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Doctrine of Past Performance(S.53A) of Transfer of Property Act


Section 53A of Transfer of Property Act
Section 53A of Transfer of Property Act

Content:-


Section 53A, TPA

The doctrine of part performance, as embodied in Sec. 53A, Transfer of Property Act (TPA) requires the following four conditions to be fulfilled:


  • There should be a contract to transfer, for consideration, any immovable property by a writ signed by the transferor or on his behalf, from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty.

  • The transferee should, in part performance of the contract, have taken possession of the property or any part thereof, or, if already in possession, should have continued in possession in part performance of the contract, and should have done some act in furtherance of the contract.


  • The transferee should have performed, or should be willing to perform, the part of the contract.


  • If all the above conditions co-exist, then notwithstanding that the contract though required to be registered ,has not been completed in the manner prescribed by law, the transferor (or any person claiming under him) will be debarred from claiming any relief, in respect of the property, as against the transferee which is inconsistent with the terms of the contract.



Principle of doctrine of part performance

The doctrine of part performance originated in English law as an equitable remedy designed to safeguard transferees in certain contractual agreements.


At its core, this principle hinges on the notion that if one party makes a commitment to another and allows that party to act upon it, they create an equity against themselves.


This equity cannot be disregarded by invoking technical deficiencies in the formalities of the contract.


Fundamentally rooted in the prevention of fraud, the doctrine of part performance aims to protect transferees who, despite incomplete formalities such as lack of registration, have taken possession of the property and made substantial investments in improvements.


When a transferee, in good faith, enters into a transaction and takes possession based on the expectation that the transfer will be completed in accordance with the law, it would be unjust to treat them as mere trespassers if the transferor seeks to renege on the agreement.



Analysis of the Doctrine 


Key points to note about the doctrine of part performance:


  1. Existence of a contract: The doctrine applies when there is a written contract signed by the transferor or on their behalf. Without a valid agreement, the doctrine cannot be invoked.

  2. Act of part-performance: The transferee must take possession of the property or continue in possession and perform some act in furtherance of the contract. Acts done in relation to the contract after its execution are considered part-performance.

  3. Nature of the act: Acts done in furtherance of the contract must be directly attributable or referable to the contract, not independent of it. For instance, arranging payment of purchase price is not considered part-performance, but paying increased rent under a new agreement is.

  4. Payment of consideration: While payment of money alone is not sufficient, a series of acts in part-performance, including payment of consideration, can establish the existence of a contract.

  5. Taking possession: Taking or giving possession of the property is a significant act of part-performance, indicating a different position from the legal standpoint.

  6. Willingness to perform: The transferee must be willing to perform their part of the contract. Equities cannot arise in favor of someone unwilling to fulfill their obligations.

  7. Anticipatory breach: If one party repudiates the contract, the other party can seek specific performance only if they show readiness and willingness to perform, despite the breach.

  8. Sequence of obligations: The sequence of obligations under the contract is crucial in determining willingness to perform. If one party fails to fulfil their obligations first, the other party cannot be compelled to perform.


In the case of Nathu Lal v Wool Chand, the Supreme Court clarified that the transferee cannot be dispossessed if the transferor fails to fulfil their obligations first, as per the contract's sequence. This underscores the importance of mutual compliance with contractual terms for invoking the defense of part-performance under Section 53A.



Application of the section  

The application of this section is not limited to cases where a contract has not been registered.  The enforceability of a contract is irrelevant to Section 53A, and it does not support a claim for damages for breach of contract.


This section requires the transferee to take possession of the property as part of the contract, but only in a lawful manner. It does not protect transferees who take possession unlawfully, as established in the case of Maram Pocham v The Agent of the State Govt.



Doctrine of Part Performance-  2001 Amendment

The doctrine of part performance, as outlined in Section 53A, underwent an amendment with the enactment of the Registration and Other Related Laws (Amendment) Act, 2001.


This amendment removed the provision stating "the contract, though required to be registered, has not been registered" from Section 53A, effective from September 24, 2001.


The impact of this amendment is that documents pertaining to contracts for the transfer of immovable property covered under Section 53A "shall be registered" if executed on or after the commencement of the 2001 Amendment Act.


If such documents are not registered after this commencement, they will not be effective for the purposes of invoking Section 53A.


Before the 2001 Amendment, an exception was made for unregistered documents to claim the protection of the doctrine of part performance.


Typically, unregistered documents concerning the transfer of immovable property could not be admitted as evidence to establish a claim or right.


However, an amendment to the Registration Act in 1929 allowed unregistered instruments to be considered for the doctrine of part performance under Section 53A.


With the 2001 Amendment, the clause providing exemption to unregistered documents for invoking the doctrine of part performance was removed from the Registration Act. Thus, the law reverted to its pre-1929 position.


Currently, the legal requirement is that the document relied upon by the transferee to protect their possession must be both in writing and registered, besides being signed by the transferor or their representative.


The doctrine of part performance applies only to partially performed contracts. If a contract of sale is registered, it constitutes a complete transfer. Therefore, the doctrine can be invoked only in cases where there is an agreement to transfer the property, not a contract to sell it.


Possession based on an unregistered agreement to sell the property can only be protected if the agreement itself was registered, unlike before the 2001 Amendment.



Exception to Sec. 53A - 

The provision in this section does not affect the rights of a subsequent transferee for consideration who has no knowledge of the contract or its part performance.


According to Section 40, such a subsequent transferee obtains a valid title to the property, and the previous transferee, holding possession under the contract, must surrender possession to the new transferee.


In essence, a person seeking the protection of Section 53A is shielded from eviction by the transferor, but not from displacement by a bona fide transferee for value from the transferor.


However, the doctrine can be invoked against a gratuitous transferee (without consideration) and also against a transferee for value if they have knowledge of the contract or its part performance.


It should be noted that possession (by the previous transferee) typically serves as notice of the title of the person in possession.

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