2021 (12) TMI 147 - SC - Indian Laws

Supreme Court restores District Court decree, deeming sale deeds void due to lack of consideration

The Supreme Court allowed the appeals, setting aside the High Court's judgment and restoring the District Court's decree. The Court held that the sale ... Sale for consideration - void sale - payment of price as essential to a sale - proof of consideration - collateral challenge to void document - limitation for declaration - benamiSale for consideration - payment of price as essential to a sale - proof of consideration - void sale - Whether the sale deeds dated 10th April 1981 effected any transfer of the appellant's undivided half share in the suit properties. - HELD THAT: - The Court applied the principle in Section 54 Transfer of Property Act that a sale of immovable property must be for a price and that payment (or a promise to pay) is an essential element of a valid sale. The material on record showed that the respondents failed to adduce any evidence that the purchasers (the minor sons and the wife of Sudarshan Kumar) had paid or had the means to pay the consideration recorded in the sale deeds. The Trial Court and the District Court specifically found absence of evidence about payment and earning capacity of the purchasers; the High Court did not disturb that factual finding but only observed that the consideration amounts were not exorbitant. The Supreme Court held that, in the absence of proof of payment or a contractual promise to pay, the instruments of 10th April 1981 are void and do not effect any transfer of the appellant's one half share. A document void for want of consideration may be ignored in collateral proceedings and need not be separately challenged by a declaratory prayer through amendment. [Paras 14, 15, 16]The sale deeds dated 10th April 1981 are void for want of consideration and do not divest the appellant of his undivided half share.Collateral challenge to void document - limitation for declaration - Whether the plaints required an amendment and a specific declaratory prayer to challenge the validity of the sale deeds, and whether such declaratory relief was barred by limitation. - HELD THAT: - The unamended plaints contained specific pleadings that the sale deeds of 10th April 1981 were sham and without consideration, and the claim for injunction was founded on title asserted by the appellant. The Court held that a document which is void need not be specially challenged by a declaration in amendment because the plea of invalidity can be set up and proved in collateral proceedings. Consequently, the fact that a declaration was formally added later does not attract the bar of limitation when the original plaint already pleaded the voidness of the instruments. [Paras 13, 16]Amendment to seek a declaration was unnecessary for adjudicating the pleaded contention that the sale deeds were void; the bar of limitation to the declaratory relief did not arise.Proof of consideration - benami - Whether the earlier findings that the appellant and Sudarshan Kumar were joint owners had become final and the consequence of that finding for title. - HELD THAT: - The District Court had found that Sudarshan Kumar failed to prove remittances or that he alone paid the purchase price of the original 1976 transactions, and the High Court did not disturb the finding that the appellant and Sudarshan Kumar were joint owners. That conclusion stands as final insofar as it was not challenged by the respondents in these appeals. Given that the subsequent sale deeds of 1981 are void for want of consideration, the appellant's undivided half share remains subsisting and the decree of the District Court granting joint possession is sustainable. [Paras 12, 17]The finding of joint ownership stands final; since the 1981 sale deeds are void, the appellant retains his undivided half share and the District Court's decree restoring joint possession is restored.Final Conclusion: The appeals are allowed; the High Court's judgment is set aside, the decree of the District Court restoring joint possession and holding the 10th April 1981 sale deeds void for want of consideration is restored, and there will be no order as to costs. Issues Involved:1. Ownership of suit properties2. Validity of power of attorney and sale deeds3. Bar of limitation for seeking declaration4. Payment of consideration for sale deeds5. Entitlement to compensation for tube wellDetailed Analysis:Ownership of Suit Properties:The appellant and his elder brother acquired the suit properties through sale deeds dated 12th August 1976 and 19th October 1976. The appellant executed a power of attorney in favor of his brother, who then executed sale deeds transferring parts of the suit properties to his minor sons and wife. The appellant filed suits for injunction and possession, later amended to include a declaration that the power of attorney and sale deeds were null and void. The trial court dismissed the suits, holding that the appellant was a benamidar and the brother was the sole owner. The District Court, however, found that both were joint owners, a finding upheld by the High Court.Validity of Power of Attorney and Sale Deeds:The trial court upheld the validity of the power of attorney and sale deeds. The District Court, however, found that the sale deeds were without consideration and therefore void, granting joint possession to the appellant. The High Court upheld the validity of the power of attorney but found the suits for declaration barred by limitation. The High Court directed the brother to pay the appellant his share in the sale consideration with interest.Bar of Limitation for Seeking Declaration:The High Court held that the suits for declaration of invalidity of the sale deeds were barred by limitation, as the prayers were incorporated belatedly. The appellant argued that the original plaints already contained assertions that the sale deeds were null and void due to lack of consideration, and thus, the amendment was not necessary for seeking a declaration.Payment of Consideration for Sale Deeds:The District Court found no evidence that the brother's minor sons and wife paid the consideration mentioned in the sale deeds. The High Court observed that the sale consideration was not exorbitant but did not address the lack of evidence regarding the purchasers' sources of income. The Supreme Court noted that the sale deeds were void as they were executed without consideration, and thus, did not transfer any title.Entitlement to Compensation for Tube Well:The trial court held that the prayer for compensation for the tube well was barred by provisions of Rule 2 of Order II of the Code of Civil Procedure, 1908. The District Court rejected the prayer for compensation, a decision not specifically addressed in the appeals.Supreme Court Judgment:The Supreme Court allowed the appeals, setting aside the High Court's judgment and restoring the District Court's decree. The Supreme Court held that the sale deeds were void due to lack of consideration, and thus, the appellant continued to have an undivided half share in the suit properties. The issue of limitation did not arise as the original plaints already challenged the validity of the sale deeds. The decree for joint possession was restored, and there was no order as to costs.