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Part Payment of Sale Deed Does Not Amount To Cancellation
Part Payment of Sale Consideration Does Not Constitute Cancellation Of The Sale Deed
The Supreme Court in the case of Dahiben Vs Arvindbhai Kalyanji Bhanusali & Ors held that making the part payment of the Sale Deed Consideration does not amount to cancellation of Sale Deed nor it declares the Sale Deed “Void”.
The Supreme Court under Section 54 of the Transfer of Property Act held that the full payment of consideration is not sine qua non that is that in the full payment of consideration to the Transferor for completion of the sale is not necessary. However, the Transferor can move to the Civil Court of the whole payment of consideration.
Facts of the Case:
The Plaintiff owned 8701 sq. meter agricultural land of old tenure which is situated in Mota Varachha Village, Sub-District Surat (hereinafter referred to as the Suit Property).
However, under Section 73AA of the Land Revenue Code, the property was of restrictive tenure. On 13th May 2008, the Plaintiff filed an application before the Collector of Surat for obtaining the permission for sale of the property to the Respondents. The Collector after verifying the documents of the Title of the property permitted the sale of the suit property and fixed the sale price of the property to ?1,74,02,000/- only. The Collector in his order also stated that the Sale was subjected to the terms and conditions under Section 73AA of the Land Revenue Code and also ordered the Respondent No.1 to make payment by the cheques and its reference must be made in the Sale Deed.
After gaining permission from the Collector, the Plaintiff sold the property to the Respondent No.1 and registered Sale Deed on 2nd July 2009. The Respondent No.1 issued 36 cheques to the Plaintiff for the payment of the consideration of Sale.
Later, the Respondent No.1 sold the same property to the Respondent No.2 and Respondent No.3 for the consideration of Rs. 2, 01, 00,000/- as registered under the sale deed dated 1st April 2013.
The Plaintiff filed a Civil Suit before Principal District Judge, Surat on 15th December 2014 suing the Respondent No.1 and Respondent No.2 and 3. The plaintiff in her application stated that the Sale Deed which took place on 1st April 2013 between the Respondents is void and illegal as the Respondent has failed to pay entirely to the Plaintiff.
It was also stated by the plaintiff that the consideration paid by the Respondent was ?40,000/- only through six cheques and the other 30 cheques sent by the Respondent for the amount of ?1,73,62,000/- were bogus.
The Plaintiff prayed the Sale Deed made between The Respondent dated 1st April 2013 to be declared as illegal and void and the possession of the property must be restored to the plaintiff.
Against this Civil Suit, Respondent No. 2 and 3 filed an application stating that the suit filed by the Plaintiff was barred and the property acquired by the Respondents was with the accordance of the law.
After hearing the parties to the suit the trial court held that the period of limitation for filing the suit was 3 years from the date of execution of Sale deed dated 2nd July 2009. That is, as per Articles 58 and 59 of the Limitation Act, the suit should have been filed by 2012. However, the suit was filed in 2014, which was barred by the Limitation Act.
Aggrieved by the decision of the Trial Court, the Plaintiff moved to the High Court of Ahemdabad, Gujrat. The High Court stated that the Plaintiff, never in 5 years has raised any grievance against the Respondent and there were no other issues or complaints made by the plaintiff before the execution of Sale Deed dated 1st April 2013.
However, the HC of Ahemdabad affirmed and held the decision given by the Trial Court and ordered that the Civil Suit was barred under the Limitation Act.
Aggrieved by the decision of HC the Plaintiff filed an appeal before the Supreme Court.
The Judgment of the Supreme Court
The Supreme Court held that "The Plaintiffs have failed to discharge the onus of proof that the suit was filed within the period of limitation.” Therefore, Order VII Rule 11 (d) of CPC applies to the suit and empowers the Principal District Judge to reject the plaint."
The prayer of cancellation of Sale Deed between the Respondents also cannot be entertained as making the part payment of the Sale Deed Consideration does not amount to cancellation of Sale Deed nor it declares the Sale Deed “Void”.
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