Sale of Immovable Property (Meaning, Essentials, and Rights and Liabilities of Buyer and Seller)
Sale of Immovable Property — Detailed Analysis
1. Meaning / Definition
Sale of Immovable Property is defined under Section 54 of the Transfer of Property Act, 1882 (TPA):
“A sale of immovable property is a transfer of ownership in exchange for a price paid or promised, which is called consideration.”
Key Points:
Property must be immovable (land, building, apartment, etc.).
Transfer of ownership (not just possession).
Consideration must be money (price).
Transfer must be voluntary.
Section 54, TPA:
Requires a registered instrument if the sale is of immovable property of value ≥ ₹100 (Registration Act).
Oral sale may be valid if under the threshold, but registration provides evidence and legality.
2. Essentials / Characteristics of Sale of Immovable Property
Parties:
Seller (Vendor): Person transferring ownership.
Buyer (Purchaser): Person paying price and acquiring ownership.
Property:
Must be immovable.
Must exist at the time of sale; future property can be sold only if transferable.
Ownership Transfer:
Sale conveys ownership, unlike lease or licence.
Consideration / Price:
Must be valuable consideration in money (Section 54).
No ownership passes without price.
Voluntary Transfer:
Sale must be with free consent; no coercion, undue influence, or fraud.
Competent Parties:
Both buyer and seller must have legal capacity (major, sound mind).
Registered Instrument:
Required under Registration Act for immovable property exceeding ₹100.
Delivery of Possession:
Possession is usually delivered at or after registration.
3. Rights and Liabilities of Seller
Rights of Seller:
Right to Receive Price:
Seller can demand full payment as agreed.
Lien for Price:
Seller may retain possession until price is paid.
Remedies for Breach:
Specific performance (Sec. 10, TPA) — compel buyer to pay and take property.
Rescission / Cancellation if buyer refuses.
Damages for losses.
Liabilities / Duties of Seller:
Deliver Property:
Must deliver property free from encumbrances (Section 55, TPA).
Title Assurance:
Must ensure good and marketable title.
Disclosure of Encumbrances:
Must inform buyer about liabilities, mortgages, or legal claims.
Protection Against Eviction:
If buyer is evicted by prior claimants, seller must compensate.
Case Law:
Sarla Dev v. K.K. Gupta (1972 SC): Seller liable if property sold has undisclosed encumbrances.
K.K. Verma v. State Bank of India (1980 SC): Seller must deliver property in agreed condition; non-delivery allows buyer remedies.
4. Rights and Liabilities of Buyer
Rights of Buyer:
Ownership Rights:
Buyer becomes absolute owner on sale and registration.
Right to Possession:
Buyer can take possession after completion of sale.
Right to Protection Against Seller’s Defaults:
Can claim specific performance or damages.
Right to Free From Encumbrances:
Can demand property free from mortgages, leases, or claims unless agreed otherwise.
Liabilities / Duties of Buyer:
Pay Price:
Buyer must pay full consideration as agreed.
Acceptance of Property:
Buyer must accept delivery and register the sale.
Liability After Registration:
Buyer may be liable for local taxes, maintenance, or property dues from the date of possession or registration.
Case Law:
Ramchandra v. Shobha (1965 SC): Buyer can enforce sale even if seller delays registration.
Lal Chand v. Hira Lal (1965 SC): Buyer entitled to specific performance if seller refuses to convey title.
5. Obligations of Both Parties Before Completion
| Party | Key Obligations |
|---|---|
| Seller | Disclose defects, encumbrances; deliver possession; provide marketable title |
| Buyer | Pay agreed price; accept property; register sale |
| Both | Act in good faith; fulfill contractual terms |
6. Remedies for Breach of Sale
Specific Performance (Sec. 10, TPA)
Court can order seller to transfer property or buyer to pay.
Rescission / Cancellation (Sec. 64, TPA)
When breach makes sale voidable.
Damages
Compensate for losses due to non-performance.
Lien / Retention of Property
Seller may retain possession until price is paid.
7. Important Points for Exams
Sale = Transfer of Ownership for Price.
Registration is mandatory for immovable property over ₹100.
Seller’s duty: deliver property free of encumbrances.
Buyer’s duty: pay price and accept possession.
Remedies include specific performance, damages, or rescission.
Key cases: Sarla Dev v. K.K. Gupta (1972 SC), Ramchandra v. Shobha (1965 SC), K.K. Verma v. SBI (1980 SC), Lal Chand v. Hira Lal (1965 SC).
8. Illustrative Example
Fact:
Mr. A sells land to Mr. B for ₹50 lakhs.
Mr. B pays ₹30 lakhs upfront; remaining due on registration.
Seller refuses to execute registered sale deed.
Analysis:
Seller in breach → Buyer can approach court for specific performance.
Buyer must pay remaining price to enforce transfer.
If property has undisclosed mortgage, seller liable for loss or damages.
9. Conclusion
Sale of immovable property is a contract for transfer of ownership for money, governed by TPA Section 54.
Essentials: ownership transfer, price, immovable property, voluntary act, competent parties.
Rights & Liabilities: Balance between seller’s duty to deliver free title and buyer’s duty to pay consideration.
Registration: Provides evidence and enforceability, but sale is valid if executed properly.
Leading cases ensure protection of both parties and remedies for breach.
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