Will and Agreement to Sell

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This article is written by Manaswini Datar of Karnataka State Law University, an intern under Legal Vidhiya.

ABSTRACT

This article traverses on the topic of Will and Agreement to Sell. Even though both appear to be different topics have several aspects in common. Both Will and Sale agreement are the two different ways to transfer the property. There are various laws which govern these concepts and they also include personal laws. To understand the concept of Will it is vital to know the basic requirements of Will. It’s registration also decides the validity of the Will. Similarly, in case of Agreement to sell there are certain essential requirements for a valid sale agreement. Further the article states various case laws which have aided in understanding and implementing laws related to the mentioned topics.

INTRODUCTION

Property means belonging of someone and he hold a possession over it. Property includes both movable and immovable. A person who holds certain property enjoys it till his death. After his death it has to pass on to somebody. Some person gives a gold chain to his friend as gift in his marriage. An estate owner sells his estate to a person for consideration. In all the above situations given there are two things in common. 1.Property 2. Transfer. A person who owns a property can dispose it of as he wishes. However there are certain laws to which one is bound to follow while disposing the property. Indian Law provides various ways to transfer the property. Property can be transferred by voluntary action or by action of law. Properties can be transferred in the following ways. 1. By sale: One can transfer his property by selling it for consideration. Here sale deed is a important document through which transfer is executed.

2. Will: Person can transfer his self acquired property to any other person he wishes to after his death.

3. Gifts: In Gifts there is no consideration, a person transfers his property with affection.

Other through settlement or partition and by Relinquishment of ownership.

In the above mentioned ways transfer through Sale and Will are common. For Wills Indian Succession Act of 1925 covers the topic of Will for Hindus, Buddhist, Jain, Sikhs, Christians and Parsis. In case of Muslims the personal law is applicable. As stated above will is one of the way to transfer the property. The Indian Succession Act defines “will”. It states the legal declaration of the intention of a testator with respect to his property which desires to be carried into effect after his death. In other words person who has a self acquired property shows his intention in certain document as to whom the property shall be transferred after his death.

Illustration

‘A ’Makes Will of his estate to his daughter ‘B’. In case if ‘A’ doesn’t make such Will and dies Intestate then ‘A’s estate would be distributed to his legal heirs as per his personal law.

Key points in concept of Will.

Will is a Testamentary Succession and not Interstate Succession.

Any property which can be disposed of can be mentioned in will. It includes both movable and immovable property. However such property should be self acquired property and not ancestral property.

In Testamentary Succession intention of the testator is considered. The testator should intend to transfer his property to the person to whom he is bequeathing the property.

Laws related to Will are seen in some personal laws. However Indian Succession Act, 1925 plays vital role in the concept of Will. According to Section 30 of Hindu Succession Act,1956 any Hindu may dispose his property which is capable of being disposed of by way of will in accordance with the provisions of Indian Succession Act. Hence ultimately the Hindu Succession Act provides to make a Will as per Indian Succession Act. It is important to know that the term ‘Hindu’ includes Hindu, Buddhist, Jain and Sikh. In case of Will of Muslims, the Muslim law is applied.

Provisions of Indian Succession Act 1925 on Will.

Only a person with sound mind can a will. Any Will made by person with an unsound mind is not valid. However it is valid if Will is made during lucid intervals. Person who is a minor and if makes a Will is also invalid, but it can be ratified by the minor once he / she turn major. If any Will is made due to coercion, undue influence and fraud it is void. Will can be revoked or altered by maker of the Will by following the provisions of law. The Act provides for privileged and unprivileged will. Unprivileged will is created by those except person creating Privileged Wills. In unprivileged will there shall be sign or mark affixed of the testator. If the testator is unable to sign or affix his mark any other person by the direction of the testator and in his presence sign on his behalf. On the other hand Privileged Wills are made by Soldiers, airman or any mariner being at sea if they have completed the eighteen years. It can be created without two witnesses. If a soldier has a written instructions for preparation of will and dies before creation of such will then the instructions itself is considered as Will.

Registration of Will is not compulsory however registration is always advisable.

Illustration

‘B’ who had professional rivalry with ‘A’ threatens ‘A’ to make him as beneficiary in the Will for ‘A’s estate. Such Will is void.

Interpretation of the concept of Will by courts

Bhura vs Kashi Ram,1994

In this case Supreme Court of India held that the intention of the Will maker be favored. This do not apply if such intention is contrary to law.

Peary Lal’s Case, 1993

Supreme Court gave certain guidelines related to Will.

• Words occurring more than once in a Will shall be presumed to be used in the same sense.

• Circumstances under which the Will is made shall be looked up by the courts like state of property, family.

• The intention of Will maker can be derived by reading the Will as a whole.

Further in Navneet Lal Aliar Rangi’s Case, 1975Supreme Court stated that courts should consider the surrounding circumstances such as position of the testator, family relationship etc.

Badrilal vs Suresh and others, 2021

The case deals with matter if revocation of the Will. The division judge bench held that to revoke a Will section 70 of the Indian Succession Act should be satisfied. If the question arises as to revocation of the Will by subsequent agreement then also the Section 70 should be satisfied.

Will in Muslim Law.

Provisions related to the concept of Will is different for Muslims. The ‘Hedaya’ is one of the authoritative text for Muslim Will. Will is also know as ‘Wasiyya’ and the Will deed as ‘ Wasiyyatnama’. In Muslim law Will can be written or oral. It should be made by a Muslim only. The Will maker shall be a major and of sound mind. According to Islam a person attains majority when he turns 15 but here the age of majority is 18 years as per Indian Majority Act. Any will made against the Islam is void. For example making will to build temple, for development of a church etc. There are some restrictions under Muslim law while making will. He should not bequeath more than one third of the property. This is called ‘ bequeath able third’. This is because if the whole property is bequeathed to one legal heir then the other legal heirs who would get that property as per law of inheritance their rights will be injured. A Muslim can revoke the will, this might be in form of expressed or implied.

AGREEMENT TO SELL

Section 54 of Transfer of Property Act defines contract for sale. It states A contract for sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not itself create any interest in or charge on such property. In other words an agreement to sell includes terms and conditions as to how the sale will take place, but that agreement doesn’t not indicate the sale in itself. Sale agreement is made before the sale deed. Parties first negotiate about the transaction then enter into a sale agreement after which executes sale deed. So the agreement of sale is made before the sale deed.

Illustration

Rani who is the owner of the land ‘A’ wants to sell it to Raj. Both of them negotiate and come into conclusion regarding the price of the property and other terms related to possession of the land ‘A’. They both make an agreement regarding all the terms and conditions as discussed. This agreement is called as Agreement to Sell.

CONTENTS OF AGREEMENT TO SELL

Details of the parties: it contains the details about the parties. Their name, address and other details. So basically the agreement has who is selling and to whom he/ she is selling.

Details of the property: Next thing is it mentions about what to sell. The agreement contains all the details regarding which property is to be transferred.

Payment proportion: Transfer of any property without consideration is not a valid transfer. Consideration is an essential element for the sale. Hence the contact of sale includes the proportion of payment. A buyer may give some money as earnest money or advance, later make payment in the agreed intervals. Usually the advance made will be not less than 10% of the actual price.

Immunity clause: It is clause for both the buyer and seller to seek immunity from any damages caused. This also includes default penalty.

Other contents: Sellers should clear all the dues before the execution of sale deed and also the declaration that it is free from any encumbrance.

Parties may include any other contents in the agreement in accordance with the law.

Registration of the agreement to sale.

Registration of the agreement is always been a debatable topic. Validity of the unregistered sale agreement also depends on the state laws.

Case of Balaram Singh vs Kelo Devi

Brief Facts of the case: x and y had come into agreement of sale of certain property. Y the buyer had paid certain earnest money and held the possession of the property of x. Due to some dispute between both the parties Y asks for the possession of his property and eventually X refuses and institutes suit for injunction.

Contention of Y was that as the agreement is not registered and therefore it cannot be enforced in courts of law

Order of Trial court: Trial court upheld the contentions of Y and orders X to give the possession.

High court: Appeal was preferred in the High court and High Court set aside the judgement of trial court.

Supreme Court: Looking at the facts of the case X was supposed to file suit for Specific performance and not for injunction. Supreme court observed that X had intentionally filed suit for injunction instead of specific performance. As the agreement is not registered no permanent injunction can be granted and it upheld the order of Trial Court.

SIMILARITIES BETWEEN WILL AND AGREEMENT TO SELL

Will and agreement to sell both deal with transfer of property. As mentioned in the introduction these are two different ways of transferring the property. Age of majority and sound mind both are essential ingredients for them to be valid.

DIFFERENCE BETWEEN WILL AND AGREEMENT TO SELL

• In case of Will there is no consideration. The testator transfers his property without any consideration. To whom he transfers depends on his relationship with his family and others. On the other hand in Agreement to sell consideration is an essential element for a valid transfer. Parties negotiate and decide the value of consideration.

• Will is executed after the death of the testator. The rights of beneficiaries on the property mentioned in the Will can be exercised only after the death of will maker. In agreement to sell the possession and title of the buyer over property comes into existence as per the agreement between the parties.

• If a person dies without making any Will then the Interstate Succession laws are applied and the legal heirs will be eligible to get the right on the property as per laws of Intestate succession. In agreement there is no role of Intestate succession laws.

•Laws of Wills are governed by Indian Succession Act of 1925, Hindu Succession Act of 1956 and Muslim laws. Laws of Agreement to sell is dealt by Transfer of Property Act, Specific Relief Act etc.

CONCLUSION

Even though Will and Agreement to Sell deal with common aspect of transferring the property, they are completely different when interpreted. One has to pay attention to the process of registration while making both Will and Agreement to Sell and both have to be drafted clearly to avoid jargon. Every religion deals with different laws on Wills. Agreement to sell is also covered under various laws like Contact Act, Sale of Goods Act, Transfer of Property Act. The courts have been interpreting the concept of Will from time to time. However one must consider all the provisions of law before making Will or Agreement to sell for better enforcement of the same.

References

https://lexforti.com/legal-news/types-of-transfers-governed-by-the-transfer-of-property-act/ 01-05-2023

https://www.legalserviceindia.com/articles/will_hindu.htm 03-05-2023

https://taxguru.in/corporate-law/concept-will-india.html 03-05-2023

https://blog.ipleaders.in/all-you-need-to-know-about-sales-agreement/ 05-05-2023

https://jlrjs.com/wills-wasiyat-under-muslim-law/ 05-05-2023

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