The doctrine of Part performance free essay sample

Property is one of the most fundamental elements of the socio-economic life of an individual. Juridically, property can be said to be a bundle of rights in a thing or a land. However, the word has gradually been given a wider meaning. Economic significance of the property, therefore, rests more on its dispositions. Property law has therefore become an important branch of civil law. The Transfer of Property Act, 1882 deals with the transfer of immoveable property inter-vivos (although some provisions deal with the transfer of moveable as well as immovable property). Before this enactment, the transfers of immovable property were mostly governed by English equitable principles as applies by Anglo-Indian Courts. The â€Å"doctrine of part-performance† is one of the equitable doctrines applied by these Courts. Doctrine of part performance Doctrine of part performance is an equitable doctrine. It is also known as â€Å"equity of part-performance†. In law of contracts (for e. g. , a contract for sale), no rights pass to another till the sale is complete. But if a person after entering into a contract performs his part or does any act in furtherance of the contract, he is entitled to reimbursement or performance in case the other party drags its feet. This doctrine is based on this part performance of contract. If a person has taken possession of an immovable property on the basis of contract of sale and has either performed or, is willing to perform his part of contract then, he would not be ejected from the property on the ground that the sale was unregistered and the legal title had not been transferred to him. Section 53A provides that â€Å"Where any person contracts to transfer for consideration any immoveable 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. The Section has been described by the Privy Council2, and by the Supreme Court3, as partial importation of the English of doctrine of part performance. By virtue of this Section part performance does not give rise to equity, as in England, but to a statutory right. 4 This right is more restricted than the English Equity in two respects: 1) there must be a written contract; and 2) it is only available as a defence. 5 So far as India is concerned, the section creates rights which were not in existence when the enactment was passed. This right to retain possession rests on the express provisions of the statute. It has been held that the doctrine of part performance is not applicable to the state of Jammu and Kashmir. 7 Section 53A was first enacted in 1929 by the Transfer of Property (Amendment) Act 1929, and imports into India a modified form of equity of part performance as developed in England in Maddison. 8 The enactment of the section sets at rest the considerable uncertainty prevailing in Indian law. Essential conditions for the application of section 53A. Analysis of the provisions of Section 53A makes it clear that following essential conditions are necessary for its application: a) There is a contract for the transfer of an immovable property. The contract must be written and it must be for the transfer of an immovable property for consideration. Also, the contract must be valid in all respects. b) The second essential is that the transferee has taken the possession of the property or continues possession in part-performance of the contract or, has done some act in the furtherance of the contract. When a person claims protection of his possession over a land under Section 53A, his own conduct must be equitable and just. That is the transferee has either performed his part of contract or is willing to perform the same. When the above mentioned conditions are fulfilled, the transferee can defend his continuance of possession over the property. In other words, if these requirements are fulfilled, the transferee is entitled to claim, under this Section, that he should not be dispossessed or evicted from the property. Comparison of 53A with English Doctrine of Part Performance Under English law, the equity of part – performance was developed by the Chancery Courts against the strict provisions of the Statute of Frauds, 1677. Sec – 4 of this Act provided that all agreements in respect of transfer of lands must be in writing. The transfer of immovable property on the basis of oral agreement was illegal and the transferee couldn’t get title in the land. Strict application of this law created great hardships and a bona fide transferee who performed his part of contract of by paying the price in full or in part and who had also taken possession of land couldn’t get title merely because of the absence of the legal formalities. Such transferees were helpless and were being harassed. Equity then came to their help. Chancery Courts held that part – performance by such transferees would take their cases out of the Statue of Frauds. Since then, the equity of part – performance developed further and passed through several stages for protecting the interests of the transferees who had performed their part of contract in good – faith and the transferor attempted to harass them on the ground of technical defect in the contract. Walsh v. Longsdale9 and Maddison v. Alderson10 are two of the major cases that have helped develop the doctrine of part performance in England. In India, this doctrine has been enacted with a few modifications. A had promised B a certain property as life estate, meaning B could enjoy the property during his life time. B served A for years upon this promised life estate. The will bequeathing such interest and property to B failed due to want for proper attestation. After A died, one of his heirs brought action to recover the property from B. It was held that the act of part performance could not be proof of the contract since the performance was a condition precedent to the contract. The heir of A was able to recover the said property. WALSH v. LONGSDALE12 Walsh took a cotton mill on lease for 7 years from Longsdale, the owner of the mill. The agreement was prepared but not signed. In the meantime, rent arrears started to accumulate as Walsh could not keep up with the quarterly payments of rent. An advance of one year’s rent could be demanded by Longsdale as per the contract. Lonsdale demanded the advance rent for one year and seized some goods of Walsh when he defaulted. Walsh sued for damages. The House of Lords decided in favour of Lonsdale stating that by running the mill, Walsh had admitted he was a lessee and evidence of his consent to the unsigned lease deed. The rule laid down in Walsh vs. Longsdale is not applicable in India – as it did not constitute the doctrine of part performance. Before 1929 (when Section 53A was inserted in the Transfer of Property Act), the application of English equity of part-performance was neither certain nor uniform. In certain cases it was applied whereas in other cases it was not applied. The Privy Council in Mohd Musa v. Aghor Kumar Ganguli13 held that doctrine of part performance is applicable in India. In this case there was a compromise deed which was in writing but not registered. Under this deed there was division of certain lands between the parties who had taken possession over their respective parts of the land on the basis of the compromise deed. The parties continued possession over their lands for many years. After about forty years, the heirs of the parties repudiated the compromise deed on the ground that it was not registered. The Privy Council applied the doctrine of part-performance as stated in Maddison v Alderson and held that although the compromise deed was unregistered but, since it was in writing, it was a valid document and can’t be repudiated. But there were divergent views a few years later stating that doctrine cannot be used to override statutory provisions. Finally in 1929, the Transfer of Property Act was amended and the English law of part performance became a part of Indian Laws though a little modified. The law contained in Section -53 A of the Act is almost same as laid by Privy Council in Mohammed Musa’s case, which had applied the English equity of part-performance with certain restrictions. The law incorporated in TPA is more restricted than English equity in two respects. Firstly, in England the equity protects the interest of also such defendant who has taken possession on the basis of oral agreement, whereas under Section – 53-A, the agreement must be written. Secondly, in England the equity gives also a right of action against the evictor, but Section – 53-A gives no such right. Scope of Section – 53A The following postulates are sine qua non for basing a claim on Section 53 A of the Transfer of Property Act: a) There must be a contract to transfer for consideration any immoveable property. b) The contract must be in writing, signed by the transferor, or by someone on his behalf. c) The writing must be in such words from which the terms necessary to construe the transfer can be ascertained. d) The transferee must in part performance of the contract take possession of the property, or of any part thereof. The transferee must have done some act in furtherance of the contract. f) The transferee must have performed or be willing to perform his part of the contract. 14 So far as applicability of Section 53A is concerned, what is to be seen is that the Section provides for 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 the other conditions of Section 53A. It doesn’t confer any title or interest to the transferee in respect of the property in possession. Except the right to continue his possession, no other title or interest is created is created in favour of the transferee. In the absence of pleadings and evidence of all the essential conditions, making out a defence of part-performance to protect possession claimed by the plaintiff, would not be attracted. 15 The plea under Section 53A of the TP Act raises a mixed question of law and fact, and therefore, cannot be permitted to be urged for the first at the stage of second appeal. 16 Is The Section Retrospective? There is sharp cleavage of judicial opinion on this question. The Madras High Court has consistently held that the section has no retrospective operation and does not apply to transfers effected prior to 1st April, 193017. The Calcutta High Court has held that the section applies retrospectively, except that the section would not apply to transactions which were subject matter of pending actions on 1st April, 1930. 18 This is also the present view of Patna High Court though there are earlier decisions of the Court to the contrary. The Allahabad High Court holds that section 53A applies to transaction that took place prior to 1st April, 1930, provided that the suit is brought after that date. 19 The Bombay High Court agrees with this view. The present view of all High Courts is that Section 53A does not effect any proceeding commenced before the Amending Act of 1929. 20 Limitations Of Section 53A Available only as a defence The Privy Council in Probodh Kumar Das v. Dantmara Tea Co. 21 has held that the right conferred by Section 53A is a right available to the defendant to protect his possession. The Section is so framed so as to impose statutory bar on the transfer; it confers no active title to the transferee. The above law laid down has been followed with approval by the Supreme Court in the case of Technicians Studio Pvt. Ltd. v. Leela Ghosh. 22 It has been held that Section 53A is only a partial importation in the statute law of India of the English doctrine of part performance. Thus, a person who is lead into possession on the strength of a void lease does not acquire any interest in the property, but gets under Section 53A only a right to defend his possession. It can be used only as a defence. 23 Following Probodh Kumar, the Supreme Court again in Delhi Motor Company v. U. A. Basrurkar24 has held that Section 53A is only available as defence to the lessee, and not as confirming a right as the basis of which the lessee can claim rights against the Lessor. This Section does not confer title on the defendant in possession25; and he cannot maintain a suit on title. 26 The Supreme Court has approved this principle. Thus it can be concluded that this section does not create a title in the defendant but merely acts as a bar to the plaintiff in asserting his title. It is limited to the cases where the transferee has taken possession, and against whom the transferor is debarred from enforcing any right, other than that mentioned in the contract. But the words of the Section do not warrant a conclusion that the plaintiff as such is necessarily debarred from the benefit of this Section. 27 The true position as explained by Justice Subba Rao, in a case decided by Andhra Pradesh High Court is: â€Å"whether the transferee occupies the position of a plaintiff or a defendant, he can resist the transferor’s claim against the property. Conversely, whether the transferor is the plaintiff or the defendant, he cannot enforce his rights in respect of the property against the transferee. The utility of the Section or the rights conferred there under should not be made to depend upon the manoeuvring for positions in the court of law, otherwise a powerful transferor can always defeat the statutory provisions of the Section by dispossessing the transferee by force and compelling him to go to the court as plaintiff. Doubtless, the right conveyed under the Section can be relied upon only as a shield and not as a sword but the protection is available to the transferee both as a plaintiff and as a defendant so long as he uses it as a shield. †28 Thus, the correct interpretation of this section is that this section gives to the transferee only the right to defend his possession; this defence of possession may be in the form of plaintiff or defendant. Transfers and Agreements Covered By This Section This Section applies to leases and agreements to lease. Where an agreement to lease is evidenced by correspondence, the lessee is put in possession, and there has been acceptance of rent by the lessor for several years, the Supreme Court held that section was applicable, and the lessee could defend the suit for ejection. 30 It also applies to usufructuary mortgages and mortgages with possession. 31 It however does not apply to a family agreement which does not involve a transfer of property32, or to a partition which is not transfer at all. 33 It also doesn’t apply to license or to the transfer of moveable property. Right Expressly Provided By The Contract The transferor may enforce a right which is expressly provided by the contract. So, if the contract were an agreement of lease not provable for the want of registration, the lessee could resist a demand for rent. Of he did so, he will be disentitled to the benefit of the Section as not being willing to perform his part of the contract. So also where a lessee has already put in possession of certain premises in part performance of an unregistered lease, the lessor can enforce the term of the lease entitling him to re-enter, if there default in payment of six months? Similarly, if the unregistered lease was only for a term, there would be no right to continue in possession after the expiry of the term. 35 Proviso: Transferee for Consideration Without Notice The proviso to this Section protects the rights of a subsequent transferee for value without notice of previous transferee’s rights of part-performance. Therefore, this Section does not affect the rights of transferee for consideration who has no notice of the contract of sale or of part-performance. The purpose of the proviso is to defeat the claim which would otherwise, have succeeded under the main part of this Section. 36 The question of proviso does not arise until and unless the claimant has substantiated his claim under the main part of this Section. 37 The proviso to the Section saves the right of a transferee for consideration who has no notice of the contract or its part-performance. The burden for proving that he is a transferee for consideration without notice is on the transferee. This was so held prior to the enactment of Section 53A. When is Doctrine of Part-Performance not Available This doctrine was not available against other co-owners, i. e. , the two brothers who were not the signatories to the agreement or the consenting party or the recitals show that the agreement was entered into with the consent of the adult members; therefore, the protection of doctrine of part performance was not available to defendant no. 3 against the plaintiffs. Therefore, even if the agreement was valid to the extent of the share of the widow, as held by the lower appellate Court, the remedy for the appellant was to institute a suit for decree for specific performance to the extent of the share of the widow and also a suit for partition as it was a Hindu undivided family property. Conclusion The doctrine of part performance is an equitable doctrine designed to relieve the rigor of the law and provide a remedy when a transfer or an agreement for transfer falls short of the requirements laid down by the law. In England the doctrine was developed by the Equity Courts. In a modified form it has been recognized statutorily in India being embodied in Section 53A. Section 53A of the Transfer of Property Act applies to a person who contracts to transfer immovable property in writing. If the proposed transferee in agreement has taken possession of the property or he continues in possession thereof being already 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, the transferor shall be debarred from enforcing any right in respect of the property. Also, Section 53A does not confer any title or interest to the transferee in respect of the property in his possession. Furthermore, it does not give to the transferee any right of action. It provides merely a right of defence. This is the essence of the principle incorporated in Section 53A of the Transfer of Property Act.