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Section 120: Rights and liabilities of parties

Transfer of Property Act • Official Statutory Text & Practice Guide

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Act 1882
Section 119 All 137 Sections of Transfer of Property Act Section 121

Legal Commentary & Landmark Judgments: Section 120

Section 120 establishes the rights and liabilities of parties to an exchange, providing that each party has the rights and is subject to the liabilities of a seller as to that which he gives, and has the rights of a buyer as to that which he takes.

  • Dual Seller and Buyer Status: Save as otherwise provided in this Chapter, each party has the rights and is subject to the liabilities of a seller as to that which he gives, and has the rights and is subject to the liabilities of a buyer as to that which he takes.
  • Application of Section 55: Statutory covenants for title, freedom from encumbrances, delivery of possession, and payment of taxes under Section 55 apply reciprocally to both parties.
  • Mutual Title Warranties: Both parties warrant good title to their respective exchanged parcels.
Key Landmark Precedents:
  • Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana, (2012) 1 SCC 656: The Supreme Court noted that an exchange of immoveable property requires mutual conveyances complying with Section 54/55 standards via Section 120.
  • State of Rajasthan v. Basant Nahata, (2005) 12 SCC 77: Affirmed that exchange deeds require proper stamp duty and registration mirroring sale instruments.
Courtroom Practice & Strategic Litigation Guidance:

In drafting exchange deeds, insert mutual Section 55 title covenants and indemnity clauses for both properties, reflecting their dual seller/buyer status under Section 120.

Section 119 All 137 Sections of Transfer of Property Act Section 121