Doctrine of Part-Performance

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Doctrine of part-performance

Section 53A was enacted in 1929 by the Transfer of property(Amendment) Act 1929 and is based upon the equitable doctrine of part performance in English law.[1] It is also known as ‘equity of part-performance.’

History 

Before 1929 :

1. The application of English equity of part-performance was neither certain nor uniform.

2. In some cases, it was applied whereas in other cases it was not applied.

3. In Mohammad Musa v. Aghore Kumar Ganguli[2], the privy council held that equity of part-performance could be applied to Indian cases.

4. In Ariff v. Jadunath[3], the privy council did not apply the doctrine of part-performance in India mainly on two grounds :

  • The agreement for lease was oral
  • Express violation of the provisions of statutory law namely , Section 107 , of the Transfer of Property Act.

5. In Mian Pir Bux v. Sardar Mohammad Tahir[4] , the Privy Council held that English equity of part-performance was not available in India against express statutory provisions regarding registration contained in the Registration Act, and the Transfer of Property Act.

NOTE: The Ariff’s and the Mian Pir Bux’s judgments were delivered after the enactment of Section 53A but as they went to the Privy Council before 1929 , the law dealt in these cases was the Indian law as it was before 1929.

Thus, the application of English equity in India was neither uniform nor certain and it was necessary to enact law on this subject.

Accordingly, Section 53A was included in Transfer of property (Amendment) Act 1929.

Section 53A

1. Section 53A of the act imposes a statutory bar on the transferor to seek possession of the immovable property from the transferee in possession.

2. It disentitles the transferor from seeking possession from the proposed transferee in possession.

3. For instance, if the transferor tries to take possession forcibly, the proposed transferee in possession would be entitled to institute a suit to enforce the bar of Section 53A of the act against the transferee.

Meaning of the Doctrine

The doctrine of part performance of contract is based on the general doctrine of prevention of fraud. It is meant to protect the transferee who has taken possession, spent money in further improvements.

When a transferee has, in the faith that the transfer would be completed according to the law, taken possession, it would be inequitable to allow the transferor to treat the transferee as trespasser.

Essential conditions for Application of Section 53A

In Vasanthi v. Venugopal[5], the Supreme Court restated the essential conditions necessary for application of this section:

a. A written contract for the transfer of an immovable property.

The most important limb of Section 53A is the pre-existence of the contract.

Related case law: Ranchoddas v. Davaji[6] lays down that there should be a contract and;

  • It must be for consideration;
  • It must be in writing and signed by the transferor;
  • The terms necessary to constitute the transfer can be ascertained with reasonable certainty.

b. The transferee takes possession of the property under this contract.

  • The transferee should have taken the possession of the property; or
  • the transferee in possession already should continue in possession and should have done some act in furtherance of the contract.

Related case law: In Arun Kumar Gupta v. Santosh Kumar[7], the agreement contained no provision about transfer of possession, nor possession was handed over in fact, protection of the section was held to be not available.

c. The transferee has either performed his part of contract or is willing to perform the same. It is an essential condition that the transferee must be willing to perform his part of contract.

Related case law: In Jacob Private Ltd v. Thomas Jacob[8] , the Kerala High Court held that willingness in the context of Section 53A must be absolute and unconditional.

If these requirements are fulfilled, the transferee is entitled to claim, under this section, that he should not be evicted/dispossessed from the property.

Exception to Section 53A

The rule laid down in this section has no application/or affect the right of a subsequent transferee for consideration who has no notice of the contract or of the part performance thereof. 

Nature of transferee’s rights under section 53A

1. No title or interest in property:

Section 53A does not affect the ownership rights of the proposed transferor who remains full owner of the lands till they are legally conveyed by sale-deed to the transferee.[9]

2.  Passive equity; no right of action:

Section 53A merely provides a right of defence, it can be used only as a shield not as a sword. The scope of this section is therefore ,limited because no right of action is available to transferee.

Leading case law dealing with the nature of rights of transferee:

Prabodh Kumar Das v. Dantamara Tea Co. Ltd[10], The Privy Council held that in India the equity of part-performance was not an active equity. It does not give any right of action to the transferee who is in possession of property under an unregistered contract of sale.

Amendment of Section 53A Transfer of Property Actand other enactments 

An amendment has been made in Section 53A of the Transfer of Property Act by the Registration and other Related Laws Act (48 of 2001) This Amending Act (48 of 2001) has made following amendments relating to Section 53A :

1. In Section 53A, para 4 of the Transfer of Property Act the words “the contract, though required to be registered, has not been registered, or,” Omitted. 

2. In Section 17 of the Registration Act, (a) after sub-section (1), the following subsection shall be inserted : 

“(1A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of Section 53A of the Transfer of Property Act, 1882 shall be registered if it has been executed on or after the commencement of the Registration and Other Related Laws and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said Section 53A.” 

3. In Section 49 of the Registration Act, in the proviso ; the words, figures and letter “or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882 ,” shall be omitted. 

4. The provisions of this Amending Act (Act 48 of 2001) came into force with effect from 24.9.2001. This Amendment Act is not retrospective.

Illustrations

1. (General) There is a contract of sale of a piece of Land between Ram and Shyam. The contract is in writing, stamped, attested and duly executed but not registered by Ram who is the seller. Shyam, who is the purchaser, has paid the price or is willing to pay the same. On the basis of such contract Shyam takes possession of land. Now, Ram sells the land to Mohan through a registered deed. Mohan having legal title of the land, attempts to eject Shyam. At this stage, since Shyam has no legal title, law may not protect his possession but, equity shall help him from being dispossessed.

2. (Suit for possession) A entered into a written contract with B to take B’s house on rent for 2 years at Rs.1000 per month. A gave Rs.12000 to B as one year’s advance rent and took possession of only one room as B promised to hand over the possession of the remaining portion after his son’s wedding which was to take place after 3 days. After the wedding, B did not give possession of the remaining portion of the house to A. Thus, A is entitled to maintain possession of one room which he received from the transferor. But he cannot use Sec. 53A to obtain possession of remaining portion of the house which was never given to him.

3. (Exception) A contracts to sell land to B for Rs. 50,000. B paid Rs. 40,000 to A, took possession of land and promised to pay the balance at the time of registration. Afterwards A sold the same to C for Rs.75.000 by means of a registered sale-deed in favor of C. Thereupon C called upon B to vacate the land ,according to the exception to Sec. 53A, the doctrine of part performance cannot affect the right of a subsequent transferee for the value without notice of the previous contract or of its part-performance. Thus, as B is in possession of land, he can claim benefit of Sec. 53A, against C.

Frequently Asked Questions 

1. What is the sine qua non for basing a claim on Section 53A of the transfer of property act?

In Vasanthi v. Venugopal[11] , the Supreme Court restated the essential conditions necessary for application of this section:

1.  A written contract for the transfer of an immovable property.

The most important limb of Section 53A is the pre-existence of the contract.

Related case law: Ranchoddas v. Davaji[12] lays down that there should be a contract and ;

a. It must be for consideration;

b. It must be in writing and signed by the transferor;

c. The terms necessary to constitute the transfer can be ascertained with reasonable certainty.

2. The transferee takes possession of the property under this contract.

d. The transferee should have taken the possession of the property; or

f. the transferee in possession already should continue in possession and should have done some act in furtherance of the contract.

Related case law: In Arun Kumar Gupta v. Santosh Kumar[13], the agreement contained no provision about transfer of possession ,nor possession was handed over in fact ,protection of  the section was held to be not available.

3. The transferee has either performed his part of contract or is willing to perform the same.

It is an essential condition that the transferee must be willing to perform his part of contract.

Related case law: In Jacob Private Ltd v. Thomas Jacob[14] , the Kerala High Court held that willingness in the context of Section 53A must be absolute and unconditional.

2.  How is the doctrine of Part-performance under 53A ,transfer of property act , is different from the English equity of part-performance?

Indian law of part-performance may be differentiated from the English law as under:

1. Under English law, as equity treats that as done which ought to have been done, even an oral agreement is sufficient to attract the application of the doctrine. But in India, it is specifically provided that the agreement must be contained in a written document. 

2. Under English law, the doctrine can be used for both attack and defence (a passive as well as active equity). In India, the doctrine can be used only for defence (a passive right) and no right of action is given to the transferee. 

3. In India, ‘possession’ is a must, while in England any act in furtherance of the contract also suffices. ‘

3.  Section 53A is a partial importation of English Equity of part- performance. Comment.

A3.  The law incorporated in Section 53A is more limited than English equity for reasons:

1. In England the equity also protects the interest of such defendant who has taken possession on the basis of oral agreement,whereas , under Section 53A ,the agreement must be written.

2. In England the equity gives right of action against the evictor , but Section 53A gives no such right.

Thus , the rule of part-performance administered in England is now a statutory law in India but with suitable changes.

Accordingly , it has rightly been said that Section 53A is a partial importation into India of the English equitable doctrine of part-performance.

4. Can the bar of Section 53A be imposed on the third party?

No, a suit by proposed transferee against the third party of the contract / agreement to sell ,for enforcement of the bar created by Section 53A shall not be maintainable against the third party to the contract/agreement to sell.[15]

5. Can doctrine of part-performance be invoked to file a suit for possession?

Application of Sec. 53A to Suit for Possession 

1. Sec. 53A expressly provides that the transferee should have taken possession of the property (or a part thereof), or if he being already in possession should continue in possession and should have done same act in furtherance of the contract.

2. Sec. 53A furnishes a. statutory defence to a person (transferee) who has no registered title-deed/or a valid instrument in his favor to maintain (or protect) his possession, if he can prove a written and signed contract and a part-performance of contract on his part (the pan-performance 55. in fact, evidenced by possession). 

3. The principle that Sec. 53A can be raised only in defence means that the section cannot be used by the transferee to his title to the property declared or to seek recovery of possession of the property. It is a wellsettled law in India that the doctrine of part-performance is available to retain the possession and not to get the possession:

  •  When the transferee is already in possession, he is entitled to file a suit under Sec. 53A, with a view to protect his possession and for an injunction restraining the transferor from interfering with his possession.[16]
  • When the transferee has been forcefully/illegally dispossessed, then under Sec. 6 of the Specific Relief Act, the transferee can claim possession of the property.
  • When the transferee is never in possession (or has lost possession), he cannot take benefit of Sec. 53A, because it is only meant to bring about a bar against enforcement of right by a transferor, but does not give any right to transferee to claim possession.[17]

Thus Section 53A cannot be used to obtain possession of property , but it can be used to retain possession of property.

Edited by Parul Soni

Approved & Published – Sakshi Raje

Reference

[1] FGP Ltd v. Saleh Hooseini Doctor , (2009) 10 SCC 223.

[2]Mohammad Musa v. Aghore Kumar Ganguli (1914) 42 Cal. 801 ; 28 IC 930.

[3]Ariff v. Jadunath AIR 1931 PC 79 ; 58 IA 91.

[4]Mian Pir Bux v. Sardar Mohammad Tahir AIR 1934 PC 235.

[5]Vasanthi v. Venugopal AIR 2017 SC 1569.

[6]Ranchoddas v. Davaji AIR 1977 SC 1517.

[7]Arun Kumar Gupta v. Santosh KumarAIR 2018 ALL 11.

[8]Jacob Private Ltd v. Thomas JacobAIR 1995 Ker. 249.

[9] State of UP v District Judge , AIR 1997 SC 53.

[10]Prabodh Kumar Das v. Dantamara Tea Co. LtdAIR 1940 PC 1.

[11]Supra note (v).

[12]Supra note (vi).

[13]Supra note (vii).

[14]Supra note (viii).

[15]Ambaden Waghubhai Haribhaidesai v. Baldevbhai BecharsinghVaghela AIR 2010 Guj. 17.

[16]See Ram Cbander v Mabamj Kunwar, AIR 1939 All 611.

[17]Delhi Motor Co. v UA Basrurkar (1968) 2 SCR 720.

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