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property_law:part_performance

Doctrine of Part Performance

Introduction

The doctrine of part performance is inserted in the Transfer of Property Act, 1882, by Act 20 of 1929, section 16. This is an equitable doctrine. This has it's origin in the English legislation, Statute of fraud and the decisions that followed it to prevent frauds caused by making use of the statute itself. This doctrine is based on the principle that, equity treats the subject-matter of a contract as to its effects in the same manner as if the act contemplated in the contract has been fully executed, from the moment the agreement has been made, though all formalities of the contract have not been yet completed.

History

The doctrine originated in England and the leading case in Maddison V. Aiderson. The Statute of Frauds required that all contracts relating to land must be in writing. This led to many difficulties. If A orally agreed to sell his land to B, received the price and put B in possession. A could eject B simply because the agreement was oral. Equity demanded that the statute of frauds itself should not be an instrument of fraud. This led to the enunciation of the doctrine of part performance.

If, due to the absence of a written document, the agreement cannot be proved in a court, it is enforceable in equity provided the party seeking the remedy has acted in part performance of the agreement.

In Maddison V. Aiderson, A agreed to remain in B's service in consideration of an oral agreement by which B was to give by a will an estate in a land. The will failed due to want of attestation. The heirs of A sued to recover the land. Held, A could not invoke 'part performance doctrine'. There was no direct correlation between the land and the services of A.

Statutory Provision

Section 53A of the Transfer of Property Act embodies the doctrine of part performance which reads as under:

“Where any person contract to transfer for consideration any immovable 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 at in furtherance of the contract, and the transfer has performed or is willing to perform his part of the contract, then notwithstanding that the contract, though requires being registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed there for 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 person 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.”

Application of the doctrine

For application of this doctrine of part performance, it must be shown that there is a contract to transfer for consideration immovable property. The contract must be for consideration in Writing and singed by the transferor, if there is no agreement or a void agreement, the doctrine cannot be applied. Further, the transfer 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 some act in furtherance of the contract. The pre-requisites for invoking the equitable doctrine of part performance, which are as follows:

(a) there must be a contract to transfer for consideration immovable property in writing singed by the person sought to be bound by it and from which the terms necessary to Constitute the transfer’ be ascertained with reasonable certainty.

(b) It must be shown that the transferee, has in part performance of the contract, either taken possession of the property or any party thereof, or the transferee being already in possession, continues in possession and had done some act in furtherance of the contract; and

(c) the transferee has performed or is willing to perform his part of the contract. When these conditions are fulfilled the transferee is entitled to claim, under this section, that he should not be dispossessed or evicted from the property.

This right in respect of part performance is only a defence to the transferee. This is a shield and not a sword. It does not create a title. The transferor is barred from asserting his title. The transferee cannot maintain a suit on title. This is the limited scope according to the Supreme Court1)

English Law vs. Indian Law

  1. 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.
  2. 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 defense and an attack. Hence, it can be used to enforce a right of possession and not merely to protect it.

Exception to Section 53A

This section provides an exception that the rule laid down in this section has no application or affect the right of a subsequent transferee for consideration who has no notice of contract or of the part-performance thereof. The doctrine can, however, be availed of against a gratuitous transferee (without consideration) and also a transferee for value if he has notice of the contract or of its part-performance.

Present Position of Section 53A

After enactment of Registration and Other Related Laws (Amendment) Act, 2001 2) w.e.f. 24-9-2001, the present position of Section 53A is zero. Now Section 53A of Transfer of Property Act, is amended, and the words “the contract, though required to be registered has not been registered” has been omitted from Section 53A. Thus, now registration of deed of transfer of immovable property is compulsory. If there is any other defect except registration, the help of the doctrine of part-performance can be taken but registration of sale deed is must, after amendment, a document (whether possession in part-performance is given or not) must be registered it if is compulsorily registrable under Section 17 of the Registration Act, 1908 or under Transfer of Property Act.

Case Laws

  1. In Nathulal V Phoolchand, A sold his ginning factory with land to B. B gave part of purchase-money & got possession. A sued B for eviction for not paying balance of money. A as agreed had not opened khata & attended properly. Held, B could claim part performance doctrine.
  2. In Technicians Studio V Lila, L had leased her premises for 5 years to T. L sued T for eviction within 5 years. Held, T may invoice part performance doctrine.
1)
Ram Gopal V. Custodian 1966
2)
Act No.48 of 2001


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Created on 2020/11/30 23:31 by Japhin Raj • Last modified on 2020/12/01 00:00 by LawPage