Reaffirming the mandatory requirement of consideration in property transactions under the Transfer of Property Act, 1882, the Supreme Court (SC) has ruled that a sale deed executed without the payment of price or a promise of future payment is not a sale in the eyes of the law and is void. In its judgement delivered on 12 September 2025, a bench of justice JB Pardiwala and justice R Mahadevan said that under Section 54 of the Act, consideration is the essence of a valid sale. The SC observed that the price for an immovable property may be paid in advance, in part, or promised to be paid later, but if no price is paid and no provision exists for future payment, the sale deed has no legal effect and is void.
The case stemmed from a land dispute in Haryana over 31 kanals and 4 marlas of agricultural land in Bisar Akbarpur village in Gurgaon. The plaintiff, Rasali Devi, claimed ownership of a one-third share and alleged that a sale deed executed in 1973 in favour of Shanti Devi was fraudulent, concocted and without consideration. The legal heirs of Shanti Devi (defendant) claimed the sale deed was genuine, stating that the agreed consideration of Rs15,000 had been paid—Rs9,000 in advance and Rs6,000 at the time of registration before the sub-registrar. Rasali Devi maintained she had never executed the deed, had not received any money and only became aware of the alleged transaction years later.
The trial court dismissed the suit, but the first appellate court reversed the decision and held the sale deed void, granting Rasali Devi joint possession with Ram Saran, the two-thirds owner of the land. The Punjab and Haryana High Court (HC) upheld this in 2018, leading to the appeal before the Supreme Court.
In its ruling, the apex court clarified that in cases where the underlying transaction is void, the applicable limitation period for filing a suit is 12 years under Article 65 of the Limitation Act, 1963. Since the suit was filed within 11 years of the alleged sale deed, it was held to be within time. The Court emphasised the distinction between void and voidable transactions, stating that a void document is a nullity and need not be cancelled through a separate suit, unlike voidable documents. Such void documents can be ignored and challenged in collateral proceedings.
The judges noted that there was no reliable proof that consideration had ever been paid. Shanti Devi’s husband, Bagdawat, who allegedly made the Rs6,000 payment at the time of registration, did not appear as a witness; one attesting witness had died and the other was her brother Budhu, whose testimony was doubted.
Referring to the concurrent findings of the first appellate court and the HC, the bench says there was no witness who could substantiate the case of Shanti Devi that there was part-payment of the sale consideration, Rs6,000, during the time of execution of the sale deed. "Furthermore, no evidence was adduced by Shanti Devi to prove that even the initial amount of Rs9,000, which was purportedly paid before the execution of the sale deed was actually received by Rasali Devi. Therefore, the averment of Rasali Devi in the plaint, that she had not received the sale consideration, had not been otherwise proven as false. In such circumstances as well, i.e., in the absence of the sale consideration being tendered, the sale deed would be void and Rasali Devi would not be required to seek its cancellation."
Rasali Devi's consistent claim that she had not received any consideration remained unrebutted, the bench noted.
Dismissing the appeal, the Court concluded that as no title was transferred under the sale deed, Rasali Devi continued to hold her share in the property. It reiterated that a transaction without consideration is a sham and cannot confer ownership.
(Special Leave Petition (C) No. 24821 of 2018 Date: 12 September 2025)
