Supreme Court Rules Right to Repurchase in Conditional Sale Deed Can Be Assigned, Validates Assignment in Gift Deed

07 May 2024 8:19 AM

By: Admin

In a significant judgment, the Supreme Court of India has clarified the legal position regarding the assignment of the right to repurchase in both conditional sale deeds and gift deeds. The verdict, delivered by Justice Rajesh Bindal, sheds light on the assignability and enforceability of such rights, along with addressing related contractual issues.

The case of Indira Devi v. Veena Gupta & Ors. came before the apex court, the bench considered the provisions of Section 15(b) of the Specific Relief Act, 1963, along with the relevant clauses and intent of the documents involved.

The headnotes of the judgment encapsulate the key rulings and principles laid down by the court:

Conditional Sale Deed - Assignment of Right to Repurchase:

The court examined whether the right to repurchase contained in a sale deed can be assigned by the vendor or if it is of a personal nature and cannot be transferred. It was held that unless explicitly stated in the document, the right to repurchase is not personal and can be assigned. The court emphasized that no implied prohibition against assignment or transfer should be inferred, and assignment of obligations would require the consent of the other party. (Para 15, 16)

Gift Deed - Validity of Assignment:

The court deliberated on the validity of the assignment of the right to repurchase in a gift deed, particularly when consideration money is involved. It ruled that the transfer of the right to repurchase can be considered an assignment and need not be categorized as a gift solely due to the involvement of consideration money. The executor's intent and the conditions attached to the assignment were deemed crucial in determining its validity. (Para 23)

Enforceability of Contract - Specific Performance - Multiple Reliefs:

The court addressed the issue of multiple reliefs claimed in a suit, including specific performance and tenancy claims. It held that multiple reliefs can be claimed in a suit, but the nature of the claims and their compatibility must be considered. (Para 14)

Assignability of Contractual Rights:

The court examined the assignability of contractual rights and distinguished between the assignment of rights and obligations. It stated that contractual rights are generally assignable unless the contract is personal in nature or the rights are incapable of assignment under the law or an agreement between the parties. Assignment of obligations requires the consent of the other party. (Para 20)

Construction of Documents - Implied Terms:

The court discussed the construction of documents and the implication of a prohibition against assignment or transfer. It emphasized that unless the contents of the document and evidence clearly indicate a prohibition, no implied prohibition against assignment or transfer should be inferred. Section 15(b) of the Specific Relief Act allows for the assignment of benefits unless the contract is personal in nature. (Para 17)

The judgment also referred to several relevant cases, including Bhoju Mandal and Ors. v. Debnath Bhagat and Ors., Kapilaben and Ors. v. Ashok Kumar Jayantilal Sheth, through POA Gopal Bhai Madhusudan Patel and Ors., and T.M. Balakrishna Mudaliar v. M. Satyanarayana Rao. These cases aided in the interpretation of the law and supported the court's findings. (Para 19, 20, 21)

This landmark judgment brings clarity to the legal landscape concerning the assignment of the right to repurchase in conditional sale deeds and gift deeds. It affirms that unless expressly

prohibited, such rights are assignable and enforceable. This ruling will have far-reaching implications on property transactions and related contracts, providing parties with greater flexibility and legal certainty.

Date of Decision: 04 July 2023

Indira Devi vs Veena Gupta & Ors.