Raziya Begum and Ors. v. Nafisa Begum Abdul Hamid and Ors.
Background
In 1975, the original plaintiffs (a mother and son, now represented by their legal heirs as respondents) executed two sale deeds in favour of the original defendant (now represented by the appellants, his legal heirs), who had agreed to help them pay off debts to banks and government departments. Of the Rs.7,000 price for each property, only Rs.2,500 was paid upfront, with the defendant retaining Rs.4,500 to clear the plaintiffs' outstanding dues: a promise he allegedly never fulfilled, prompting later agreements reaffirming the obligation. The plaintiffs sued in 1984 to cancel the sale deeds as void for non-payment of full consideration; the Trial Court and First Appellate Court dismissed the suit, but the High Court, in second appeal, reversed and decreed cancellation in the plaintiffs' favour.
Decision Breakdown
The Supreme Court restored the Trial Court's dismissal of the suit, relying on Section 54 of the Transfer of Property Act, 1882 and its own precedents (Vidhyadhar and Dahiben) holding that actual payment of the full sale price at the time of execution is not essential for a sale to be complete, once a sale deed for property worth more than Rs.100 is executed and registered, ownership passes even if the price is only part-paid. The Court held that non-payment of the balance sale consideration gives the seller only a right to sue for recovery of that money (with interest), not a right to have the sale deed declared void. Since the plaintiffs never filed such a recovery suit and instead sought cancellation years later, their claim to void the sale deeds failed, and the High Court had erred in reversing the concurrent findings of the courts below on this point of law.
Lesson Learnt
A registered sale deed transfers ownership and remains legally valid even if the buyer has not paid the full price at the time of signing; if the balance amount is unpaid, the seller's remedy is to sue for that money, not to have the sale itself cancelled.