Tag Archives: agreement to sell

Family Settlement – Clause Contemplating Preferential Offer

When in an agreement it is stated that the property cannot be sold without concurrence of the three brothers in writing, there cannot be any doubt about its meaning. It means what it says which is that should a brother want to sell the property, the other two brothers must agree in writing. This clause cannot be described as vague. This is different from the aspect as to whether it is a clog on ownership or whether it is otherwise unenforceable but it cannot be described as being vague. The second contention is that when a decision is taken by the brothers permitting sale by a third brother, then, first preference is to be given to both the other brothers. What is intended is that after the written concurrence is obtained for selling in order that property is not sold to a third party/stranger, the other two brothers are given an opportunity to buy that property. This portion of the clause cannot also be described as vague as such. No doubt, it could be argued that the price at which the offer is to be made is not expressly mentioned. It only contemplates a preferential offer being treated as a condition precedent to a brother affecting a sale outside of a family to a stranger. The price can only be understood as market price which would be the fair price. Tilak Raj Bakshi v. Avinash Chand Sharma, (2020) 15 SCC 605.

Leave a comment

Filed under Preferential Offer

GPA Transaction – Does Not Convey Any Title

In Suraj Lamp & Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656, it was observed as under:
“Therefore, an SA/GPA/will transaction does not convey any title nor creates any interest in an immovable property. The observations by the Delhi High Court in Asha M. Jain v. Canara Bank, (2001) 94 DLT 841, that the concept of power of attorney sales has been recognized as a mode of transaction when dealing with transactions by way of SA/GPA/will are unwarranted and not justified, unintendedly misleading the general public into thinking that SA/GPA/will transactions are some kind of a recognized or accepted mode of transfer and that it can be a valid substitute for a sale deed. Such decisions to the extent they recognize or accept SA/GPA/will transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law.
Transactions of the nature of ‘GPA sale’ or ‘SA/GPA/will transfers’ do not convey title and do not amount to transfer, nor can they be recognized a valid mode of transfer of immovable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of Section 53-
A of the Transfer of Property Act. Such transactions cannot be relied upon or made the basis for mutations in municipal or revenue records. What is stated will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered assignment of lease. It is time that an end is put to the pernicious practice of SA/GPA/will transactions known as GPA sales.” Delhi Development Authority v. Gaurav Kukreja, (2015) 14 SCC 254.

Leave a comment

Filed under GPA Transactions, Property Law

Agreement for sale – time specified for payment of sale price

In an agreement for sale relating to immovable property if time is specified for Payment of sale price but not in regard to execution of sale-deed, it will become essence only with reference to payment of sale price but not in regard to execution of sale deed. Ordinarily in relation to agreements to sale of immovable properties, time is not considered to be the essence of contract unless such an intention can be gathered either from express terms of contract or by necessary implication, if it is or can be borne out from the terms of the contract as to what is the intention of the parties.
A constitution bench of the Hon’ble Apex Court in Chand Rani v. Kamal Rani, (1993) 1 SCC 519 explained this principle as under:
“It is well accepted principle that in the case of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.”
In Saradamani Kandappan v. S. Rajalakshmi and others, (2011) 12 SCC 18, it was held as under:
“The intention to make time stipulated for payment of balance consideration will be considered to be essence of the contract where such intention is evident from the express terms or the circumstances necessitating the sale, set out in the agreement….Even if the urgent need for the money within the specified time is not set out, if the words used clearly show an intention of the parties to make time the essence of the contract, with reference to payment , time will be held to be the essence of the contract.” Narayan Sharma v. Devendra Kumar Sharma, 2013 (121) RD 365.

Leave a comment

Filed under Agreement for sale, Civil Law