Non-payment of full sale consideration does not invalidate a registered sale deed absent contrary stipulation.

The plaintiffs claimed ownership of land bearing Survey No. 415, Block No. 303, admeasuring 0-65-76 hectare-sq. metre, at Mauje Bil, Vadodara, acquired under a registered Will and mutated in their names through Revenue Entry No. 2237.

They alleged that defendant No. 2, a broker, initially agreed to purchase the land and obtained their signatures on blank papers after paying an advance. Subsequently, allegedly in collusion with defendant No. 1, the defendants represented that the plaintiffs were signing a registered agreement to sell but procured execution and registration of a sale deed dated 7 July 2011 in favour of defendant No. 1.

The plaintiffs asserted that only Rs. 50 lakhs was paid, although the sale deed recorded consideration of approximately Rs. 85.34 lakhs, and that possession remained with them.

The Trial Court dismissed the suit in Special Civil Suit No. 181 of 2012 by judgment and decree dated 10 May 2024, leading to the present appeal under Section 96 CPC.

1. Whether the plaintiffs established that the sale deed was obtained under the guise of an agreement to sell by fraud or misrepresentation?

2. Whether the plaintiffs established non-payment of the full sale consideration and, consequently, that title did not pass to defendant No. 1?

3. Whether the plaintiffs were entitled to challenge the transaction on the ground that it was prohibited by the Gujarat Prevention of Fragmentation and Consolidation of Holdings Act, 1947?

4. Whether the Trial Court committed an error in dismissing the plaintiffs’ suit?

The Court applied Sections 5 and 54 of the Transfer of Property Act, 1882, under which a sale is a transfer of ownership for a price paid, promised, or partly paid and partly promised; non-payment of part of the consideration does not invalidate a registered sale unless the deed makes transfer of title conditional upon complete payment.

Relying on Dahiben v. Arvindbhai Kalyanji Bhanusali, the Court held that the vendor’s remedy for unpaid consideration is ordinarily recovery of money, not cancellation of the sale deed.

Under Hemalatha (D) by LRs v. Tukaram (D) by LRs, a registered sale deed carries a strong presumption of valid execution and genuineness, which can be displaced only by specific pleadings and cogent evidence of fraud, coercion, mistake, incapacity, or fundamental illegality; vague allegations do not satisfy Order VI Rule 4 CPC.

The Court also considered the principle of non est factum recognised in Bismillah v. Janeshwar Prasad and Ramathal v. K. Rajamani, as well as the law concerning fragmentation under the Gujarat/Bombay Fragmentation Act discussed in Damodhar Narayan Sawale v. Shri Tezrao Bajirao Mhaske.

The Court found that the plaintiffs’ pleadings concerning the alleged fraud were general and lacked material particulars, including specific dates, events, or evidence showing how the defendants had prevented them from understanding the document.

The plaintiffs voluntarily attended the Sub-Registrar’s office, signed the sale deed on every page, and participated in a registration process lasting nearly one hour. The registered document also contained the plaintiffs’ acknowledgment of execution, and no supporting evidence established that they had been falsely told that they were signing only an agreement to sell.

On consideration, the sale deed expressly recorded payment of the full amount, cash-payment vouchers were produced, and the defendant produced bank records showing encashment of cheques and withdrawal of cash. The Court accordingly accepted the Trial Court’s finding that the consideration had been paid.

In any event, even assuming some balance remained unpaid, Sections 54 and the rule in Dahiben established that the registered sale would remain valid because the deed contained no clause making transfer of title conditional upon full payment.

The fragmentation plea also failed because the plaintiffs produced no evidence that any portion of the land had been acquired for a road or that the land sold was a prohibited fragment. The sale was of the property as a whole on an “as is where is” basis, and no competent revenue or statutory authority had declared the transaction void or voidable.

The First Appeal was dismissed, and the Trial Court’s judgment and decree dated 10 May 2024 in Special Civil Suit No. 181 of 2012 were confirmed.

Interim relief, if any, was vacated; the connected civil applications were disposed of as not surviving.

The plaintiffs were permitted to withdraw the amount deposited before the Trial Court, with accrued interest, subject to verification of identity, but their request to suspend operation of the judgment for four weeks was refused.