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1. SALE, Section 54-57

2. Essentials Two parties Subject matter Price or consideration Transfer of Ownership: Conveyance Mode of execution

3. Mode of execution

4. Sale and Contract of sale

5. Buyer’s rights and liabilities - Rights • Before sale • After sale Liabilities • Before sale • After sale

6. Buyer’s right before and after sale Section 55(6) (a) - Buyer is entitled to: A charge on the property for the purchase money properly paid by him in anticipation of delivery. Interest on such purchase money. The earnest , and cost awarded to him in a suit to compel specific performance of the contract in case he properly declines to accept delivery. Buyer’s right after Sale- Section 55 (6) (a) - Buyer is entitled to receive any benefit of any appreciation of the property or increase in its value and to the rents and profits thereof.

7. Duties of Buyer before Sale Section 55(5)(a) :The buyer is bound to disclose, facts which materially increases the value of property. Section 55(5) (b)- Buyer is bound to pay the price of property to Seller

8. Duties of buyer after Sale Section 55 (5) (c) - 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. Section 55(5) (d) - Liable to pay the outgoings, e.g., Government dues, rents, revenue or taxes.

9. Duties of Seller Before Sale Section 55 (1)(a): Disclose material defects in property to buyer Section 55 (1)(b): Produce property documents for inspection by buyer. Section 55 (1)(2) : R eply to the best of his ability all queries put up by the buyer, in respect to the property or the title. Section 55 (1)(d) : Execution the conveyance is responsibility of the seller. Section 55 (1)(c) : S eller must inform the buyer about any ongoing case pending in the court related to the property that may affect the transfer or sale of the property. Section 55 (1)(g) : Pay all the dues, taxes, etc. that accrues before the completion of sale.

10. Seller’s duty after sale Section 55 (1) (f) : After completion of the sale, it is the seller’s duty to gave possession to the buyer. Section 55 (2) : Seller’s duty to covenant for title. The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same. Section 55 (3) mandates that when the entire of purchase-money has been paid to the seller, he is duty bound to handover all documents of title relating to the property, which is in the seller’s possession or power, to the buyer.

11. Seller’s Right before and after sale Seller’s Rights before Sale Section 55 (4) (a) - Seller has right to receive all the rents and profits out of property. Seller’s right after sale Section 55 (4)(b)- Seller has the right to Lien or charge on the property , if any amount is unpaid by the seller i.e. seller has a right to recover unpaid purchase money from and out of the property.

12. Marshalling by Subsequent Purchaser: Section 56 MEANING When owner of two or more properties mortgages them to one person and subsequently sells one of the properties to another person, the buyer is entitled to claim that the mortgage debt must be first satisfied out of the properties not sold to him. Marshalling cannot be applied to prejudice the rights of the mortgagee Cannot be applied to prejudice the rights of a person who has for consideration acquired interest in the property.

13. EXAMPLE

14. OTHER EXAMPLES A is the owner of three properties X, Y and Z. He mortgages them to B and then sells X to C free from encumbrance. C can ask B, that he should satisfy his mortgage debt as far as possible out of the properties Y and Z. If whole of the mortgage debt is not realized by B out of Y and Z, he has a right to proceed against X. But if this actually happens, then purchaser C has right to claim from the mortgagor the amount realized from X. A is the owner of X and Y properties. He mortgages both to B, thereafter, X sold to C free from encumbrance and Y is sold to D subject to mortgage. C is entitled to ask B to realize his mortgage debt out of Y as far as possible.