SALE AND ITS ESSENTIALS

SALE : ( Section 54, TPA 1882)

"Sale" is
a transfer of ownership in exchange for a price paid or
promised or part-paid and part-promised.
(It is the transfer of ownership for money consideration ( i.e it’s an
absolute transfer of all the rights in the property sold, for money
consideration ).

ESSENTIALS OF A VALID SALE:

There are four essentials of a valid sale which are discussed as under:

1) PARTIES:

➢ There must be at least two parties i.e buyer (transferee) and

seller(transferor).
➢ Buyer or seller can be a natural person or a juristic person.
Competency Of Seller:
➢ Major, Sound Mind and Not Disqualified By Law (competent
to contract).
➢ Must be the owner of the property (immovable) ,or,
authorized to sell the property.
Competency Of Buyer:
➢ Any person capable of holding the property and not
disqualified by law.
( It must be noted that a minor cannot sell his property, however,
he can purchase property. Similarly, an unsound person cannot
transfer his property despite being the owner of the property,
however, property transferred by a mentally challenged person
during lucid intervals is considered as valid).

2) SUBJECT-MATTER:

➢ The subject-matter of sale must be immovable property

(whether tangible or intangible) under the transfer of
property act,1882).
➢ Immovable property includes – land, the benefits arising out
of land and the things attached to earth except standing
timber, growing crops and grass.
(It must be noted that sale of movable property is dealt under sale
of goods act, 1929).
3) MONEY CONSIDERATION:

➢ Price is an essential element of a sale and must be

ascertained for which the property is going to be transferred.
➢ Price may be paid at the time of execution of sale, before it
in advance or after the sale.
➢ Inadequacy of consideration is not any relevant factor. It is
sufficient for a sale to be valid , if the consideration is
sufficiently mentioned along with it’s mode of payment.

4) CONVEYANCE:

There are two modes for the sale of immovable property.

1) By delivery of possession.
2) By registration of sale-deed.

1) By Delivery of possession:

If the property is tangible immovable property of value less

than 100 rupees, it can be transferred either by delivery of
possession or by a registered instrument. ( i.e registration not
compulsory).
 2) By Registration of Sale-deed:
If the property is tangible immovable property of value 100 rupees
or more , transfer must be done by registration of instrument
(Sale-deed). I.e registration is compulsory.

(Where the property is intangible immovable property of any

valuation, it will require registration for complete of sale i.e
registration is compulsory).

LIABILITIES OF SELLER

1) To Disclose Material Fact:

It is the duty of the seller to disclose any material defect in the
property or in the seller’s title thereto of which the seller is and the
buyer is not aware, and which the buyer could not discover by
ordinary prudence.
2) Production Of Document Of Title:
The seller is duty-bound to produce documents of title in his
possession or power for examination, on buyer’s request.

3) To Answer The Questions:

The seller shall answer all the relevant questions put to him by the
buyer in respect to the property or the title thereto.

4) To Execute A Proper Conveyance:

It is the duty of the of the seller to execute a proper conveyance
of the property, on payment of amount due in respect of the price,
by the buyer.

5) To Take Care Of Property And Documents:

The seller must take a reasonable care of the property and all
documents of title thereto which are in his possession, between
the date of contract of sale and the delivery of property.
6) Delivery Of Possession:
The seller must give possession of the property to the buyer or
such person as he(buyer) directs.

7) Payment Of All Charges:

Before the completion of sale , the seller has to pay all outgoings
on the property like rent, revenue, taxes etc, upto the date of sale.
 8) Delivery Of Title Deeds:
Where the whole of the sale money has been paid to the seller,
he is bound to deliver to the buyer all documents of title relating to
the property which are in the seller’s possession or power.

RIGHTS OF SELLER;
The seller has got the following rights:

1) Rents And Profits:

The seller is entitled to get rents and profits from the property until
the ownership passes to the buyer.

2) Charge On The Property;

When ownership of immoveable property has been passed to
buyer before payment of whole of purchase-money, seller is
entitled to a charge upon that property, which is in the hands of
buyer, to the extent of unpaid part.

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LIABILITIES OF BUYER;
The liabilities of buyer can be divided into:
• Liabilities Before Sale:

1) Disclosure:
Where the buyer is aware of any material fact, of which the seller
is unaware, which increases the value of property, he/she is
bound to inform the seller of the same.

2) Payment Of Sale-Money:

After completion of the sale, the buyer is bound to pay the full
amount (Sale-Money) to the seller, but he/she is not bound to
make the whole payment before the execution of the sale.

• Liabilities After Sale:

1) To Bear Loss:
After the sale has been executed, it’s the duty of the buyer to bear
any loss to the property (e.g in case of damage or decrease in the
market price) and the seller is not liable to pay for it.

2) To Pay Outgoings:
Where the ownership of the property has been passed to the
buyer , he has to pay all the public charges and rents which may
become payable in respect of the property from the date of
transfer.
RIGHTS OF BUYER:

1) Rents & Profits:

When the ownership of the property has been transferred to
the buyer, he is entitled to any improvement in or increase
in value of the property and to the rents and profits thereof.

2) Entitlement to charge on immoveable property

Buyer is entitled to charge on immoveable property to extent
of seller’s interest in the property, to charge for amount of
any purchase-money, which is properly paid by buyer in
anticipation of delivery, and to charge for interest on such
amount. Such charge is against seller and all persons, who
claim under seller.

THE END