Sudarshan remitted to the appellant and had also agreed to transfer the premises in the name of Sudarshan.
  3. The Apex Court observed that it was established that since Sudarshan did not adduce any evidence to prove that he remitted money to the appellant and nor did he step into the witness box, Sudarshan and appellant were the joint owners of the suit premises.
  4. The Court pointed that no evidence was adduced to prove that the minor sons and wife of Sudarshan had any source of income. Under Section 54 of the Transfer of Property Act, 1882, the immovable property must be sold for a price, which may be payable in the future. A sale that is executed without any payment of the price and which does not provide for any price payable in the future is void.

CONCLUSION

On the basis of the observations made, the Court held that the sale deeds were sham transactions and the wife and sons of Sudarshan would have no title, interest, or right to the suit properties. The Court thereby restored the decree passed by the District Court and held that the appellant was the owner of half of the suit premises.

The Court has rightly interpreted Section 54 of the Act and has provided correct interpretation regarding the intention of the legislation behind this statute. The necessity of payment of a price to constitute a sale of immovable property helps in keeping a check on exploitative practices as it did in the present case.

 
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