Prachurya Sahu | Symbiosis Law School, Pune

In all agreements involving the transfer of property, the transferor and the transferee need to mutually agree to the transfer for a decided consideration and terms. Further, such a transaction is said to be validly executed only when both parties have completed their obligations under the contract i.e. consideration has been paid or a promise to pay has been made from the transferee and the requisite interest has been transferred by the transferor.

Therefore, an agreement of transfer of property is a reciprocal arrangement imposing obligations as well as benefits on both parties to the agreement which is enforceable at the instance either party. Both parties are expected to carry out their obligations towards the other, in good faith. However, there are cases of fraud committed by the transferors which is where the Doctrine of Part Performance becomes useful. It is an equitable doctrine which is incorporated in Property Law, to prevent such deceitful transferors from taking advantage of transferees who have fulfilled their obligations under the contract.

This doctrine in India is the modified manifestation of the equity principle of part performance developed in England in the case of Elizabeth Maddison v. John Alderson[1] which aims to save the interest of the transferee against the transferors who do not fulfil their obligations.

Transfer Of Property Act, 1882

Section 53A of the TPA encapsulates the Doctrine of Part Performance: –

“Part performance. —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, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed there for 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 doctrine essentially allows a transferee or any person under him to take possession or continue to hold possession of a property whose interest has been so transferred to him and for which the transferee has performed his obligation. It prevents the transferor or any person under him to eject such a transferee. Furthermore, it is settled that the Section does not provide protection to a party who was not willing to perform his part of the contract. For the operation of this right, a transferee must prove that he has or was honestly ready and willing to perform his part under the contract.[2]

Essential Elements

The Supreme Court in Vasanthi v. Venugopal[3] laid down the necessary ingredients to warrant the protection of Section 53A: –

• Pre-existence of a valid contract.
• Transferee must take possession of the property or continue to hold possession under the contract.
• Transferee has performed his part of the contractual obligations or is willing to perform it.

Existing contract

One of the most quintessential elements for the application of Section 53A is the existence of a contract. The Section as well as the doctrine is not applicable to gifts,[4] as they are not considered to figure within the purview of “contracts.”  Such a contract must be:

Valid contract- A contract must be valid on all fronts. This means that it must be enforceable by law under the Indian Contract Act, 1872. In the case of Ranchoddas v. Davaji,[5] the Supreme Court lays down that a valid contract must be for consideration, in writing and signed, the terms necessary to constitute the transfer can be ascertained with reasonable certainty. If the terms are ambiguous or confusing, then this Section cannot be applied.[6]

Written contract- For the application of Section 53A, the contract in question relating to the transfer of property must be in written form.[7] The protection under Section 53A is not available to a person who is in possession of property under an oral agreement of transfer.[8] The contract should not only be written but also executed i.e. signed by the transferor or any other person on his behalf.[9]

Transferee must take possession or continue to hold possession.

The Section applies to all transferees who, in accordance to the contract of transfer, have taken possession of the property or continue to remain in possession as part performance to the contract. In such cases, the transferor shall be debarred from enforcing any right in respect for the property. [10]

There is a significant difference between the probative value of entering into possession for the first time and continuing possession. For claiming the benefit of part performance of a contract where the property was in possession prior to the contract, the transferee needs to show something independent of the mere retention of property as evidence of part performance to seek the protection of Section 53A.[11] A tenant cannot claim the benefit of part performance by a simple plea of retention of property, without doing anything in furtherance of the contract to escape eviction as that would result in misuse of the Doctrine. [12] Similarly, the retention by a mortgagee in possession,[13] after the expiry of the original lease or mortgage or advancement of money for the purchase of stamps[14] is not an act of part performance. However, in a case where the tenant remains in possession after the expiry of an old lease by paying a reduced rent, it is a requisite act of part performance for the renewal of the lease at a reduced rent.[15]

Willingness of the Transferee to perform his part of the contract.

This ingredient is well established and derived from English law based on the maxim, “He who seeks equity must do equity.” In the case of Walsh v. Lonsdale,[16] a person in possession of property in pursuance to a lease, when failed to perform a condition precedent to such agreement of lease, was not allowed to raise equity.

In India, the same principle has been partially embodied in the Section 53A. This section confers no rights on a party who was unwilling to perform his part of the contract.[17] Any transferee intending to claim protection under the doctrine of part performance, must prove that he was honestly ready and willing to perform his part under the contract in question.[18]

Such willingness must also be absolute and unconditional.[19] such protection is contingent on continuous willingness on the part of the transferee to perform his part of the contract.[20] If such willingness is not continuous but exist with conditions, it transforms into an offer and cannot be considered to warrant this section. For example, when the vendee company is willing to pay an amount on the condition that the plaintiff clears his income tax arrears, there is no complete willingness but on conditional or partial willingness.

Doctrine of Part Performance- Sword or Shield?

The nature of right that embodies the Doctrine of Part Performance is only as a shield or protection. As held by the Privy Council[21] and further upheld by the Supreme Court,[22] that this right, though statutory in nature, is not a positive right, but negative in the sense that it is used as a defence only by the transferee against the transferor. While it protects the right of possession over property of the transferor, it does not enrich him/her with entitlement. The section does not create a title in the defendant[23] but imposes a statutory ban on transfer of such disputed property.[24] Neither can the transferee maintain a suit against a third party to the contract for the enforcement of a bar as against the transferor.[25]

It has been rightly been held as a “weapon of defence, but not attack.”[26]

[1] Elizabeth Maddison V/s John Alderson, (1883) 8 App. Cases 467.

[2] Jacob Private Ltd v. Thomas Jacob, AIR 1995 Ker. 249.

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

[4] Hari Pada v Elokeshi Devi, AIR 1940 Cal 254 

[5] Ranchoddas v. Davaji, AIR 1977 SC 1517.

[6] Hamida v. Humer and Ors. AIR 1992 All. 346

[7] Thampikunju v Vachi Yesudasan, 2014 (2) KLJ 79 

[8] V.R. Sudhakara Rao v. T.V. Kameswari, Mahadeva v Tanabai, AIR 2004 Bom 378 

[9] Berendra Huttaya v Gauri Channaya, AIR 1948 Mad. 546

[10] Shashi Kapila v R P Ashwin, (2002) AIR 2002 SC 101

[11] Nanjegowda v Gangamma, AIR 2011 SC 3774

[12] Girija Shankar v Sheela Devi, AIR 2013 CHG. 30 

[13] Pannalal v Labhchand, AIR 1955 Madh Bh 49.

[14] Govindrao Mahadik v Devi Sahay, AIR 1982 SC 989.

[15] Satyaniranjan Chakravarty v Habibur Sobhan, AIR 1933 Cal 393

[16] Walsh v Lonsdale, [1982] 21 ChD 9

[17] A Lewis v M T Ramamurthy, AIR 2008 SC 493

[18] Lakshmi v Karuppathathaal, AIR 2011 Mad. 192 

[19] Chinnaraj v Sheik Davood Nachair, AIR 2003 Mad. 89

[20] Mohan Lal v Mira Abdul Gaffar, AIR 1996 SC 910 

[21] Prabodh Kumar Das v. Dantamara Tea Co. Ltd, AIR 1940 PC 1.

[22] Technicians Studio Pvt Ltd v Leela Ghosh, (1977) 4 SCC 324 

[23] Rajpal v Harswaroop, AIR 2011 Del 203 

[24] Ram Gopal v Custodian, AIR 1966 SC 1438

[25] Patel Natwarlal Rupji v Kondh Group Kheti Vishayak, AIR 1996 SC 1088 

[26] Chetak Construction Ltd v Om Prakash, AIR 2003 MP 145