A registered sale deed cannot be cancelled solely for non-payment of sale consideration.

The plaintiffs sued for a declaration that a registered sale deed dated 21.03.2016 and a subsequent mortgage were invalid, alleging that the sale deed had been procured by fraud and that the stated consideration of ₹56,00,000—paid by cheque—had not been received.

They also sought a declaration of ownership and possession.

Defendant No. 1 sought rejection of the plaint under Order VII Rule 11 CPC, contending, among other things, that the suit was undervalued and that non-payment of consideration did not give the plaintiffs a cause of action to cancel the sale deed.

The trial court dismissed the application; defendant No. 1 challenged that order under Article 227 of the Constitution.

Whether the plaint disclosed a cause of action to cancel the registered sale deed on the pleaded ground that its consideration had not been paid.

Whether the plaint was liable to be rejected under Order VII Rule 11 CPC on the separate ground of incorrect valuation or deficient court fee.

Order VII Rule 11 CPC permits rejection of a plaint where it does not disclose a cause of action or appears from its statements to be barred by law; the court ordinarily assesses the plaint as a whole, taking its material averments as true, and does not determine disputed evidence or the merits of the controversy at that stage (Madanuri Sri Rama Chandra Murthy v. Syed Jalal; Dahiben v. Arvindbhai Kalyanji Bhanusali).

Under Section 54 of the Transfer of Property Act, 1882, a sale may be completed where the price is paid, promised, or partly paid and partly promised; non-payment of the whole or balance consideration does not, by itself, invalidate a registered sale, and the remedy is ordinarily recovery of the unpaid amount (Vidyadhar v. Manikrao; Dahiben; Razia Begum v. Nafisa Begum Abdul Hamid).

The court also noted that Article 227 supervisory intervention may be justified where an error affects the subordinate court’s exercise of jurisdiction.

The Court treated non-payment of the ₹56,00,000 consideration as the essential basis of the challenge to the sale deed.

Applying Section 54 and the cited precedents, it held that non-payment alone could not justify cancellation of a registered sale deed.

It further relied on the sale deed’s recital that the plaintiffs had received the full consideration and handed over possession, and noted that the plaint did not explain the fate of the cheque said to represent the consideration.

On that basis, it concluded that the plaintiffs had no cause of action to seek cancellation and that their remedy, if consideration remained unpaid, was recovery rather than cancellation.

Although incorrect valuation and deficient court fee were pleaded, the Court’s dispositive reasoning addressed the absence of a cause of action; it did not separately determine that objection.