On January 2, 2024, the Supreme Court of in India in the case of, Kanwar Raj Singh (D) Th. Lrs. v. Gejo (D) Th. Lrs., has held that a sale deed will only operate from the date of registration and upon complete consideration been paid by the purchaser. It was also held that any unilateral changes made after the execution of the sale deed without the knowledge and consent of the purchaser would have to be ignored and any such change made with the consent of the purchaser would be applicable retrospectively, i.e., from the date of execution of the sale deed.

Background: 

1. Late Smt. Gejo was the Plaintiff in a suit for declaration, wherein, she claimed a declaration of ownership over a property parcel on the basis of a sale deed dated 06.06.1975 with the Defendant no. 1, Mr. Kanwar Raj Singh, which came to be registered on 23.07.1975.
2. Thereafter, the Defendant No. 1 executed a gift deed regarding a part portion of the property, being 2/3rd share of the property, in favour of the Defendant No. 8, who was the wife of the Defendant No. 1.
3. As per the case of the Plaintiff, prior to the registration of the sale deed, an interpolation was made in the sale deed by the Defendant No. 1, with the addition that only 1/3rd share of the property was being sold. Whereas the Defendant No. 1 put forth the case that only 1/3rd share of the property was sold to the Plaintiff, which is evident from the sale deed.
4. The Trial Court decreed that the Plaintiff was entitled to the total share of the property, which order was impugned by the Defendant Nos. 1 and 8 before the District Court. The District Court held that that the correction made in the sale deed was bonafide. The order passed by the District Court was challenged before the High Court, however, during the pendency of the second appeal, the Plaintiff passed away, as a result of which the legal heirs of the Plaintiff were impleaded in the matter. The High Court allowed the appeal and resultantly, restored the decree of the Trial Court. As a result of the judgment of the High Court, an appeal was filed before the Supreme Court. 

Submissions of the Appellant:

1. The consideration of the property sold under the sale deed was fixed at Rs. 30,000/- (Rupees thirty thousand only), which under no circumstances could have been agreed taking into consideration the vast area of the total size of the property.
2. The sale of the property came into effect from the date of registration of the sale deed and not from the date when it was executed.
3. Even the agreement for sale executed before the sale deed refers to 1/3rd share of the property which was being sold and not the entire property.
4. The entry in the revenue records to the effect that the owner of the property would be the Plaintiff, would not confer title of the property, as the relevant description of the property is only mentioned in the registered sale deed.  

Issue: 

1. When does a sale deed come into operation?
2. Whether any interpolation can be made in the sale deed after execution of sale deed and prior to the registration of the sale deed?

Relevant law: 

Section 54 of the Transfer of Property Act, 1882 is reproduced hereinbelow:

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

Sale how made—Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument. In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

Contract for sale—A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property”.

Section 47 of The Registration Act, 1908 is reproduced hereinbelow:

“Time from which registered document operates.—A registered document shall operate from the time which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration”. 

Decision:  

The Supreme Court of India has held that a sale deed will only come into operation from the date when the complete consideration is paid by the purchaser, with the registration of the sale deed. The changes made after the execution of the sale deed and prior to the registration of the sale deed can only come into effect, if both the parties have consented to such requisite changes and under no circumstances, any interpolation to the sale deed, without the consent of the other party, cannot come into operation.

In the instant case, admittedly the complete consideration was paid on the date of execution of the sale deed and the interpolation was made after the execution of the sale deed and prior to the registration of the sale deed, without the consent of the purchaser, thus, the interpolation would have no impact on the original sale deed. Accordingly, the Appeal was dismissed, and the decree of the Trial Court was upheld.  

Analysis:  

The judgment makes it clear that an interpolation to the sale deed is allowed, even if the complete consideration is paid, with the caveat that such changes would meet the twin conditions, namely, consent of both the parties and such changes are made prior to the registration of the sale deed. Further, no changes are permissible after the sale deed is registered with the relevant authority. 

Please find a copy of the judgment, here.

This update has been contributed by Namitha Mathews (Partner) and Pulkit Malhotra (Senior Associate).

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