Sale is a transfer of ownership in exchange for a price paid or promised or part paid and part promised. The transfer, way of sale of tangible immovable property of the value of rupee one hundred and above can be made by a registered instrument. The way of sale transfer of tangible immovable property of the value of less than one hundred rupees may be made either by a registered instrument or delivery of the property.

Sale of immovable property has been defined as a transfer of ownership in exchange for a price paid or promised or part paid and part promised.

According to Transfer of Property Act:

immovable property does not include standing timber, growing crops or grass.

In General Clauses Act:

immovable property has been defined as including land benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth. The term “attached to the earth” has been defined in Transfer of Property Act as under:

• rooted in the earth, as in the case of trees and shrubs,
• imbedded in the earth, as in the case of walls or buildings, or
• attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.

The benefits to arise out of land is an interest in land e.g. life interest in the income of immovable property, right of way, ferry, fishery, lease of land. Right to enter upon land and to carry away fish from a lake, right to enter upon land and to remove trees. Right to collect dues at a fair held on the land, right to rear land. But right to recover maintenance charged on land, royalty are not benefits to arise out of land.

A contract for the sale of immovable property is a contract laying down. The ‘Sale’ of such property shall take place on the terms settled between the parties in the said contract. Such contract for sale does not create any interest in or charge on such immovable property. The contract for sale does not result in any transfer of ownership. However a sort of obligation is created in respect of the ownership of the property.

• Parties

A minor or lunatic cannot be a transferor / vendor as he is not competent to contract under Section II of the Indian Contract Act, 1872. However it has been held that a minor or a lunatic can be a transferee or purchaser. In the case of transfer by way of sale or mortgage, represented by his Guardian.

• Subject Matter

Subject matter is the transferable immovable property.

• Price

Price is an essential ingredient for all transactions of sale and in the absence of the price or the consideration, the transfer is not regarded as a sale. The transfer way of sale must be in exchange for a price. It has been held that price normally means money. The price can be paid fully in cash or it can be partly paid and partly promised to be paid in future. The price can be fixed by the agreement between the parties before the conveyance of the property. The price is to be fixed reasonably.

• Delivery of Property

Transfer by way of sale in the case of tangible property worth less than rupees One Hundred can be made either by a registered instrument or by delivery of property by putting the purchaser or the person directed by the purchaser, in possession of property. If the consideration for the sale is more than Rs.100/- then the instrument must be registered under the Registration Act, 1908.

• Rights and Duties of Seller and Buyer

The rights and duties of seller and buyer are subject to the contract. In the absence of any contract to the contrary, the rights and duties of seller and buyer are governed by section 55, Transfer of Property Act. The rights and duties of seller and buyer under the provisions of section 55 of Transfer of Property Act are as under:

Duties of Seller Before Sale

• To disclose any material defect-

The seller is bound to disclose to the buyer any material defect in the property or in the seller’s title thereto of which the seller is and the buyer is not aware, and which the buyer could not with ordinary care discover. A latent defect is a defect, which cannot be discovered by the buyer with ordinary diligence.

• To produce documents of title-

is bound to produce to the buyer on his request for examination all documents of title relating to the property which are in the seller’s possession or power.

• To answer question about the property or the title thereto-

• Vendor is bound to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto.

• To execute conveyance-

It is bound on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property, when the buyer tenders it to him for execution at a proper time and place. The seller is bound to execute conveyance on the payment of price by the buyer.

• To take care of the property and title documents-

The vendor is bound between the date of the contract of sale and the delivery of the property, to take as much care of the property and all documents of title relating thereto, which are in his possession as an owner of ordinary prudence would take of such property and documents.

• To pay outgoings –

The trader is bound to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all encumbrances on such property due on such date, and, except where the property is sold subject to encumbrances to discharge all encumbrances on the property then existing.

After Sale

• To deliver possession of the property-

is bound to give, on being so required, the buyer or such person as he directs, such possession of the property as its nature admits.

• Implied covenant for title –

shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same.

• To deliver title deeds on receipt of consideration-

Where the whole of the purchase money has been paid to the seller, he is bound to deliver to the buyer all documents of title relating to the property which are in the seller’s possession or power;

Duties before Sale and Purchase 

• To disclose fact which materially increases the value of property-

The buyer is bound to disclose to the seller any fact as to the nature or extent of the seller’s interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest.

• To pay price for the property-

Buyer is bound to pay or tender, at the time and place of completing the sale, the purchase money to the seller or such person as he directs; provided that, where the property is sold free from encumbrances, the buyer may retain, out of the purchase money, the amount of any encumbrances on the property existing at the date of the sale and shall pay the amount so retained to the persons entitled thereto.

• To bear loss to the property-

Purchaser is bound to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller where the ownership of the property has passed to the buyer.

• To pay public charges and rents-

Where the ownership of the property has passed to the buyer, as between himself and the seller, the buyer is bound to pay all public charges and rent which may become payable in respect of the property, the principal moneys due on any encumbrances subject to which the property is sold, and the interest thereon afterwards accruing due.

“immovable property” includes land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth or permanently fastened to anything which is attached to the earth, but not standing timber, growing crops nor grass;

Leases of immovable property from year to year or for any terms exceeding one year or for receiving yearly rent are compulsorily registrable. Non testamentary instruments transferring or assigning any decree or order of a court or any award when such decree order or award purports or operates to create, declare, assign, or limit or extinguish in present or in future any right, title or interest, vested or contingent, in any immovable property are compulsorily registrable. An authority to adopt a son is compulsorily registrable. The documents is to be registered with the Registrar of Assurances or Sub registrars.