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Validity of Sale by a Co-owner of Interest in Undivided Immovable Property to Third Party without Getting a Decree

This article answers the query; whether a sale of immovable property or an interest in immovable property which is jointly owned by two persons, or more than two persons, or when such interest in property had arisen from bequest, can be made to a third party without intervention of Courts i.e. without getting a decree to that effect.

Supreme Court in Gautam Paul v. Debi Rani Paul,(2000) 8 SCC 330 has held that there is no law which provides that co-sharer must sell/ her share to another co-sharer. Thus, strangers/ outsiders can purchase shares even in a dwelling house.

Sale of undivided interest in property can take place without a compulsory decree from appropriate Court by way of “mutual settlement”. In Ramdas vs. Sitabai and Ors., MANU/SC/0910/2009Court laid down, that" There could be no dispute with regard to the fact that an undivided share of co-sharer may be a subject matter of sale, but possession cannot be handed over to the vendee unless the property is partitioned by metes and bounds amicably and through mutual settlement or by a decree of the Court." (Para 17)

Thus, following are the requisites for carrying out sale of undivided interest to third party, in Immovable property, where sale is by mutual consent:
1. No Objection Certificate from the co-owners with respect to transfer of ownership i.e. title and possession.
2. Division /arrangement by metes and bounds, reached out amongst the co-owners.

No doubt any co-owner, where the property is undivided or otherwise in certain cases, does have a right of pre-emption and has a right over any stranger who is a potential vendee of the property in question, that’s why an NOC is required.

In the absence of division by metes and bounds no undivided interest can be given in possession to the stranger unless there is a decree of partition, or there is an arrangement already reached amongst the parties and which divides property by metes and bounds.

The provisions under law regulating the same; Section 4 of the Partition Act, 1893 and provisions of Section 44 of the Transfer of Property Act, 1882. The Object of these provisions is to keep-off strangers who may purchase the undivided share of a co-sharer of an immovable property, so far as dwelling houses are concerned to make it possible for a co-sharer who has not sold his share to buy off the stranger purchaser.[1]

Thus, a sale of undivided interest can be made to a third party if the co-sharers reach a settlement for division of said property by metes and bound and give an NOC for the same. In absence of division by metes and bounds, a sale remains valid and only the possession of joint estate cannot be enjoyed by the vendee unless the property which is subject matter of sale has a character of exclusivity.

More Articles:
1. Harmful effects of Tax-Competition:
2. Law on Injunction over encashment of Performance Bank Guarantee:
[1]Daral Chandra Chatterjee v. Gartha Behari Metra(1954) ILR 1 Cal 384,Bulu Sarkhel v. kali Prasad BasuAIR 2012 Cal 67

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