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DOCTRINE OF PART-PERFORMANCE

Author: Palak Mehta, V year of B.B.A.,LL.B. from Unitedworld School of Law, Karnavati University.


Introduction

Doctrine of part performance got statutory recognition by the amendment in transfer of property act in 1929. There were conflicts in Indian court prior to 1929 as to application of English doctrine. Special committee was set up to give recommendation whether the doctrine be extended to India. The committee was of the view that where a transferee in good faith, that lawful instrument i.e. a written contract would be executed by the transferor, takes possession over the property, the equity demanded that the transferee should not be treated as a trespasser by the transferor and subsequently evict him through process of law in the absence of lawful transfer instrument.[1] Government of India, inserted section 53A in accordance to the recommendation by the special committee.


Courts of equity in England invented the doctrine to take inequitable cases out of the Statute of Frauds, 1677 with a view to avoid further frauds by persons apparently relying upon the very same statute itself. The doctrine is protective guard for prospective transferee as it allow them to retain possession to prevent fraud or illegal benefit becauseof non-registration of the documents. The doctrine of part performance is based in the maxim “Equity looks on as done that which ought to be done”. It highlights the creation of equitable interests by specifically enforceable contracts, one of the most fundamental principles of property law. It imposes duty on both transferor and transferee- generally on part if transferor to execute transfer deed in return of consideration which is to be paid by transferee in accordance to the rem of contract.


Wordings of 53A[2] are “Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession 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, then, notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.


Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or the part performance thereof.” Section 53A of Transfer of Property Act, 1882 enunciate part performance. As the name suggest the part of the contract is performed and the said section emphases upon the saving the party who have performed some part of the contract in good faith. The section seeks to protect the prospective transferees by allowing them to retain the possession over the property, against the rights of the transferors, who after the execution of an incomplete instrument of transfer, fails to complete it in the manner specified by law, without there being any fault on part of the transferee.[3] The section provided that where a person takes possession of an immovable property in part performance of a written contract and he has performed or willing to perform his part of the contract, then the transferor shall be debarred from enforcing against him any right in respect of such transferred property notwithstanding that the contract, though required to be registered, has not been registered.[4]


Evidently the scope of the provisions of section 53 A is very much narrower than the corresponding principle of part performance of the English law insofar as :-

  1. A memorandum in writing signed by the person against whom the relief is sought embodying all the material terms of the contract is necessary.

  2. The transferee ought to have taken possession of the property or any part thereof, or he being already in possession then he ought to continue to retain such possession and ought to have done some further act in furtherance of the contract and that

  3. The 'equity' thus created is only 'passive' as it could be used only as a shield to protect his rights under the invalid contract or deed of transfer.[5]


Essentials & Exceptions

The essential condition which are required to be fulfilled for application of doctrine as enacted in section 53A are –

  1. There must be a contract to transfer an immovable property;[6]

  2. The contract must be evidenced by writing which must be signed by the transferor himself or by someone on his behalf;[7]

  3. The writing must be in such words from which the terms necessary to constitute the transfer can be ascertained;[8]

  4. The contract must have been partly performed. The section leaves no room for conjecturing, as to what would amount to part performance within the meaning of this section. It provides that the transferee must have taken possession of the property concerned in whole or in part because of the contract. And -where the transferee is already in possession, continues in possession in part performance of the contract and does some act in furtherance of the contract, such as making alterations of a permanent nature, additional constructions, paying rent at a higher rate;[9]

  5. The transferee must have performed or be willing to perform his part of the contract.[10]


If the above essential conditions are fulfilled then transferee can seek protection under the said section. There is equity in favour of a proposed transferee who can protect his possession against the proposed transferor even though a registered deed conveying the title is not executed by the proposed transferor.[11]In such a situation, equitable doctrine of part performance provided under Section 53-A of the Transfer of Property Act, 1882 comes into play and provides that the transferor or any other person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property in respect of which the transferee has taken or continued in possession, other than the right expressly provided by the terms of the contract.[12]


Supreme court in the case of Deli Motors v. Basrurkar[13] laying down the principle of 53A held that “section is only meant to bring about a bar against enforcement of rights by a lessor in respect of property of which the lessee had already taken possession, but does not give any right to the lessee to claim possession or to claim any other rights on the basis of an unregistered lease. Section 53A of the Transfer of Property Act is only available as a defence to a lessee and not as conferring a right on the basis of which the lessee can claim rights against the lessee”.


Section 53-A of the Transfer of Property Act, 1882, does not confer right of action on the transferee in possession. This section only confers right on the transferee to protect his possession but it does not confer any active right on the transferee.[14] It can be determined that the said section is for the shield to transferee and estops the transferor from disturbing the possession, which is put in possession of transferee in pursuance of the agreement. However the said section have nothing to do with ownership of property and the said transferor is the legal owner till registered sale deed is executed in favour of transferee.


There are certain exception to doctrine of part performance, as this doctrine does not affect the right of a subsequent transferee for consideration who has no notice of the contract or of the part performance thereof.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.[15]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.[16]





Relation: Part Performance and Proprietary Estoppel

Doctrine of part performance is an elongated rule of proprietary estoppel if defendant was not founded upon a completed contract, it may form a valid plea to resist an action. In case of executory contract, the remedy available to the aggrieved party in a suit is specific performance subject to limitation period. In the case of a competed contract where all the formalities required by law have been duly fulfilled, the case of the party rests upon a perfected title. In between these two stages comes the doctrine of part performance.[17] This gives rise to certain rights which are higher than the rights under the contract and which fall short of the rights under the completed transfer.[18] There is a close relation between the doctrines of part performance and that of proprietary estoppel.[19] Privy council in Ariff v. Jadunath[20] observed that the principle laid down by Lord Kingsdown in Ramsden v. Dyson[21] is dealing with the case of express verbal contract or something which amounts to the same thing.‘ He nowhere puts the case of estoppel, the word is not mentioned. He would appear to be dealing with the equitable doctrine of part performance.


Doctrine of part performance as stated in Section 53-A of the Act is an equitable doctrine which creates a bar of estoppel in favour of the transferee against the transferor.[22]In such a situation, equitable doctrine of part performance provided under Section 53-A of the Transfer of Property Act, 1882 comes into play and provides that the transferor or any other person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property in respect of which the transferee has taken or continued in possession, other than the right expressly provided by the terms of the contract.[23]


Doctrine of part performance is rooted in equity and provides a shield of protection to the proposed transferee to remain in possession against the original owner who has agreed to sell to the transferee if the proposed transferee satisfies other conditions of Section 53-A.[24] It operates as an equitable estoppel against the original owner to seek possession of the property which was given to the proposed vendee in part performance of the contract. Appellant being a third party and not a privy to the transaction on which the estoppel rests can take no advantage of it.[25]


Conclusion

Doctrine of part performance is an equitable doctrine, incorporated to prevent fraud. Fraud in the sense that on part of non-registration transferor do not take undue advantage of transferee who in good faith have completed a part of his performance. The doctrine is based on the concept that equity looks for intention rather than form. Intention meaning the willingness of the parties to execute the agreement although the form i.e. the same is unregistered. The present doctrine is a shield used by the transferee to defend is interest, it cannot be used a sword as a weapon of attack. The defence here does not imply that the transferee can only avail the said protection as defendant; he can appear before the court as the plaintiff too. The said doctrine will come in when part of the contractis performed and the transferee is willing to perform the other part of the contract.


In conclusion, 53A is simply put in effect when there is absence of registration of conveyance deed it will not go against the transferor when buyer has performed his part in a manner that legal transfer by way of registration is left.


[1]Praveen Kumar Jain, “Judgment in Deewan Arora v. Tara Devi Sen – A Critical Study”, 51 JILI 531 (2001). [2] Transfer of Property Act, 1882, s. 53A. [3]Poonam Pradhan, Property Law253(Lexis Nexis, New Delhi, 2nd edn., 2013) . [4]Supra note 1. [5]Mulla, Transfer of Property Act 269-71 (4th edn. Setalvad ed. 1966). [6]Shrimat Shamrao Suryavanshi v. Prahlad Bhairoba Suryavanshi, (2002) 3 SCC 676. [7]Allam Gangadhara Rao v. Gollapalli Gangarao, AIR. 1968 AP. 291. [8]Supra note 5. [9]Achayya v. Venkata Subba Raot, AIR. 1957 AP 854. [10]Supra note 5. [11]Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra,(2004) 8 SCC 614. [12]Ibid. [13] AIR 1968 SG 794. [14]Prabodh Kumar Das v. Dantamara Tea Co. Ltd, AIR 1940 PC 1. [15]State of UP v District Judge, AIR 1997 SC 53. [16]Supra note 9. [17]Hira Mani Singh v. Anmol Singh, AIR 1928 All 699. [18]Ibid. [19] Kelvin F.K Low, “Informal Dealings with Land”, (2010) 22 SACLJ 704. [20] AIR 1931 PC 79. [21] (1866) 1 HL 129. [22]Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra (Dead), (2004) 8 SCC 614. [23]Ibid. [24]State of U.P. v. District Judge & Ors., 1997 (1) SCC 496. [25]Supra note 31.