Doctrine of Part Performance Under TP, Act

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The doctrine of Part Performance Under TP, Act

The doctrine of part performance is rooted in the principles of equity, which prioritize the intent of parties over strict formalities

Introduction to the Doctrine of Part Performance

The doctrine of part performance is rooted in the principles of equity, which prioritize the intent of parties over strict formalities. It serves to prevent fraud and exploitation resulting from the non-registration of property transfer documents.

Under standard contract law, no rights are transferred until a sale is fully completed. However, when two parties enter into a contract, and one party performs their obligations or takes actions in furtherance of the contract, they are entitled to compensation or performance by the other party if that party fails to fulfill their part.

What is the Doctrine of Part Performance?

Section 53A of TP, Act, 1882 incorporates the doctrine of part performance. This provision asserts that if one person enters into an agreement with another and allows the latter to act in accordance with the contract, an equitable interest is created that cannot be denied.

In essence, when one party fulfills their contractual obligations, the absence of certain formalities, such as property registration, does not hinder contract performance. As a result, neither the transferor nor anyone claiming through them can sue the transferee.

This doctrine prevents the transferor or their successors from enforcing any rights concerning the property against the transferee, except for those explicitly granted by the contract regarding the property in possession or occupation.

It’s essential to note that the contract should not be unsigned or unstamped. If both parties have signed the contract and the transferee has acted in accordance with it, the transferor is obligated to fulfill their part of the contract, or they may be liable to pay compensation for the breach.

Section 53A of TP, ACT

Section 53A of the Transfer of Property Act outlines the conditions for invoking the doctrine of part performance. It states that when a person enters into a contract to transfer immovable property, the contract must be signed by the parties or on their behalf to ascertain the transfer with reasonable certainty.

Moreover, if the transferee has taken possession of the property as part of the contract performance, or has undertaken other contract-related activities and is willing to fulfill their part of the contract (such as paying the property’s price), the transferor cannot backtrack on the contract, even if the transfer has not been completed through proper legal means (i.e., property registration).

However, this section does not affect a transferee for consideration who is unaware of the contract or the part performance.

Key Elements of Section 53A of TPA

The Bombay High Court, in the case of Kamalabai Laxman Pathak vs. Onkar Parsharam Patil (1994), emphasized the essential elements of Section 53A of the Transfer of Property Act:

  • There must be a contract for the transfer of immovable property.
  • The contract must be in writing.
  • The contract must be valid.
  • The contract must be signed.
  • The transfer must involve consideration.
  • The transferee takes possession as part of the contract performance.
  • The transferee must undertake some actions in furtherance of the contract.
  • The transferee must be willing to fulfill their part of the contract.

Case Laws on Part Performance

Nathulal vs Phoolchand AIR 1969 SC

This case clarified that taking possession is not the sole method of part performance. As long as the transferee is already in possession of the property following the contract’s execution, they must undertake additional actions in part performance of the contract.

Sardar Govindrao Mahadik vs Devi Sahai Govind AIR 1981

The court emphasized that Section 53A is grounded in equity. Equity dictates that one seeking equitable relief must also act equitably. Therefore, a person claiming possession of land under Section 53A must conduct themselves justly and fairly.

S. Palaniappa Chettiar vs. Chokalingam Chettiar (1977)

In this case, the Supreme Court held that the transferee must have done something substantial in furtherance of the contract, not merely taken possession. The court clarified that the term “possession” must involve more than just physical possession; it should signify an exercise of some act of ownership, control, or management over the property.

R. Lakshmi Narayanan vs. K. V. Sundaram (1992)

This case emphasized that for part performance to apply, the transferee’s possession should be related to the contract and not due to some other title or source. In other words, the possession should be clearly in furtherance of the contract between the parties.

Vandana S. Gutgutia vs. Sunil M. Jadhav (2008)

This case highlighted that part performance can be invoked even when the transferee’s possession is not exclusive. In this instance, the court held that the transferee’s possession, though shared with the transferor, was sufficient to fulfill the requirements of Section 53A of the Transfer of Property Act.

Hardev Kaur vs. Harmander Singh Choudhary (2013)

The Supreme Court in this case ruled that the doctrine of part performance can be applicable even when the transferee’s possession is not physical. In certain cases, symbolic possession or acts that symbolize control and dominion over the property can fulfill the possession requirement under Section 53A.

Jai Dhar vs. Genda Lal (2007)

This case dealt with the issue of whether an oral agreement can be considered for invoking the doctrine of part performance. The court held that oral agreements can be taken into account when combined with other circumstances that show the transferor’s intention to transfer the property and the transferee’s reliance on the agreement.

Chiranjilal Shrilal Goenka vs. Jasjit Singh (1993)

In this case, the court emphasized that Section 53A is an exception to the general rule that immovable property must be transferred through a registered document. It protects the rights of a transferee who has acted in good faith and is ready and willing to perform their part of the contract.

Ram Kishan vs. Rajinder Singh (2000)

This case illustrated that the doctrine of part performance is not confined to sales agreements alone but can also apply to other forms of agreements, such as lease agreements, where the transferee has taken possession and performed acts in furtherance of the agreement.

Conclusion

In summary, the doctrine of part performance applies to written and valid contracts and does not extend to oral or void agreements. Transfers must be documented in writing and signed by the transferor. The transferee must take possession of the immovable property as part of the contract performance and be ready and willing to fulfill their contractual obligations.

The doctrine of part performance is an equitable remedy designed to prevent fraud and exploitation by parties to a contract, particularly in cases where registration has not been completed. It ensures that individuals acting in good faith and performing their contractual obligations are protected under the law.

Read more:

7 Most Important Constitutional Doctrines

Doctrine Of Frustration Under Indian Contract Act

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