Introduction:

In the case of Shanti Devi (since deceased) through LRs. Goran versus Jagan Devi & Others, 2025 LiveLaw (SC) 900, the Supreme Court of India dealt with a critical issue concerning the validity of a sale deed executed without consideration under Section 54 of the Transfer of Property Act, 1882 (“TPA”), and the applicable limitation period for filing a suit for possession when such a deed is void ab initio. The dispute arose when the plaintiff, Shanti Devi, challenged the sale deed executed in favour of the defendant, arguing that the alleged consideration claimed under the deed had never been paid, rendering the transaction void. The deed purported to record that ₹9,000 had been paid earlier and ₹6,000 was paid at the time of registration, but the plaintiff denied receipt of any such payments. When the matter came before the Court, the defendant failed to substantiate the payment of consideration. The husband of the defendant, who allegedly made the final payment at the time of registration, did not appear as a witness, while one of the attesting witnesses had died and the other attesting witness was the defendant’s brother whose testimony was found unreliable. Furthermore, the original sale deed was not produced in evidence, leading to an adverse inference against the defendant.

Arguments:

The plaintiff’s arguments centered on the foundational principle enshrined in Section 54 of the TPA, which defines a sale of immovable property as a transfer of ownership in exchange for a price paid or promised, or partly paid and partly promised. The plaintiff’s counsel submitted that the absence of consideration meant that no sale had taken place in the eyes of law, and therefore, the deed was void ab initio. Relying on the precedent set in Kewal Krishnan v. Rajesh Kumar & Others, (2022) 18 SCC 489, they argued that payment of consideration is not a mere formality but an essential ingredient of a valid sale, and if the sale deed neither records nor proves actual payment or future promise of price, it is not a valid transaction. The plaintiff asserted that since no valid sale had taken place, her title to the property remained intact and she was entitled to recover possession on the basis of ownership. Further, they argued that since the sale deed was void, it was not necessary to seek cancellation under Article 59 of the Limitation Act, 1963, which provides a three-year limitation for suits seeking cancellation of instruments. Instead, they contended that the proper article governing limitation was Article 65, which allows a 12-year period for recovery of possession based on title. Thus, the plaintiff’s suit was filed within time as it was initiated within 12 years of her knowledge of the defendant’s adverse possession.

The defendant’s arguments rested on the assertion that the consideration had in fact been paid, with ₹9,000 having been given earlier and ₹6,000 allegedly paid at the time of registration in the presence of witnesses. The defendant contended that the sale deed, once registered, carried a presumption of validity and authenticity, and the burden was on the plaintiff to prove otherwise. They argued that the plaintiff had failed to seek cancellation of the deed within three years under Article 59 of the Limitation Act and therefore, the suit was barred by limitation. Further, they emphasized that the plaintiff’s denial of the sale consideration was a tactic to defeat the legitimate rights of the defendant, who had been in possession of the property for years. The defendant relied on the principle that possession must also be protected under law, and long enjoyment of property should not be disturbed without clear proof of invalidity in the underlying transaction. They further submitted that the absence of the husband as a witness or the death of one attesting witness should not lead to an adverse inference, as the deed was otherwise duly executed and registered in accordance with law.

Judgement:

After examining the rival submissions and the evidence on record, the Supreme Court’s judgment, delivered by a bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan, reaffirmed the settled principle that under Section 54 of the TPA, consideration is a sine qua non for a valid sale. The Court observed that “the sale of an immovable property would have to be for a price and such a payment of price is essential, even if it is payable in the future. If a sale deed is executed without the payment of the price, it is not a sale at all in the eyes of law, specifically, under Section 54 of the Transfer of Property Act. Such a sale without consideration would be void and would not affect the transfer of the immovable property.” Referring to the earlier precedent in Kewal Krishnan v. Rajesh Kumar, the Court reiterated that a deed devoid of payment or promise of payment of price is a nullity, incapable of transferring title. Applying this principle, the Court held that the defendant’s failure to prove actual payment of ₹15,000 consideration rendered the sale deed void ab initio. The Court noted with concern that the defendant failed to produce the original deed, one key witness had died, and the testimony of the surviving witness, being the defendant’s brother, was unreliable, while the husband who allegedly made the payment never entered the witness box. This, the Court held, was fatal to the defendant’s case.

Importantly, the Court clarified the legal position regarding limitation. It held that when a sale deed is void, there is no need for the aggrieved party to seek cancellation under Article 59, which is applicable only when a voidable instrument is to be set aside. Instead, a void document can simply be ignored, and the true owner may seek possession based on title within the 12-year limitation period provided under Article 65 of the Limitation Act. The Court observed: “To put it simply, in the eyes of the law, the plaintiff could not be said to have executed the sale deed. Therefore, the plaintiff could indeed have maintained an action to obtain possession of the property on the basis of her title and filed the same within the period of 12 years from the date of knowledge that the possession of the defendant was adverse to that of the plaintiff.” This reasoning ensures that rightful owners are not deprived of property merely because they did not challenge a void instrument within the shorter three-year period under Article 59. The judgment thus draws a critical distinction between void and voidable transactions in property law, reinforcing that void deeds can never create title and are non est in the eyes of law.

The ruling has significant implications for property law. First, it strengthens the requirement of consideration as an indispensable element of a sale, bringing clarity to cases where registered documents are executed without actual transfer of price. Second, it protects true owners by ensuring that they have 12 years to reclaim possession when faced with void deeds, thereby preventing unjust enrichment of defendants who claim under such null instruments. Third, it reiterates that courts will not hesitate to draw adverse inferences against parties who fail to produce primary evidence like the original sale deed or credible witnesses to prove disputed payments. The judgment also underscores the responsibility of defendants in property disputes to affirmatively prove that consideration was indeed paid, since mere registration of a document is not conclusive proof of validity if foundational requirements are absent. Finally, by aligning with the principle laid down in Kewal Krishnan, the Court reinforced continuity in jurisprudence while expanding its application to disputes over limitation.

In sum, the Supreme Court ruled in favour of the plaintiff, holding the impugned sale deed void ab initio for want of consideration and allowing the suit for possession based on title within the 12-year period under Article 65 of the Limitation Act. This judgment not only clarifies the law but also sends a clear message that property transfers cannot be reduced to hollow paperwork devoid of actual substance and that the constitutional principle of fairness will prevail over technical manipulations.