Section 54 of the Transfer of Property Act, 1882 defines the meaning of the ‘sale’ and also specifies how the sale of immovable property can be done. Here, sale refers to the sale of immovable property whether tangible or intangible (For example: easement rights)

Section 54: Sale ownership is transferred in exchange for a price paid or promised or part-paid and part-promised.

Sale is defined as the transfer of ownership of a property in exchange for a price paid or promised or partly paid or part promised. Sale simply means the purchase and sale of goods and services, the sale of immovable property is provided under Section 54 of Transfer of Property Act 1882. A sale under transfer of property act is a transfer of ownership for a money consideration. It refers to the complete transfer of all rights in the property sold. No rights in the property sold, are left to the transferor.

What are the elements of Sale?

The elements of Sale are given as follows:

• Transfer of Ownership: Ownership is the aggregation of all rights and liabilities in a property. When transfer of ownership occurs, all rights and liabilities in the property are transferred from transferor to transferee.
• Money Consideration: Where the ownership of the property is transferred for money, it amounts to sale, but if it is transferred for something else, it amounts to exchange.
• The seller must be a person competent to transfer. The seller should be either the owner of the property or should have the authority to dispose of it.
• The buyer must be a person competent to the transferee.
• The subject matter must be a transferable immovable property which can be tangible or intangible.
• There must be a transfer of ownership.
  In Vidhyadhar v. Manikrao (AIR 1999 SC 1441), the Supreme Court held that to constitute a ‘sale’ the parties must intend to transfer the ownership of the property. The intention is to be gathered from the recitals in the sale deed, the conduct of the parties, and the evidence on record.
• The transfer must be in exchange for a price. ‘Price’ in the ordinary sense connotes money consideration for the sale of the property. The price must be paid or promised or partly paid.

What are the essentials of a Sale under Transfer of Property Act?

The essentials of a sale under Transfer of Property Act are given as follows:

• Parties i.e., Seller, Buyer
• Competency
• Money consideration
• Conveyance
• Registration

Explanation

1. Parties: In a sale, there must be at least two parties. The person who transfers his property is known as the transferor/seller/vendor and the person to whom the property is transferred is known as the transferee/buyer/vendee. Seller:
   • The seller must own the property which he is going to sell.
   • The seller should have legal title to it only then he can sell the property.
   • The seller should be competent to contract.
   • He must not be a minor person.
   • He should not be of unsound mind.
   • He must not be statutorily incompetent.
   • The seller may be a natural person or judicial person, for example, a corporation or any other legal person.
   Buyer:
   • The buyer must be competent to get the ownership of the property.
   • The buyer should not be disqualified from purchasing the immovable property under any law at the time of sale, for example: under Section 136 of the Act, a judge, a legal practitioner or an officer of the court is incompetent for purchase of actionable claim.
   • The buyer may be a natural person or judicial person, for example: a corporation or other legal person.
   In Misabul Enterprises v. Vijaya Srivastava (AIR 2003 Del. 15), the court held that a contract of sale should be based on a mutual agreement between seller and buyer.
   
   
2. Subject Matter: The sale under the Transfer of Property Act, 1882 specifically deals with the sale of immovable property. Immovable property includes the benefits from the land and the things attached to the earth and it does not include standing timber, growing crops and grass.
   
   
3. Competency: A valid sale requires both the parties i.e., the buyer and seller to be competent on the date of sale.
   
   
4. Money Consideration: The consideration must only be in money to constitute a sale. If it is for exchange or some other item, then it is not a sale. The consideration for the sale must be paid, partly paid, promised, or partly promised. Therefore, price is money but not necessarily money immediately paid in notes and coins; it includes money which might be already due or payable at a future date. In Umakanta Das vs. Pradip Kumar Ray (AIR 1983 Ori 196), the court held that if the sale deed contains a condition that the price will be paid within one year, provided that possession is obtained within that time, and if possession is not obtained, the payment of the price will be postponed, or in the event of the vendee not getting the property, the price will not be paid. In all the above cases, the deed within the meaning of the section is the sale deed.
   
   
5. Conveyance: Section 54 provides for two ways for transfer of property:
   • Where the property transferred is tangible immovable property of value of one hundred rupees and upward, transfer can only be made by a registered instrument. Where the property is immovable property of less than one hundred rupees, it can be transferred either by registered instrument or delivery of property. The delivery of tangible immovable property occurs when the seller puts the buyer or such person as the buyer directs in possession of the property.
   • Registration of sale deed: Where the value of tangible immovable property is Rs. 100 or more, the sale of such property requires registration of the deed. Where the property is intangible immovable property of any valuation, it will require registration to complete the sale.
   In Arjuna Reddy V. Arjuna C Thanga ((2006) 7 SCC 756), a sale of a property of a value less than rupees hundred, the formalities required are optional. In Jhandu Vs. Ramesh Chand (AIR 1971 Allahabad 189), the Court observed that if the instrument is registered, the transfer is affected from the date of writing the contract and not from the date of registration.

Registration:

Both section 8 and 54 of the Transfer of property act, 1882 suggests that through execution and registration of a sale deed, the ownership and all interests in the property passes to the transferee, yet this will be on the terms and conditions embodied in the deed indicating the intention of the parties. The intention of the parties can be gathered from the averments (formal statement) in the sale deed itself or under other attending circumstances.

Where the sale is to be completed only by the registered instrument, the ownership is presumed to pass on the execution of the sale deed, not on the deed’s registration. The sale deed transferring immovable property of the value of 100 or more will require registration under Indian Registration Act 1908.

In Nahar Lal vs. Brijnath (1928 AC 385), the court held that if the registration is done in violation of the provisions of the Registration Act, a document cannot be said to be duly registered.

Conclusion
‘Sale’ under TPA is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Following are the essentials of a valid sale under TPA:

• The seller must be a person competent to transfer. The seller should be either the owner of the property or should have the authority to dispose of it.
• The buyer must be a person competent to the transferee.
• The subject matter must be a transferable immovable property which can be tangible or intangible.
• There must be a transfer of ownership.
• The transfer must be in exchange for a price. ‘Price’ in the ordinary sense connotes money consideration for the sale of the property. The price must be paid or promised or partly paid.

Bibliography

• Sale under Transfer of Property Act | Essentials of sale | Legal PaathShala, https://legalpaathshala.com/sale-under-transfer-of-property-act/ (last visited Jun 22, 2022)
• Sale of immovable property: Essentials of valid sale The Fact Factor, https://thefactfactor.com/facts/law/civil_law/topa/sale-of-immovable-property/2270/ (last visited Jun 22, 2022)