Law: Transfer of Property Act, 1882

Section: 54,54(4)(b)

Law: Code Of Civil Procedure, 1908.

Section: 11a

Summary of the Judgment The Supreme Court considered whether the plaintiff’s suit could be rejected at the preliminary stage under Order VII Rule 11(a) CPC for allegedly not disclosing a cause of action. The plaintiff claimed that he transferred his property to the defendant on the latter’s assurance that the agreed sale consideration of Rs. 6.5 crore would be paid later. According to the plaintiff, the defendant never paid the amount and fraudulently obtained title to the property. The Trial Court and the High Court rejected the plaint, holding that since the plaintiff admitted executing the sale agreement acknowledging receipt of consideration, he could not deny that receipt and therefore had no cause of action. The majority judgment (Justice Shahid Waheed) allowed the appeal and restored the suit. The Court held that while deciding an application under Order VII Rule 11(a) CPC, the court must only examine whether the facts stated in the plaint, if assumed to be true, disclose a legally enforceable claim. The truth or falsity of those allegations, and whether the plaintiff can ultimately prove fraud or non-payment, are matters for trial. Since the plaint alleged that the defendant obtained the property through deceit and failed to pay the agreed consideration, it disclosed a triable cause of action. Therefore, the plaint could not be rejected without recording evidence. Dissenting Opinion Justice Muhammad Shafi Siddiqui disagreed. He held that under Sections 54 and 55(4)(b) of the Transfer of Property Act, 1882, a sale remains valid even where the purchase price is promised to be paid later. Non-payment of consideration does not invalidate the transfer; rather, the seller's remedy is to recover the unpaid amount and enforce a statutory charge on the property. Since the plaintiff himself admitted that the property was voluntarily transferred on a promise of future payment and did not plead coercion or fraud in a legally sufficient manner, he had no cause of action for cancellation of the transfer. According to the dissent, the plaint was rightly rejected because the proper remedy was recovery of the unpaid consideration, not cancellation of the…