Payment of price is an essential part of a sale, thus sale deed executed without payment of price is void: Supreme Court

The Supreme Court has ruled that payment of the agreed price is a fundamental requirement for a sale deed to be legally valid under Section 54 of the Transfer of Property Act. If a sale deed for immovable property is executed without the price being paid, and without any provision for future payment, it is not considered a sale in the eyes of the law. Consequently, such a deed cannot transfer ownership of the property.

In Kewal Krishan v. Rajesh Kumar & Ors. Etc. [Civil Appeal Nos. 6989-6992 of 2021 arising out of S.L.P. (C) Nos. 2033-2036 of 2016 dated November 22, 2021] Hon'ble Supreme Court held that the payment of price is an essential part of a sale covered by Section 54 of the Transfer of Property Act, 1882 ("the Transfer of Property Act"). 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 a sale at all in the eyes of law. Therefore, such a sale will not effect the transfer of the immovable property.

Kewal Krishan ("the Appellant") executed a power of attorney in favour of Sudarshan Kumar ("the Respondent") on March 28, 1980. Acting on the basis of the said power of attorney, two sale deeds were executed by the Respondent on April 10, 1981. The first sale deed was executed by him by which he purported to sell a part of the suit properties to his minor sons. The sale consideration was shown as Rs. 5,500/-. The other sale deed was executed by the Respondent in favour of his wife for consideration shown in the sale deed was of Rs. 6,875/-.

The Appellant contended that the purchasers i.e. wife and minor sons of the Respondent did not have any source of income at the time the sale deed was executed and therefore, consideration amounts were not out of reach of the purchasers. Further, contended that the market value of the suit properties was more than Rs. 30,000/- and there was no occasion to sell the suit properties at the price shown in the sale deeds.

Hon'ble Supreme Court observed that, there is no evidence adduced on record by the Respondent that his minor sons and his wife had any source of income at the relevant time and that they paid him consideration as mentioned in the sale deed.

Further observed that, the Respondent by taking advantage of the power of attorney, transferred the suit lands to his own minor sons and his wife without any consideration.

Held that, as per Section 54 of the Transfer of Property Act the payment of price is an essential part of a sale, 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 a sale at all in the eyes of law.

Held that, the sale deeds of April 10, 1981 will not confer any right, title and interest on the Respondents wife and children as the sale deeds will have to be ignored being void.