Rule of Part Performance

Section 53A was enacted in 1929 by the Transfer of property(Amendment) Act

1929 and is based upon the equitable doctrine of part performance in English
law. It is also known as ‘equity of part-performance.’
History
Before 1929 :
1. The application of English equity of part-performance was neither certain
nor uniform.
2. In some cases, it was applied whereas in other cases it was not applied.
3. In Mohammad Musa v. Aghore Kumar Ganguli, the privy council held that
equity of part-performance could be applied to Indian cases.
4. In Ariff v. Jadunath, the privy council did not apply the doctrine of part-
performance in India mainly on two grounds :
a)The agreemeease was oral
b)Express violation of the provisions of statutory law namely , Section 107 , of
the Transfer of Property Act.
5. In Mian Pir Bux v. Sardar Mohammad Tahir , the Privy Council held that
English equity of part-performance was not available in India against express
statutory provisions regarding registration contained in the Registration Act,
and the Transfer of Property Act.
NOTE: The Ariff’s and the Mian Pir Bux’s judgments were delivered after the
enactment of Section 53A but as they went to the Privy Council before 1929 ,
the law dealt in these cases was the Indian law as it was before 1929.
Thus, the application of English equity in India was neither uniform nor certain
and it was necessary to enact law on this subject.
Accordingly, Section 53A was included in Transfer of property (Amendment)
Act 1929.
Section 53A
1. Section 53A of the act imposes a statutory bar on the transferor to seek
possession of the immovable property from the transferee in possession.

2. It disentitles the transferor from seeking possession from the proposed

transferee in possession.

3. For instance, if the transferor tries to take possession forcibly, the proposed
transferee in possession would be entitled to institute a suit to enforce the bar
of Section 53A of the act against the transferee.
Meaning of the Doctrine
The doctrine of part performance of contract is based on the general doctrine
of prevention of fraud. It is meant to protect the transferee who has taken
possession, spent money in further improvements.
When a transferee has, in the faith that the transfer would be completed
according to the law, taken possession, it would be inequitable to allow the
transferor to treat the transferee as trespasser.

Let’s consider a situation where X is the tenant on the property that Y owns. Y
agrees to sell the property on which X is staying to X only. X in furtherance of
it, pays the consideration of amount 1 Lac to Y. the tenancy was to end on
10th, but even after that X stayed in the possession of the property in
furtherance of that agreement. Y, later on, sells the same property to C. C now
becomes the owner of the property and asks X to leave the possession of the
property.
In this case, the questions as to what remedy does X have and is C entitled to
evict X would be determined by the Rule of Part performance.

The title ‘part performance’ itself suggests that a part of a contract has been
performed by a party. And the rule focuses upon saving the interest of the
party who has performed some part of his contract. The Doctrine of Part
Performance has been adopted in Indian Law from the Common Law. Section
53A of Transfer of Property Act, 1882 embodies the Rule of Part Performance.

The Essentials of Section 53A are:

1.A person enters into a contract to transfer an immovable property
*For consideration
* In writing and it must be signed by him or on his behalf
* The terms of the contract must be certain.
2. The transferee
* Either take the possession of the property or any part of the property or if
already in possession, continues the same
* The act of taking possession is done in the part performance of the contract.
* And the transferee who already was in possession prior to the contract does
some act in furtherance of the contract.
3. The transferee is willing to perform or has already performed his part of the
contract

4. The transferor or any person claiming under him cannot enforce any right in
the property that the transferee is in or continues to remain in possession of,
against the transferee, unless the right has been expressly provided by the
terms of the contract.
5. Also, the instrument of transfer has not been completed in the manner
prescribed by law.
The proviso to the Section provides that: the Section will not affect the rights
of a bona fide transferee. Where:
*The transfer was for consideration and
*The transferee had no notice of the previous contract or it’s part performance
The section will not affect the rights of such transferee.
The objective behind the rule of part performance
The Section is based upon the maxim ‘which ought to have been done’.
In execution of a transfer, the law imposes a duty on both, the transferor and
the transferee. Generally, the transferee’s duty is to pay the consideration
according to the terms of the contract and the duty of the transferor is to
execute the transfer deed in a manner prescribed by the law.

The section 53A focuses upon protecting the right of the transferee to retain
the possession of the property where there is no fault on his part, as the
transferee should not suffer because of the fault on the part of the transferor
to complete the instrument of transfer in a manner prescribed by law.
Transfer:
The transfer can be of an immovable property absolutely such as sale, and it
can also be of a right in immovable property. Hence, the rule of part
performance applies to lease, mortgage, etc.

Written Contract:
The situation in Indian Law is different from Common Law.
In India, the contract has to be in writing in order to attract the rule of part
performance. As there is no particular format provided for the contract, it does
not have to be formal. The rule is not attracted in cases of oral contracts where
there is a complete absence of any written agreement.
Just the contract in writing is not sufficient but it should also be signed by the
transferor or by someone else on the transferor’s behalf. If the contract is not
signed, it would not be considered as a valid contract under this section.
Also for the purpose of attracting this section, the contract of sale has to be
registered (after the Amendment). If the contract of sale is not registered then
too the section does not have any application.
The reading of the deed should make the nature of the transaction clear and
also what rights are being transferred to the transferee should be clear.
Dhannalal Ahirwar V. Satyanarayan
The parties entered into an oral contract for sale. No efforts were made to get
the sale deed executed. It was held that the requisite condition for attracting
Section 53A was not fulfilled. Hence, no benefit under the same section can be
provided.
Possession by the transferee:
One of the main essentials of this section is that the transferee at the time of
moving under this section should have possession of the property. The
possession can be taken by the transferee after entering into the contract or
the possession can be a continuing one.
But for attracting this section, the possession of the property should’ve been
taken place in part performance of the contract and for no other purpose.
In case of continuing possession, it has to be shown by the transferee that he
has done something in furtherance of the contract. Mere continuation of
possession by the person who was already in possession prior to the contract is
not sufficient.

Example: X agrees to sell his property A to Y after 2 months. But at the

moment of the agreement Y had no other place to stay, so X allows Y to stay at
his property A. If the contract fails to take place, Y cannot ask for retention of
possession on the basis of the Doctrine of part performance. As the possession
was taken by Y here is not done in furtherance of the contract, but that was
the permission provided by X to Y for a specific purpose.

Act done in furtherance of the contract:

When the transferee was already in possession of the property prior to the
contract, it has to be shown by the transferee that he has done something in
furtherance of the contract. The act is done and the contract must have some
reasonable real nexus.
1. Kukaji v. Basantilal
A mortgaged his house to B and delivered the possession of the same. Later
on, A sold the house to B but didn’t get the deed registered. The consideration
for the sale was mortgage debt. An after some time sold the Property to C and
got that deed registered. C sued B for the redemption of the mortgage. B
moved under Section 53A of TPA claiming retention of possession under part
performance.
It was held that: B was already in possession of the property as mortgagee.
Mere continuance of possession doesn’t constitute a part performance. B has
to show that he did something else in furtherance of the contract.
Payment of consideration Or Purchase of stamp doesn’t amount to act done in
furtherance of a contract.
2. Sardar Govindrao Mahadik v. Devi Sahai
A mortgaged his properties to B and delivered the possession of the same.
Subsequently, there was an agreement between A and B to sell the properties
mortgaged. For the same, the mortgagee advanced Rs. 1000 for the purchase
of stamp to be affixed on the deed. But the sale deed was never registered.

Later on, A sold the property to C. A and C then filed a suit against B for the
redemption of the property. B claimed the benefit of the doctrine of part
performance on the ground that: a sale deed was executed in his favour, he
retained the possession and also provided Rs. 1000 for the purchase of stamp
which should be considered as an act done in furtherance of the contract.
Court held that: the money provided for the purchase of stamp is antecedent
to contract and not an act is done in furtherance of it. B was not entitled to the
benefit of the Doctrine of Part Performance.
Willingness on the part of the transferee to fulfill his part of the contract:
A failure on the part of the transferee to show his willingness to fulfill his part
of the contract would disentitle him to the protection provided under Section
53A or the doctrine.
Rights of a bona fide transferee no affected:
Where there is any subsequent transfer and the transfer is for a consideration,
the transfer would be valid if the transferee had no notice of the pre-existing
contract. The notice would include the actual as well as the constructive
notice.
The transferee must have taken reasonable care before entering the
transaction. In a case where the transferee is unaware of the contract but if by
taking reasonable care he would’ve become aware of it, it would be
considered as the transferee had the constructive notice.
Equity is followed under the doctrine:
The doctrine doesn’t confer any title on the transferee but it only imposes a
ban on the transferor. Also, the only protection afforded to the transferee is to
retain the possession that he has acquired in furtherance of the partly
performed contract.
The right under the doctrine which has been provided to the transferee can be
used only as a defence and hence, it cannot be used as an independent
remedy.
Nature of transferee’s rights under section 53A
1. No title or interest in property:
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.
2. Passive equity; no right of action:
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.
Leading case law dealing with the nature of rights of transferee:
Prabodh Kumar Das v. Dantamara Tea Co. Ltd, The Privy Council held that in
India the equity of part-performance was not an active equity. It does not give
any right of action to the transferee who is in possession of property under an
unregistered contract of sale.

Amendment of Section 53A Transfer of Property Act and other enactments

An amendment has been made in Section 53A of the Transfer of Property Act
by the Registration and other Related Laws Act (48 of 2001) This Amending Act
(48 of 2001) has made following amendments relating to Section 53A :
1. In Section 53A, para 4 of the Transfer of Property Act the words “the
contract, though required to be registered, has not been registered, or,”
Omitted.
2. In Section 17 of the Registration Act, (a) after sub-section (1), the following
subsection shall be inserted :
“(1A) The documents containing contracts to transfer for consideration, any
immovable property for the purpose of Section 53A of the Transfer of Property
Act, 1882 shall be registered if it has been executed on or after the
commencement of the Registration and Other Related Laws and if such
documents are not registered on or after such commencement, then, they
shall have no effect for the purposes of the said Section 53A.”
Frequently Asked Questions
1. What is the sine qua non for basing a claim on Section 53A of the transfer
of property act?
In Vasanthi v. Venugopal , the Supreme Court restated the essential conditions
necessary for application of this section:
1. A written contract for the transfer of an immovable property.
The most important limb of Section 53A is the pre-existence of the contract.
Related case law: Ranchoddas v. Davaji[12] lays down that there should be a
contract and ;
a. It must be for consideration;
b. It must be in writing and signed by the transferor;
c. The terms necessary to constitute the transfer can be ascertained with
reasonable certainty.

2. The transferee takes possession of the property under this contract.

d. The transferee should have taken the possession of the property; or

f. the transferee in possession already should continue in possession and

should have done some act in furtherance of the contract.
Related case law: In Arun Kumar Gupta v. Santosh Kumar, the agreement
contained no provision about transfer of possession ,nor possession was
handed over in fact ,protection of the section was held to be not available.
3. The transferee has either performed his part of contract or is willing to
perform the same.
It is an essential condition that the transferee must be willing to perform his
part of contract.
Related case law: In Jacob Private Ltd v. Thomas Jacob , the Kerala High Court
held that willingness in the context of Section 53A must be absolute and
unconditional.
2. How is the doctrine of Part-performance under 53A ,transfer of property
act , is different from the English equity of part-performance?
Indian law of part-performance may be differentiated from the English law as
under:

1. Under English law, as equity treats that as done which ought to have been
done, even an oral agreement is sufficient to attract the application of the
doctrine. But in India, it is specifically provided that the agreement must be
contained in a written document.

2. Under English law, the doctrine can be used for both attack and defence (a
passive as well as active equity). In India, the doctrine can be used only for
defence (a passive right) and no right of action is given to the transferee.

3. In India, ‘possession’ is a must, while in England any act in furtherance of the

contract also suffices. ‘

3. Section 53A is a partial importation of English Equity of part- performance.

Comment.
A3. The law incorporated in Section 53A is more limited than English equity for
reasons:
1. In England the equity also protects the interest of such defendant who has
taken possession on the basis of oral agreement, whereas , under Section 53A
,the agreement must be written.
2. In England the equity gives right of action against the evictor , but Section
53A gives no such right.
Thus , the rule of part-performance administered in England is now a statutory
law in India but with suitable changes.
Accordingly , it has rightly been said that Section 53A is a partial importation
into India of the English equitable doctrine of part-performance.
4. Can the bar of Section 53A be imposed on the third party?
No, a suit by proposed transferee against the third party of the contract /
agreement to sell, for enforcement of the bar created by Section 53A shall not
be maintainable against the third party to the contract/agreement to sell.

5. Can doctrine of part-performance be invoked to file a suit for possession?

Application of Sec. 53A to Suit for Possession
1. Sec. 53A expressly provides that the transferee should have taken
possession of the property (or a part thereof), or if he being already in
possession should continue in possession and should have done same act in
furtherance of the contract

Difference between the Doctrine of part performance followed in Common

Law and Indian Law:
Under English Law, there is no need for a written agreement to attract the
doctrine. An oral agreement can also invoke the doctrine of part performance.
Whereas in Indian Law, the contract or the agreement has to be in writing.
In India, the protection provided under the doctrine can only be used to
defend and it cannot be used as an independent remedy. Whereas in English
Law, the doctrine can be used as both: a defence and an attack. Hence, it can
be used to enforce a right of possession and not merely to protect it.