Non-Payment of Full Sale Consideration Does Not Render a Registered Sale Deed Void: Supreme Court

The Hon’ble Supreme Court, in its recent ruling dated August 7, 2026, in Raziya Begum & Ors. v. Nafisa Begum Abdul Hamid & Ors., (Civil Appeal No. 7225 of 2011), reaffirmed the position that a sale deed does not become void or inoperative merely because the full sale consideration is not paid.

The dispute arose out of two sale deeds both dated 10.03.1975 executed by the Original Plaintiffs in favour of the Original Defendant. The Plaintiffs had approached the Defendant for help to sell their properties to be able to clear their debts owed to financial institutions and government departments.

When a prospective purchaser withdrew at the last moment, the Defendant himself agreed to purchase the said properties. However, since the entire consideration was not available with him, he persuaded the Plaintiffs to execute the sale deeds with respect to both the properties upon payment of only part of the consideration. When the Defendant failed to clear the entire dues, he executed subsequent agreements, undertaking to re-pay the balance amount under one of the sale agreements to the Plaintiffs and in respect of the other sale agreement, he took upon himself the liability to repay all the loans. The Plaintiffs eventually filed a suit in 1984 seeking cancellation of the said sale deeds being void, a declaration of ownership in favour of the Plaintiffs, and a permanent injunction against the Defendant.

The Trial Court and the First Appellate Court dismissed the Suit, holding that the sale deeds did not contain any condition that the non- payment of the balance consideration would result in any cancellation of the deed, and that the remedy against the Defendant was to seek balance payment from him along with interest. In the Second Appeal, the High Court, reversed these findings and held the sale deeds inoperative due to want of full consideration.

The Hon’ble Supreme Court relied on its previous decisions in Vidhyadhar v. Manikrao & Anr. [(1999) 3 SCC 573] and Dahiben v. Arvindbhai Kalyanji Bhanusali (Gajra) [(2020) 7 SCC 366] to observe that actual payment of the entire sale price at the time of execution is not a sine qua non for completion of a sale under Section 54 of the Transfer of Property Act, 1882. Once a sale deed is registered, the title passes to the transferee even on part payment, and the remedy would be to recover the balance and not the cancellation of the sale deed. The Court(s) held that the Plaintiffs’ proper remedy should be a suit for money recovery.

Allowing the appeal, the Hon’ble Supreme Court set aside the High Court’s judgment and observed that the sale deed executed with full knowledge of the part consideration alone having been paid, cannot be rendered void or inoperative merely because the balance consideration was promised to be paid, which promise was incorporated in the sale deed, had not been complied with. The right of the Plaintiffs was to file for recovery of balance sale consideration and not to seek declaration that the sale deeds were null and void, which they were not. The Hon’ble Apex Court further, clarified that the Appellants/legal heirs of the Original Defendant would still be liable to pay the balance sale consideration with interest from 10.03.1975, if they wished to seek possession of the properties.