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  • Writer's pictureTrivedi and Parashar (Advocates and Solicitors)

Judicial Updates-

SUPREME COURT - CONDITION OF RIGHT TO REPURCHASE IN SALE DEED NOT PERSONAL UNLESS EXPRESSLY STATED.


In the case of Indira Devi v. Veena Gupta & Ors (Civil Appeal No. 9833 of 2014), a tenant was inducted in the property in dispute by late Kishore Lal Sahu who was the exclusive owner of the property. He along with his son executed a conditional sale deed in favour of the Appellant who was the daughter of the tenant. The conditional sale deed mentioned that the vendors are in urgent need of money, and hence they are selling their property to the vendee for a sale consideration of Rs. 5000/-. The condition in the sale deed was that in case the vendors return the full consideration amount to the vendee by July 1984, the vendee would return the property by means of a registered sale deed back to the vendors. In case the vendors fail to pay the amount within the stipulated time, the vendee will become the exclusive owner of the property. Late Kishore Lal Sahu also executed a gift deed in favour the Respondent which also contained the property that was sold to Indira Devi. However, it was mentioned that the property can be repurchased by the Respondent.



The vendors were willing to pay 5000 to the vendee to get the sale deed registered back in their name but the vendee refused to agree to the same. A civil suit was filed by the Respondent along with late Kishore Lal Sahufor a direction to be passed against the Appellant to accept the consideration money and execute the sale deed in favour of the Respondent. However, the Trial Court dismissed the suit, which was also upheld by the lower appellate court. In the second appeal, the judgment by the High Court reversed the judgment given by both the courts and formed various substantial questionsof law on appeal to the Supreme Court. The primary issue that arose is whether the vendor can assign the right contained in a sale deed to get the property registered back in his name.


The Appellant argued before the Apex Court that Late Kishori Lal Sahu, being the original vendor who executed the conditional sale deed, cannot assign his personal right to repurchase the property to a third person, here being his daughter-in-law; more so in absence of any clause permitting the same. Furthermore, it was pleaded that the gift deed is also not valid as it required Veena Gupta to pay a certain consideration to get the gifted property transferred to her. In response, the Respondent argued that the right emanating from the sale deed was not personal and even assuming without admitting that it was, it cannot be said that it was assigned to a third-party. It was done by the father-in-law of the Respondent in her favour owing to his feeble age.


The Supreme Court after carefully analyzing the authorities present, observed that “The condition of right to repurchase in sale deed will not be personal to the vendor unless the terms in the documents specifically state so. Such a right can always be assigned and the contract containing such condition shall be enforceable. The only exception being that this assignment of right should not be personal in nature. The assignment of obligations in a document is not possible without the consent of the other party. No implied prohibition of transfer or assignment can be inferred in a document. The benefit of contract is assignable in cases where it does not make any difference to the person on whom the obligations lies, to which of two persons he is to discharge. After consideration of the documents the supreme court held that the condition of right to repurchase in sale deed is not personal unless it is stated and can be assigned.”


The Supreme Court placed major reliance on the decision of the Privy Council in the case of Sakalaguna Nayudu v. Chinna Munuswami Naykar [AIR 1928 PC 174] wherein it was held that “the benefit of a contract of repurchase which did not show that it was intended only for the benefit of the parties contracting, could be assigned and such contract is enforceable”.


Thus, the appeal was allowed and the judgement of the High Court was affirmed.

 
 

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