Sale Deed – Part payment of the sale price would not affect the validity of the sale of property

 

1.    Section 54 of the Transfer of Property Act, 1882 defines Sale as under.

      “Sale’ is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.”

      The above definition of “sale” indicates that there must be a transfer of ownership from one person to another i.e. transfer of all rights and interest in the property, which was possessed by the transferor to the transferee. The transferor cannot retain any part of the interest or right in the property, or else it would not be a sale. The definition further indicates that the transfer of ownership has to be made for a “price paid or promised or part paid and part promised”. Price therefore, constitutes an essential ingredient of the transaction of sale.

2.    The Hon’ble Supreme Court in its recent Judgment dated 9^th July, 2020 in Civil Appeal No. 9519 has thrown light on the Sale of Property and part payment of the sale price.

        Brief Facts of the Case: -

3.    The Appellant sold the suit property to Defendant No. 1 vide registered Sale Deed dated 2^nd July, 2009.  The Defendant No. 1 issued 36 cheques for Rs.1,74,02,000/- towards payment of the sale consideration in favour of the Appellant, the details of which were mentioned in the registered Sale Deed dated 2^nd July, 2009. The Defendant No. 1 subsequently sold the suit property to Defendant Nos. 2 and 3 vide registered Sale Deed dated 1^st April, 2013.

4.    The Appellant filed the Civil Suit on 15^th December, 2014 against the Defendants before the Principal Civil Judge, Surat alleging that the sale consideration had not been paid in entirety by Defendant No. 1 and that the Sale Deed dated 2^nd July, 2009 was obtained without payment of full consideration. The Appellant further alleged that the Defendant No. 1 had paid only Rs. 40,000 through 6 cheques, and remaining 30 cheques for Rs.1,73,62,000 were “bogus” cheques.  The Appellant prayed that the Sale Deed dated 2^nd July, 2009 be cancelled and declared as being illegal, void, ineffective and not binding on them and also prayed that the subsequent Sale Deed dated 1^st April, 2013 be declared as illegal, void and ineffective; and, the physical possession of the suit property be restored to the Appellant.

5.    The Defendant Nos. 2 & 3 filed an Application for Rejection of the Plaint under Order VII Rule 11 (a) and (d) of the CPC, contending that the suit filed by the Appellant was barred by the period of limitation, and that no cause of action had been disclosed in the plaint.

6.   The Hon’ble Supreme Court has relied upon its earlier Judgment in the case between Vidyadhar Vs.  Manikrao & Anr. The key observations of the Hon’ble Supreme Court in the said Judgment are as under.

(i)    Even if the whole of the price is not paid, but the document is executed, and thereafter registered, the sale would be complete, and the title would pass on to the transferee under the transaction.

(ii)    The non-payment of a part of the sale price would not affect the validity of the sale. Once the title in the property has already passed, even if the balance sale consideration is not paid, the sale could not be invalidated on this ground.

(iii)    In order to constitute a “sale”, the parties must intend to transfer the ownership of the property, on the agreement to pay the price either in praesenti, or in future. The intention is to be gathered from the recitals of the sale deed, the conduct of the parties, and the evidence on record.

7.    The Hon’ble Supreme Court has held that even if the averments of the Appellant are taken to be true, that the entire sale consideration had not in fact been paid, it could not be a ground for cancellation of the Sale Deed. The Appellant may have other remedies in law for recovery of the balance consideration, but could not be granted the relief of cancellation of the registered Sale Deed.

Payment of Wages-Salary – During Period of Lockdown (Part 1)

The Hon’ble Supreme Court of India has passed the Interim Orders on 12^th June, 2020 in the Writ Petition (C) Diary No. 10983 of 2020 and others  concerning the  payments of the wages during the period of lockdown. Some of  the key  observations  of the  Hon’ble Supreme Court are as under.

1. Lockdown measures enforced by the Government of India under the Disaster Management Act, 2005, had equally adverse effect on the employers as well as on employees.
2. Various Industries, establishments were not allowed to function during the said period and those allowed to function also could not function to their capacity.
3. All industries/establishments are of different nature and of different capacity, including financial capacity. Some of the industries and establishments may bear the financial burden of payment of wages or substantial wages during the lockdown period to its workers and employees. Some of them may not be able to bear the entire burden. A balance has to be struck between them.
4. Employees although were ready to work but due to closure of industries could not work and suffered. For smooth running of industries with the participation of the workforce, it is essential that a via media be found out.
5. The obligatory orders having been issued on 29.03.2020 which has been withdrawn w.e.f. 18.05.2020, in between there has been only 50 days during which period, the statutory obligation was imposed.
6. Both Industry and Labourers need each other. No Industry or establishment can survive without employees/labourers and vice versa.
7. We are thus of the opinion that efforts should be made to sort out the differences and disputes between the workers and the employers regarding payment of wages of above 50 days and if any settlement or negotiation can be entered into between them without regard to the order dated 29.03.2020, the said steps may restore congenial work atmosphere.

In view of the above observations, the Hon’ble Supreme Court has directed the interim measures which can be availed by all the private establishment, industries, factories and workers Trade Unions/ Employees Associations.  The key points of interim measures are as under.

1. The private establishment, industries, employers may initiate a process of negotiation with their employees and enter into a settlement for payment of wages for 50 days or for any other period, when the establishment was closed due to lockdown.
2. If the employer and employees are unable to settle by themselves, submit a request to concerned labour authorities who are entrusted with the obligation under the different statute to conciliate the dispute between the parties.
3. In the event a settlement is arrived at, that may be acted upon by the employers and workers irrespective of the order dated 29.03.2020 issued by the Government of India, Ministry of Home Affairs.
4. The private establishments, industries, factories shall permit the workers/employees to work in their establishment who are willing to work which may be without prejudice to rights of the workers/employees regarding unpaid wages of above 50 days.
5. The settlement, if any, as indicated above shall be without prejudice to the rights of employers and employees which is pending adjudication in the writ petitions”. 

Thus, in view of the above Order of the Hon’ble Supreme Court of India, it is clear that the employer and employees may negotiate for amicable settlement of the dispute regarding the payment of wages during the period of lockdown. The employees cannot force the employer to accept their demand. Likewise, the employer cannot force the employees to accept their demand. If both the employer and employees unable to arrive at an amicable settlement, the remedy is given to approach the Labour Authorities, i.e. Assistant Commissioner of Labour or the Conciliation Officer of the respective region, who in turn mediates in the matter and finds out the via-media between them.