UNIVERSITY OF PETROLEUM AND ENERGY STUDIES

COLLEGE OF LEGAL STUDIES

PROJECT OF TRANSFER OF PROPERTY ACT

TOPIC: SECTION 53A, PART PERFORMANCE

SUBMITTED BY: SUBMITTED TO:

Mrs. Yasha Sharma

Raushan Kumar

Bba Llb Batch 2

500053937

R760216087
Objective of the Study

The objective of the study is to know the extent and scope of “any right” debarred, which was
procured by the transferor in respect of the “property” and what kinds of property can be covered
within this section and what is the meaning of “taken or continued in possession” of the property.

Hypothesis

The provision provides a statutory right to the transferee against any right of the transferor to
defend his possession over the property, either taken possession or right in continuance of the
possession, the scope of which is discussed in this project.

Introduction

Section 53A of the Transfer of Property Act, 1882 seeks to protect the prospective transferees by
allowing them to retain the possession over the property, against the rights of the transferors,
who after the execution of an incomplete instrument of transfer, fails to complete it in the
manner specified by law, without there being any fault on part of the transferee.

While understanding the concerned phrase, it is important to know the meaning of “any right”,
“property” and “taken or continued in possession”, which the project will deal about. From
the preceding phrase, it is clear that the “any right” is talked about in respect of the transferor or
any person claiming under him to not to have his rights enforced against the rights of the
transferee and any person claiming under the transferee. Thus, the project will deal with “any
right of the transferor.” As to the property, the author shall look into the meaning and scope of
the word “property” and what all can be included in the word property. Also, the phrase “taken
or continued in possession” will be dealt with in order to establish a reasonable link with the
rights of the transferor and the transferee as any right is only subject to the possession being
taken or already in possession of the transferee and no other condition.

Section 53A, Transfer of Property Act, 1882

Part performance.—Where any person contracts to transfer for consideration any immoveable
property by writing signed by him or on his behalf from which the terms necessary to constitute
the transfer can be ascertained with reasonable certainty, and the transferee has, in part
performance of the contract, taken possession of the property or any part thereof, or 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 2[***] where there is
an instrument of transfer, that the transfer has not been completed in the manner prescribed
therefore by the law for the time being in force, 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: Provided that nothing in this
section shall affect the rights of a transferee for consideration who has no notice of the contract
or of the part performance thereof.

The concept of part performance has been taken from English Law. This principle though is an
English doctrine, but in India it has been incorporated with some differences. Thus, the English
doctrine of Part Performance and the Indian doctrine of Part Performance are different in some
aspects. This principle was brought by the amendment made in the Transfer of Property Act.
Before the amendment, the English doctrine was applied to the cases of part performance. “This
doctrine is a partial importation of the English doctrine of part performance. It furnishes a
statutory defense to a person who has no registered title in his favour to maintain possession.

Following conditions should be complied under Section 53A;

1. There should be a contract for consideration in writing and same should be signed by the
transferor;
2. The contract should be for transfer of immovable property and from therein the term
necessary to constitute transfer should be certainly ascertained;
3. The transferred should has taken possession of the property and has done something for
furtherance of the contract;
4. The transferee should be ready and willing to perform his part of the contract; and
 5. In this case even without execution of sale deed, the transferee acquires the right in the
property and the transferor cannot claim any right in respect of property under
consideration other than the rights expressly provided in the terms of contract.

For applying the doctrine of Part performance, there are certain conditions that need to be
fulfilled which are as follows:

 that the transferee has, in part performance of the contract, taken possession of the
property or any part thereof, or 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,
 that the transferee has performed or is willing to perform his part of the contract, and
 that the plea of part performance is not available to be raised against a transferee for
consideration who has no notice of the contract or of the part performance thereof.

Also, this doctrine, which is a statutory right, cannot be denied on the ground of laches. This is
available only as a defense for the transferee against the transferor. The transferor’s rights, if
there exists the defense of part performance, cannot invoke any of his rights to get the property.
Though the right is available to the transferee against the transferor, and that it protects the right
of the transferee of possession over the property, it does not provide any entitlement to the
transferee. It only provide with the right to remain or obtain the possession over the property by
the transferee.

Meaning and scope of “any right”

In concern with the given principle, it is important to know the meaning and scope of “any right”
of the transferor against the transferee. What all are the rights of the transferor or any other
person claiming under him. Since, it is “any right” that the transferor is debarred to enforce, it
means that all the rights that the transferor is holding against the transferee in respect of the
property has been prohibited to enforce.

Findings of the project are that the transferor does not hold any right in respect of the property
against the transferee in case the transferee is well able to establish that he has performed his task
in furtherance of the contract to transfer. The transferor or any other person claiming under him,
in such a case cannot enforce his rights to get back the property, for which the transferee taken
possession or was already in possession of the property. This, not only means that the transferor
is debarred from enforcing his right in the court of law but any other means outside the court of
law which the Courts cannot upheld. This is the right provided to the transferee to protect his
possession. Debarring of rights does not mean some specific rights, it means any right that the
transferor is having against the transferee in respect of the property taken in possession or
already in possession.

One of the major requirements for the applicability of the doctrine of Part Performance under
Section 53A of the Act is that the application of this doctrine should not affect the rights of the
transferee for consideration without notice of the contract or part performance thereof. This is the
main reason why there is no right available to the transferor or any other person claiming under
him against the transferee or any other person claiming under the transferee. Debarring of the
transferor’s rights and the not affecting the rights of the transferee cohere with each other. It is a
protective shield provided to the transferee to protect his property rights against the transferor,
i.e., this can only be used as defence by the transferee.

The rights of the transferor are taken in respect of the kind of “property” dealt within Section
53A of the Transfer of Property Act, 1882. This section only talks about immovable property and
not movable property. Immovable property has been defined under three provisions namely,
Section 3(26), General Clauses Act, 1897 and Section 2(6), Registration Act, 1908. But in any of
the definitions, the phrase immovable property defined has a vague definition. In general,
immovable property is any estate or interest over land which is a benefit to arise out of land.
Now talking of land, the land in general includes things attached to the Earth or anything
permanently fastened to anything attached to the Earth, but not standing timber, growing crops or
grass as defined in the provisions talked about.

One other important requirement for the application of this doctrine is that there should be a
contract to transfer of an immovable property for a consideration Thus, two things can be
inferred from the given phrase, that the property transferred should be an immovable property
and that the property should be transferred for a consideration. This implies that the two
qualifications are jointly necessary for the application of the doctrine and where any of the two
qualifications are missing, the doctrine as a whole fails to apply. Application of either the two is
individually not sufficient. Thus, only a certain kind of estates can be brought in into the
category where the doctrine of part performance can be applied. This section specifically
provides for a contract to transfer of property should take place in writing. Section 9 of Transfer
of Property Act, 1882, talks about the oral agreement or contract unless expressly required by
law. Since, Section 53A expressly provides for the contract to transfer or property to be made in
writing, thus, there is no applicability of Section 9 of the Act in this case. Also, one important
requirement of the law is that the contract should be made for a consideration, or else the
doctrine would not be applicable. Considering the two elements or the essentials, it can be said
that the requirement of the two is must. If there is no written contract or no consideration for the
contract or both, the doctrine cannot be applied. This also brings to the point that only in the
estates where there is a requirement of consideration can the doctrine is applied.

Meaning and scope of “Taken or continued in possession”

Also, the right of transferee over the property which is “taken or continued in possession” is
dealt in detail as to their differences and requirements and what right do the transferee hold when
the property is in the possession of him or under any other person claiming under him.

There lies a difference in taken possession and already in possession of the property, that in order
to invoke the doctrine of part performance, the transferee must take the possession of the
property in furtherance of the contract to transfer and if the transferee was already in possession
of the property, then he must do some act which must constitute an act of part performance.

The difference is that in taken possession, the transferee must take possession of the property or
any part thereof, and in the case the transferee is already in possession, the transferee must do
some act in furtherance of the contract and it should be something independent of the mere
retention of the possession of the property. In case of the transferee taking possession for the
first time, mere taking possession would be a strong evidence to prove that an act (to take the
possession) was done in furtherance of the contract. In case of transferee already in possession of
the property, the transferee must do some independent act than a mere retention of possession
over the property to evidence part performance and the act done should be in furtherance of the
contract. Only then will the court consider the plea of part performance.

The acts of part performance, if they preceded the contract, could not be evidence of part
performance, unless performance is a condition precedent without the fulfilment of which the
promise could not be a binding contract.

Thus, where the transferee has proved his claim over property through part performance, the
transferor’s rights does not stand validated in the manner that the transferor cannot invoke any of
his rights over the property against the transferee. Here, any right of the transferor thus, is related
to the possession taken over by the transferee and his subsequent proving of the same. Any right,
thus, include all the rights that the transferor has over the property. Thus, the transferee cannot be
evicted from the property and has full right to enjoy the property pursuant to the contract made
between the parties. Thereby meaning that the rights of the transferee supersede the rights of the
transferor.

But, this does not mean that the transferor does not have any right over the property. Since, the
doctrine of part performance only provides as the transferee with the possession of the property,
it does not confer any entitlement.

In the case of Srimant Shamrao Suryavanshi and Anr. V. Prahlad Bhairoba Suryavanshi1, it
was held that Even if the limitation period was over, a person can obtain possession of property
in part performance of a contract to sale; the transferee can defend his possession in case filed by
the transferor. but this can only be done is the transferee can well prove that he has done some
act in furtherance of the agreement or the contract or is willing to perform his part of the act in
furtherance of the contract. This was interpreted so as there was not expressly said that the plea
of part performance cannot be taken once the time limit for filing a suit for specific performance
is expired.

In this case, 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

1
(2002) 3 SCC 676
performing some act in furtherance of a contract, either in taken possession or in continued
possession of the property.

In the case of Serandaya Pillai v. Sankaralingam Pillai2, it was held 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. Clearly, there involves a consideration to be given for
the property in a contract to sale, lease, mortgage, exchange and a gift.

The present act makes writing of the contract necessary for the property of value of Rs. 100 or
more as per Section 54 of the Act for the purpose of sale, in case of simple and other mortgages,
a sum of Rs. 100 or above is required to be deposited as per Section 59, in case of lease
extending one year as per Section 107 of the Act, exchanges under Section 118 and under
Section 123 of the Act in case of gifts.

In the present case, the promise to marriage was a consideration for the transfer of property
which was taken as a consideration but since, the there only took place an oral transaction
between the parties and not the contract in writing, thus, it falls within the ambit of Section 9 of
the Act. Thus, it is neither a sale nor a mortgage, lease, exchange or a gift. Hence, the present
case could not be said to fall within the ambit of Section 53A of the Act.

In the case of Govindrao Mahadik v. Devi Sahai3,it was held that transferee can avail the right
over the property. Mere already in possession of the property is not enough as the person may be
in possession of the property pursuant to any other prior encumbrances. The mere possession of
the property is enough and a strong evidences when the mortgagee or the transferee is for the
first time taking the possession of the property and not when he is already in possession of the
property. Thus, an independent act than a mere possession of property was required to proved in
such case. In the present case, the mortgagee failed to do so and thus the decision of the court to
not to provide him with the defence under Section 53A of the Act was justified.

ANALYSIS OF PROVISIONS OF INCOME TAX ACT, 1961;

2
(1959) 2 Mad LJ 502 (506)
3
AIR 1982 SC 989
Section 2(47) in the Income- Tax Act, 1995

(47) transfer", in relation to a capital asset, includes,-

(i) the sale, exchange or relinquishment of the asset; or

(ii) the extinguishment of any rights therein; or

(iii) the compulsory acquisition thereof under any law; or

(iv) in a case where the asset is converted by the owner thereof into, or is treated by him as,
stock- in- trade of a business carried on by him, such conversion or treatment;] or

(v) any transaction involving the allowing of the possession of any immovable property to be
taken or retained in part performance of a contract of the nature referred to in section 53A of the
Transfer of Property Act, 1882 1 (4 of 1882 ); or

(vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-
operative society, company or other association of persons or by way of any agreement or any
arrangement or in any other manner whatsoever) which has the effect of transferring, or
enabling the enjoyment of, any immovable property.

Section 2(47(v) of the Income Tax Act, 1961; covers within its scope any transaction involving
the allowing of the possession of any immovable property to be taken or retained in part
performance of a contract of the nature referred to in section 53A of the Transfer of Property
Act, 1882.

All transactions in which possession of immovable property is handed over would not covered
under provisions of section 2(47) (v). Only those transactions, which are complied provisions of
section 53A, are considered as transfer under 2(47) (v). The main ingredient is the intention of
transfer of property in the contract for the consideration.
Handing over possession of the property by the transferor to the transferee in part performance
of the contract under section 53A of the Transfer of Property Act, 1882 in necessary, but transfer
should be of legal titles and rights to enjoy the property. The essence of handing over the
possession as contemplated in section 53A of Transfer of Property Act, 1882 lies not merely in
handing over possession but lies in the intention of the transferor to transfer the ownership rights
of the property for consideration in favor of transferee.

In the case of Dwarka Das Kapadia v. CIT4, which is considered to be the landmark case
provided that event of handing over the possession of land or entering into the date of Joint
Development Agreement as the year of transfer of land by the landowner. The court observed
that the contract read as a whole indicates that at the time of entering into JDA(Joint
Development Agreements), there is transfer of complete control over the property in favor of the
developer. Therefore, the date of entering into JDA, in the above decision was considered to be
relevant for recognizing the transfer of land by the landowner. Thus the essence of Section 2(47)
(v) may be considered, when there is transfer of complete control over the asset by the owner to
the developer.

WHETHER REGISTRATION OF CONTRACT RELATNG TO PART PERFORMANCE

MANDATORY?

The Government has amended Section 17A of the Registration Act, 1908 in the year 2001 in such
a manner that the documents containing contracts to transfer for consideration of any
immovable property for the purpose of Section 53A of the Transfer of Property Act, 1882 shall
be registered if they have been executed on or after the commencement of Registration and other
Related Laws(Amendment) Act, 2001 and if such documents are not registered on or after such
commencement then they shall have no effect for the purpose of Section 53A of the Transfer of
Property Act, 1882, subject to one safeguard that unregistered agreement of sale executed
earlier would be taken as a tool to enforce part performance of the contract by the other part.
We may conclude that Power of Attorneys, Sale Agreements, Contract to Sale etc., made should

4
260 ITR 491(Bom)[2003]
be registered for transfer of valid title of ownership to the transferee. But provisions of Section
2(47) (v) are applicable as earlier.

In the case of Dr. T. Achyutha v. Asstt.CIT5; the assessee entered into a “Sale cum Development
Agreement” with the developer on 22-08-1997. An Irrevocable Power of Attorney was also
signed thereby passing all rights to dispose of the developed property and also to utilize advance
and sale consideration. It was decided by the Tribunal that was a transfer of property under
Section 53A of the Transfer of Property Act, 1882, which fell within scope of Section 2(47)(v) of
the Income Tax Act, 1961.

In the case of Charanjit Singh Atwal v. ITO Ward-VI(1) Ludhiyana; it was held that
Irrevocable General Power of Attorney which leads to overall control of property in hands of
developer, even if that does not involve exclusive possession of developer, would constitute
transfer within the meaning of Section 2(47)(v) . It was held that the possession contemplated by
provisions of Section 2(47) (v) of the Income tax Act, 1961 does not require handing over
exclusive possession. What is required is that the transferred by virtue of possession should be
able to exercise from overall intended purposes.

In the case of Smt. Vasavi Pratap Chandv. Dy.6, it was held that, an immovable property can be
said to be sold or transferred either when the deed of conveyance is executed as per the general
law under the Transfer of Property Act, 1882, or when the possession is transferred in part
performance of contract within the meaning of provisions of section 53A of the Transfer of
Property Act, 1882 as provided under provisions of Section 2(47) of the Income Tax Act, 1961.

5
[2007]108TTJ (Hyd.)
6
CIT [2004]89ITD73 (Delhi)