The Supreme Court of India has held that the non-payment of sale consideration at the time of execution and registration does not render a registered sale deed void or invalid.

A Bench comprising Justice J.B. Pardiwala and Justice K. Vinod Chandran observed that once title passes under an executed and registered deed, failure to pay the full agreed consideration gives the vendor the right to seek recovery of the unpaid amount through a suit for money, but does not automatically invalidate the transfer of ownership.

Key Legal Findings

The Court reiterated established principles under the Transfer of Property Act, 1882, clarifying:

  • Passing of Ownership: Transfer of property is completed upon execution and registration of the deed, provided the intention to transfer ownership is clear from the document.
  • Remedy for Non-Payment: The vendor's appropriate remedy against non-payment or partial payment of balance price is to file a money recovery suit, not to seek cancellation of the registered sale deed.
  • Vendor's Lien: The seller retains a statutory charge or lien over the property for the unpaid price under Section 55(4)(b) of the Transfer of Property Act.

The Apex Court accordingly set aside the contrary findings of the lower appellate court, confirming the validity of the registered transfer.