Sale is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Transfer of tangible immovable assets of value of Rs100 or above or other intangible thing can be made only by registered instrument and in case of tangible immovable property of less than Rs100 may made either by registered instrument or by delivery of property.
Rights and liabilities of buyer and seller of immovable property (Section 55)
Liabilities of seller
1 In the absence of the contract to the contrary, the seller is bound –
- To disclose to buyer any material defect in the property or in 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;
- 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 the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto;
- 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;
- 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 give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits;
- 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.
2 Where the whole of the purchase-money has been paid to the seller, he is also bound to deliver to the buyer all documents of title relating to the property which are in the seller’s possession or power
Rights of seller
The seller is entitled –
- To the rents and profits of the property till the ownership thereof passes to the buyer;
- Where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, to a change upon the property in the hands of the buyer, any transferee without consideration or any transferee with notice of the non-payment, for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part from the date on which possession has been delivered.
Liabilities of buyer
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 or tender, at the time and place of completing the sale, the purchase money to the seller or such person as he directs but 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;
- Where the ownership of the property has passed to the buyer, 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, as between himself and the seller, 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.
Rights of buyer
- The buyer is entitled – (a) where thee ownership of the property has passed to him, to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof; (b) unless he has improperly declined to accept the delivery of the property, to charge on the property, as against the seller and all persons claiming under him, to the extent of the seller’s interest in the property, for the amount of any purchase-money properly paid by the buyer is anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission.