Jointly Owned Property Sale - Co-Owner Consent

Introduction

The Supreme Court of India provided much-needed legal guidance on the matter of jointly owned immovable properties in its recent judgment in Civil Appeal No. 4177 of 2024. The Court ruled that no individual co-owner has the right to sell the entire joint property without a prior partition, unilateral division, or legal agreement from other co-owners. This decision continues to fortify the rights of a property and the interests of co-owners under Indian law.

The Court also examined the application of Section 31 of the Specific Relief Act of 1963, stating that it is not necessary to cancel a sale deed in all situations, especially when the aggrieved party does not initiate a suit to seek such relief.

This case is significant not only because it reiterates the principles of the law on joint ownership, but also because it creates new benchmarks for transactions involving real estate that is inherited or owned by a family.

Background of the Case

The disputed property is located in Howrah, West Bengal, comprising approximately 6 cottahs and 1 chittack of land along with 17 rooms. The ownership roots back to a joint purchase made by two brothers, Salik Ram and Sita Ram, who acquired the property in equal undivided shares in 1959.

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Emergence of the Dispute

• The appellant, S.K. Golam Lalchand, contended exclusive ownership of the entire property after a sale deed was executed in his favor by Sita Ram’s son, Brij Mohan.
• The respondent, Nandu Lal, opposed the sale asserting his rights as a co-owner through Salik Ram.
• Nandu Lal countered the argument suggesting that a formal partition of the property had not taken place and thus it was still held in joint tenancy. Hence, Brij Mohan had no legal authority to convey the entire undivided property.
• On the contrary, Brij Mohan claimed full ownership of the property arguing that his father, Sita Ram, was gifted the share by Salik Ram. He was not, however, able to provide any registered Gift Deed or other supporting documents evidencing this assertion.

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Judicial Journey

• Trial Court refused to rule in favor of Nandu Lal, deciding that his arguments did not hold enough weight.
• First Appellate Court overturned the trial court’s decision and validated Nandu Lal’s co-ownership, claiming the trial court erred in its decision.
• The High Court confirmed the findings of the appellate court, which caused the appellant to take the issue to the Supreme Court of India.

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Key Legal Issues Before The Supreme Court

1. Is it allowed for such a property to be fully sold by one of the co-owners without partitioning it first?
2. Does the lack of a registered gift deed eliminate the ability to claim ownership?
3. Is not filing a counter-claim to cancel the sale deed a bar preventing a co-owner from exercising his right?
4. Family arrangements or oral partition—what importance do they hold in the absence of written records?

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Supreme Court’s Observations and Findings

1. Co-Ownership Without Partition And Sale

In a landmark ruling, the Court stated:

"The lack of a formal division does not give a co-owner the right to sell the whole property; only his or her share from the undivided parcel can be sold."

Since the property had never been formally divided, joint ownership existed. Hence, Brij Mohan’s selling off the property was collusive and illegal.

“No one co-owner’s right to jointly owned property shall be extended to full ownership, without legal partition or consent of the other co-owners,” said the Court.

2. Missing a Valid Gift Deed

Brij Mohan's assertions regarding Salik Ram's alleged gift of his share to Sita Ram were deemed legally unsustainable. The Court noted that no registered gift deed or document was presented to justify this claim.

A gift of immovable property is governed under Section 123 of the Transfer of Property Act, 1882, and requires:

• An instrument of transfer bearing the signature of the donor
• Endorsement by at least two witnesses

As highlighted in this case, the lack of documentation means that the supposed gift is null in law.

3. Family Settlement – Needs Documentary Evidence

Brij Mohan claimed that there was a settlement of property in his favor via a family arrangement. The Court rejected this argument, stating that no written document or other material evidence of a family settlement was provided.

Family oral settlements, whether spoken or done, are permissible under the law—albeit with conditions such as supporting actions, which were absent in this case.

4. Specific Relief Act - Sale Deed Cancellation Is Not Essential

A particularly interesting aspect of this judgment was how the Court interpreted Section 31 of the Specific Relief Act, 1963. This section allows for the cancellation of void or voidable instruments where such contracts can cause significant harm.

However, the Court noted that cancellation is not mandatory in cases where:

• The purchaser is not in possession of the property
• The co-owner does not expressly seek cancellation
• The legal effects of the deed do not harm the co-owner’s interests

Even though Nandu Lal did not file a suit to cancel the sale deed, his co-ownership rights were upheld, and Golam Lalchand was restrained from disturbing the property.

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The Conclusion

• The sale of the entire undivided joint property by Brij Mohan to S.K. Golam Lalchand was legally unjust.
• Only Brij Mohan’s undivided share, if any, could be sold—not the entire property.
• The rights of co-owner Nandu Lal were rightfully protected.
• A formal cancellation of the sale deed was not necessary in this particular case.
• An injunction was issued against S.K. Golam Lalchand to prevent further encroachment upon joint ownership rights.
• If the appellant sought relief, he was advised to pursue partition and compensation through the appropriate legal channels.

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Legal Importance and Observations

• Joint properties cannot be sold in entirety by a single co-owner without a formal partition.
• Purchasers must conduct proper due diligence and verify title and ownership history before buying such property.
• Oral family arrangements or claims of gift must be supported by credible documentary evidence, preferably registered instruments.
• Courts can enforce co-ownership rights even if the plaintiff has not specifically sought the cancellation of the deed.
• The judgment emphasizes discipline in real estate transactions and underscores the need for compliance with legal formalities in the sale of inherited or jointly held properties.

In Closing

The ruling by the Supreme Court in Civil Appeal No. 4177 of 2024 stands as a crucial precedent in Indian property law. It not only delineates the rights and limitations of co-owners in jointly owned properties but also restricts arbitrary or undocumented transactions.

The decision affirms the principle that property ownership is not absolute—especially in joint ownership scenarios. It must be exercised within the legal framework and with consideration to co-owners’ rights.

This case reiterates the legal doctrine that title must be clear, consent must be informed, and any deviation from statutory requirements may render property transactions vulnerable to legal scrutiny.

Disclaimer

The information contained in this document is provided for general informational purposes only and does not constitute legal advice or a legal opinion. No part of this document should be relied upon or used as a substitute for consultation with qualified legal professionals. Legal Parihar expressly disclaims any and all liability for any loss, damage, or harm arising from reliance on the information contained herein, whether due to errors, omissions, negligence, or any other cause.