Yogendra Prasad Singh (Dead) Through LRs vs. Ram Bachan Devi and Ors. (2023 INSC 658)
Background
The plaintiff had purchased agricultural land from his father-in-law (the first defendant) under a registered sale deed of 1963, paying part of the price to clear the seller's existing mortgage debts. The father-in-law later executed a unilateral deed purporting to cancel the sale, and then gifted the same land to another daughter (the second defendant). After the plaintiff was dispossessed through separate criminal proceedings, he sued for a declaration of his title and for possession, while the defendants argued that under the Bihar practice known as "ta khubzul badlain," title only transfers once the full sale consideration is actually exchanged, which they claimed had not happened. The trial court ruled for the plaintiff, but the Patna High Court reversed, holding no valid title had passed and dismissing the suit.
Decision Breakdown
The Supreme Court held that under Section 54 of the Transfer of Property Act, a registered sale deed ordinarily transfers title immediately, and that the Bihar-specific exception of "ta khubzul badlain", where title is postponed until an actual exchange of consideration, applies only where the document's own terms clearly show that was the parties' intention. Examining the translated sale deed, the Court found explicit recitals that possession and ownership had already passed to the plaintiff and that nothing further was due from him, so the exception did not apply here. It further held that even if part of the consideration had genuinely remained unpaid, the seller's remedy would at most be a charge on the property for that amount (under Section 55(4)(b) of the Act), not a right to unilaterally cancel the sale, and in any event the father-in-law's cancellation deed, executed without the plaintiff's consent, was not legally binding on him. The appeal was allowed, the High Court's judgment set aside, and the trial court's decree restored.
Lesson Learnt
Once a registered sale deed with clear recitals of transferred title and possession is executed, the seller cannot unilaterally "cancel" it later even if he later disputes whether the full price was actually paid: his only remedy, if any, is to sue for the unpaid balance or enforce a charge over the property, not to undo the sale on his own.