The doctrine of part performance is based on the principle of equity, which means that equity looks at the intention rather than form. It is incorporated to prevent fraud and from taking advantage of non-registration of the document.
As per the law of contracts, no right can pass to another person till the sale is complete. But when a person enters into a contract and performs his part or does any act in furtherance of the contract, he is entitled to compensation or the performance by the other party – in case the other party has not acted upon his part of the contract.
What Is the Doctrine of Part Performance?
Section 53A of the Transfer of Property Act of 1882 incorporates the doctrine of part performance. According to this doctrine, if a person makes an agreement with another and lets the other person act in furtherance of the contract, he has created equity that cannot be resisted. Since the person in the contract played his part, the absence of a formality like registration does not affect the performance of the contract. As a result, neither the transferor nor anyone under him may sue the transferee.
As a result of the doctrine, the transferor or any person claiming under him cannot enforce any right in respect of property upon the transferor or the person claiming under him except to assert the right expressly granted by the contract about the property of which they have taken or continued possession.
However, it is to be noted that the contract should not be unsigned or unstamped. Since the contract is signed by both parties and the transferee has acted his part, the transferor is bound to perform his part; otherwise, he needs to pay compensation for the breach.
Please read the examples below to understand more.
Section 53A of the Transfer of Property Act
According to section 53A of TPA, when a person contracts with another person to transfer immovable property, the contract must be signed by the parties or someone on behalf of the parties so that the transfer can be ascertained with reasonable certainty. And when the transferee has taken possession of the property as part performance of the contract or has done some other activities as part performance of the contract and is willing to perform his part of the contract (e.g., paying the amount for the property), the transferor cannot go back on his words or perform breach of the contract, even when the transfer has not been completed in the prescribed manner by the law (i.e., registration of the property).
Nevertheless, nothing in this section shall affect a transferee for consideration who is unaware of the contract or part performance.
Ingredients of Section 53A of TPA
The Bombay High Court, in the case of Kamalabai Laxman Pathak vs Onkar Parsharam Patil (1994), has emphasised the ingredients of section 53A of TPA that are as follows:
- There must be a contract for the transfer of immovable property.
- The contract must be written.
- The contract must be valid.
- The contract must be signed.
- The transfer must be for consideration.
- The transferee takes possession in furtherance of the contract.
- The transferee must do some act in furtherance of the contract.
- The transferee is willing to perform his part of the contract.
Examples of Part Performance
Example 1: A and B entered into a contract for the transfer of land. The contract was in writing, signed by both parties and attested except for registration. Based on such a contract, B takes possession of the land. Now, A sold the same land to C. Now C having the legal title of the land, attempts to eject B. Here, although the law does not recognise any legal title of B on the said property. Nonetheless, the equity of part performance may help him (B) from being dispossessed.
Example 2: P contracts to sell her house to Q for Rs. 120000. Q paid Rs. 70000 to P. Q took possession and promised to pay the balance at the registration. After a few weeks, P sold the same house to R for Rs. 150000 using a registered sale deed. R, thus, asked Q to vacate the house. Q, therefore, can claim the benefit of section 53A of TPA.
Case Laws on Part Performance
Here are two important Indian cases.
Nathulal vs Phoolchand AIR 1969 SC
The court held that taking possession is not the only method of part performance. As long as the transferee is already in possession of the property, after the contract of transfer, he must perform some further action in part performance of the contract.
Sardar Govindrao Mahadik vs Devi Sahai Govind AIR 1981
According to the court, section 53A is based on equity. Equity says that one who is sick of equity must do equity. Therefore, a person claiming possession of land under section 53A must conduct himself in an equitable and just manner.
The doctrine of part performance applies to the written and valid contract and does not apply to oral or void agreements. Transfers must be in writing and signed by the transferor. The transferee has taken possession of the immovable property as a part performance of a contract and must be ready and willing to perform his part of the promise.
Thus, the doctrine of part performance is an equitable right. It is incorporated to prevent fraud by any person in the contract merely on account of non-registration of the document.
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