Introduction
Welcome to the official blog of the Law Offices of Kr. Vivek Tanwar Advocate and Associates, where we are dedicated to providing litigation support services for matters related to properties. In today’s blog post, we aim to shed light on the prevailing issues surrounding property, the legal framework in place for their protection, and the steps we can take as a society to combat these acts. Join us as we explore this critical subject and empower you with the knowledge to protect your rights and safety.
History
The law in India has been influenced by English Law, particularly property laws during British rule. To create property laws suitable for the Indian population, the first and second law commissions were established in 1870 and 1879, respectively. Their main goal was to develop property laws that local judges and advocates could easily understand. Finally, on February 17, 1882, the Transfer of Property Act was enacted. This law was derived from the English Law of Conveyancing and Property Act of 1881 but underwent several amendments due to conflicting aspects. In 1927, a Special Committee proposed amendments that were passed in 1929 as Act No. 20. This amendment included Section 53A, which recognized the Doctrine of Part Performance to protect the interests and possession of transferees. Section 53A aimed to prevent fraud and misdemeanours by buyers and ensure the transferee’s right to enjoy the property. It stated that if a transferor or someone on their behalf transfers immovable property in writing, with reasonable certainty, and the transferee acts upon the contract by taking possession or partially using the property, the transferor cannot enforce their rights against the transferee if the agreement is not properly registered. There are certain exceptions mentioned in the contract. The English equity of part performance differs from the Indian doctrine in several ways, including the requirement of a written document in India and the availability of both defence and attack rights in England. Section 53A is a partial adoption of the English equity of part performance.
What Is the Doctrine Of Part Performance?
The doctrine of Part Performance of Contract, as outlined in Section 53-A of the Transfer of Property Act, 1882, allows for the enforcement of certain agreements involving immovable property that are partially performed. It requires a written contract with ascertainable terms, possession of the property by the transferee, acts performed in furtherance of the contract, and willingness to perform one’s part. However, the amendment to Section 53-A in 2001 states that an unregistered and unstamped Agreement to Sell cannot create rights, and a power of attorney must be stamped as a conveyance deed if it grants ownership rights. The stamp duty requirement does not apply if the power of attorney is executed between relatives without consideration.
Principle Of Doctrine Of Part Performance
The doctrine of part performance is a legal principle that applies to contracts and is used to enforce agreements that have not been fully performed. It allows a party to seek specific performance or enforceable remedies in situations where the contract is partially fulfilled, even though the contract itself may not be in writing or may lack certain formalities required by law.
Here are the key details about the doctrine of part performance:
- Definition: Part performance refers to the substantial completion of certain terms or obligations of a contract, indicating the parties’ intent to fulfil the agreement. It involves one party’s performance or partial performance of the contract in reliance on the other party’s promise.
- Oral or Informal Contracts: The doctrine of part performance is particularly relevant when dealing with oral or informal contracts. In many jurisdictions, contracts for the sale of land or agreements that cannot be performed within one year must be in writing to be enforceable. However, if one party has partly performed their obligations under such a contract, the doctrine of part performance may allow them to seek enforcement.
- Elements of Part Performance: To invoke the doctrine of part performance, the following elements must generally be met:
- Substantial Performance: The performing party must have completed a significant portion of their obligations under the contract. The exact threshold for what constitutes “substantial” may vary depending on the circumstances and jurisdiction.
- Change of Position: The party seeking enforcement must have changed their position in reliance on the contract. This means they have relied on the other party’s promise and have taken actions or incurred expenses that they would not have done otherwise.
- Unjust Enrichment: Allowing the party in breach to avoid their obligations would result in unjust enrichment, meaning they would unfairly benefit from the other party’s performance without fulfilling their own obligations.
- Remedies: If the doctrine of part performance applies, the non-breaching party may seek specific performance, which means they can ask the court to order the breaching party to fulfil their obligations under the contract. This is an alternative to seeking damages or other remedies available in contract law. Specific performance is typically granted when monetary compensation would not adequately remedy the situation, such as in cases involving the sale of unique property.
- Limitations: The doctrine of part performance is not universally applied, and its availability and requirements may vary across jurisdictions. Some jurisdictions may have specific statutory provisions that govern part performance, while others may rely on common law principles. It is important to consult the applicable laws and regulations in the relevant jurisdiction to determine the availability and scope of the doctrine.
CASES
Sheth Maneklal Mansukh Bhai v. Messrs. Hormusji Jamshedji 1950
In this case, the court considered the application of Section 53A of the Transfer of Property Act. The plaintiff had a written agreement with the government for a lease, but there was no registered lease deed. The defendants claimed they were permanent tenants and refused to vacate. The trial court ruled in favour of the defendants, but the Bombay High Court reversed the decision. The Supreme Court held that the written agreement signed by both parties was sufficient evidence, and the lack of a registered lease deed did not invalidate the agreement. The decision of the High Court was overturned, and the plaintiff’s rights were upheld. This case established the importance of a written agreement in applying the doctrine of part performance.
Nathulal v. Phool Chand
The Supreme Court established conditions for the doctrine of part performance to be a defence against encroachment. The court stated that if the transferor has agreed to transfer the property with reasonable terms, possession has been given to the transferee, the transferee has acted upon the agreement, and the transferee has performed or is willing to perform their part of the contract, the transferor cannot force the transferee to vacate the property.
Roop Singh v. Ram Singh
It was held that adverse possession is inconsistent with possession under Section 53A of the Transfer of Property Act.
Moolchand Bakhru & Anr v. Rohan & Others
The Supreme Court ruled that letters stating the intention to sell half share of a property cannot be considered a written agreement under Section 53A, and possession of the property must be given to the transferee for the doctrine of part performance to apply.
Union of India v. M/s K.C. Sharma & Co.& Ors
The Supreme Court upheld the High Court’s decision, stating that the respondents were entitled to compensation as they were in possession of the land based on a lease agreement, even without a registered lease deed, under Section 53A of the Transfer of Property Act.
Conclusion
The doctrine of part performance is essential to safeguard the interests of the transferee. It ensures that when a transfer deed is established, the transferee fulfils their obligations and pays for the property. Additionally, it protects the transferee’s possession, even in cases where there is only a mutual agreement or an informal contract. This defence prevents the transferor from encroaching or demanding eviction. Although the doctrine has been provided by the judiciary as a statutory defence, there is a need for further clarity on certain ambiguous aspects.
We are a law firm in the name and style of Law Offices of Kr. Vivek Tanwar Advocate and Associates at Gurugram and Rewari. We are providing litigation support services for matters related to the Transfer of Property Act.