INTRODUCTION

Property is one of the fundamental elements of socio-economic life of an individual. The

economic significance of property rests more on its dispositions rather than on its abstract
content. Property Law has, therefore, been an important branch of civil law. Transfer of
Property Act, 1882 deals with the transfers inter vivos of immovable properties albeit
some of its provisions are applicable to transfers also of movable properties.1 Ordinarily,
it is the right of the owner of the property to sell or deal with the property as he likes. No
developer of property gets a right to sell or deal with the property unless he is given such
right specifically and specially.2 The sale has been defined under sec.54 of the T.P Act in
following words:-
"Sale" is a transfer of ownership in exchange for a price paid or promised or part-
paid and part-promised.
Sale how made: Such transfer, in the case of tangible immovable property of the
value of one hundred rupees and upwards, or in the case of a reversion or other
intangible thing, can be made only by a registered instrument.
In the case of tangible immovable property of a value less than one hundred
rupees, such transfer may be made either by a registered instrument or by delivery
of the property.
Delivery of tangible immovable property takes place when the seller places the
buyer, or such person as he directs, in possession of the property.
Contract for sale: A contract for the sale of immovable property is a contract that
a sale of such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property.

Sale is defined as being transfer of ownership. In a sale there is an absolute transfer of all
rights in the property sold. The words “transfer of ownership” stand in the contrast with
the words “transfer of a right to enjoy property”. There are two parties in a sale. The
transferor is called seller and the transferee is called purchaser. Seller and purchaser are
also known as vendor and vendee. Subject matter of the sale may be immovable property
whether tangible or intangible. The transfer of ownership in exchange for a price is the
1
R.K. SINHA, THE TRANSFER OF PROPERTY ACT Preface to the First Edition (11th ed. 2010)
2
Volition Investment Pvt. Ltd. V. Madhuri Jitendra Mashroo, AIR 2003 Bom 360.
essence of a sale. Price means money price. If the consideration of the transfer is
something other than price, it is not a sale. It may be an exchange but not sale.

CHAPTER - I
 UNDERSTANDING THE CONCEPT OF SALE
Sale is transfer of ownership for money consideration. Sec.54 defines sale as a transfer of
ownership in exchange for a price paid or promised to be paid. Accordingly the elements
which are necessary to constitute a sale are as under:
a) Transfer of ownership, and
b) Money consideration.
Transfer of ownership-Sale is a transfer of ownership. Ownership is absolute
interest in the property. Therefore, in a sale there is transfer of all the rights in the
property sold; no right in respect of property is left with the transferor (seller).
Ownership means bundle of all the right and liabilities of property. So, when
ownership is transferred, there is transfer of all the rights in property by transfer of
property but, the is transfer all the rights in the property by transferor to transferee. In
the other word nothing less than ownership or absolute interest may be transferred by
the way of sale. Lease is not the transfer of property but, there is transfer of only
partial interest (right to use or enjoyment of the property).3Similarly mortgage too is
transfer of property but, it is transfer of merely a limited interest in the mortgaged
property.
Money Consideration- The ownership of the property must be transferred in
exchange of money. That is to say, the transferor must receive some money from the
transferee in the return of transferred ownership of his property. The money in
exchange of ownership is called ‘price’. However, for a valid sale amount of money
is an irrelevant factor. It may or may not be adequate some of money as compared to
the market value of the property. For example, transfer of ownership in a property
valuing one lac rupees in consideration of only one hundred rupees is a sale, although
the price is negligible or grossly inadequate.

3
Vijay Kumar Sharma v.Devesh Behari Saxena, AIR 2008 All 66
 CHAPTER - II
ESSENTIAL INGREDIENTS

The following are the essential ingredients of Sale: -

 The parties i.e. the seller and the purchaser are competent.
 The subject matter i.e. the property is in existence.
 The price or consideration i.e. the price has been fixed or referred.
 The transfer or conveyance i.e. the transfer has been made as prescribed under the
law.
The Parties: Seller and Purchaser: Competence. – There are two parties in a sale. The
transferor is called seller and the transferee is called purchaser. Seller and purchaser are
also known as vendor and vendee.
The parties to sale are the sellers and buyers must be competent on the date when the sale
is made. The seller must be a person competent to transfer within the meaning of Section
7 of T.P.Act, i.e, must be competent to contract and has right to transfer that
property.4Since only ownership may be transferred in sale, therefore the seller must be
the owner of the property (must have absolute interest in that property) 5 at the time of
effecting the sale. The buyer may be any person who is not disqualified to be a transferee
under any law forced in India. For example, a judge, a practitioner or an official of the
Court is incompetent to purchase actionable claims under Section 136 of T.P Act. Sale in
favour of minor is valid.6 A sale deed executed when vendor was minor is not per se void,
but become voidable as soon as the option is exercised by the minor through guardian. 7
With regards to the person under disability like pardanashin or illiterate lady, the court
must be satisfied that the deed had been explained to and understood by the party, under
disability, either before execution or after it under circumstances showing that the deed
has been executed that the deed has been executed with full knowledge and
comprehension. Mere execution by such person, although unaccompanied by duress,

4
S.N ,SINHA , THE TRANSFER OF PROPERTY ACT p. 491 (11th ed. 2008)
5
Supra footnote1.
6
Ibid.
7
Dev Kishan v. Ram Kishan ,AIR 2002 SC 370 ¶33.
protest or obvious sign of misunderstanding or want of comprehensions, is, in itself no
real proof of a true understanding in the mind of the executants. 8

Subject matter of sale: Immovable Property-The subject matter of sale under Sec.54 is
immovable property. The subject matter of sale may be any kind of immovable property
as defined under Sec.3 of T.P Act. Accordingly, the immovable property which may be
subject matter of sale means lands, benefit arising out of land and the things attached to
earth and the things embedded to earth, things what so ever embedded to earth and the
things rooted in the earth. But, standing timber, growing crops and grass are movable
properties.9
The subject-matter is immovable property which may be tangible immovable property,
such as land, house, or things attached to the earth or it may be intangible immovable
property, such as right of ferry or fishery, or right to a mortgage debt, etc. But the
property must be in existence at the date of transfer by way of sale and is transferable
property within the meaning of Section 6 of T.P.Act.
Mortgage-debt are intangible immovable property and can be sold within the meaning of
Section 54. ‘Reversion’ means the bundle of rights which remains with the lessor after
giving his property on lease. Lease is transfer of only the right of enjoyment of property.
After transferring this right, the lessor has ownership minus right to enjoy property.
‘Reversion’ is everything except right to enjoy the property for certain duration. Hence,
‘reversion’ is equal to ownership and can be sold.10
Equity of redemption is in reality a tangible property. Therefore, sale of equity of
redemption has been held as sale of tangible immovable property.11

Price or consideration-
The transfer of ownership in exchange for a price is the essence of a sale. Price means
money price. If the consideration of the transfer is something other than price, it is not a
sale. It may be an exchange but not sale. There is no definition of the word ‘price’ in the
Act. But it is well settled that the word ‘price’ is used in the same sense as in Section 4 of
8
Santoo v. Jagannath ,AIR 2004 All 131.
9
Jainarain Parasramparia v. Puspa Devi Saraf, (2006) 7 SCC 756.
10
Supra footnote 4.
11
Ibid.
the Sale of Goods Act, 1930.12Section 2(10) of the Sale of Goods Act defines “price” as
meaning money consideration for a sale of goods. Therefore, the presence of money
consideration is an essential element in a transaction of sale. If the consideration is not
money but some other valuable consideration, it may be an exchange or barter but not a
sale.13
The price is fixed by the contract antecedent to the conveyance. Price is the essence of
contract of sale,14unless the price is fixed, there is no enforceable contract, because no
price is named the law does not imply, as in the case of a sale of goods. 15There is no
enforceable contract despite its registration. 16 May not be regarded as sale. FRY ON
SPECIFIC PERFORMANCE observes:
“In all sales it is evident that price is an essential ingredient, and that where it is
neither ascertained nor rendered ascertainable, the contract of sale is void for
incompleteness and incapable of enforcement. It is not, however, necessary that the
contract should be in first instance determine the price. It may either appoint a way in
which it is to be determined or it may stipulate for a price”.17
The ordinary rule governing vendors and purchasers that the payment of a consideration
is simultaneous with and at the time, when the conveyance is executed by a vendor can
be deviated from in case of an agreement with the parties.18A sale is complete even
through the price has not been paid but promised to be paid.19
Mere the inadequacy of consideration does not vitiate sale, nor does it render the sale
fictitious through it may be evidence that the deed was not intended to operate. The price
is the essence of the contract. It needs not to be ascertained at once. The agreement may
stipulate the manner of ascertaining it. It must be paid or promised or part-paid and part-
promised. If it be neither paid nor promised there is no sale. 20 Under Muslim Law, wife
claim of her dower is regarded as a debt. Where a Muslim husband makes gift of a land
in consideration of her unpaid dower, the transfer is not a gift but a sale because
12
Madan Pillai v. Badra Kali Ammal, AIR 1988 Mad.311.
13
Commissioner of Income-Tax v. Motors & Gn. Stores Pvt. Ltd., AIR 1967 SC 200.
14
MULLA, THE TRANSFER OF PROPERTY ACT 1882 358 (10th ed. 2010)
15
Morgan v. Milman (1853) 3 De G M & G 24.
16
Manug Saing v. Shwe Lon(1909) 4LBR369.
17
Supra footnote no.13.
18
Chandra Shankar Manishankar v. Abhla Mathur ,AIR 1952 Bom 56
19
Shiva Narayan Sah v. Baidya Pasad Tiwary, AIR 1973 Pat 386.
20
Ibid.
ownership is transferred in consideration of dower which is money debt. 21Such
transaction is known as Hiba-bil –Ewaz having all the legal incidents of sale. Where a
sale has been completed execution of registration of the conveyance, the mere non
payment of the purchase money does not prevent the passing of the title of the property
sold22.
Non –payment of consideration-Passing of title- the transfer of ownership can be in
exchange for a price or part –paid or part –promised. As such the passing of consideration
is not a prerequisite or condition precedent for the sale or transfer of ownership of
immovable property.23In Vijayadhar v.Makikrao, the Supreme Court held:-
“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 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 or part promised.” Price thus constitutes an
essential ingredient of the transaction of sale. The word “price paid or promised or part
paid or part promised” indicate that actual payment of whole of the price is not a sine
qua non to the completion of the sale. Even if the whole price is not paid but the
document is executed and thereafter registered, if the property is of the value more than
Rs.100/-the sale would be complete.”
Future payment of sale consideration- To constitute a sale, ownership has to be
exchanged for the price paid or promised to be paid or partly paid or partly promised.
Therefore future payment of price does not arrest the passing of title, made by a registers
instrument. If the parties so contract, it may be postponed, till the payment of full
consideration.24 It is not necessary for the transfer of title that the entire consideration
should also pass, since consideration may be agreed to be received subsequently. 25
If the price is not paid seller’s remedy- The payment of the price is not necessarily a sine
qua non to the completion of the sale. If the intension is that the property should be

21
Subreunnissa v. Sabha Sheikh, (1934)Cal 693.
22
Shiblal v. Bhagwan, 11 All 244.
23
Appu v.Bhasakaran, 2001(3)KLT 670
24
Hampamma v. Kartigi Sajjvalada Kalingappa ,AIR 1990 Kant 128.
25
Nrusinghanath Deb v. Banamali Panda, AIR 1970 Ori 218
 passed on registration, the sale is complete as soon as the deed is registered, whether the
price has been paid or not. The purchaser is entitled for the possession, although he has
not paid the price. If the price is not paid, the seller on that account cannot repudicate the
sale and his only remedy is to sue for the price or the balance of the price unpaid.
The passing of consideration cannot be challenged except buy the parties to the
transaction who claim through those parties.26

Transfer or conveyance-
There must be conveyance, i.e., transportation of absolute interest in the property by the
seller in the favour of the purchaser in the manner prescribed by law. Thus, there must be
a transfer of property. 27Sale is transfer of ownership of an immovable property. Property
therefore must be transferred from seller to purchaser.
There are two modes of transfer of property provided in Section 54:-
1. Delivery of possession and
2. Registration of the sale deed.
1. Delivery of Possession:-Where the property is tangible immovable property of a value
less than rupees one hundred the sale may be made by delivery of possession. Writing
and registration is not essential. However, if the parties so desire, they may get sale deed
registered. In the case of tangible property valuing less that rupees one hundred
registration is not compulsory; it’s optional. The simple method of delivery of possession
in the case of sale of tangible immovable property of value less then than rupees one
hundred has been provided because of small sum of money involved in the transaction. 28
Oral sale of immovable property, which is possible only when the market value is less
than Rs.100, is completed merely by delivery of possession. However, the court may
satisfy that the entire price is paid to the seller. Delivery of possession here means giving
the physical control of the property to buyer. The delivery of possession takes place
when the seller places the buyer or such person as he directs, in possession of the
property.29 In Mohiuddin v.President,Municipal Com., Khargone30 a piece of land is sold

26
Melur Co-op.Mktg Society v.Alia Maniam ,AIR 1974 Mad 30
27
Supra footnote 4.
28
Bhaskar Gopal v. Padnam Hira,(1916) 40 Bom 313
29
Birjvasilal v. Abdul Haji,(2001) 9 SCC 367
30
AIR 1993 MP 5
 for the less than Rs.100. There was unregistered sale deed. No physical possession could
be proved. The court held that the transaction of sale could not be proved to be taken.
Where actual physical possession is not possible due to nature and kind of property,
anything done by the seller to buyer is deemed to be delivery of possession. For example,
possession of a house can be given by seller either by allowing the purchaser to reside in
it or handing over its keys to him. Similarly in the case of land the possession is delivered
to the purchaser when he goes to the land or otherwise shows his physical control over it.
Where the purchaser is already in possession of the property declarations and acts so as to
change the previous possession into that of the purchaser is sufficient. In other words, if
the vendee is already in possession of the property sold to him; it is not necessary that
there should be any formal taking over of the possession. A direction is sufficient to
constitute delivery of possession.31
2. Registration of Sale-deed- The Registration Act, 1908 doest not distinguish between
tangible and intangible property. Except in the sale of tangible property valuing less than
Rs. 100, in all other cases of sale of immovable property, registration is compulsory.
Registration is necessary to complete the sale in the following cases:
I. Where tangible property is of the value Rs.100 or more, and
II. Where the property is intangible immovable property of any valuation.
It is significant to note that Sec.54 of T.P Act comprehends the value of property, as
distinguished from the purported consideration of alienation, and, therefore, even if the
property worth more then Rs.100 is transferred for a consideration of less than Rs.100, it
cannot be done without a registered document.32
State of Uttar Pradesh- In State of Uttar Pradesh, registration is compulsory even if the
value of tangible immovable property is less than Rs.100.

31
Supra footnote 4.
32
Davendra Singh v State of Rajasthan, AIR 2002 Raj 66.
 CHAPTER - III
HOW SALE IS DIFFERENT FROM EXCHANGE AND GIFT?

Distinction between Sale and Exchange-

Sale is transfer of ownership in a property in exchange of price which is the money
consideration. On the other hand, exchange is transfer of ownership in a property in
exchange of ownership of another property. Both are transfer of absolute interest in the
property but, in sale the consideration is money whereas in exchange, it is another
property or, anything of value. Sec.118 of the T.P Act defines exchange in the following
words:
“Where two persons mutually transferred the ownership of one thing for the ownership of
another, neither thing nor both things being money only, the transaction is called an
exchange.”
A transfer of ownership of money in return of money is called exchange. It is not sale.
For instance, transfer of one ten rupee note is exchange of ten notes of one rupee is an
exchange
‘Sale’ is a transfer of property in the goods or of the ownership in immovable property
for a money consideration. The definition of ‘exchange’ in Sec118 is not limited to
immovable property but go to the extends of goods. In exchange there is reciprocal
transfer of interest in the movable property is denoted by the word ‘barter’.33

Distinction between Sale and Gift-

In sale and gift both, there is transfer of ownership of an immovable property. But in sale
the ownership is transferred in exchange for a price i.e the consideration is money. In gift,
the ownership of an immovable property is transferred without any kind of consideration.
The consideration in gift is neither money nor anything of value.
Except in the State of Uttar Pradesh, sale of immovable property of value less than
Rs.100 need not be made through registered instrument. But gift of an immovable
property must be made only by a registered instrument irrespective of the valuation of
property.
Punjab: - In Punjab where the T.P Act is not in force Sec.54 was also not enforceable,
and an oral sale of immovable property was valid. But now since April 1955, paragraphs
2 and 3 have been made enforceable throughout the State of Punjab. The result is that like

33
Commissioner of Income-Tax v. Motors & Gn. Stores Pvt. Ltd. AIR 1967 SC 200.
rest of the country, in Punjab too sale of an immovable property valuing Rs.100 or more
must be effected by a registered instrument.

CONCLUSION
Sale is transfer of ownership for money consideration. Sec.54 defines sale as a transfer of
ownership in exchange for a price paid or promised to be paid. Accordingly the elements
which are necessary to constitute a sale are as under:
 The parties i.e. the seller and the purchaser are competent.
 The subject matter i.e. the property is in existence.
  The price or consideration i.e. the price has been fixed or referred.
 The transfer or conveyance i.e. the transfer has been made as prescribed under the
law.
Sale is transfer of ownership of an immovable property. Property therefore must be
transferred from seller to purchaser. Sale is transfer of ownership in a property in
exchange of price which is the money consideration. On the other hand, exchange is
transfer of ownership in a property in exchange of ownership of another property.
In sale and gift both, there is transfer of ownership of an immovable property. But in sale
the ownership is transferred in exchange for a price i.e the consideration is money. In gift,
the ownership of an immovable property is transferred without any kind of consideration.
The consideration in gift is neither money nor anything of value.
 BIBLIOGRAPHY

-BOOKS REFERRED-

 DR. SIR HARI SINGH GOUR, THE TRANSFER OF PROPERTY ACT

(11th ed. 2008)
 M.R. MALIK, GOYLE’S A COMMENTARY ON THE TRANSFER OF
PROPERTY ACT ( 2nd ed.)
 MULLA, THE TRANSFER OF PROPERTY ACT 1882 (10th ed. 2010)
 R.K.SINHA, THE TRANSFER OF PROPERTY ACT (11th ed. 2010)
 VERA P. SARTHI, G.C.V SUBBA RAO’S LAW OF TRANSFER OF
PROPERTY (EASMENTS, TRUSTS AND WILLS) (Reprint ed. 2005)

-DICTIONARIES REFERRED-

 GARNER A BRYAN, BLACKS LAW DICTIONARY, 7TH EDN, 2002.

 JUDY PEARSALL, CONCISE OXFORD ENGLISH DICTIONARY, 10 TH EDN,

2002, OXFORD UNIVERSITY PRESS.

-WEBSITES ACCESSED-

 www.firstappeal.com
 www.indlaw.com
 www.manupatra.com
 www.supremecourtofindia.nic.in

-LEGISLATIONS REFERRED-
 THE TRANSFER OF PROPERTY ACT,1882
 INDIAN REGISTRATION ACT, 1908.
 UTTAR PRADESH CIVIL LAWS (REFORMS AND AMENDMENT)
ACT, 1976.