Agreement to Sell - S. 53A of Transfer of Property Act

Patel Natwarlal Rupji vs Shri Kondm Group Kheti Vishayak & Anr
http://indiankanoon.org/doc/484854/

The contract for sale of immovable property does not create any title except when covered under Section 54 of the Act and registered under Section 17 of the Registration Act, Equally, it does not create an interest in the property. It merely gives a right to enforce it specifically as an equitable relief in a court of law. 

Section 53-A of the Act merely protects the transferee's right to retain possession of the property had under the contract and imposes a statutory bar on the transferor to seek possession of the immovable property from the transferee. Equally, Section 53-A does not confer any title to the defendant in possession nor can he maintain a suit on title. Section 53- A can be used as a shield but not as an independent claim either as a plaintiff or as a defendant.

Section 53-A of the Act provides that where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf which constitutes 'transfer', and the transferee has, in part performance of the contract, taken possession of the property of the transferor, 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 the contract, though required to be registered, has not been registered, 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.

Though the doctrine of part performance embodied in Section 53-A of the Act is part of equitable doctrine in English Law, Section 53-A gives statutory right which is available to the transferee for consideration in possession of the property had under the contract. In terms of the section, so long as the transferee has done and is willing to perform his part of the contract or, in other words, is always ready to abide by the terms of the Contract and has performed or is always ready and willing to perform his part of the contract, the transferee is entitled to avail of this statutory right to protect his possession as a shield but not as a sword. The right to retain possession of the property rests on the express provisions of the Act and on his compliance thereof. A person who pleads equity must come to the court with clean hands and he alone is entitled to the benefit of his section. The section does not create a right or title in the defendant. It merely operates as a bar to the plaintiff to assert his title. The transferor is barred from enforcing his rights other than those expressly provided by the contract. The section, therefore, imposes a bar on the transferor, when the Conditions mentioned in the section are fulfilled by the transferee, and section bars the transferor to enforce his rights against such transferee or person deriving right, title and interest from such transferee.

In Sardar Govindrao Mahadik & Anr. v, Devi Sahai & Ors., [1982] 1 SCC 237, Supreme Court had held that the court would look at the writing that is offered as a contract for transfer for consideration of any immovable property, then examine the acts said to have been done in furtherance of the contract, and find out whether there is a real nexus between the contract and the acts pleaded as a part performance so that, to refuse relief would be perpetuating the fraud of the party, who after having taken advantage or benefit of the contract, backs out and pleads non-registration as a defence.

Conditions to obtain relief under S. 53A are :

(i) there must be a contract for transfer for consideration of any immoveable property;

(ii) the contract must be in writing, signed by the transferor, or by someone on his behalf;

(iii) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained;

(iv) the transferee must in part-performance of the contract take possession of the property, or of any part thereof;

(v) the transferee must have done some act in furtherance of the contract; and

(vi) the transferee must have performed or be willing to perform his part of the contract;