Under Section 54 of the Transfer of Property Act, 1882, is payment of the entire sale price at the time of execution necessary for a sale to be validly completed?

Paragraph 10In Vidhyadhar (supra), it was held so in Paragraph Nos.36, 37 and 38 with respect to Section 54 of the Transfer of Property Act, 18823:- “36. The definition indicates that in order to constitute a sale, there must be a transfer of ownership from one person to another, i.e., transfer of all rights and interests in the properties which are possessed by that person are transferred by him to another person. The transferor cannot retain any part of his interest or right in that property or else it would not be a sale. The definition further says that the transfer of ownership has to be for a “price paid or promised or part-paid and part- promised”. Price thus constitutes an essential ingredient of the transaction of sale. The words “price paid or promised or part-paid and part-promised” indicate that actual payment of the whole of the price at the time of the execution of sale deed is not a sine qua non to the completion of the sale. Even if the whole of the price is not paid but the document is executed and thereafter registered, if the property is of the value of more than Rs 100, the sale would be complete. 37. There is a catena of decisions of various High Courts in which it has been held that even if the whole of the price is not paid, the transaction of sale will take effect and the title would pass under that transaction. To cite only a few, in Gayatri Prasad v. Board of Revenue [1973 All LJ 412] it was held that non-payment of a portion of the sale price would not affect validity of sale. It was observed that part- payment of consideration by the vendee itself proved the intention to pay the remaining amount of the sale price. To the same effect is the decision of the Madhya Pradesh High Court in Sukaloo v. Punau [AIR 1961 MP 176 : ILR 1960 MP 614]. 38. The real test is the intention of the parties. In order to constitute a “sale”, the parties must intend to transfer the ownership of the property and they must also intend that Civil Appeal No. 7225 of 2011 the price would be paid either in praesenti or in future. The intention is to be gathered from the recital in the sale deed, the conduct of the parties and the evidence on record.”

Paragraph 12Section 54 of the Act squarely applies to the above case. A reading of the translated sale deeds produced along with the appeal, clearly indicates that the defendant had retained Rs.4,500/- for clearing the dues of the plaintiffs. Obviously, the same was not paid and later, by two agreements, the defendant agreed to pay the full consideration and to repay all the government loans.