Indira Devi vs. Veena Gupta & Ors.
Background
In 1977, a father and son sold a house to Indira Devi under a "conditional sale deed": an arrangement where the family could buy the house back for Rs. 5,000 by July 1984. Before that deadline arrived, the original owner gifted his other properties, including the right to buy back this house, to his daughter-in-law, Veena Gupta. When the family tried to repurchase the house by depositing the money in court, Indira Devi refused, arguing that the right to repurchase was personal to the original owner and could not be passed on to Veena Gupta. Both the trial court and first appellate court agreed with Indira Devi, but the High Court reversed this and ruled in Veena Gupta's favour.
Decision Breakdown
The Supreme Court held that a right to repurchase property under a conditional sale deed is generally assignable (transferable to someone else) unless the deed's own wording shows it was meant to be personal only to the original party. Since the sale deed here contained no such restriction, the right to buy back the house could validly be passed on as part of the gift to Veena Gupta. The Court relied on a line of its own precedents establishing that such repurchase rights are presumed transferable, and that an implied restriction cannot be read into a document just because it mentions "heirs" without mentioning "assignees." Accordingly, the Supreme Court upheld the High Court's decision and dismissed Indira Devi's appeal.
Lesson Learnt
When drafting a sale deed with a buy-back clause, the right to repurchase can normally be passed on to someone else (through a gift or otherwise) unless the deed explicitly says that right is personal and non-transferable: silence on the point favours transferability, not against it.