SALE AND ITS
ESSENTIALS
SALE : ( Section 54, TPA
1882)
"Sale" is a transfer of ownership in exchange for a price paid or
promised or part-paid and part-promised.
(It is the transfer of ownership for
money consideration ( i.e it’s an
absolute transfer of all the rights in the property sold, for money
consideration ).
ESSENTIALS OF A VALID SALE:
There are four essentials of a valid
sale which are discussed as under:
1)
PARTIES:
Ø There must be at least two parties i.e buyer (transferee) and seller(transferor).
Ø Buyer or seller can be a natural person or a juristic person.
Competency Of Seller:
Ø Major, Sound Mind and Not Disqualified By Law (competent to contract).
Ø Must be the owner of the property (immovable) ,or, authorized to sell the
property.
Competency Of Buyer:
Ø Any person capable of holding the property and not disqualified by law.
( It must be noted that a minor
cannot sell his property, however, he can purchase property. Similarly, an
unsound person cannot transfer his property despite being the owner of the property,
however, property transferred by a mentally challenged person during lucid
intervals is considered as valid).
2)
SUBJECT-MATTER:
Ø The subject-matter of sale must be immovable property (whether tangible or
intangible) under the transfer of property
act,1882).
Ø Immovable property includes – land, the benefits arising out of land and
the things attached to earth except standing timber, growing crops and grass.
(It must be noted that sale of
movable property is dealt under sale of goods act, 1929).
3)
MONEY
CONSIDERATION:
Ø Price is an essential element of a sale and must be ascertained for which
the property is going to be transferred.
Ø Price may be paid at the time of execution of sale, before it in advance
or after the sale.
Ø Inadequacy of consideration is not any relevant factor. It is sufficient
for a sale to be valid , if the consideration is sufficiently mentioned along with it’s mode of payment.
4)
CONVEYANCE:
There are two modes for the sale of immovable property.
1)
By delivery of
possession.
2)
By registration of sale-deed.
1)
By Delivery of
possession:
If the property is tangible immovable property of value less than 100
rupees, it can be transferred either by delivery of possession or by a
registered instrument. ( i.e registration not compulsory).
2)
By Registration
of Sale-deed:
If the property
is tangible immovable property of value 100 rupees or more , transfer must be
done by registration of instrument (Sale-deed). I.e registration is compulsory.
(Where the
property is intangible immovable property of any valuation, it will require
registration for complete of sale i.e registration is compulsory).
LIABILITIES OF SELLER
1)
To Disclose Material Fact:
It is the duty of the
seller to disclose any material defect in the property or in the seller’s title
thereto of which the seller is and the buyer is not aware, and which the buyer
could not discover by ordinary prudence.
2)
Production Of Document Of Title:
The seller is duty-bound to produce
documents of title in his possession or power for examination, on buyer’s
request.
3)
To Answer The Questions:
The seller shall
answer all the relevant questions put to him by the buyer in respect to the
property or the title thereto.
4)
To Execute A Proper Conveyance:
It is the duty of the
of the seller to execute a proper
conveyance of the property, on payment of amount due in respect of the
price, by the buyer.
5)
To Take Care Of Property And
Documents:
The seller must take a
reasonable care of the property and all documents of title thereto which are in
his possession, between the date of contract of sale and the delivery of
property.
6)
Delivery Of Possession:
The seller must give
possession of the property to the buyer or such person as he(buyer) directs.
7)
Payment Of All Charges:
Before the completion
of sale , the seller has to pay all outgoings on the property like rent,
revenue, taxes etc, upto the date of sale.
RIGHTS OF SELLER;
The seller has got the following rights:
1)
Rents And Profits:
The seller is entitled to get rents
and profits from the property until the ownership passes to the buyer.
2)
Charge On The
Property;
When ownership of
immoveable property has been passed to buyer before payment of whole of
purchase-money, seller is entitled to a charge upon that property, which is in
the hands of buyer, to the extent of unpaid part.
………………………………………………………………………………......
LIABILITIES OF BUYER;
The liabilities of buyer can be
divided into:
·
Liabilities
Before Sale:
1)
Disclosure:
Where the buyer is
aware of any material fact, of which the seller is unaware, which increases the
value of property, he/she is bound to inform the seller of the same.
2)
Payment Of Sale-Money:
After completion of
the sale, the buyer is bound to pay the full amount (Sale-Money) to the seller,
but he/she is not bound to make the whole payment before the execution of the
sale.
·
Liabilities
After Sale:
1)
To Bear Loss:
After the sale has
been executed, it’s the duty of the buyer to bear any loss to the property (e.g
in case of damage or decrease in the market price) and the seller is not liable
to pay for it.
2)
To Pay
Outgoings:
Where the ownership of the property has been passed
to the buyer , he has to pay all the public charges and rents which may become
payable in respect of the property from the date of transfer.
RIGHTS OF BUYER:
1)
Rents &
Profits:
When the ownership of the property has been transferred to the buyer, he
is entitled to any improvement in or increase in value of the property and to the rents and
profits thereof.
2)
Entitlement to
charge on immoveable property
Buyer is entitled to charge on immoveable property to extent of seller’s
interest in the property, to charge for amount of any purchase-money, which is
properly paid by buyer in anticipation of delivery, and to charge for interest
on such amount. Such charge is against seller and all persons, who claim under
seller.
THE END
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