On November 22, 2021, the Supreme Court of India in the case of Kewal Krishan vs. Rajesh Kumar & Ors. etc.1, held that if a sale deed in respect of an immovable property is executed without payment of price and if it does not provide for the payment of price at a future, it is not a sale at all in the eyes of the law.
In this case, the appellant Kewal Krishan and his elder brother (one of the respondents), Sudarshan Kumar, acquired certain properties under two sale deeds dated August 12, 1976 and October 19, 1976 (referred to as the "Suit Properties").
The appellant, Kewal Krishan executed a power of attorney in favour of Sudarshan Kumar on March 28, 1980. Acting on the basis of the said power of attorney, two sale deeds were executed by Sudarshan Kumar on April 10, 1981 ("Sale Deeds"). One sale deed was executed by him through which he purported to sell a part of the Suit Properties to his minor sons. The sale consideration in this sale deed was shown as Rs. 5,500/-. The other sale deed was executed by him in favour of his wife in respect of remaining part of the Suit Properties and the consideration shown was Rs. 6,875/-.
Two separate suits were filed by Kewal Krishan on May 10, 1983. One was against Sudarshan Kumar and his two sons and the other was against Sudarshan Kumar and his wife. Both the suits, as originally filed, were for injunction restraining the defendants from interfering with his possession and from alienating his share in the Suit Properties. In the alternative, a prayer was made for passing a decree for possession of the Suit Properties. On November 23, 1985, the plaints were amended by incorporating the relief of declaration that the power of attorney and the Sale Deeds were null and void. Sudarshan Kumar's contention was that he was the sole owner of the Suit Properties. The Trial Court dismissed the suits filed by Kewal Krishan and held that Sudarshan Kumar was the sole owner of the Suit Properties. In appeal, the District Court partly decreed the suits by granting joint possession of the Suit Properties by setting aside the Sale Deeds. The Court took note of the fact that Sudarshan Kumar failed to substantiate that the entire sale consideration for acquiring the Suit Properties was paid by him. The High Court held that the suits for declaration of invalidity of the Sale Deeds were barred by limitation as the said prayers were belatedly incorporated on November 23, 1985. It also held that the sale consideration mentioned in the Sale Deeds of Rs. 5,500/- and Rs. 6,875/- respectively was not exorbitant and therefore, the amounts were not out of reach of the sons and wife of Sudarshan Kumar. It directed Sudarshan Kumar to pay the share of the appellant along with 12% interest from the date of execution of sale deeds.
In appeal before the Apex Court, it was contended that there was no evidence adduced to show that the purchasers under the Sale Deeds dated April 10, 1981 had paid consideration to Sudarshan Kumar, and that the minor sons and wife of Sudarshan Kumar had no source of earning.
The Supreme Court observed that the undisputed factual position is that the respondents failed to adduce any evidence to prove that the minor sons had any source of income and that they had paid the consideration payable under the Sale Deed. They did not adduce any evidence to prove that Sudarshan Kumar's wife was earning anything and that she had actually paid the consideration as mentioned in the Sale Deed.
The Court referred to Section 54 of the Transfer of Property Act, 1882 ("TOPA"), which defines 'Sale' as a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. The Court therefore observed that a sale of an immovable property has to be for a price. The price may be payable in future. It may be partly paid and the remaining part can be made payable in future. The payment of price is an essential part of Section 54 of the TOPA. If a sale deed in respect of an immovable property is executed without payment of price and if it does not provide for the payment of price at a future date, it is not sale at all in the eyes of the law. It is of no legal effect, and it will not effect the transfer of the immovable property.
In light of the above, it was held by the Apex Court that the Sale Deeds did not affect in any manner one half share of the appellant in the Suit Properties. In fact, such a transaction made by Sudarshan Kumar of selling the Suit Properties on the basis of the power of attorney of the appellant to his own wife and minor sons is a sham transaction.
The Court also held that it was not necessary for the appellant to specifically claim a declaration regarding the Sale Deeds by way of amendment to the plaint. There were specific pleadings in the plaints as originally filed that the Sale Deeds were void. A document which is void need not be challenged by claiming a declaration as the said plea can be set up and proved even in collateral proceedings.
1 Civil Appeal Nos. 6989-6992 of 2021.
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