Over Alleged Unpaid Sale Price, Uttarakhand HC Tells Trial Court To Decide First If Sale-Deed Cancellation Suit Is Maintainable

The plaintiff brought a suit seeking cancellation of a sale deed executed on 31 March 2023 and registered on 29 May 2023, alleging that the full sale consideration had not been paid.

The trial court allowed the plaintiff’s application under Order XXXIX Rule 1 CPC and restrained the defendant from creating third-party interests in the suit property.

The defendant appealed, relying on authorities concerning the effect of non-payment of sale consideration and pointing out that the trial court had framed an issue on the suit’s maintainability.

The respondent did not oppose a direction to decide that issue first, but sought an opportunity to respond to any additional affidavit filed by the appellant.

Section 54 of the Transfer of Property Act, 1882 provides that a sale may be completed where the parties intend to transfer ownership for a price paid, promised, or partly paid and partly promised; payment of the entire price at execution is not invariably essential.

The appellant relied on Vidhyadhar and Dahiben for the proposition that non-payment of the balance consideration ordinarily does not invalidate a completed sale and that recovery of the balance may be the appropriate remedy.

The appeal was brought under Section 104 read with Order XLIII Rule 1(r) CPC.

The High Court did not determine the substantive application of these principles to the disputed sale deed; it directed the trial court to decide the already-framed maintainability issue first.

The trial court had framed Issue No. 6 on whether the suit was liable to be rejected under Order VII Rule 11 CPC for want of a cause of action.

Given the appellant’s challenge to the maintainability of a cancellation suit based on non-payment of consideration, and the parties’ agreement on the proposed procedure, the High Court considered it appropriate for the trial court to determine that issue before proceeding further.

It permitted an additional affidavit from the appellant and allowed the respondent to file objections, without expressing a view on the merits of the maintainability issue.

The appellant may file an additional affidavit, and the respondent may file objections.

The trial court is to proceed with the rest of the matter only if Issue No. 6 is answered in favour of the plaintiff.