Sale Deed Confirms Transfer of Title and Ownership – Unilateral Cancellation Deed Invalid: Supreme Court

In a recent landmark ruling, the Supreme Court of India clarified the validity of a Sale Deed and its implications on the transfer of title and ownership in property disputes. The judgment in Civil Appeal No. 10412 of 2013, delivered by Hon’ble Justice Abhay S. Oka and Hon’ble Justice Rajesh Bindal on July 31, 2023, sets a significant precedent in property law.

The dispute involved Yogendra Prasad Singh (deceased) and the legal representatives of the plaintiff (appellants) against Ram Bachan Devi & Ors. (respondents). The plaintiff, being the son-in-law of the first defendant, claimed ownership of the suit property through a registered Sale Deed. However, the defendants contested that the Sale Deed did not effect an absolute transfer and that the consideration was not fully paid.

The Court’s ruling, based on a thorough examination of the Sale Deed, put emphasis on its recitals. The judgment stated, “Under the Sale Deed, the entire right, title, and interest of the first defendant in the suit property has been transferred to the plaintiff.” This confirms the passing of title and possession to the plaintiff on the date of the Sale Deed, upholding the plaintiff’s ownership claim.

Furthermore, the Court deemed the unilateral cancellation deed executed by the first defendant as invalid and not binding on the plaintiff, as the latter was not a consenting party to its execution. The subsequent Gift Deed executed by the first defendant was also deemed ineffective since he had no transferable title after the Sale Deed was executed in favor of the plaintiff.

The judgment also addressed the question of unpaid consideration and its impact on the seller’s rights. It was clarified that the plaintiff’s liability to discharge the loan liabilities mentioned in the Sale Deed did not affect his ownership rights over the property.

The Supreme Court’s decision reaffirms the significance of the Sale Deed as a valid instrument for the transfer of title and ownership. The ruling protects the rights of property buyers and emphasizes the importance of comprehensive Sale Deeds in property transactions.

This judgment echoes the legal maxim “Noscitur a sociis,” which means a word is known by the company it keeps. The Court interpreted the Sale Deed in its entirety, considering all recitals to determine the true intent of the parties involved.

Date of Decision: July 31, 2023

Yogendra Prasad Singh (Dead) through LRs vs Ram Bachan Devi & Ors.