Where Consideration Does Not Pass in Terms of the Sale Deed, the Sale Deed Is Null and Void, a Nullity and Dead Letter in the Eyes of Law: Jharkhand High Court

“Eight Cheques Returned, No Money Paid — Registered Sale Deeds Are Dead Letters”, Jharkhand High Court has allowed a first appeal and declared two registered sale deeds — executed for a combined consideration of over Rs. 1.02 crore — to be void, null and dead letters, holding that where a sale deed recites payment of consideration through cheques and all eight cheques are admittedly returned to the purchaser without encashment, no consideration passes and no title transfers, notwithstanding any recitals to the contrary in the registered deed.

Justice Anubha Rawat Choudhary, setting aside the judgment of the Civil Judge (Senior Division) III, Jamshedpur, directed the defendant to return the original sale deeds to the plaintiffs within three months, failing which the plaintiffs were granted liberty to recover them through the process of court.

Background of the Case

The plaintiffs — the late Satyanand Mohan Raju and his brothers — were the recorded owners of Schedule-I property in Jamshedpur, having obtained a decree from a civil court in 1976 in a title suit filed by their father against the State of Bihar.

In February and May 2014, the plaintiffs executed two registered sale deeds in favour of the sole defendant, Shivjee Sharma. The first sale deed dated 7 February 2014 covered 206 decimals of land for a consideration of Rs. 62,70,000, stated to have been paid through four cheques all dated the same day. The second sale deed dated 17 May 2014 covered 132 decimals for Rs. 39,60,000, similarly through four cheques dated that day. The sale deeds expressly recorded that the entire consideration had been received and that title and possession had been handed over to the defendant upon execution.

Upon registration, the plaintiffs handed over the registration slips to the defendant. The defendant then applied for mutation — but the authorities refused on the ground that the land stood recorded in the name of the State of Jharkhand. The defendant thereupon wrote to the plaintiffs demanding the return of all cheques, citing the failed mutation. By April and July 2014, all eight cheques were returned to the defendant, acknowledged by his signatures. The defendant then collected the original sale deeds from the registry office using the registration slips.

When the plaintiffs demanded return of the original sale deeds through legal notice dated 23 August 2016, the defendant refused — claiming he had paid the entire consideration of over Rs. 1.02 crore through alternative means including cash payments to the plaintiffs' creditors, security personnel, and relatives. The plaintiffs filed suit for return of the sale deeds, asserting they were void for want of consideration. The Trial Court dismissed the suit. The plaintiffs appealed.

Was the Suit Maintainable Without Seeking Cancellation or Declaration?

The defendant argued before both courts that since the plaintiffs had not sought a declaration that the sale deeds were void, and had not prayed for recovery of possession, the suit for mere return of documents was not maintainable and was barred by Section 34 of the Specific Relief Act, 1963.

The High Court firmly rejected this. Relying on the Supreme Court's judgment in Prem Singh v. Birbal, (2006) 5 SCC 353 — followed in the recent ruling in Shanti Devi v. Jagan Devi, 2025 SCC OnLine SC 1961 — the Court held that "when a document is void ab initio, a decree for setting aside the same would not be necessary since such a transaction is non-est in the eyes of law, being a nullity."

The Court held that where sale deeds are void, the plaintiffs need neither seek their cancellation nor a declaration. A suit for return of the void documents was entirely maintainable. "If the deeds are void, the recitals of the deeds are of no consequence," the Court observed pointedly.

Fixed Court Fee of Rs. 250 Sufficient — No Ad Valorem Fee Required

On the court fee question, the High Court upheld the plaintiffs' payment of a fixed fee of Rs. 250. Since neither a declaration of title nor recovery of possession was sought — only return of the original sale deeds — ad valorem court fees were not payable. The suit was held to be properly valued.

The Doctrine of "Ta Khubzul Badlain" Applies to Jharkhand

The Trial Court had refused to apply the Bihar practice of "Ta Khubzul Badlain" — the principle that title passes only upon exchange of equivalents, i.e., registration receipt against payment of consideration — on the ground that this practice was specific to Bihar and had not been separately recognised in Jharkhand.

The High Court overruled this finding entirely. It held that Jharkhand was carved out of Bihar by the Bihar Reorganisation Act, 2000, and the legal practices judicially recognised in the undivided State of Bihar "cannot cease to exist when it comes to the State of Jharkhand."

The Court drew upon the Supreme Court's authoritative exposition in Janak Dulari Devi v. Kapildeo Rai, (2011) 6 SCC 555, which explained that under "Ta Khubzul Badlain," even where a duly executed and registered sale deed recites payment of consideration, transfer of title, and delivery of possession, the actual transfer of title and possession is postponed until there is an exchange of equivalents — that is, payment of the agreed consideration against delivery of the registration receipt.

The Court held that in the present case, the registration slips were handed over to the defendant upon execution of the deeds — when the cheques (representing the consideration) were still in the plaintiffs' hands. The defendant never paid the consideration through the cheques, nor did he prove that the registration slips were handed over after subsequent payment of an equivalent consideration through alternate modes. The "exchange of equivalents" never occurred. Title therefore never passed.

Defendant's Claim of Alternate Payment — Not Proved

The defendant's primary defence was that the cheques were returned because it had been orally agreed between the parties that they would be encashed only after mutation — and that he had meanwhile paid the entire Rs. 1.02 crore (and more) to the plaintiffs through their creditors, security personnel and relatives.

The High Court meticulously rejected this claim on the evidence. The two letters relied upon by the defendant — Exhibits A and B — allegedly bearing the plaintiffs' signatures acknowledging receipt of payments, were denied as forged and remained unproved, as the defendant did not get the signatures examined by a handwriting expert and did not produce any of the eleven creditors named in those letters as witnesses. The bank statements of the defendant's son's proprietary firm, Shree Balajee Heritage, showed transactions with other persons but no documentary proof linking them to the sale consideration. The Rs. 20 lakh paid to PW-2 Arun Kumar Thakur was pursuant to a bail condition before the High Court — not a sale consideration payment.

"The Sale Deeds Did Not Refer to Any Deferred or Part Payment"

The Court found a critical lacuna in the defendant's case — the sale deeds themselves made no mention of any deferred payment, part-payment, or a condition that the cheques would be encashed only after mutation. "The sale deeds were clear that the consideration stood paid through the cheques mentioned therein," the Court held. Since the deeds contemplated full payment through cheques on the date of execution, any subsequent claimed payment through a different mode — even if proved — would not satisfy the terms of the sale deed, nor would it validate what had become a void transaction.

Relying on Kewal Krishan v. Rajesh Kumar, (2022) 18 SCC 489 and the Supreme Court's 2025 ruling in Shanti Devi v. Jagan Devi, the Court affirmed that "if a sale deed in respect of 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 — it is of no legal effect and will be void."

Neither Title Nor Possession Passed

The Court rejected the defendant's argument that possession had transferred by virtue of the recitals in the registered sale deeds. Since the sale deeds themselves were void, "any recital in the sale deed relating to possession of vacant land is of no consequence." The only evidence for the defendant's possession was the recital in the void deed itself — a document that had become a nullity.

"The Argument That Plaintiffs Ought to Have Filed a Money Suit Is Devoid of Merit"

The defendant contended that the plaintiffs' remedy, if any, was to sue for the unpaid consideration — not to challenge the sale deeds. The Court dismissed this argument as entirely misconceived. Since the sale deeds were void and dead letters, the defendant had no right to retain the original deeds collected from the registry office, and the plaintiffs were entitled to their return.

The High Court set aside the Trial Court's judgment and decree dated 31 May 2023. Both sale deeds — bearing nos. 705/508 dated 7 February 2014 and 2736/2125 dated 17 May 2014 — were held to be void, null and dead letters for want of consideration. The defendant was directed to hand over the original sale deeds to the plaintiffs within three months, failing which the plaintiffs were granted liberty to recover them through court process.

Date of Decision: 16 March 2026