Introduction
The Indian legislation that regulates the transfer of property between living persons is the Transfer of Property Act 1882. The legislation specifies provisions regarding what constitutes a transfer and the conditions attached to it. The legislation was enforced in India on 1 July 1882. A transfer of property follows the rule of Nemo dat quod non-habet, meaning that the transferee can transfer only those interests which he himself has to the transferee. The act of transferring property from one person to another, whether in present or in the future, is known as a transfer of property under the Transfer of Property Act. By transferring property, the transferor transfers all rights in the property, according to Section 8 of the Transfer of Property Act 1882 (The Act). There are several ways to transfer property ownership: 1) relinquishment 2) sale 3) gift; and temporarily by way of 4) mortgage 5) lease and, 6) leave and license agreement. People, on the whole, prefer to own their own properties rather than pay rent on someone else’s. Nonetheless, a lease is an alternative option that provides immovable properties for temporary use and can provide benefits such as low initial payments, tax savings, and low risk, among others.
The doctrine of part performance is based on the idea that when two people enter into an agreement in which one side allows the other to act in furtherance of the agreement, that person establishes equity and cannot later object to the agreement’s performance because the legalities were not completed. As a result, this doctrine aims to protect a transferee in cases where the transferor may be acting dishonestly by refusing to perform the contract. For example, suppose the transferor and transferee enter into a land transfer contract, and the transferee is given custody of the land according to the contract’s conditions. The transferor may still refuse to ratify the first sales agreement, instead entering into a contract with a third party in response to a greater offer, and then ejecting the first transferee from the estate. The concept of part performance recognises the possibility of such events and strives to protect transferees. While the concept of part performance has its origins in English law, it was given legal recognition in India in 1929 when Section 53A of the Transfer of Property Act, 1882 was added.
Ingredients For The Application Of The Doctrine Of Part Performance
Section 53A provides a benefit to a person who has a prior agreement in his favour, as well as possession of the land specified in the agreement. The provision prohibits the original owner or anybody claiming title under him from asserting any right of title or interest in the land indicated in the agreement. As a result, if his possession is threatened, the person claiming the benefit of the clause can only bring an injunction suit. His remedy is not confined to defending himself if a lawsuit is brought against him. He can also be a proper plaintiff if he demonstrates and confirms the Section’s requirements, as well as registration, as laid in the case of Ghnshyambhai Dhirubai Barvaliya v Rasikbhai Dhirubahi Ambaliya. The case of Gita Devi v Sobha Agarwal held that the Section’s protection covers a wide range of issues, including both facts and legislation.
1) Contract To Transfer An Immovable Property For Consideration
The primary criterion of this Section is that a contract must be written in order to transfer immovable property. It must be signed by the person to whom it is intended to bind, or by his agent on his behalf. This clause does not apply to the transferee under an oral agreement. For the purposes of Section 53A, however, any conditions of a previous oral agreement converted to writing can be used as held in the case of Parvathamma v A Srinivasan. Section 53A provides protection only in circumstances when the property is transferred under a contract. Because partition is not a transfer of property, Section 53A protection will not apply. Property must be transferred for consideration. This doctrine will not apply if the transfer is made without consideration. As stated in the case of SDP Sabha Baijnath Co-op Multipurpose Society Ltd v State of Himachal Pradesh because a gift, for example, is a transfer without consideration, this Section will not apply to such circumstances. Only transfers of immovable property are covered by this provision. The doctrine does not apply to a transfer of moveable property agreement. The Section will not apply to any provision allowing the owner to repossess a vehicle leased on a hire purchase agreement for non-payment of installments, as stated in the case of Hameed v Jayabharat Credit & Investment Co.
2) Contract In Writing And Ascertainable With Reasonable Certainty
The second criterion was also stated and reiterated in the case of Govind Prasad Dubey v Chandra Mohan Agnihotri is that the contract must be in writing and that the contract’s terms can be determined with reasonable certainty. The contract must also be signed by or on behalf of the individual requesting to reclaim possession. The contract must be signed by the transferee himself or by someone who has been officially authorised to sign on his behalf as held in Yadav Motors v Hitendra Kumar Ahuja. The Supreme Court did not consider a letter made by the property owner stating that he had agreed to sell his half portion of the land as a deemed agreement to sell in order to meet the Section’s criteria. It is not required for every last detail to be revealed in the writing. Even if it is not registered or attested, an unfinished deed of transfer is considered a contract in writing, but it must be signed by the transferor or his agent. Unregistered documents affecting the real property that is required to be registered under the Transfer of Property Act or the Registration Act may be used as evidence of a contract in a suit for specific performance, as evidence of part-performance of a contract for the purposes of Section 53A, or as evidence of any collateral transaction not required by a registered instrument. In the case of Routu Sivudunaidu v Pandranki Laksminaraynamma laid down, the transaction shall be void and this provision will not apply if parties execute an unregistered sale deed without first obtaining permission from the competent authority.
3) Part-performance Of Contract By Transferee, Transfer Of Possession Or Continuance In Possession
Another criterion is that the transferee either took possession of the property after the contract was signed or if he was already in possession, he must have continued to do so. Possession must have been taken or continued in accordance with the terms of the contract. This clause will not apply if the transferee has not yet taken control of the property, as stated in the case of Sardar Kamaljit Singh v Suresh Chand The fact that the transferee originally had possession but afterward lost it does not deprive him of his entitlement under Section 53A, as laid down in the case of Yenugu Achayya v Ernaki Venkata Subba Rao.
The case of SS Kapoor v Sanjay states that if the transferee is already in possession of the property in another role and all of the essential requirements of this Section are met, he will be allowed to keep it. It is important for a tenant continuing in possession of immovable property after a valid contract of transfer to establish that he does so in accordance with the contract of transfer. The transfer of possession or the continuation of it must have been agreed upon in the contract’s conditions. Then possession would be attributed solely to partial fulfilment of the contract. In the absence of such an agreement, the transferee’s possession could not be regarded to be in fulfilment of the selling agreement. There was no such term in this case. The right to collect rent was not even transferred. As a result, the buyer’s possession was not in part-performance of the transaction. When he transferred it to someone else, the recipient had no more rights than the transferor. He had been a tenant and would continue to be a tenant.
4) Readiness Or Willingness Of Transferee
“He who seeks equity must do equity,” says the equity principle, as reiterated in the case of B Paramashivaiah v MR. Shankar Prasad. In the case of Andhra Graphite P Ltd v Jobbing Syndicate (Regd. Partnership) it was laid that if the transferee wants to take advantage of this clause, he or she must also fulfil his or her obligations under the contract. He must be willing and able to fulfil his contractual obligations. Protection under Section 53A is a separate right, and a person performing a part of an agreement is only entitled to it if it can be demonstrated that he was always ready and prepared to carry out his share of the agreement, was established in the case of Rani Sambhi v Lt Col (Retd) R.L Vashisht. Absolute and unconditional readiness and willingness are required. In the case of Chinnaraj v Sheik Davood Nachiar, the benefit under the clause cannot be granted to a person who refuses to fulfil his contractual obligations.
History Of The Doctrine Of Part Performance
The doctrine of part performance is based on the Court of Chancery’s equitable rule of part performance that evolved under English law. Foxcroft v Lyster, was the first case to establish the equitable rule of part performance. No person shall be charged upon any contract for the sale of lands or any interest in land, etc., unless the agreement or some memorandum or some note thereof is in writing and signed by the party to be charged thereunder or some other person thereunto be him lawfully authorised, according to English law. This clause was incorporated in its entirety in Section 40 (i) of the Legislation of Property Act, 1925, with the exception that Sub-Section (2) expressly states that the substantive provision in Sub-Section (i) has no bearing on the law related to part performance or court sales. Because no action could be filed on oral agreements, the Chancery Court established the doctrine of part performance to alleviate the difficulty caused by an advantage obtained by a person under an oral contract. Failure to enforce it would have allowed the unjustified advantage gained by the equity court enforcing the contract to be retained. In actuality, if the contract was not enforced because the Statute of Frauds did not take oral agreements into account, a person could take advantage of the oral agreements and prolong the fraud that the statute was intended to prevent. At the same time, a claim involving immovable property could not be based solely on an oral agreement. As a result, the Chancery Court wanted to be completely satisfied before granting specific performance relief, and in order to ascertain the existence of the oral contract, the court wanted to be satisfied that some such act had been done that was unequivocally referable to the oral contract and would prove its existence beyond a reasonable doubt, implying the part performance of the contract. The act used to prove part performance must be of such a nature and character that its existence establishes the contract and its execution. Each action taken after the contract may not be sufficient to prove part performance on its own. The act must be of a kind that is unmistakably related to the contract and has been carried out in the course of the contract. In the case of Lady Thyme v Earl of Glengall, 74 the court observed that part performance, in order to avoid the Statute of Frauds, necessitates the completion of the agreement. There can be no partial performance if there isn’t a fully executed agreement. It must be mandatory, and whatever is done must be in accordance with the agreement’s terms and by the agreement’s force.
Emergence of Part Performance Doctrine in India
In India, the doctrine of part performance has been codified by statute, as stated in the case Rikhi v New Delhi Municipality, although it is not available outside of Section 53A. It has only been partially translated from the English notion of part performance, and it gives rise to a statutory right, not only equity, that is passive and more limited than English equity. Even on the strength of an oral agreement, a person might use the doctrine of part performance in English law. It can be employed as a defence as well as an assault weapon, i.e., it can be used to enforce a right of possession rather than only protect it. The High Court of Madras held in the old Madras case of Kurri Veera Reddi v Kurri Bapi Reddi that the English notion of part performance was not relevant in Indian law. In Md Musa v Aghore Kumar Ganguly, the Privy Council concluded that the doctrine of part-performance was applicable in India based on fairness, equity, and good conscience in 1914. A compromise deed (razinamah) was written but not registered in this case. Certain lands were divided between the parties who had taken ownership of their separate portions of the land under this deed. The parties kept possession of the compromise deed for many years, and roughly 40 years later, the parties’ heirs repudiated it because it was not recorded. Although the compromise deed was unregistered, the Privy Council used this theory and found that it was in writing and so a genuine document that could not be repudiated.
The concept enshrined in Section 53A of the TPA in India is a partial adaptation of the concept as it is applied in English law. India’s notion, on the other hand, is more limited in scope. Under English law, the egalitarian notion can be used as a defense or a “weapon of attack.” Section 53A, on the other hand, can only be used as a shield, not as a weapon, as previously stated. The notion is related to a verbal agreement in England, which is another major contrast in its applicability. The justices have made it clear that Section 53A only applies to contracts that are documented in India. As a result, the doctrine’s application in Indian law is severely limited.
Amendment To Section 53A And Their Repercussions
Prior to 2001, the law allowed for an exemption to the idea of part performance, allowing unregistered documentation to be used as sufficient proof to seek protection under the concept. The phrase “the document, though needed to be registered, has not been registered” was used in Section 53A to express this.” As a result, a person requesting protection under Section 53A may rely on an unregistered paper to prove his or her case. However, in 2001, the clause was changed to remove the aforementioned phrasing. It is vital to discuss the history of such a criterion in order to properly comprehend the implications of this evolution. Until 1929, Section 49 of the Registration Act of 1908 made it crystal clear that any unregistered documentation relating to immovable property was inadmissible as proof of title. As a result, any documents relied on to assert any title or benefit in connection with immovable property must always be registered. By 1929, the law had been modified to cover unregistered papers in immovable property claims under Section 49 of the Registration Act. Provision 53A of the TPA, which was introduced in 1929, did not require documents to be registered in order to be protected by the portion. Unregistered papers, such as an unregistered sale deed, were found to be appropriate evidence for asserting Section 53A privilege.
Later in 2001, the Act was revised to remove the clause in Section 53A that allowed unregistered papers to be admitted. In addition, in 2001, Section 49 of the Registration Act 1908 was amended, and the exemption allowing unregistered papers to be admitted was repealed. As a result, the legal situation was exactly the same as it was prior to 1929, when any claim involving real estate required the backing of a registered document. Only registered papers can be acknowledged to apply Section 53A as a result of the 2001 change. An individual, for example, cannot claim Section 53A protection based on an unregistered agreement. Part performance, on the other hand, is restricted to contracts that have been partially completed. A registered sale contract also suggests that the transaction has been completed in its entirety. A recorded agreement to sell a property, on the other hand, does not automatically mean that the parties have reached an agreement. As a result, the transferee may utilize paperwork, such as a registered agreement to transfer the property, to plead part performance. The revision significantly reduced the scope of Section 53A of the TPA’s application. Despite this, the Section will continue to apply to legal violations other than a lack of registration.
Conclusion
In a country like India, where a large Section of the population is unaware of the legal standards that must be met in certain situations, the number of cases where misinformed and uneducated clients are easily misled is rather high. The regularity with which courts invoke Section 53A demonstrates this. Given the foregoing, the required step of statutorily recognizing the concept of the part performance was taken. As previously stated, the differences between the doctrines in India and England show that the concept has only been partially integrated into the Indian legal system. While requiring the presence of a signed agreement limits the scope of use, the major requirements limit the scope of legal abuse. Nonetheless, given the Indian people’s social and financial situation, the change that removed the exemption allowing the use of unregistered papers for Section 53A purposes is likely to undermine the provision’s goal.
This article is written and submitted by Neha Haldhar during her course of internship at B&B Associates LLP. Neha is a B.S.W LL.B (Hons.) student from Gujarat National Law University.
