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Disclaimer

This project report has been prepared by the author as a student of 3rd year under the five year
BBA.LL.B (H) Program in the MATS Law School for academic purposes only. The views
expressed in this report are personal to the student and do not reflect the view of commission or
any another person, law school or any of its staff or personnel. Any for academically publishing
of this article then it must be authority from the respective law school in any manner. This report
is the Duties And Rights of Seller and the same or any part thereof may not be used in any
manner whatsoever, without express permission of the MATS Law School in writing.

Divyansh Sharma
MU13BBALLB09

ACKNOWLEDGEMENT

I feel highly elated to work on this dynamic and highly important topic that is
International Law And Regulation of Refugees. This topic instantly drew my attention and
attracted me to research on it.
I am fortunate to be provided with an opportunity to write my paper under the kind
supervision of Dr. G.P Tripathi (Director., MATS Law School) and I am thankful to her for
providing me with the appropriate guidance while writing the paper.
This paper would not have been possible without her valuable inputs, honest remarks and
earnest effort to guide me throughout the drafting of the paper. I would like to extend my sincere
thank to her for giving me her valuable time to view my research from her busy schedule.
I am highly indebted to the library staff to help me find the relevant books and journals,
and other officials and office staffs, who have also extended their help whenever needed.
I would like to extend my sincere thanks to my friends and for their review and honest
remarks.
So, I hope I have tried my level best to bring in new ideas and thoughts regarding the
basics of this topic. Not to forget my deep sense of regard and gratitude to my faculty adviser,
Dr. G.P Tripathi who played the role of a protagonist. Last but not the least; I thank all the
members of the MATS Law School and all others who have helped me in making this project a
success.

Introduction
The transactions involving sale or purchase of immovable properties need to be handled with
utmost care, transparency, honesty and dignity. The risk(s) involved in the transaction can be
eliminated or at least minimized if both the parties to the deal are aware of the duties and
responsibilities of each other. Some illustrative examples of rights, duties & responsibilities of
Seller and Buyer are given below. If these are meticulously followed and adhered to, a lot of
bad blood and drainage of scarce resources the investment can be avoided.
However a common citizen may not be aware of the legal stipulations / obligations / rights while
entering a deal involving immovable property. So it is advisable to obtain the legal services of a
competent, honest and recommended property lawyer. One must not be Penny Wise, Pound
Foolish in such transactions.
Section 55 and sub-sections of the Transfer of Property Act, 1882 confer certain Duties, Rights
and Liabilities on the Seller and the Buyer. Theyve been listed below and they should be taken
cognizance of while entering into any deal of immovable property.

A seller has a duty in a real property transaction to present marketable title. To present
marketable title, a seller must not attempt to sell the property to another buyer. Additionally, the
title must be free of any encumbrance, such as a lien or mortgage on the property. This
requirement does not need to be written in the purchase agreement to be binding. Indeed,
California law imposes this requirement on all sellers. Therefore, a seller would need to settle a
mortgage on a property before transferring title to the buyer. Sellers are also obligated to inspect
the property and inform buyers if there are any conditions that affect the value of the property.
This can include, among others, termites, foundational problems, structural concerns, and
plumbing issues. According to California law, sellers of residential property must also provide a
Natural Hazard Disclosure Statement to buyers.
the law requires the parties to perform their duties under a real estate contract in a timely manner
(i.e., time is of the essence). The law does not set a specific timeline, but only requires that
parties do not delay the transaction in bad faith, or fail to perform their requirements without a
good excuse. Both parties also have a duty to satisfy any conditions (e.g. promises) with a goodfaith effort. For instance, if a seller promises to make improvements on the property before the
sale of the property, the seller has a duty to make a good-faith effort to satisfy this promise.
Additionally, buyers have a duty to make a good-faith effort to secure financing to purchase the
property. In the event that the property is substantially damaged, without the fault of either the
buyer or the seller, before the buyer takes title of the property, California law excuses the
purchase and requires a refund to the buyer. However, buyers and sellers are at liberty to
negotiate to different terms and conditions in their purchase agreements.
In the event that legal disputes do arise, buyers and sellers are increasingly seeking resolution
through arbitration. Although, California law does not require real estate agents and brokers to be
attorneys, buyers and sellers engaging in residential or commercial real estate transactions can
benefit from the legal counsel of a skilled attorney. Having an attorney oversee the transaction
ensures that both parties are aware of the applicable legal requirements and all parties are
satisfying their duties under the purchase agreement.

RIGHTS AND LIABILITIES OF SELLER :


Under Section 55 of the Transfer of Property Act, 1882, in absence of any contract to the
contrary, certain rights and liabilities have been ascertained for the seller, as detailed below:
Duties and Liabilities:
(i) The seller has to disclose to the buyer any material defect in the property or in the sellers
title thereto.
(ii) The seller is deemed to contract with the buyer that he / she enjoys the interest in the
property which he / she intends to transfer to the buyer, and that he / she has authority and power
to transfer the same to the buyer.
(iii) To produce to the buyer all documents of title relating to the property and to answer relevant
questions of the buyer in respect of property and the title thereto.
(iv) To execute a proper conveyance of the property, on payment of the due amount, at a proper
time and place.
(v) To handover possession of the property to the buyer as agreed in the conveyance executed
and registered.
(vi) To pay all public charges, rents, taxes, in respect of the property up to the date of sale.
(vii) To deliver, after receipt of the price or as agreed, to the buyer all documents of title relating
to the property which are in the sellers possession and power.

Rights:
The seller is entitled to the following rights as conferred upon him by Section 55 (4) (a) and (b)
of Transfer of Property Act, 1882, in normal circumstances, and if there is no express contract
to the contrary:

(i) To the rents and profits of the property till the date of transfer of ownership.
(ii) To a charge upon the property where full price is not received.

RIGHTS AND LIABILITIES OF THE BUYER:


Section 55 (5) (a) to (d) of Transfer of Property Act, 1882, imposes upon the buyer certain
duties, while Section 55 (6) (a) and (b) of the Transfer of Property Act, 1882, entitles the buyer
to certain rights, as detailed below:
Duties:
(i) Where the buyer is aware of the sellers interest in the property of which the seller himself is
not aware, then the buyer must disclose it to the seller.
(ii) To pay or tender the purchase price, to the seller or his authorized agent, at the time and place
of completing the sale.
(iii) To bear any loss arising from the destruction, injury or decrease in value of the property after
ownership of the property has passed to the buyer and such destruction / injury is not caused by
the seller.
Rights:
(i) To the benefit of improvement or increase in value of the property where the ownership of the
property has passed to him.
(ii) Where two properties are subject to a common charge and one of the properties is sold, the
buyer is entitled to get the charge satisfied out of the other property without affecting the
property purchased by him.
(iii) To compel the seller for specific performance of the contract to the extent of the sellers
interest in the property, where he has paid the purchase price

Hopefully, this post has clarified the rights, as well as the duties and liabilities that both sellers
and buyers acquire. Write in with your suggestions on other topics relating to Property buying
and selling in India, that you think we should be addressing.

Cases:
1. Srimant Shamrao Suryavanshi and Anr. V. Prahlad Bhairoba Suryavanshi, (2002) 3
SCC 676
FACTS: In the present case, the respondents executed an agreement of sale of an agricultural
land in favour of the appellant. The appellants in pursuance of the agreement got the possession
of the property. After the execution of the agreement, the appellant came to know that the
respondent is negotiating for sale with another respondent for which the appellant filed a suit.
The appellant filed for injunction and an injunction order was passed in favour of the appellant,
yet the respondent sold the land through a registered sale deed. The transferee did not bring any
suit within the limitation period for specific relief.
ISSUE: Whether the appellant can defend his possession over the land by way of Part
Performance under Transfer of Property Act even after the suit for specific performance for a
contract to sale is barred by limitation?
HELD: Even if the limitation period was over, a person can obtain possession of property in part
performance of a contract to sale; the transferee can defend his possession in case filed by the
transferor. but this can only be done is the transferee can well prove that he has done some act in
furtherance of the agreement or the contract or is willing to perform his part of the act in
furtherance of the contract. This was interpreted so as there was not expressly said that the plea
of part performance cannot be taken once the time limit for filing a suit for specific performance
is expired.
In this case, all the requirements of Part Performance were complied with and the transferee was
able to prove that he was willing to perform his part of the contract which fulfils the essential of

performing some act in furtherance of a contract, either in taken possession or in continued


possession of the property.
The court in this case allowed the appeal as it was not disputed that the appellants were willing to
perform their part of the contract.
The court in this case has rightly applied the doctrine. Here the appellant was able to prove the
willingness to perform his part of the contract which is an important essential. Since, along with
this requirement all other requirements were also proved. Hence, it was the right of the appellant
to have the defence of the doctrine which the court provided.

2. Serandaya Pillai v. Sankaralingam Pillai, (1959) 2 Mad LJ 502 (506)


FACTS: A contract was entered into by the plaintiffs and the first and the second defendant to
transfer an immovable property to the first defendant and that the first defendant, in
consideration of the said contract so made for transfer of property, shall marry the second
defendant. The said contract was made orally. The defendants were given the possession of the
said property and the kist to be given was filed in the name of the second defendant for the years
1948 and 1949.
Later the plaintiffs claimed back the said property saying that the gift was invalid as it was
contrary to the Section 123 of the Transfer of Property Act and Section 17 of the Registration
Act.
ISSUE: Whether the defendants can take the defence of Part Performance under Section 53A of
the Act in the given case and circumstances?
HELD: It was said in the judgment that as per the section, gift, along with sale, lease, mortgage
and exchange require a written contract to take place and that the contract should be for a
consideration. Clearly, there involves a consideration to be given for the property in a contract to
sale, lease, mortgage, exchange and a gift.

The present act makes writing of the contract necessary for the property of value of Rs. 100 or
more as per Section 54 of the Act for the purpose of sale, in case of simple and other mortgages,
a sum of Rs. 100 or above is required to be deposited as per Section 59, in case of lease
extending one year as per Section 107 of the Act, exchanges under Section 118 and under
Section 123 of the Act in case of gifts.
In the present case, the promise to marriage was a consideration for the transfer of property
which was taken as a consideration but since, the there only took place an oral transaction
between the parties and not the contract in writing, thus, it falls within the ambit of Section 9 of
the Act. Thus, it is neither a sale nor a mortgage, lease, exchange or a gift. Hence, the present
case could not be said to fall within the ambit of Section 53A of the Act.

3. Govindrao Mahadik v. Devi Sahai, AIR 1982 SC 989


The mortgagee in this case failed to prove that he did any act in furtherance of the contract or
that the mortgagee was willing to perform his part of the contract either of which is an essential
to prove the case in favour.
The Court held that the mortgagee was not entitled to the benefit under Section 53A and that he
could not possess that property.
FACTS: The original Plaintiff 1, Sardar Govendrao Mahadik (Mortgagor), mortgaged a property
to sole defendant Devi Sahai (Mortgagee) at some rate of interest annually. The mortgage was a
mortgage with possession. The mortgagor on Oct. 5, 1945 served a notice to the defendant to
show the full accounts of the mortgage, of which the mortgagee failed to provide. Subsequently,
some negotiations took place between the two and the property was sold to the mortgagee but the
sale deed for the same could never be registered. On the other hand, the mortgagor sold the
property to the Plaintiff 2, Gyarsilal (Subsequent purchaser) via a registered sale deed.
Thereafter, both the plaintiffs filed a suit against the defendant for the redemption of the
property. The mortgagee at that time was already in possession of the property.

ISSUE: Can the mortgagee gain the benefit of Section 53A of the Act?
HELD: The Court held that the mortgagee was not entitled to the benefit under Section 53A and
that he could not possess that property. This was due to the fact that the mortgagee could not
prove that he has performed any act or is willing to perform any act in furtherance of the
contract. Since, the mortgagee was already in possession of the property, the mere possession of
the property would render any result to the transferee. He needed to prove something
independent of the mere possession of the property and an act done in furtherance of the
contract, as the court shall not take any the mere act of continuing in possession of the property
as evidence enough to provide the defence to the transferee. The mortgagee could not prove that
he did any act in furtherance of the contract, thus he was held not entitled to possession over the
property.
In this case, the judgment set a good precedent over when the transferee can avail the right over
the property. Mere already in possession of the property is not enough as the person may be in
possession of the property pursuant to any other prior encumbrances. The mere possession of the
property is enough and a strong evidences when the mortgagee or the transferee is for the first
time taking the possession of the property and not when he is already in possession of the
property. Thus, an independent act than a mere possession of property was required to proved in
such case. In the present case, the mortgagee failed to do so and thus the decision of the court to
not to provide him with the defence under Section 53A of the Act was justified.

4. S. Parvarthamma v. A. Srinivasan, (2003) 4 SCC 705


FACTS: The appellant in this case was the rentholder of the property and thereafter he entered
into an agreement with the landlord for the purchase of the property, thereby becoming a
prospective buyer of the property. Since, he was already living in that property or was in the
possession of that property, the landlord-tenancy relationship superseded to the prospective
buyer-seller relationship where the appellant became the buyer in possession of that property.
But the disputed fact remained of the agreement to sell made between the original landlord and
the tenant. The original landlord in 1983 sold the land to the respondent via a registered sale deed

and transferred their right, title and interest in the property to the respondent including the suit
premises. Thus, in this case, the respondent here became the subsequent transferee and as per the
law under Section 53A of the Act, nothing in the section shall affect the rights of the transferee
for consideration who has no notice of the contract or the part performance thereof. Thus, the
respondent being the subsequent transferee has the right to protect his property rights under the
section.
The respondent in this case claimed himself to be the owner-landlord of a property seeking
eviction of the appellant which the respondent claimed that he is the tenant of the said property,
and got eviction by the Rent Controller and the judgment was upheld by the High Court.
ISSUE: Whether the appellant can exercise the right under Section 53A of the Act?
HELD: The court in this case dismissed the petition on the following grounds:
1. When the appellant filed a suit for injunction, the suit was dismissed in its entirety. Along
with the suit for injunction dismissed but also the alternative suit filed for specific
performance and monetary relief was also dismissed.
2. Secondly, he could not prove that he was in possession of the property in part
performance of the contract. When a person who is already in possession of the property
enters into a contract to purchase the property, he in order to protect his benefit as the
possessor of that property must show that he has done some act in furtherance of the
contract and that the act must be effective from that day must be consistent with the
contract alleged.
3. Thirdly, with his suit for specific relief getting dismissed, it could not be said that the he
performed or was willing to perform his part of the contract. This is so as the appellant
had not disowned his character as tenant in the suit premises and that there was no
evidence or findings that the appellant was in possession of the property pursuant to the
contract to sale. Also the appellant did not pursue the matter further.

4. Fourthly, the respondent who became the subsequent transferee had no notice of contract
of part performance. As stated in Section 53 of the Act, the rights of the transferee are to
be protected and taken care of. In no case can the transferees rights over the property be
affected if he had no prior notice of the contract or the part performance. In this case, the
transferee was a bona fide purchaser and had no notice of the contract to sale of the
property.
Thus, the High Court upheld the decision of the Rent Controller and said that the appellant had
no right over the property. The case was held liable to be dismissed and was dismissed by the
High Court.
As per the law, nothing in the Section 53A of the Act shall affect the rights of the transferee, and
and here the Defendant 2 was the subsequent transferee. Hence his rights should be safeguarded.
It has been said that a subsequent transferee can retain the possession of the property if:
1. He has paid the whole amount
2. He has done so in bona fide and had no knowledge of the prior contract.
Since, both the above requirements were met, the the Court thus was right in saying that the
appellant had no right over the property and safeguarded the rights of the subsequent transferee.

5. Babu Murlidhar v. Soudagar Mohammad Abdul Bashir and Anr, AIR 1970 Kant
203, AIR 1970 Mys 203.
FACTS: In this case, an unregistered agreement of sale was executed by the mortgager, Plaintiff
in favour of the mortgagee, Defendant who was in possession of the property and would become
the owner of the property if his name could be mutated into the mutation register of the
municipality. The mortgager himself, in furtherance of the agreement to sale made an application
for mutation to municipal authorities and mortgagees name was registered as the owner of the
property.

ISSUE: Can the Mortgagee defendant avail the defence of Part Performance in this case?
HELD: An act should be done by the transferee in furtherance of the contract to transfer of
property in order to avail the defence of part performance.
Since, the mortgagee himself made an application for the mutation of the documents to the
municipal authority and that the mortgagees name was duly registered as the owner of the
property, it was thus an act done in furtherance of the agreement to sale. Since, all the
requirements of the part performance were fulfilled and that it was clear that the mortgagee had
done some act in furtherance of the agreement to sale, thus, the court said that the mortgagee can
avail the defence of part performance.
The Court held that this act was sufficient enough to protect the mortgagee under Section 53A of
the transfer of property Act, 1882 as there was some act done in furtherance of the contract to
sale which was sufficient enough to put the mortgagee on the protection.
Thus, the court in this case thus, dismissed the petition.
As per the provision, there must be some act done in furtherance of the contract, only then shall
the defence of part performance can be availed. And, in this case, the mortgagee by filing for the
mutation of the documents in his name had done an act, sufficient enough to prove that the act so
done was in furtherance of the contract. Thus, the court by providing him relief of protecting his
right to possession over the property had right done the justice.

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