While setting aside a judgment cancelling a sale deed, the Delhi High Court has held that when there is a deficit or non-payment of sale consideration, the appropriate remedy for the plaintiff would be to seek recovery of the sale consideration and not avoidance of the sale deed.

The High Court was considering a regular first appeal filed under Section 96 of CPC against the judgment and decree whereby the suit of the plaintiff/respondent was decreed and the sale deed was declared as null and void.

The Single Bench of Justice Neena Bansal Krishna stated, “It is therefore, abundantly clear when there is a deficit or non-payment of sale consideration, the appropriate remedy with the Plaintiff was to seek recovery of the sale consideration and not seek avoidance of the Sale Deed.”

“Therefore, whether the Sale Deed was lost or kept in possession by the Plaintiff is of little consequence in the light of the Judgement of the Apex Court in case of Dahiben v. Arvindbhai Kalyanji Bhanusali, (2020) 16 SCC 366 that the mere non-payment of sale consideration cannot be a ground for cancellation of Sale Deed”, it added.

Advocate Yugansh Mittal represented the Appellant, while Advocate Sidharth Chaudhary represented the Respondent.

Factual Background

As per the plaint, the plaintiff/respondent was the registered owner of a shop (suit property). He agreed to sell the property to the defendants/appellants for a total sale consideration of Rs 7,25,000. The defendants tendered two cheques for a total amount of Rs 7,25,000 (one cheque for Rs 4 lakh and the other for Rs 3.25 lakh) at the time of Registration of the sale deed, in their favour. Since the defendants and plaintiffs were known to each other for more than 25 years, being neighbours, the sale deed was drawn by the plaintiff. The defendants assured that even though the cheques were not received, they would, in due course of time, hand over the cheques to the plaintiff.

The plaintiff visited the suit property, but was shocked to see that the defendants had forcibly taken possession of the property and had put their own locks on the shutter. The plaintiff claimed that the sale of the suit property had never been crystallised under the sale deed as it was without any consideration. Hence, the plaintiff filed the suit for declaring him as the owner of the suit property and to declare the sale deed as null and void. The District Judge held that the suit was maintainable. The sale deed was declared null and void, and the suit of the plaintiff for possession and injunction was also decreed in favour of the plaintiff. Aggrieved thereby, the appellants/defendants approached the High Court.

Reasoning

Dealing with the issue of whether non-payment / non-receipt of sale consideration was a circumstance which could lead to avoidance/cancellation of the sale deed, the Bench referred to the judgment of the Apex Court in Vidyadhar vs. Manikrao and Anr., (1999) wherein it was held that even if the whole of the price is not paid, but the document is executed and thereafter registered, the sale would be complete and the title would pass on to the transferee under the transaction.

Further reference was made to Dahiben (Supra) wherein it has been held that mere non-payment of sale consideration cannot be a ground for cancellation of the sale deed. The Bench was of the view that the Plaintiff could seek recovery of the sale consideration.

As per the Bench, it could not be said that the agreement in question was an agreement without any consideration or void under Section 25 of the Indian Contract Act,1872.

Thus, the Bench set aside the impugned judgment passed by the District Judge, cancelling the sale deed and decree of possession. Dismissing the suit of the plaintiff, the Bench allowed the appeal and ordered, “...it is directed that the Defendants / Appellants shall pay / deposit the amount of Rs.7,25,000/- along with interest @ 12% per annum from the date of Sale Deed, till the amount is fully paid to the Plaintiff.”

Cause Title: Akhilesh Gupta v. Rajwans Vadehra (Neutral Citation: 2026:DHC:3189)

Appearance

Appellant: Advocate Yugansh Mittal

Respondent: Advocates Sidharth Chaudhary, Rinku Yadav

Click here to read/download Order


Delhi High CourtJustice Neena Bansal Krishna

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.