Sale Under Transfer of Property Act

5/16/23, 7:51 AM Sale under Transfer of Property Act
Sale under
Transfer of
Property Act
Sale under Transfer of

Property Act
What is sale under

transfer of property act?
Meaning of Sale under Transfer of
Property Act: – Sale is defined as
the transfer of ownership of
a property in exchange for a price
paid or promised or partly paid or part
promised. Sale simply means the
purchase and sale of goods and
services, the sale of immovable
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property is provided under Section 54

of Transfer of Property Act 1882.
Section 3 of the Act is the

interpretation clause, which provides
the meaning: –
1. Immovable Property: –
Immovable property exclude
standing timber, growing crops
or grass
2. ,Instrument: – It means a non-

testamentary instrument. The
instrument should be in writing,
a formal or legal document in
writing, such as a contract,
deed, bond or lease or
anything reduced to writing.
3. Registered: – A register is a
book contains records of the
facts as they are kept by the
public authority. If the
registration is done in violation
of the provisions of the
Registration Act, that document
cannot be said to be duly
registered.
4. Attached: – It is a term that
describes the physical union of
two independent structures or
objects, which refers to the
relationship between two parts
of the structure each having its
function.
Section 54 of the
Transfer of Property Act
Section 54 of the Act defines the
meaning of the ‘sale’ and also
specifies how the sale of immovable
property can be done. Here, sale refers
to the sale of immovable property
whether tangible or intangible (For
example: – easement rights)
A sale under transfer of property act

is a transfer of ownership for a money
consideration. It refers to the
complete transfer of all rights in the
property sold. No rights in the property
sold, are left to the transferor.
Section 54: – Sale ownership is

transferred in exchange for a price
paid or promised or part-paid and part-
promised.
What is contract for

sale?
Meaning of Contract for Sale: – A
contract for the sale of immovable
property is a contract which takes
place on the settled terms between
the parties. In this, the seller agrees to
sell or deliver something to the buyer
for a fixed price that the buyer has
agreed to pay. A contract of sale of
goods is a contract whereby the
seller transfers or agrees to transfer
the property in goods to the buyer
for a price. There may be a contract of
sale between one part-owner and
another.
What are the elements

of Sale?
The elements of Sale are given as
follows: –
1. Transfer of Ownership: –
Ownership is the aggregation
of all rights and liabilities in a
property. When transfer of
ownership occurs, all rights and
liabilities in the property is
transferred from transferor to
transferee.
2. Money Consideration: –
Where the ownership of the
property is transferred for
money, it amounts to sale, but if
it is transferred for something
else, it amounts to exchange.
3. The seller must be a person
competent to transfer. The
seller should be either the
owner of the property or should
have the authority to dispose of
it.
4. The buyer must be a person
competent to the transferee.
5. The subject matter must be a
transferable immovable
property which can be tangible
or intangible.
6. There must be a transfer of

ownership
7. The transfer must be in
exchange for a price. ‘Price’ in
the ordinary sense connotes
money consideration for the
sale of the property. The price
must be paid or promised or
partly paid.
What are the essentials

of a Sale under Transfer
of Property Act?
The essentials of a sale under transfer
of property act are given as follows: –
Parties i.e., Seller, Buyer

Competency
Money consideration
Conveyance
Registration
Explanation: –
1. Parties: – In a sale, there must

be at least two parties. The
person who transfers his
property is known as the
transferor/seller/vendor and the
person to whom the property is
transferred is known as the
transferee/buyer/vendee.
2. Seller: –
The seller must own the

property which he is
going to sell.
The seller should have
legal title to it only then
he can sell the property.
The seller should be
competent to contract.
He must not be a minor
person.
He should not be of
unsound mind.
He must not be
statutorily incompetent.
The seller may be a

natural person / judicial
person, for example, a
corporation or any other
legal person.
3. Buyer: –
The buyer must be

competent to get the
ownership of the
property.
The buyer should not be
disqualified from
purchasing the
immovable property
under any law at the
time of sale, for
example: under section
136 of the Act, a judge,
a legal practitioner or an
officer of the court is
incompetent for
purchase of actionable
claim.
The seller may be a

natural person / judicial
person, for example: a
corporation or other
legal person.
4. Subject Matter: – The sale

under Transfer of Property Act,
1882 specifically deals with the
sale of immovable property.
Immovable property includes
the benefits from the land and
the things attached to the earth
and it does not include
standing timber, growing crops
and grass.
5. Competency: – A valid sale

requires both the parties i.e.,
the buyer and seller to be
competent on the date of sale.
6. Money Consideration: – The

consideration must only be in
money to constitute a sale. If it
is for exchange or some other
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items then it is not sale. The

consideration for the sale must
be paid, partly paid, promised
or partly promised. Therefore
price is money but not
necessarily money immediately
paid in notes and coins, it
includes money which might be
already due or payable at a
future date.
7. Conveyance: – Section 54
provides for two ways for
transfer of property: –
Where the property

transferred is tangible
immovable property of
value of one hundred
rupees and upward
transfer can only be
made by a registered
instrument. Where the
property is immovable
property of less than
one hundred rupees, it
can be transferred either

by registered instrument
or delivery of property.
The delivery of tangible
immovable property
occurs when the seller
puts the buyer or such
person as the buyer
directs in possession of
the property.
Registration of sale
deed: – Where the value
of tangible immovable
property is Rs. 100 or
more, the sale of such
property requires
registration of the deed.
Where the property is
intangible immovable
property of any
valuation, it will require
registration to complete
the sale.
8. Registration: – Both section 8
and 54 of the Transfer of
property act, 1882 suggests
that through execution and

registration of a sale deed, the
ownership and all interests in
the property passes to the
transferee, yet this will be on
the terms and conditions
embodied in the deed
indicating the intention of the
parties. The intention of the
parties can be gathered from
the averments (formal
statement) in the sale deed
itself or under other attending
circumstances. Where the sale
is to be completed only by the
registered instrument, the
ownership is presumed to pass
on the execution of the sale
deed, not on the deed’s
registration. The sale deed
transferring immovable
property of the value of 100 or
more it will require registration
under Indian Registration Act
1908.
Rights and liabilities of

Buyer and Seller
The buyer and the seller of the
immovable property respectively are
subject to the liabilities, and have the
rights, mentioned in the rules
following: –
1. The seller is bound: –
To disclose to the buyer

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 with ordinary
care discover;
To produce to the buyer
on his request for
examination all
documents of title
relating to the property
which are in the seller’s

possession or power;
To answer to the best of
his information all
relevant questions put to
him by the buyer with
respect to the property
or the title thereto;
On payment or tender of
the amount due in
respect of the price, to
execute a proper
conveyance of the
property when the buyer
tenders it to him for
execution at a proper
time and place;
Between the date of the
contract of sale and the
delivery of the property,
to take as much care of
the property and all
documents of title
relating thereto which
are in his possession as
an owner of ordinary
prudence would take of

such property and
documents;
To give, on being so
required, the buyer, or
such person as he
directs, such
possession of the
property as its nature
admits;
To pay all public
charges and rent
accrued due in respect
of the property up to the
date of the sale, the
interest on all
encumbrances on such
property due on such
date, and,except where
the property is sold
subject to
encumbrances, to
discharge all
encumbrances on the
property then existing.
2. The seller is entitled: –
To the rents and profits

of the property till the
ownership thereof
passes to the buyer;
Where the ownership of
the property has passed
to the buyer before
payment of the whole of
the purchase-money, to
a charge upon the
property in the hands of
the buyer, any
transferee without
consideration or any
transferee with notice of
the non-payment, for the
amount of the purchase
money, or any part
thereof remaining
unpaid, and for interest
on such amount or part
from the date on which
possession has been
delivered.
3. The buyer is bound: –
To disclose to the seller

any fact as to nature or
extent of the seller’s
interest in the property
of which the buyer is
aware, but of which he
has reason to believe
that the seller is not
aware, and which
materially increases the
value of such interest;
To pay or tender, at the
time and place of
completing the sale, the
purchase-money to the
seller or such person as
he
directs. Provided that,
where the property is
sold free from
encumbrances, the
buyer may retain out of
the purchase money the
amount of any
encumbrances on the
property existing at the

date of the sale, and
shall pay the amount so
retained to the persons
entitled thereto;
to the buyer, to bear any
loss arising from the
destruction, injury or
decrease in value of the
property not caused by
the seller;
to the buyer, as between
himself and the seller, to
pay all public charges
and rent which may
become payable in
respect of the property,
the principal money due
on any encumbrances
subject to which the
property is sold, and the
interest thereon
afterwards accruing
due.
4. The buyer is entitled: –

to him, to the benefit of
any improvement in, or
increase in the value of,
the property, and to the
rents and profits thereof;
Unless he has
improperly declined to
accept delivery of the
property, to a charge on
the property, as against
the seller and all
persons claiming under
him, to the extent of the
seller’s interest in the
property, for the amount
of any purchase-money
properly paid by the
buyer in anticipation of
the delivery and for
interest on such
amount; and, when he
properly declines to
accept the delivery, also
for the earnest (if any)
and for the costs (if any)
awarded to him of a suit
to compel specific
performance of the
contractor to obtain a
decree for its rescission.
Difference between Sale

under Transfer of
Property Act and
Contract for Sale
S.No. Sale Contract for
sale
1. There is a There is an
transfer of agreement
ownership of between the
the property. parties for the
S.No. Sale Contract for

sale
sale of the
property with
consent.
2. Gives legal Does not
title to buyer. generate any
interest in the
property.
3. Creates a Creates a
right in rem. right in
personam
4. Registration is Registration is
mandatory not required.
where the sale
is of
immovable
property of
Rs. 100 or
more.
Case laws of Sale under

Transfer of Property Act
1. Nahar Lal vs. Brijnath 1928
AC 385
Judgments of the case: – In this case,

the court held that if the registration is
done in violation of the provisions of
the Registration Act, a document
cannot be said to be duly registered.
2. Umakanta Das vs. Pradip

Kumar Ray, AIR 1983 Ori 196

the court held that if the sale deed
contains a condition that the price will
be paid within one year, provided that
possession is obtained within that
time, and if possession is not obtained,
the payment of the price will be
postponed, or in the event of the
vendee not getting the property, the
price will not be paid. In all the above
cases, the deed within the meaning of

the section is the sale deed.
3. Raheja Universal Ltd. vs. NAC

Ltd., 2012 4 SCC 148

the court states that a contract for sale
of immovable property or an
agreement to sell is a contract that a
sale of such property shall be on the
terms settled between the parties. This
in itself does not create any interest or
charge on such property.
4. Misabul Enterprises vs. Vijaya

Srivastava, AIR 2003 Del. 15.

the court held that a contract of sale
should be based on a mutual
agreement between seller and buyer.

Sale Under Transfer of Property Act

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5/16/23, 7:51 AM Sale under Transfer of Property Act

Sale under Transfer of

What is sale under

property is provided under Section 54

Section 3 of the Act is the

2. ,Instrument: – It means a non-

A sale under transfer of property act

Section 54: – Sale ownership is

What is contract for

What are the elements

6. There must be a transfer of

What are the essentials

Parties i.e., Seller, Buyer

1. Parties: – In a sale, there must

The seller must own the

The seller may be a

The buyer must be

The seller may be a

4. Subject Matter: – The sale

5. Competency: – A valid sale

6. Money Consideration: – The

items then it is not sale. The

Where the property

can be transferred either

that through execution and

Rights and liabilities of

1. The seller is bound: –

To disclose to the buyer

which are in the seller’s

prudence would take of

2. The seller is entitled: –

To the rents and profits

3. The buyer is bound: –

To disclose to the seller

property existing at the

4. The buyer is entitled: –

Where the ownership of

Difference between Sale

S.No. Sale Contract for

Case laws of Sale under

Judgments of the case: – In this case,

2. Umakanta Das vs. Pradip

Judgments of the case: – In this case,

cases, the deed within the meaning of

3. Raheja Universal Ltd. vs. NAC

Judgments of the case: – In this case,

4. Misabul Enterprises vs. Vijaya

Judgments of the case: – In this case,

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