Condition Of Right To Repurchase In Sale Deed Won’t Be Personal To The Vendor Unless Terms In Documents Specifically State So: SC

The Supreme Court has held that the condition of the right to repurchase in the sale deed will not be personal to the vendor unless the terms in the documents specifically state so.

The Bench comprising Justice Abhay S. Oka and Justice Rajesh Bindal noted, “… the condition of right to repurchase in sale deed will not be personal to the vendor unless the terms in the documents specifically state so. Such a right can always be assigned and the contract containing such condition shall be enforceable. The only exception being that such a right should not be personal in nature. The assignment of obligations in a document is not possible without the consent of the other party. No implied prohibition of transfer or assignment can be inferred in a document.”

The Bench said that the benefit of a contract is assignable in cases where it does not make any difference to the person on whom the obligations lie, to which of two persons he is to discharge.

Senior Advocate Sanjay Hegde and Advocate Farrukh Rasheed represented the appellant while Advocates Yadav Narendra Singh and Rahul Pratap represented the respondents.

In this case, a man was inducted as a tenant in the property in question by the one who was the exclusive owner and he along with his son executed a conditional sale deed in favour of the appellant. The condition in the sale deed was that in case the vendors return the full consideration amount to the vendee by July 1984, the vendee would return the property by means of a registered sale deed at the cost of the vendors, and in case, the vendors fail to pay the consideration money within the stipulated time, the vendee will become the exclusive owner of the property. Till then the vendee would not deal with the property in any manner whatsoever.

A registered gift deed was executed in favour of the respondent and it was mentioned therein that the property as mentioned in column no. 5 was transferred to the appellant by way of a registered sale deed which can be purchased back by the respondent from the appellant. The vendors were ready and willing to return ₹ 5000/- to the vendee to get the sale deed registered back in their name but the vendee was not agreeing to the same. A civil suit was thereafter filed by the respondent against the appellant which was dismissed by the Trial Court but then the High Court reversed the judgments of the lower courts.

The Supreme Court in the above regard observed, “If the facts of the case in hand are considered, we do not find that there is any term in the conditional Sale Deed which debars its assignment to any other person. The clause only mentions regarding right of repurchase. The option is given to the vendors with the obligations on the vendee. The right to repurchase in the present case has been assigned by Kishori Lal Sahu (now deceased) in favour of respondent no.1 who is none else than his daughter-in-law to whom other properties have also been gifted.”

The Court rejected the argument raised by the counsel for the appellant that such an assignment of a right cannot be treated as a gift as consideration money is involved. It rejected the same for the reason that the executor of the Gift Deed had transferred his right to repurchase the property in favour of the respondent.

“That right could always be assigned by him with whatever conditions attached to it. Further in the suit filed, he was also a plaintiff, who died later. … For the reasons mentioned above, we do not find any error in the judgment of the High Court”, held the Court.

Accordingly, the Apex Court dismissed the appeal.

Cause Title- Indira Devi v. Veena Gupta & Ors.

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