Conveyance Deed vs Sale Deed: What is the Difference

Understand the disparity between conveyance deed and sale deed in property transactions. Explore the unique legal ramifications, rights, and responsibilities inherent in each document governing the transfer of property ownership.

Overview

In India, property transactions involve various legal documents, with conveyance deeds and sale deeds being among the most significant. Understanding the distinctions between these documents is crucial for anyone involved in property transfers. Both conveyance deeds and sale deeds facilitate the transfer of property ownership, but they serve different purposes and have unique legal implications. This article delves into the nuances of conveyance deeds and sale deeds, providing a comprehensive overview of their key differences, legal requirements, and the process involved in their execution and registration.

Key Differences Between Conveyance Deed and Sale Deed

Meaning 

A conveyance deed is a broad term that encompasses any legal document used to transfer ownership of property from one party to another. This can include various types of deeds such as sale deeds, gift deeds, exchange deeds, partition deeds, release deeds, mortgage deeds, and lease deeds. The primary purpose of a conveyance deed is to legally formalize the transfer of ownership rights.

A sale deed, on the other hand, is a specific type of conveyance deed that is used exclusively for the transfer of ownership in exchange for monetary consideration. It is the most common document in real estate transactions, acting as proof of the sale and transfer of property from the seller to the buyer.

Origin

The origin of conveyance deeds can be traced back to the need for formal documentation of property transfers, ensuring legal protection and clarity of ownership. In India, the concept of conveyance is governed by the Transfer of Property Act, 1882, and the Indian Registration Act, 1908.

Sale deeds originate from the specific need to document the sale transaction of property. They are legally recognized under the same acts but are particularly emphasized in real estate law due to the financial nature of the transaction.

Features

Conveyance Deed:

• Can be used for various types of property transfers, including sales, gifts, exchanges, and leases.
• Not necessarily tied to a monetary transaction.
• Ensures the legality of the transfer and protects both parties involved.

Sale Deed:

• Specifically used for property sales involving monetary consideration.
• Acts as conclusive proof of ownership transfer from seller to buyer.
• Includes detailed terms of the sale, including the purchase price, conditions of sale, and any warranties or covenants.

Governing Laws

Both conveyance deeds and sale deeds in India are governed by the Transfer of Property Act, 1882, which outlines the general principles for property transfer, and the Indian Registration Act, 1908, which mandates the registration of certain documents to provide legal validity.

Applicability 

Conveyance deeds are applicable in a wide range of scenarios involving the transfer of property rights, including:

1. Transfer by sale
2. Transfer by gift
3. Transfer by exchange
4. Transfer by partition
5. Transfer by release
6. Mortgage deeds
7. Lease deeds

Sale deeds, however, are specifically applicable to transactions involving the sale of property, where the transfer of ownership occurs in exchange for a specified amount of money.

Contents

Conveyance Deed:

1. Date of execution
2. Names and addresses of the parties involved (transferor and transferee)
3. Complete description of the property, including boundaries, measurements, and location
4. Consideration (if applicable)
5. Details of previous ownership
6. Payment of applicable taxes and charges
7. Covenants and warranties
8. Signatures of both parties and witnesses
9. Registration details

Sale Deed:

1. Similar to conveyance deeds but with a focus on the terms of sale
2. Specific purchase price and payment details
3. Conditions and contingencies of the sale
4. Detailed description of the property
5. Covenants and warranties specific to the sale
6. Execution and registration details

Registration 

Registration is a crucial aspect of both conveyance and sale deeds, providing legal recognition and enforceability of the document. The process generally involves:

• Preparation of the deed.
• Payment of stamp duty and other applicable taxes.
• Presentation of the deed at the local sub-registrar’s office.
• Verification of documents.
• Execution by the parties involved.
• Registration and issuance of a registered deed.
• Failure to register a conveyance or sale deed can result in legal complications and disputes over property ownership.

Difference Between a Conveyance Deed and a Sale Deed

While a sale deed is a type of conveyance deed specifically used for sales transactions, a conveyance deed can refer to any document that transfers property ownership. The key differences lie in their scope and the nature of the transaction they represent. Sale deeds are restricted to property sales, involving monetary exchange and specific sale-related terms. Conveyance deeds, however, encompass a broader range of property transfers, not limited to sales alone.

Landmark Cases 

Narinder Singh Rao v. Avm Mahinder Singh Rao (2013)

Facts:

1. Rao Gajraj Singh executed a document stating that the survivor between him and his wife would inherit his property.
2. This document was attested by only his sister and one witness.
3. After his death, his wife, Sumitra Devi, inherited the property, constructed shops, and rented them out.
4. Sumitra Devi later bequeathed the property to her son, Narinder Singh Rao, through a will.
5. Narinder’s siblings challenged the will’s validity.

Issue:

1. Whether the wills executed by Rao Gajraj Singh and Sumitra Devi were valid.

Judgment:

1. The Supreme Court upheld the validity of Sumitra Devi’s will but invalidated Rao Gajraj Singh’s will due to improper attestation.
2. Each heir was entitled to a 1/9th share of the property, with Narinder receiving an additional 1/9th share from Sumitra Devi.

The case emphasized the necessity of proper attestation for conveyance deeds, requiring two witnesses’ signatures for validity.

Syed Afsar Pasha Quadri v. The State Of Telangana (2021)

Facts:

1. The petitioner sought anticipatory bail with a condition to cancel the registration of a sale deed and return the consideration.
2. The Telangana High Court imposed this condition.
3. The petitioner challenged this condition in the Supreme Court.

Issue:

1. Whether the condition to cancel the sale deed was valid.

Judgment:

1. The Supreme Court granted bail to the petitioner, ruling that the condition to cancel the sale deed was invalid.
2. A registered sale deed cannot be unilaterally cancelled by one party based on a court’s directive, as it adversely affects the purchasers’ rights.
3. The decision reinforced the principle that registered deeds have legal sanctity and cannot be annulled unilaterally.

Kewal Krishnan v. Rajesh Kumar and Others (2021)

Facts:

1. Kewal Krishnan and Sudarshan Kumar jointly owned property.
2. Kewal executed a Power of Attorney in favor of Sudarshan, who fraudulently sold the property to his son and wife without consideration.
3. The Trial Court provided no relief to Kewal, but the District Court and Punjab and Haryana High Court ruled in his favor.
4. Sudarshan appealed to the Supreme Court.

Issue:

1. Whether the sale deeds executed without any consideration were void.

Judgment:

1. The Supreme Court held that the sale deeds were void due to lack of consideration.
2. The fraudulent sales were invalid, and Kewal retained his undivided share of the property.
3. This case highlighted that a sale deed must involve consideration; without it, the deed is void.

Damodhar Narayan Sawale (D) through LRs v. Shri Tejrao Bajirao Mhaske & Ors (2023)

Facts:

1. The plaintiff purchased land from the defendants, but the second defendant disturbed his possession.
2. The lower court dismissed the plaintiff’s claim, declaring the sale deed void due to unlawful fragmentation under Maharashtra law.
3. The First Appellate Court ruled in favor of the plaintiff, but the Bombay High Court sided with the defendants, considering the deed a mortgage security.
4. The matter reached the Supreme Court.

Issue:

1. Whether the sale deed was valid and the significance of a sale deed in sale transactions.

Judgment:

1. The Supreme Court upheld the First Appellate Court’s decision, recognizing the sale deed as valid.
2. The court emphasized that the primary purpose of property sale registration is to clarify ownership, highlighting the legitimacy of a properly prepared and recorded sale deed.
3. This case underscored the importance of sale deeds in confirming genuine and bona fide property transactions.

FAQs

What is the purpose of a conveyance deed?

The primary purpose of a conveyance deed is to transfer ownership of real property from one person (the grantor) to another (the grantee). It provides legal evidence of the transfer, detailing the property, the terms of transfer, and ensuring the legality of the transaction.

What happens if a conveyance deed is not registered?

If a conveyance deed is not registered, it does not have legal validity, and the transfer of ownership is not recognized by law. This can lead to disputes over property ownership and difficulties in proving ownership rights in legal matters.

Can a conveyance deed be challenged in court?

Yes, a conveyance deed can be challenged in court on various grounds, such as fraud, misrepresentation, undue influence, or lack of proper execution and registration. Legal proceedings can invalidate the deed if any of these issues are proven.