FRAUDULENT SALE DEED
Authored by: Jhanvi Vashisht
Abstract: A sale deed
signifies the cooperation and satisfaction between both of the parties on
various terms and conditions. A sale deed
is prepared with the mutual consent of both the parties on a non judicial
paper. The property schedule must be incorporated in the sale deed to define the accurate location.
The sale deed is true and it is
supported by consideration but only in part. found that the Appellants
(Plaintiffs) have asserted that the suit was filed immediately after getting
knowledge about the fraudulent sale deed
executed by original Defendant Nos. Therefore consideration for the sale deed was thoroughly inadequate, sale
cannot be upheld. Recited consideration in sale
deed is thoroughly inadequate in nature and such sale deed was executed only nominally for
collateral purpose and with view to stave off creditors. Also the sale deed be signed by witnesses part from
just the buyer and the seller.
Keywords: Sale, sale deed, Fraudulent, Consideration, Trial
Sale is a transfer of ownership in exchange for a price paid or promise or part-paid and part promised.sale deed is one of the important legal documents in order to transfer an immovable property for consideration from seller to buyer and such an evidence of the sale also acts as the main document for further sale by the buyer as it establishes his proof of ownership of the property. It symbolizes the transfer of rights over the property. It is also known as bargain deed and is governed by Registration Act. A sale deed of a property which is not signed is incomplete and hence property cannot be sold or purchased by either buyer or the seller. A sale deed signifies the cooperation and satisfaction between both of the parties on various terms and conditions.
ESSENTIALS OF A SALE DEED
1. Parties of the sale deed – it is a necessary condition that the sale deed ensaviages the complete name of the buyer and seller along with their addresses, identification number.
2. Description of the immovable sales property – The description of a sale deed includes all the necessary information regarding the sale property like total area covered by the plot, identification number, details of construction, the exact location and surroundings. The property schedule must be incorporated in the sale deed to define the accurate location.
4. Clause of Sale consideration – the amount of consideration must be included in the sale deed which directs to the total payable amount by the buyer to the seller. It also ensavigaes the date of payment, and the deadline of payment.
5. Mode of payment – the mode of transaction should be mentioned. Also if the payment is done in installments for booking of a property the advance paid as well as the remaining consideration should be mentioned clearly in the sale deed.
One of the most important statements incorporated in a sale deed is that the seller certifies that the subject to sale is free from all encumbrances and is without any lien.
PREPARATION OF SALE DEED
A sale deed is prepared on a non judicial paper with the mutual consent of both the parties. The value of the deed differs from state to state based upon the prescribed Stamp Act of the State. Also the sale deed be signed by witnesses part from just the buyer and the seller.
WORKING OF A SALE DEED
The Jurisdictional Sub- Registrar’s office registers the sale deed and there should also be two witnesses present apart from the buyer and the seller at the time of registration. In case the buyer or the seller is not in a position to present them physically, a nominated agent can be present who will be empowered with a legal power of attorney in order to execute the sale deed.
The deadline to produce the original documents will be four months from its execution. In case the documents are not produced within the given period, the Registrar will allow a grace period of another four months for the documents to be produced. Further, this will also levy a maximum penalty of 10times the registration charges to the property.
At the time of property selling, the buyer pays charges like the stamp duty and registration charges, whereas the seller pays for the property tax, the cess, water and electricity charges.
FRAUDULENT SALE DEED
Under Section 53 defines the Fraudulent transfer as every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Clause 2 ensaviages that every transfer of immovable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee.
A suit instituted by a creditor (which term includes a decree-holder whether he has or has
not applied for execution of his decree) to avoid a transfer on the ground that it has been made
with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, or
for the benefit of all the creditors.
In the case of M. Mohamed Kassim And Ors. v. C. Rajaram And Ors. The question of fraudulent sale deed was arose in which the hon’ble court of Madras High Court decided the intention of the defendant by following first defendant had no other debts excepting the loan obtained by him from the Co-operative Society which was payable by instalments in 15 years and the interest charged was only at 9 per cent per annum. There was absolutely no pressure from the Bank or anybody else necessitating the alienations by the first defendant. This indicates that the main intention of the first defendant was to convert the properties into cash so that he can place the properties beyond the reach of his creditors, especially the plaintiff to whom he owed money. Other important circumstances showing the fraudulent intention of the first defendant. The sale deeds were registered at Parasalai in Kerala State after including an item of property in Kerala to which the first defendant had absolutely no right, even though the suit properties are situated in Tamil Nadu. This was done with a view to maintain the secrecy of the sale deeds so that he can secret the amounts and defeat the rights of his creditors. It was also submitted that the property had been grossly undervalued in a fraudulent manner. It was pointed out that the value of the building-item No. 1 at the relevant time was estimated to be Rs. 80,000. Excluding the value of the site, the value of the building alone comes to Rs. 72,075. But in both the sale deeds, only a sum of Rs. 30,000 is shown as consideration. The court held that the defendant is not a Bona Fide purchaser from the fourth defendant and therefore, we hold that he is not entitled to any protection on that ground.In the result, these appeals are dismissed with costs (one set) and the relief of injunction granted by the trial Court would stand deleted from the decree.
The Supreme Court of India in the case of Chhotanben and Ors. vs. Kiritbhai Jalkrushnabhai Thakkar and Ors. found that the Appellants (Plaintiffs) have asserted that the suit was filed immediately after getting knowledge about the fraudulent sale deed executed by original Defendant Nos. 1 & 2 by keeping them in the dark about such execution and within two days from the refusal by the original Defendant Nos. 1 & 2 to refrain from obstructing the peaceful enjoyment of use and possession of the ancestral property of the Appellants.
The court further affirmed that the view taken by the Trial Court that the issue regarding the suit being barred by limitation in the facts of the present case, is a triable issue and for which reason the plaint cannot be rejected at the threshold in exercise of the power Under Order VII Rule 11(d) thus no hesitation was done in reversing the view taken by the High Court and restoring the order of the Trial Court rejecting the application.
In the case of Prasad and Ors. Vs. V. Govindaswami Mudaliar and Ors. The question of validity of the sale deed arose whether a sale deed executed from joint family property was valid and the order of the Trial Court for partition was legal or not ? The Supreme court held, considering evidence it appears that land was fertile land and the Trial Court rightly concluded that property in dispute was of high rate but it was sold at less rate which is inordinately inadequate consideration. Therefore the sale deed is true and it is supported by consideration but only in part. Recited consideration in sale deed is thoroughly inadequate in nature and such sale deed was executed only nominally for collateral purpose and with view to stave off creditors. Debts under promissory notes were fictitious. If a transaction of sale is itself vitiated, no relief in equity could be granted to vendees. Therefore consideration for sale deed was thoroughly inadequate, sale cannot be upheld. Hence, appeals allowed, judgment of High Court set aside and that of Trial Court restored
There have been numerous cases of fraudulent sales deed and the application of laws are based upon the evidence proposed in the court. In the case of tangible immoveable 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 immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property. To the best interest and protective transaction between buyer and seller this provision protects and secures them from being frauded with an intent to defeat or delay by any party against others.
This disclaimer informs readers that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.
 (1988) 1 MLJ 447, 10 December, 1987
 Civil Appeal No. 3500 of 2018, SC
 1982 AIR 84