The Meaning of ‘Sales’ under Transfer of Property Act, 1882
Introduction
The term “sales” encompasses the various activities involved in the process of selling goods or services. As per the Transfer of Property Act 1882, sales entail not only the act of selling a property but also the transfer of ownership from the current owner to the subsequent owner. This transfer is conducted through a transaction method stipulated by the government of India. It is important to note that any attempt to circumvent this legally mandated process constitutes an illegal offence. Furthermore, under the Transfer of Property Act 1882, such unauthorized transfers are deemed void.
Section 54 of the Transfer of Property Act, 1882
Bare act defined Sale.
“Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Sale how made.—Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
Contract for sale.—A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property
This section aims to provide a detailed explanation of the concept of sales. Sales is the process of transferring ownership of a property to another party in exchange for a specified price. It also involves a promise that after the payment, the recipient will become the new owner of the property. The terms “Part-Paid” or “Part-Promised” indicate that the transfer of ownership or the payment amount may not be completed in full at the time of the transaction. Instead, it depends on the specific terms outlined in the contract for the property transaction.
Sale made for the transfer of immovable tangible property or other intangible property of a value of more than 100 rupees and upwards requires mandatory registration. Also, in the case of reversion, which refers to when a life interest is created in favour of a particular person and that person dies during the transferor’s lifetime, the property will revert back to the transferor. In this circumstance, registration is also mandatory.
In the case of tangible immovable property valued at less than 100 rupees, registration is not mandatory and can be completed through the delivery of the property. Delivery of tangible immovable property occurs when the seller places the buyer or a person directed by the buyer in possession of the property.
The contract for the sale of immovable property is an agreement for the sale of the property according to the terms and conditions decided by the parties involved. This contract does not create any interest in or charge on the property.
Case
Suraj Lamp & Industries (P) Ld.Tr.Dir vs State Of Haryana & Anr on 11 October 2011
Equivalent citations: AIR 2012 SUPREME COURT 206, 2011 AIR SCW 6385, AIR 2012 SC (CIVIL) 91,
Bench: H. L. Gokhale, A. K. Patnaik, R. V. Raveendran
Facts: This case involves malpractice by many people to evade payment of stamp duty, registration fees, and capital gains taxes, and to generate black money. It all started when people began using General Power of Attorney (GPA) to transfer their property. GPA is a power given by the actual owner of the property to another person, granting them the authority to perform ownership rights such as transfer and lease. The petitioner challenges the legality and validity of such transactions because many people were misusing GPAs to commit fraud by transferring them to multiple individuals and deriving financial gain from them.
Issues:
1. Are GPA transfers legally valid and enforceable?
2. Do GPA transfers lead to adverse consequences such as the generation of black money, the growth of land mafia, and the criminalization of real estate transactions?
3. Are the measures taken by the states and the Union of India to discourage GPA transfers sufficient?
Judgement
The verdict by the honourable Supreme Court emphasized that the practice of transferring property through a General Power of Attorney (GPA) is deemed illegal due to its association with circumventing legal requirements and facilitating the generation of illicit funds. The court underscored the detrimental impact of this practice on the nation’s economy, civil society, and law and order. While acknowledging the efforts made by some states and union territories to curb this misuse, the court deemed these actions inadequate, leading to the prohibition of property transfer through this method.
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