Supreme Court Clarifies Impact of Deficient Stamp Duty on Vendor’s Rights In a landmark decision, the Supreme Court has clarified that a vendor cannot reclaim ownership of land merely because the sale deed is pending registration due to a deficiency in stamp duty. This ruling emphasizes the finality of a sale once the deed is executed and the consideration is received.
Key Judgement Highlights
The Bench, comprising Justice Vikram Nath and Justice Ahsanuddin Amanullah, addressed the critical issue of whether a vendor retains any rights to the property if the registration of the sale deed is delayed due to insufficient stamp duty. The Court observed: “Pendency of registration on account of deficiency cannot enure any benefit to the vendor, who has already eliminated all his rights by executing the sale deed after receiving the sale consideration. He cannot become the owner of the transferred land merely because the document of sale is pending for registration. It is the purchaser who cannot produce such document which is pending registration with respect to the immovable property in evidence before the Court of law as the same would be inadmissible in view of statutory provision contained in the TP Act as also the Act, 1908.”
Legal Context The Supreme Court’s decision addresses a common legal issue involving the rights of parties in property transactions when there is a delay in the registration process. The Transfer of Property Act, 1882 (TP Act), and the Registration Act, 1908, govern these transactions, stipulating the requirements for a sale deed to be considered legally valid and enforceable.
Implications for Vendors and Purchasers
1. Finality of Sale: Once a sale deed is executed and the consideration is paid, the vendor forfeits all rights to the property. This ruling prevents vendors from reclaiming ownership based on pending registration due to stamp duty deficiencies.
2. Purchaser’s Position: The purchaser, while unable to present the unregistered sale deed as evidence in court, remains the rightful owner of the property. This ensures that vendors cannot exploit procedural delays to regain property ownership.
3. Legal Admissibility: The ruling underscores that pending registration affects the admissibility of the sale document in court but does not revert ownership to the vendor. This distinction protects the purchaser’s rights while maintaining procedural integrity.
Case Background In the case of *Kaushik Premkumar Mishra & Anr. vs. Kanji Ravaria Kanji & Anr.*, the vendor executed a sale deed and received the full sale consideration. However, the document was pending registration due to a deficiency in stamp duty. The vendor attempted to reclaim ownership of the property, arguing that the sale was incomplete without registration. The Supreme Court rejected this argument, holding that the execution of the sale deed and receipt of consideration finalized the transfer of ownership. The Court’s decision prevents vendors from leveraging technicalities to undo completed sales, thereby ensuring stability and fairness in property transactions. Conclusion The Supreme Court’s ruling in this case sets a precedent that reinforces the finality of executed sale deeds. Vendors cannot benefit from registration delays due to stamp duty deficiencies, and purchasers retain ownership rights despite pending procedural formalities. This decision strengthens the legal framework governing property transactions, providing clarity and protection for all parties involved