Doctrine of Part Performance PDF

Preview

Summary

Download Doctrine of Part Performance PDF

Description

Property Law PROJECT SUBMISSION

TOPIC: Part Performances under property Law

Submitted by Priyanshu Grover

Batch: 2017-22

Course: BA-LLB

Division: C PRN:17010223031

In August, 2019

Symbiosis Law School, NOIDA Symbiosis International (Deemed University)

CERTIFICATE The project entitled “Part Performances under property Law” submitted to the Symbiosis Law School, NOIDA for Property Law as part of Internal assessment is based on my original work carried out under the guidance of Mr. Vikram Singh, Course-in-Charge, Property Law. The research work has not been submitted elsewhere for award of any degree. The material borrowed from other sources and incorporated in the project has been duly acknowledged. understand that I myself could be held responsible and accountable for plagiarism, if any, detected later on.

Signature of the candidate Date:

I

Introduction Property is one of the most fundamental elements of the socio-economic life of an individual. character. 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, i.e. between two individuals. Before the Transfer of property Act (1882), the transfers of immovable property were mostly governed by English equitable principles as applied by Anglo-Indian Courts. The doctrine of “part-performance” is one of the equitable doctrines applied by these Courts. The Doctrine of Part Performance, based on principle of equity in English Law, was subsequently added to the Transfer of Property Act (1882) via Amendment Act in the year 1929 and incorporated as provision under Section 53A. In the law of Contracts (for example, the contract of sale), no right passes to another until the sale is complete but if any person entering into a contract has done his part of performance, he is entitled to either reimbursement or specific performance in case the other party is reluctant to act on its part of the performance. Therefore, under Section 53A of the Transfer of Property Act, if a person enters into a contract with another and lets the other person act on it, he creates an equity for himself that cannot be resisted on the mere grounds of absence of formality in evidence or contract in such a transfer. The doctrine of part performance provides for a statutory bar on the transferor to seek possession of immovable property from the transferee in possession.

Evolution of the Doctrine The Doctrine of Part Performance in Indian Law is based on the English principle of Equity which believes that if a man has made a bargain with another and allowed that other to act upon it, then such person cannot resist the contracts on the grounds that performance has not been done in the manner laid down in the contract or want of evidence. The English principle of equity was applicable in the Statute of Frauds where, in Section 4 of the Statute, it was provided that no action or suit will be maintainable against transfers relating to land which is not in writing by the party in question in the contracts. The courts faced hardship in strict application of this provision but in such cases, courts intervened on equitable grounds and held that where one party has executed his part of the performance in a contract/agreement in the confidence that the other party would act upon its part and if later the other refuses to perform his part, it would be fraud upon the former party. This is the basic idea of principle of equity in the English Statute of Frauds. The latter rule was established in the case law of Elizabeth Maddison v. John Alderson1, where, a man induced a woman to serve as a house-keeper without wages as against a verbal promise to leave her in his will a life-estate in his land. The man died without making a will and the woman claimed specific performance of the verbal contract based on the English doctrine of equity but the court said that continuance in her service was not in direct reference to the contract was “to be understood even without existence of such contract”. This case established an important doctrine that where a person has taken possession of an immovable property on the basis of a contract of sale and he has either performed or is willing to perform his part of the contract he cannot be evicted on the ground that sale was unregistered or not done in manner specified in the contact, i.e. on the basis of mere formality. This laid the foundation of the doctrine of Part performance. 2 The ratio of Maddison’s case was applied in Mohammad Musa’s Case3 in India.

1 (1883) 81 A.C. 467. 2 Narsimhasetty v. Padmesetty, AIR 1998 Kant 389 (FB). 3 Mohammad Musa v. Agore Kajar Ganguli (1914) 42 Cal. 801.

Extent and Scope of Part Performance The English Concept of Equity as applicable under Statute of Frauds, as held in cases ranging from Maddison v. Alderson to Walsh v. Landsdale, whose ratios was applied in many Indian cases as precedents, propounds that in a contract between two parties, whether written or unwritten, if one party has acted upon his/her part in a contact, an equity is created for the other and thus, otherwise fraud would be committed on the party who performs an act in furtherance of its performance in confidence of the terms of the contract. Similarly, the Indian concept of Part Performance, incorporated in Section 53-A of the transfer of Property Act has been adopted from the above principle of equity and extends to providing a defence to the transferee in two types of claims, namely – one, in case of non-registration of deeds, wherein the Registration (Amendment) Act, 2001 and Section 53-A work in consonance and provide the effect that if any party has acted on his/her part of the performance, such party in a contract will not be told to evict the property merely on the ground of nonregistration of deed or documents; second, in cases where the instrument of transfer is not in proper format and holds the effect as a defence protecting the rights of a transferee and not annulling such rights merely on the grounds that the contract or document were not in proper format or that the transfer did not happen in the manner provided in the contract.





Although Section 53-A, in substance has been borrowed from the English Equitable Doctrine, yet it is not a total importation of that doctrine. There are certain notable differences between the two:  

While the English Doctrine applies to is applicable to every agreement, oral or written, the Indian Doctrine of Part Performance is applicable only to the Written Contracts. In England, defence for part-performance is both active and passive, i.e. transferee is entitled to defend his possession as well as file and independent suit claiming possession. In India, however, the doctrine is applicable only as a defence and therefore, in the passive form only.

Essential Conditions of Part Performance (Section 53A) The First Essential is that there must be a contract to transfer for consideration any immovable property. Section 53-A applies only to transfers of immovable property and movable property is beyond the scope of the provision. Immovable property has been defined under Section 3 of the Transfer of Property Act and does not include growing crops, standing timber and grass and if any of these is under consideration, the provision contained in Section 53-A will not be applicable. No defence of part performance can be taken in case of possession of movable property. As held in Hameed v. Jayabharat Credit and Invest. Co.4, that Section 53-A will not apply where there is any stipulation authorizing the owner to seize a vehicle on hire purchase for non-payment of an instalment and such stipulation will be valid. The second essential of Part Performance under Section 53-A is that the contract must be in writing signed by the transferor, or by someone on his behalf. This essential consists of two elements (a) the contract must be in writing and (b) the contract must be signed by the transferee or someone on his behalf. The writing so mentioned under Section 53-A can be in any form but should be such so as to easily ascertain the terms of the contract. As it was noted in the case of Allam Gangadhar Rao v. Gangarao5, “an oral agreement for part performance may not suffice but such an agreement reduced into writing may be valid under Section 534 AIR (1986) Ker. 206. 5 AIR 1968 AP 291.

A” and therefore, even an oral agreement which will not be valid by itself, when reduced to writing will be a valid contract for claiming defence under the said provision, Similarly, in the case of N. Patra v. SG Patra and Others6, a claim for part performance under an oral agreement is not maintainable and therefore would be unsustainable under law. Another important element is that the contract must be in writing and signed by the “transferee claiming to protect the possession or someone on his behalf”. This involves two cases- one in which transferee signs the contract or the other where he has specifically interested someone to sign it on his behalf, both of which will have a binding effect on the transferee and will be necessary for attracting the provisions of Part Performance in Indian law. The third essential is taking or retaining possession of the property, in which there are two important subelements including the position of the transferee after taking possession and the position when possession is retained. When the transferee takes corpus of the possession after the contract to transfer that property is signed, the requirement of this element of the section is completed provided that it is referable to the contract and contract alone. However, if transferee remains in possession of the property prior to the establishment of a contract, it is sufficient that the transferor proposes and transferee agrees to that proposal to hold on to possession of the property. For example: X lets out his villa to Y for lease for 5 years. After the expiration of the lease, X proposes to sell the same villa to Y for Rs. 1,000, and therefore, Y would now retain the possession of the property and would satisfy the essential of Section 53-A. “The fourth element is that the transferee has done some act in the furtherance of his part of performance which shall be referable to the contract. This, in particular, applies when the possession is retained. The purpose of bringing such an act in furtherance of the performance is to prove that the transferee has not taken possession accidentally or casually but as a part of the contract under consideration and thus, would form a Part Performance under the meaning of Section 53-A. As it was held in the case of P.C. Thomas v. Lalita Beevi7 that one who is already in possession of the property and claims the benefit of the doctrine of part performance must have done something independent from the mere retention of possession to evidence the act of part performance.” “Taking possession in itself does not constitute part performance and some “further act” must be done referable to a pre-existing contract. Such an act must not be done as a past act or in relation or referable to any other contract. A direct co-relationship must be established between the act done on furtherance and the contract in whose furtherance such act has been done.” The last essential of the Doctrine of Part-Performance as under Section 53-A is that the transferee must be willing to perform his part of the contract. In this element, if the transferee has not yet performed his part of the performance, another angle arises, i.e. he must be willing to perform the same. The assumption is that the law will protect the interests of the transferee only when his hands are clean and he is willing and ready to perform the act which constitutes his part of the performance. For example: In part of a contract between A and B, money is to be paid by A to B, then in this case A’s willingness will be determined if he tenders the money at the right time to the transferor. In the case of Govind v, Harridutt8, two months were given for registration of a deed, in which period the transferee remained ready and willing but the transferor did not execute the deed. The court held that in such cases time would not be of essence and only thing needed to be proved is that the parties were ready and willing, which may be implied from the conduct of the parties. Similarly, in Jawahar Lal Wadhwa v. Haripal Chakerbortey9, the Supreme Court reiterated that the transferee must perform or be willing to 6 AIR 1998 Ori. 19. 7 AIR 1993 Ker. 335. 8 AIR 1977 S.C. 1005. 9 AIR 1989 S.C. 606.

perform his part of performance and failure on part of transferee to pay monthly instalments would disentitle him of the protection granted under section 53-A.

Judicial Pronouncements In analysis the effect of Judicial Pronouncements upon the evolution of the Doctrine in India, such shall be viewed under two phases of time- one before the incorporation of Section 53-A in 1929 and the other after its incorporation in the Transfer of Property Act, 1882.

Indian Legal Position on Part Performance prior to 1929 Various decisions of Courts in India had established that as doctrine of part performance in England takes gives effect to take an oral contract out of the Statute of frauds, thus in India, it would take a document requiring registration out of Registration Act and Transfer of Property Acts. The Court also held that in absence of an explicit and unequivocal document stating such a contract between the parties, the woman’s claim cannot be established, thus recognising that even for part performance, the contract must be unequivocal. This principle was further reiterated in the Indian Case of Mohammad Musa v. Agore Kajar Ganguli10, where there was a contract between parties for compromise on the division of property which was recorded in a Razinama. However, the Razinama was not registered but the parties acted on it for thirty or forty years and later raised the representative of one of the parties sought to repudiate the razinama on the basis of non-registration. The court held that mere fact of an absence of formality (i.e. non-registration of Razinama) would not repudiate the Razinama and the terms therein. However, in the Privy Council Judgement of Ariff v. Jadunath11, it was held that the English doctrine of Part-performance was inapplicable in India. This decision therefore, emphasised on the need for an unequivocal and written contract indicating an agreement of sale between parties. Similarly, in Pir Bux v. Sardar Mahomed Tahar12, the Privy Council held that doctrine of part-performance was not available in India by the way of an action of ejectment.

Indian Legal Position on Part Performance post 1929 In Govindrao Mahadik v. Devi Sahai13, the court further propounded the idea that an independent act than a mere possession of property was required to proved in such case. A different aspect related to the Doctrine was dealt with in the case of Serandaya Pillai v. Sankaralingam Pillai14, in which it was said in the judgment that as per the section, gift, along with sale, lease, mortgage and exchange require a written contract to take place and that the contract should be for a consideration. In the case of Srimant Shamrao Suryavanshi and Anr. V. Prahlad Bhairoba Suryavanshi 15, all the requirements of Part Performance were complied with and the transferee was able to prove that he was willing to perform his part of the contract which fulfils the essential of performing some act in furtherance of a contract, either in taken possession or in continued possession of the property.

Exceptions to Part Performance 10 (1914) 42 Cal. 801. 11 (1931) 58 I.A. 91. 12 I.L.R. 58 Bom. 650. 13 AIR 1982 SC 989. 14 (1959) 2 Mad LJ 502 (506) 15 (2002) 3 SCC 676.

There are certain exceptions to the Doctrine of Part Performance and it is stated that Section 53-A shall not affect the rights of bona-fide purchaser or the rights of the transferee who has no notice of the contract or of the part performance.16

Conclusion and application of the doctrine of Part Performance Section 53-A provides a protection to the transferee that he cannot be dispossessed or ejected by a legal process. It does not confer any title on the transferee nor does it give him any additional rights than what he has got under the original contract. The transferor will, however, be free to impose against the transferee any other right that he may have reserved for himself under the main contract. It is therefore quite true that section 53 A confers only a limited right to a person claiming relief under it. Judicial Intervention in applying this doctrine has been a major step in its development in India, The position that mere account of nonregistration does not extinguish the defence available to the transferee, has undergone certain degree of development because now Section 53-A does not stand as a substitute to Registration (Amendment) Act, 2001 but as registration has now been made compulsory, Section 53-A has been amended to incorporate the same. The Courts apply this Doctrine in providing a defence (though passive) to the transferee in good faith enter into a contract and perform their part of the promise and thus creates an equity for parties of the contract despite the irregularities in documentation or in procedure. This provision is a very important provision available as a defence to the transferee for enforcing his rights under the Transfer of Property Act, 1882.

BIBLIOGRAPHY 16 Proviso to Section 53-A.

Books: 1. Dr. G.P. Tripathi, “The Transfer of Property Act”, Central Law Publications, Reprinted (2018 Edition). 2. S.N. Shukla, “Transfer of Property Act”, Allahabad Law Agency, 29th Edition (2015).

Cases: 1. Elizabeth Maddison v. John Alderson (1883) 81 A.C. 467. 2. Narsimhasetty v. Padmesetty, AIR 1998 Kant 389 (FB). 3. Mohammad Musa v. Agore Kajar Ganguli (1914) 42 Cal. 801. 4. Hameed v. Jayabharat Credit and Invest. Co AIR (1986) Ker. 206. 5. Allam Gangadhar Rao v. Gangarao AIR 1968 AP 291. 6. Govindrao Mahadik v. Devi Sahai AIR 1982 SC 989. 7. Serandaya Pillai v. Sankaralingam Pillai (1959) 2 Mad LJ 502 (506) 8. Srimant Shamrao Suryavanshi and Anr. V. Prahlad Bhairoba Suryavanshi (2002) 3 SCC 676. 9. Mohammad Musa v. Agore Kajar Ganguli (1914) 42 Cal. 801. 10. Ariff v. Jadunath (1931) 58 I.A. 91. 11. Pir Bux v. Sardar Mahomed Tahar I.L.R. 58 Bom. 650.

Legislations and Statutes 1. Transfer of Property Act, 1882 2. Transfer of Property (Amendment) Act, 1929 3. Registration (Amendment) Act, 2001...