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RIGHTS OF TRANSFEREE UNDER SECTION 53-A OF THE TRANSFER OF PROPERTY ACT, 1882
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RIGHTS OF TRANSFEREE
UNDER SECTION 53-A OF THE TRANSFER OF PROPERTY ACT, 1882
AUTHORED BY - ARUNAV BHATTACHARJYA
The Doctrine of
Part-performance is based on the English principle of equity, and is given
statutory recognition by Section 53A of the Transfer of Property Act, 1882.
Section 53A has been so far, applied by the Indian Courts in cases where the
transfer has been effected by a registered deed. According to this doctrine, if
a party to the contract has sought to take possession of an immovable property
(say, a house), on the grounds of a contract for a sale and the person has
either in his capacity performed, or is willing to perform his part of the
stipulations in the contract, the person would then be not ejected from having
possession of the house for the sole reason that the registered sale deed was
yet to be effectuated and that a legal title is yet to be transferred to that
person.
The English doctrine of part-performance is based on the maxim Equity
looks on that as done which ought to have been done. This equitable doctrine
treats the subject matter of a contract of sale as to its effects in the manner
as if the condition stipulated in the contract has been duly executed by the
transferee, right from the moment the agreement has been made. This is
regardless of the fact that the legal formalities involving registration of the
contract was yet to be completed. The general premise upon which this doctrine
is based is to prevent fraudulent transfers. Where one party to the contract
has executed his part of the stipulations stated in the contract in the
confidence that the other party would too follow the same, it would be a fraud
upon the former party if the latter refuses to abide by the stipulations and
lay claim to the property on the ground that a registered sale deed was yet to
be effectuated.
The Doctrine of part
performance acts as a safeguard to the transferee against the transferor in
retaining the possession of the property in question in circumstances where
there was no fault on the part of the transferee even when the sale deed was
not being registered. Nothing in the provision of Section 53A, alter the rights
of the transferee for consideration even if he had no notice of contract of
part performance. The doctrine of part-performance was imported to Indian law
by the Amending Act of 1929. Prior to 1929, the Anglo-Indian Courts, though
applied this doctrine based on the principle of equity, but it was marred but a
lack of uniformity and inconsistency that duly affected the contract for
transfer, its consideration and subsequently the rights of the transferee, who
is an erstwhile party to the contract. Section 53A, after 1929, as acted as a
defense as well as a right that helps to protect the possession of the property
in question. It tries to prevent any act of fraud on the mere basis that the
evidence of a registered sale deed is ineffective on the given date. Section
53A therefore, does not confer a title of possession or ownership upon the
transferee but it duly imposes a statutory bar on the transferor.
THE INDIAN CONTEXT
Section 53A of the
Transfer of Property Act, acts as a safeguard to prospective transferees in a
contract of sale of immovable property, and allows them to retain the
possession of the same as against the transferors to the contract, who after
having executed an incomplete instrument of transfer, fails to comply with the
procedure established by law and with no fault on the part of the transferee.[1]
In common parlance,
there are corresponding rights and duties which are duly imposed by law on both
the transferor and the transferee, when there is an execution of a contract
between any two parties. It is a duty which is cast upon the transferor to
execute the transfer deed in the manner and procedure established by law and to
pay the consideration as and when the transferee is required to do so by the
transferor.[2] In
matters relating to the transfer deed, the transferor plays an important role.
The transferor in his capacity has to sign the deed, his signature should be
duly attested by the competent witnesses and it is he at whose behest the deed
would have to be registered in the Registrar’s Office, by following all the
legal requirements.[3]
On the other hand,
the primary duty of the transferee is to pay the due consideration, he can also
be asked to pay the same in advance to the transferor at any time in the manner
the later specifies.[4] In
certain situations where the parties to the contract of sale initially agrees
for the transfer of a certain property and in furtherance of the written
agreement between the parties, the transferee is give the possession of the
property by the transferor, this act of the transferor would imply that the
intention to act upon the agreement entered by both parties are clear in terms
of the condition stipulated.[5]
Under such
circumstances, if the transferee has paid the full amount of consideration or
is ready to fulfill his part of the contract stipulations, and the transferor
does not intend to go ahead with the transfer of the property, then under
Section 53A of the Transfer of Property Act 1882, the transferor or any other
person claiming under him would be disqualified from claiming back possession
of the property in question, for which consideration has already been given by
the transferee to the transferor.[6]
According to Section
53A, when there is a contract in writing to transfer any immovable property,[7]
which has been signed by the transferor and from the language of it, the terms,
conditions and other stipulations essential to constitute the transfer should
be ascertained with a reasonable certainty.
And the transferee in
in part performance of the contract, taken possession of the property or any
part of it, or the transferee being already in possession, continues in
possession of the property in part performance of the contract and has done
some act in furtherance of the contract, and the transferee has performed or is
willing to perform his part of the contract,[8] the transferor or any person
claiming under him shall be disqualified from enforcing against the transferee
and persons claiming under him any rights in respect of the property of which
the transferee has taken or continued in possession.[9]
Under English Law,
the equitable doctrine of part-performance was developed by the Court of
Chancery against the strict provisions of the Statute of Frauds, 1677. Section
4 of the Statute of Frauds provided that, agreements made by parties in respect
of land must be made in writing. The provision of this Section stated that the
transfer of immovable property on the basis of any oral agreement was deemed
illegal and if done so, the transferee would not get the title of possession of
that property. In this manner, if a bona fide transferee performed his part of
the contract by paying the amount of consideration (fully or in part) and had
also taken possession of the property in furtherance of the agreement, could
not get the title of possession on the grounds of absence of legal formalities.
The Court of Chancery
then held that part performance of the transferee in furtherance of the
agreement would be outside the purview of the Statute of Frauds. Lord Selbourne
in Maddison v. Alderson[10], one of the leading
cases on the doctrine, held that if such equities were excluded, against the
interest of the defendant in a suit of part performance, it would be a
injustice of a kind which even the statute cannot be thought to have had in
contemplation.
Not every act which
is subsequent to the contract by itself may not be sufficient to establish part
performance on the behalf of the transferee.[11] The act must be of such a
nature which is being one unequivocally referable to the contract and having
been performed in furtherance of the contract by the transferee.[12]
The doctrine of
part-performance was partially imported under Section 53A of the Transfer of
Property Act, 1882 by the Amending Act of 1929. Prior to this amendment, there
was no established law on the subject of part-performance in India. The
Anglo-Indian courts thus, applied the English equitable doctrine in India, but
it was neither certain nor it was uniform in nature. In the case of Mohammad
Musa v. Aghore Kumar Ganguli[13], the Privy Council
held that the English equitable doctrine can be applied in Indian cases as it
was applied under English law in England. In this case, the Privy Council
applied the rule in Maddison[14], and held that even
though the razinama was not registered by the parties but since this was in
writing, it was held to be a valid document and hence, the same cannot be
repudiated. This opinion was soon changed by the Privy Council in the case of Ariff
v. Jadunath[15], where the Court
held that the doctrine could not be applied in India as it over-rides the
existing provisions in the Indian Registration Act and subsequently the
Transfer of Property Act. This was because, the facts of the case involved an
agreement for lease which was made orally and not in written, and the
application of the doctrine would violate the existing provision of Section 107
of the Transfer of Property Act.
The law contained in
Section 53A of the Transfer of Property Act is same as the what the Privy
Council held in the case of Mohammad Musa[16],
which applies the English equitable doctrine albeit with certain
restrictions. The English equity of part-performance crystallized by Section
53A of the Transfer of Property Act, has been only partially imported in India[17] and
gives rise to not merely equity but is a passive[18], statutory right which is
much more limited than the English equity[19]. This is because under the
English law, the doctrine of part-performance can be invoked as a safeguard by
a person even when there is an oral agreement and not necessarily in writing,
which is the case under Indian law[20]. The doctrine is used both
as a defence as well as a weapon because it can also be used by the transferee
to enforce the right of possession.
Under Section 53A,
the property for which there has been a contract of transfer refers to
immovable property and excludes any kind of movable property[21].
Section 3 of the Transfer of Property Act 1882, defines immovable property to
every kind except standing timber, growing crops or grass. For more clarity as
to the definition of what constitutes an immovable property, Section 3(26) of
the General Clauses Act, 1897 is referred to, which defines immovable property
as property which includes land, benefits arising out of land and things
attached to the earth. What constitutes immovable property has been further
defined in Section 2(8) of the Registration Act 1908, which incorporates land,
buildings, hereditary allowances, right to ways, lights, ferries, fisheries or
any other benefit to arise out of land, and things attached to Earth, or
permanently fastened to anything which is attached to Earth, but not standing
timber, growing crops nor grass as kinds of immovable property.[22]
Only those
transactions, which complies with the provisions of Section 53A, are considered
as transfer under 2(47) (v)of the Income Tax Act, 1961. The main condition is
the intention of transfer of property in the contract for the consideration.[23]
Handing over the
possession of the property in question by the transferor to the transferee in
part performance of the contract under Section 53A is necessary, but the
transfer should be of legal title and rights to enjoy the property.[24]
53A BY THE
TRANSFEREE
In the case of Kamalabai
Laxman Pathak v. Onkar Parsharam Patil[25],
the Bombay High Court emphasized on the following conditions for the
application of the doctrine of part-performance.
i) Contract for
Transfer of Immovable Property
For the application
of the doctrine, there has to be a contract for transfer of an immovable
property between two parties. The contract must be a written agreement and not
oral, or else Section 53A cannot be applied.[26] A simple written contract
is not sufficient, it has to be duly registered as per the procedure
established by law. It should be signed by the transferor or any other person
authorized by him, in the presence of competent witnesses.[27] Furthermore, the written
contract on the basis of which the property has been possessed by the
transferee must clearly suggest the transfer of the property in question. The
terms of the contract must be ascertained with reasonable certainty.[28] The
contract must also be genuine in all respects and enforceable by law under the
Indian Contract Act, 1872.
An agreement to sell
does not lead to creation of any new interest, title or right to the property
in question. Such rights, interest or title is created only when there is a
transfer of a property through a registered sale deed.[29] Where there was an
agreement for a sale of an immovable property along with the delivery of
possession, the agreement holder is duly entitled to possession provided that
the transferee is willing to perform his part of the contract.[30]
With the Amending Act of 2001, which amended the provision of Section 17A of the
Registration Act and proviso to Section 49, so as to amend Section 53A of the
Transfer of Property Act,the scope and application of Section 53A has been
limited to a certain extent. With the amendment, recognition is given to
transfer deed which have been incomplete, albeit as a written contract is a
piece of evidence to recognize that the transferee’s possession is unauthorized
without the deed being complete. An unregistered contract therefore, has no
value for the purposes of Section 53A but can be regarded to have evidentiary
value for the existence of certain facts of that particular transaction.[31]
ii) Transfer for
Consideration
The contract between
the parties must be for a transfer of an immovable property for a valid
consideration. The plea of part-performance cannot be taken where the contract
clearly does not amount to a document for the transfer of the property. Section
53A clearly does not apply where the transfer is without a valid consideration.
Under Section 23 of the Indian Contract Act, an agreement between parties
without a consideration is deemed to be void, and if this situation exist, the
safeguard of Section 53A cannot be enforced.[32]
iii) Possession in
furtherance of the Contract
Another essential
condition is that the transferee should take possession or continue to take
possession in part-performance of the contract, and perform some act in
furtherance of the contract. In Shyam Narayan Prasad v. Krishna Prasad and
Ors[33], the Court held
that the party who wish to avail the benefit of the doctrine of
part-performance must plead before the court that he has taken possession of
the property in question in part-performance of the contract. No relief will be
granted to the party, if no pleading to this effect is made.
The possession of the
property must be solely in furtherance of the contract. A plea of adverse
possession, otherwise, contrary to the acquisition of possession in a lawful
manner by the transferee and is thus, unavailable to the possessor of the
property. Setting up a title by adverse possession and readiness and
willingness to perform the contract are opposite stands which a party cannot be
permitted to take and a relief of specific performance would not be granted in
such cases despite the presence of a sale agreement and possession for more
than 12 years.[34]
If the possession is
given to a person in furtherance of the contract that is partly performed, this
acquisition of possession in itself is sufficient to invoke the doctrine of
part performance, but in cases where the transferee already had the possession
of the property and retains it after a partly performed contract, he must show
that besides the retention of the possession, he has done some act in
furtherance of the contract that can show clearly his altered position. Mere continuation
of possession by a person already in possession prior to the contract is not
sufficient.[35]
iv) Act done in
furtherance of a contract
To invoke the
safeguard of Section 53A, it has to be shown that there is a contract to
transfer the property in writing, which is signed by the transferor, the
document being registered, and the terms essential to constitute the transfer
can be ascertained with reasonable certainty. After establishing the aforesaid
conditions, it has to be further shown that the transferee, in part performance
of the contract, has either taken possession of the property, or the transferee
being already in possession has done some act in furtherance of the contract.
The act claimed to be in part performance of the contract must unambiguously be
ascribable to the pre-existing contract between the parties,[36] and
the act of part performance must unequivocally point to the direction of the
existence of contract. This acts as evidencing the implementation or
performance of the existing conditions or stipulations in the contract.[37]
v) Transferee is
willing to perform his part of the contract
The transferee must
show his willingness to fulfil his part of the contract in order to take the
benefit of part performance.[38]A
failure to prove willingness will disentitle them to such protection.[39]
Post induction of the purchaser in possession, payment of complete or even a
substantial consideration to transferor by him can lead to a strong presumption
of the purchaser's willingness to perform his obligations arising out under the
sale agreement and he would therefore be entitled to protection under Section
53A.[40]
Where the possession
of the property was handed over in furtherance of an agreement to sell but the
transferee was not ready and willing to fulfil his specific obligations under
the agreement and part of the bargain, the benefit of Section 53A would not be
available to him.[41]
The nature of the
transferee’s rights under Section 53A can be analyzed as follows-
i) No title or
interest in the property-
The safeguard of
Section 53A does not confer upon the transferee, any title or interest in
relation to the property in which he has taken possession. Section 53A simply
provides that if the above conditions are duly fulfilled, the transferor is
duty bound to not evict the transferee from the property in which the later has
taken possession of. It is only if the transferee is evicted from the property
or a suit is filed by the transferor in lieu of the same, the defence of
Part-performance can be pleaded in the court of law and the transferor would be
given the right to continue with possession if the conditions are fulfilled.
Therefore, the transferor in this regard is simply given the right to continue
possession and there is no creation of any new title or interest in favor of
the transferee.[42]
Section 53A imposes a statutory restriction upon the transferor to not
dispossess the transferee from continuing with the possession of the property.[43]
It is only after the
registration of the sale deed that the transferee can get any title over the
property. The registration of the sale deed is important for creation of any
new title or interest so as to not defeat the provisions of the Registration
Act.[44]
Section 53A does not affect in any way, the ownership rights of the transferor
over the property in question unless registration of the sale deed is complete.[45]
ii) Passive
equity; no right of action-
Section 53A does not
give the transferee any right of action against the transferor. It is used as a
mere right of defence. The transferee can raise the defence of part-performance
against being evicted from possession of the property, but he cannot use the
provision of Section 53A to restrain the transferor from transferring the
property to any other party. That is, the equity of part-performance in India
can be used only as a shield and not as a sword, unlike English law, where the
equity of part-performance is an active equity; which gives the right to the
transferee to proceed against the transferor when being evicted. Therefore, in
India, the scope of Section 53A has been limited to just as a right of defence.[46]
In the leading case
of Prabodh Kumar Das v. Dantamara Tea Co. Ltd[47].,
the Privy Council held that the equity of part-performance in India as
incorporated by Section 53A is not an active equity as in England and is
limited in nature. That is, under an unregistered sale deed, Section 53A does
not give any right of action to the transferee, who in furtherance of the
stipulations of the contract has taken possession of the property. The
safeguard of Section 53A is therefore, available to the transferee only as a
right of defence to protect the possession and does not confer upon the
transferee any right of action. The case thereby, reiterated the established
principle of law of equity of part performance in India as that of a shied and
not as a sword.
iii) Transferee-
Plaintiff or a Defendant?
The opinion of the
Courts in India, whether the transferee is a defendant or can also be a
plaintiff to defend the possession of the property is divided. As per
Allahabad, Andhra Pradesh and Bombay High Courts, the transferee under Section
53A can also be a plaintiff, if the situation demands that the transferee has
to protect his possession.[48]
Contrary to this opinion, the Rajasthan, Orissa and Madras High Courts observed
that transferee is a defendant, as he has to protect his possession.[49]
However, it would be
correct to say that the transferee can avail the safeguard of Section 53A, both
as a defendant and as a plaintiff, only if used as a right of defence.[50]
Proviso to Section
53A states that the interests of a subsequent transferee for value without
prior notice of the previous transferee’s rights of the doctrine of
part-performance is protected. Section 53A in any way, does not affect the
right of the subsequent transferee for consideration who has no notice of the
contract of sale or of part-performance.[51] Any rights which the
transferee under Section 53A may have against the transferor would not be of
any avail against a bona fide transferee for value having no notice of the
transaction.[52]
After the Amending
Act of 2001, the non-registration of the contract has been made an irrelevant
factor for the application of the doctrine of part-performance under Section
53A and the defence can also be invoked on a registered sale deed. However, the
same Amendment has to be read with amendments made to Section 17 and Section 49
of the Registration Act. Reading Section 53A with Section 17A of the
Registration Act makes Section 53A inapplicable and the defence of
part-performance worthless unless the sale deed has been duly registered.
Therefore, in case of transfer of an immovable property and to invoke
protection under Section 53A, the contract has to be registered.[53]
The amended proviso
to Section 49 of the Registration Act can now be interpreted in a manner that
would mean that an unregistered document carries an evidentiary value in the
court of law for proving any collateral transaction or of that of possession of
the property in question. Hence, the object of the amendments to the Transfer
of Property Act and the Registration Act is to prevent evasion of the law of
registration.[54]
The doctrine of
part-performance is not a total import of the English equitable doctrine. On
the question of the rights of the transferee, courts in India have interpreted
this doctrine as a passive equity, that is, protection under Section 53A can be
invoked only as a right of defence. It can be used as a shield and not as a
weapon of attack as the against the transferor or any person claiming under
him. This, in the opinion of the researcher, is something that the Courts must
look into while interpreting the doctrine. The benefit of Section 53A for the
transferee as just passive equity devoids the transferee the right to action,
which can be against his case in certain instances and this could be clearly
seen in the Prabodh Kumar Das case[55].
Also, in the opinion
of the researcher, the fact that under Indian law, only written agreement is
valid can also act as a negative for the transferee, as not everyone has the
clarity of the legal language, given the condition of literacy in a country
like India. Indian law should permit both written as well as oral agreements,
as things stand under English law. But any oral agreement must be, sooner or
later be in the form of a written agreement, for it to be admissible in the
court of law.
Lastly, the
researcher feels that the Amending Act of 2001 was a much-needed step by the
legislature, because prior to it, there was a great deal of confusion as to the
cause of action when there is a unregistered sale deed. With the position being
clear after the Amendment, the real purpose and object of the doctrine of
part-performance comes into fruition, which was previously marred with
uncertainty.
References-
l MULLA, DF, THE
TRANSFER OF PROPERTY ACT 1882 (HR Khanna and PM Bakshi, 5ed. N.M Tripathy
Private Ltd.)
l Sen, G.M., The
Doctrine Of Part Performance In India, JOURNAL OF THE INDIAN LAW INSTITUTE,
(Vol. 11, No. 2, 1969), www.jstor.org/stable/43950022.
l Goel, S., Doctrine
of Part Performance & Specific Performance of Contract, BLOG iPLEADERS
(Sept 28, 2018) https://blog.ipleaders.in/doctrine-of-part-performance/#:~:text=Doctrine%20of%20Part%20Performance%20of%20Contract&text=The%20transferee%20must%20in%20part,his%20part%20of%20the%20contract.
l Priest Jr.,Whayne C.,
The Doctrine of Part Performance and Contracts to Devise in Kentucky, KENTUCKY
LAW JOURNAL, (Vol. 50, Issue 2) https://uknowledge.uky.edu/cgi/viewcontent.cgi?article=3177&context=klj
l Pant, I., Rule of
Part Performance, LEGAL BITES (March 14, 2020)https://www.legalbites.in/rule-of-part-performance/
l Ahuja, U., Doctrine
of Part-Performance, LAW TIMES JOURNAL (July 01, 2019) http://lawtimesjournal.in/__trashed/
[1] DR. POONAM
PRADHAN SAXENA, PROPERTY LAW, (3ed. Lexis Nexis 2019).
[2] Id.
[3] Id.
[4] Aman
Mehta, S.53A, Transfer of Property Act- A Sword to its own Shield? SUPREMO
AMICUS (Vol.19) https://supremoamicus.org/wp-content/uploads/2020/07/A1-10.pdf
[5] Id.
[6] Supra Note
6.
[10] Maddison
v. Alderson, (1883) 8 AC 467.
[11] Sardar
Govindrao Mahadik & Anr v. Devi Sahai & Ors, 1982 AIR 989.
[12] Id.
[14] Supra Note
9.
[15] Ariff v.
Jadunath, AIR 1931 PC 79.
[16] Supra Note
12.
[21]
Ramchandrappa v. Satyanarayana, AIR 1964 SC 877.
[22] Ankita
Singh, The Doctrine of Part Performance, ACADEMIKE (Feb. 14, 2015) https://www.lawctopus.com/academike/doctrine-of-part-performance/#:~:text=%E2%80%94Where%20any%20person%20contracts%20to,contract%2C%20taken%20possession%20of%20the
[23] C.S Deepak
P. Singh, Analysis of Section 53A of Transfer of Property Act, 1882, TAX
GURU, (Feb 26, 2016) https://taxguru.in/corporate-law/analysis-provisions-section-53a-transfer-property-act-1882.html
[24] Id.
[26] V.R
Sudhakara Rao v. T.V Kameswari, (2007) 6 SCC 650.
[27] Subramanyam
v. Subba Rao, AIR 1948 PC 95.
[28] Mool Chand
Bakru v. Rohan, AIR 2002 SC 812.
[29] DR. R.K
SINHA, THE TRANSFER OF PROPERTY ACT, (Dr. Shreedutta Arvind Pandey ed. Central
Law Agency 2019).
[30] Devinder
Singh v. Fateh Jung Singh and Ors, AIR 2018 P&H 70.
[31] Supra Note
26.
[32] Thakurmal
v. Chakradhar Rao Bhosle, AIR 2009 Chh. 27.
[42] Sitaram
Rao v. Bibhisana Pradhan, AIR 1978 Ori. 222.
[43] Id.
[44] Supra Note
26.
[45] State of
UP v. District Judge, AIR 1997 SC 53.
[46] Supra Note
26.
[47] Prabodh
Kumar Das v. Dantamara Tea Co. Ltd, AIR 1940 PC 1.
[48] Ram
Chandra v. Maharaj Kumar, AIR 1939 All. 611; Achayya v. Venkata Subbarao, AIR
1957 AP 854; Dharmaji v. Jagannath Shankar Jadhav, AIR 1994 Bom. 254.
[49] Motilal v.
Jaswant Singh, AIR 1964 Raj. 11; Padmalabha v. Appala Narsamma, AIR 1952 Ori.
143; also AIR 1981 Mad. 310.
[50] A.K
Srivastava, Bal Krishna, Nature of Right under
Section 53A of the Transfer of Property Act 1882, INDIAN LAW INSTITUTE (1973).
[51] Supra Note
26.
[52] Id.
[53] Id.
[54] Id.
[55] Supra Note
46.
Article Information
RIGHTS OF TRANSFEREE UNDER SECTION 53-A OF THE TRANSFER OF PROPERTY ACT, 1882
Authors: ARUNAV BHATTACHARJYA
- Journal IJLRA
- ISSN 2582-6433
- Published 2024/10/23
- Volume 2
- Issue 2
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