Mahalingam vs Ayyathurai and others

Ramanujam, J.—The only question that arises in this revision is whether the suit, O.S. No. 1486 of 1969, filed by the first respondent herein

for a declaration of his right to be in possession of the suit property in part performance of the contract dated 5th June 1969 and for an injunction

restraining the defendants from interfering with his possession of the same is maintainable in law. The second respondent herein entered into an

agreement to sell the suit property to the first respondent on 5th June 1969, agreeing to sell three items of the property for a sum of Rs. 25,000

receiving an advance of Rs. 10,000 on the same day. It has been agreed that the balance of Rs. 15,000 was to be paid on or before 5th

December, 1969, when the sale deed was to be executed. Subsequently the first respondent had sold items 1 and 2 to the petitioner herein for a

sum of Rs. 26,000 on 1st November, 1969. The petitioner, in pursuance of the sale in his favour sought to interfere with the possession of the first

respondent who is said to have been put in possession of the properties even on 5th June 1969, the date of the agreement in his favour. Hence he

filed the above suit for a declaration that he is entitled to be in possession and for injunction restraining the respondents 1 and 2 from interfering

with his possession.

Issues: 5 and 8 framed in the suit are as follows:

Issue: 5 Whether the plaintiff can invoke the doctrine of part performance?

Issue: 8 Whether the suit is within the jurisdiction of this Court?

The said issues were taken up for trial as preliminary issues. On issue 5 the lower court held that the plaintiff can invoke the doctrine of part

performance as a shield from any interference with his possession, and, on issue 8 it held that the suit is well within the jurisdiction of that court. In

this revision the decision of the lower court on both the issues is being challenged.

It is contended on behalf of the petitioner, the second defendant in the suit, that the lower court was in error in thinking that the first respondent

can invoke the doctrine of part performance to sustain his suit for declaration of possession and injunction and that S. 54 of the Transfer of

Property Act cannot give him such a right. It is also contended that the suit filed by the first respondent should be treated as one for specific

performance and if so treated, the value of the suit will be outside the pecuniary jurisdiction of the lower court. As regards the latter contention that

the suit should be in substance and effect treated as a suit for specific performance, the first respondent does not seek to specifically enforce the

contract in his favour and the nature of the suit has to be gathered only from the averments in the plaint. When the first respondent does not seek a

relief of specific performance, the court cannot construe the suit as one for specific performance and value the suit on that basis. Hence the

petitioner''s contention that the suit should be treated as one for specific performance has to be rejected. Therefore, the only question that remains

to be considered is whether the suit as framed is maintainable in law.

S. 54 of the Transfer of Property Act came up for consideration before the Privy Council in Main Pir Bux v. Sarrdar Mohamed Tahar 67

M.L.J. 865, where Lord Macmillian had expressed that an averment of the existence of a contract of sale, whether with or without an averment of

possession following upon the contract, is not a relevant defence to an action of ejectment in India, that the English doctrine of part performance

which is available by way of defence in an action of ejectment is not applicable to India, that if the contract remained enforceable, the defendant

may found upon it to have the action in ejectment stayed and by suing for specific performance obtain a title which will protect him from ejectment,

and that if the contract was no longer enforceable its part performance will not avail to any effect. The above decision of the Privy Council was

with reference to the law before the insertion of S. 53-A in the Transfer of Property Act. The scope of the newly inserted provision, S. 53 A also

came up for consideration before the Privy Council in Probodh Kumar Das v. Datmara Tea Co., Ltd. (1940) 1 M.L.J. 75. In that case a company

bought an estate at auction but obtained no conveyance of it to themselves, and then by letters of offer and acceptance agreed to sell the estate to

one R who paid the first installment of the price and entered into possession. Later the company executed a deed, which was duly registered

assigning the estate to the defendants. That deed recited that R had failed to complete his contract of sale in respect of the property. The plaintiff

claiming title through R brought an action for declaration that the defendants had no title to the estate as against the plaintiffs invoking S. 53 A of the

Transfer of property Act. Their Lordships of the Privy Council held that the right conferred by S. 53 A is a right available only to a defendant to

protect his possession, and it confers no right of action on a transferee in possession under an unregistered contract of sale and that, therefore, the

suit was not maintainable. Their Lordships observed:

In their Lordships'' opinion the amendment of the law effected by the enactment of S. 53 A conferred no right of action on a transferee in

possession under an unregistered contract of sale. Their Lordships agree with the view expressed by Mr. Justice Matter in the High Court that.

The right conferred by S. 53A is a right available only to the defendant to protect his possession.

They note that this was also the view of their late distinguished colleague, Sir Dinshah Mullah, as stated in the second edition of his treatise on

the Transfer of Property Act at page 262. The Section is so framed as to impose a statutory bar on the transferor; it confers no active title on the

transferee Indeed, any other reading of it would make a serious inroad on the whole scheme of the Transfer of Property Act.

The scope of S. 53 A was also considered by the Supreme Court in Delhi Motor Co. v. V.A. Basrukar (1968) 2 S.C.J. 614 = 1968 S.C. 794,

wherein Their Lordship have expressed that S. 53 A is only available as a defence to a lessee and not as conferring a right on the basis of which

the lessee can claim rights against the lesser. In that case the plaintiff, a partnership firm, entered into a contract with the defendant-company for

taking a sub-lease of a building in which the company was a tenant. The contract was evidenced by three unregistered documents which did not in

terms purport to be a sub-lease but was given the form of a partnership deed in order to avoid the liability to ejectment under the Rent Control

Law. Subsequently the plaintiff was given possession of only a portion of the building. The plaintiff brought a suit for possession of the rest of the

building on the basis of unregistered documents and also claimed damages and injunction. On these facts their Lordships of the Supreme Court

held that the plaintiff could not claim any rights on the basis of a lease evidenced by unregistered documents by invoking S. 53A of the Transfer of

Property Act. In Vora Mulla v. Majoranjan 1970 Guj. 122, it has been expressed, after an elaborate consideration of the relevant decisions on the

point thus:

We may make it clear that in our opinion, under the provisions of S. 53-A, the transferee does not get any right in respect of the property. S. 53-

A, does not speak of the conferment of the right of possession by the transferor to the transferee. It merely speaks of the estoppel against the

transferor preventing him from enforcing any right in the property against the transferee. It is on account of this estoppel against the transferor that it

is loosely spoken as if the transferee acquires a right to protect his possession. In our opinion, S. 53 A does not confer any right in respect to

property on the transferee to whom possession is delivered. The only right conferred by S. 53 A on the transferee in possession is a right to plead

this estoppel against the transferor or persons claiming under him.

In Gobald Motor Services (P.) Ltd., Mettupalayam Vs. Regional Transport Authority, Coimbatore, Ismail, J., has also held that in view of the

provisions contained in S. 54 of the Transfer of Property Act, it is not possible to hold that a person who has been put in possession of a property

pursuant to an agreement to sell in whose favour no conveyance has been executed, can establish his title on the basis of that agreement to sell

itself, and that to hold otherwise would be to fly in the face of the provisions contained in S. 54 of the Act and to render the same clearly nugatory.

As against the above decisions which clearly lay down the position that the right under S. 53-A of the Transfer of Property Act can be invoked

only by a defendant to defend his possession on the basis of part performance, the learned counsel for the respondent relies on the decision in

Ramchunder v. Maharaj kunwar (1939) All. 611, in support of his contention that S. 53A can be worked by a plaintiff to protect the possession

which he has got already in part performance of the agreement to sell without asserting any title to property. In that case a lessee under an

unregistered lease which was defective and did not comply with the requirements of S. 107 of the Transfer of Property Act brought a suit against a

subsequent purchaser of the house from the lesser on the allegation that the purchaser had in collusion with the Municipal Board, procured an

order for demolition of a portion of the house claiming a relief of perpetual injunction restraining the purchaser from demolishing the house or

otherwise interfering with the lessee''s rights as such and for restoration of the demolished portion at the purchaser''s cost. The High Court allowed

the claim of the lessee holding that the plaintiff does not seek to enforce a covenant of an invalid lease but what he is seeking to do is to debar the

defendants from interfering with his possession in part performance of his contract to lease. The Court took the view that the plaintiff is only

defending his rights which he will be entitled to under S. 53-A of the Transfer of Property Act and debarring the defendants from interfering with

his right. This decision was considered by the Supreme Court in Delhi Motor Co. v. V.A. Basrurkar (1968) 2 S.C.J. 6143 : 1968 S.C. 794, and

their Lordships of the Supreme Court reframed from expressing any opinion as to the correctness of that decision but expressed the view that the

decision might be justified if at all on the basis that though the lessee in that case was a plaintiff he was actually seeking protection under S. 53-A

by being in the real position of a defendant. Reference has also been made by the learned Counsel for the respondent to the decision in Etah

Municipality v. Moradhuj 1940 All 340, wherein it was expressed that a transferee in possession in whose favour no conveyance had been

executed could enforce his rights as a plaintiff if the transferor did some unlawful action in contravention of that section. Ewaz Ali v. Firdous Johan

1944 Oudh 212, was also referred to. In that case it was held that though S. 53-A cannot be used as a weapon of attack, it confers upon the

transferee the privilege of invoking the doctrine embodied therein only as a shield against any invasion of his rights by the transferor or persons

claiming under him, that the words of the section do not warrant a conclusion that the plaintiff as such is necessarily debarred from the benefit of the

rule, that where by the nature of the case as disclosed by the pleadings or otherwise, it is apparent that the transferee comes to Court to defend his

possession against the invasion of it by the transferor he is entitled to invoke the said equitable doctrine therein embodied, that if the capacity in

which the plaintiff comes to Court is in reality one of defence, the plaintiff can take advantage of S. 53-A, and that the mere position of a party in

the heading of a suit would not determine whether he is or he is not entitled to the benefit of that section. Relying on the above decisions, the

learned Counsel for the respondent contends that the plaintiff in the suit merely seeks a declaration of his right to be in possession under S. 53-A

on the basis of part performance, that he does not want any declaration of title as such to the properties and that on the pleadings he cannot be

said to enforce his rights under the agreement. The learned Counsel explains the decisions of the Privy Council in Probodh Kumar Das v.

Dantmara Tea Co., Ltd. (1940) 1 M.L.J. 75 = 66 I.A. 293 and that of the Supreme Court in Delhi Motor Co. v. V.R. Basrurkar (1968) 2 S.C.J.

6143 : 1968 S.C. 794 by saying that there as the parties wanted to enforce the terms of a document which was not registered the Courts hold that

it is not possible for the plaintiff to seek the benefit of S. 53-A of the Transfer of Properties Act, and that the principles of these decisions cannot

be applied to the facts of this case. The learned Counsel seeks strong reliance on the decision of a Division Bench of the Andhra Pradesh High

Court in Achayya v. Venkata Subba Rao 1957 A.P. 854. In that case a sale deed was executed conveying certain properties in favour of the

plaintiff on payment of the entire consideration for the sale and the plaintiff was also put in possession. But before the document could be registered

the vendor died and, therefore, the document could not be registered within the time prescribed therefore .After the vendor''s death, though an

attempt was made to have the sale compulsorily registered, it could not be done for some reason or other. Subsequently a third party filed a suit

for contribution towards taxes paid on that land and obtained a decree therein. In execution of the decree the property which was sold to the

plaintiffs and was in their possession was sold and a sum of Rs. 1,025 was realised. After satisfying the decree due to the third party the balance of

the sale proceeds was attempted to be withdrawn by the heirs of the vendor. The plaintiffs resisted that application on the ground that the sale

proceeds related to the property that was sold to them by the vendor and that they were in possession thereof at the time when it was sold in

Court auction. The Court directed the parties to establish their rights in the land or to the amount in Court deposit in a separate proceeding.

Thereafter, the plaintiffs filed O.S. No. 266 of 1951 for a declaration that they were entitled to the surplus proceeds in Court deposit and that suit

was decreed relying on the provisions Sec. 53-A of the Transfer of Property Act. In appeal before the High Court it was contended that S. 53-A

gave statutory recognition to a defensive equity and that the said provision can, therefore, be relied upon by a transferee as a defendant but not as

a plaintiff. The High Court after considering the relevant decisions on the questions agreed with the following observations made in Pandit Ram

Chander Vs. Pandit Maharaj Kunwar and Others, .

Now, in the present case, what is it that the plaintiff is attempting to do. He is not attempting to set up a transfer which is invalid; he has not

instituted a suit for the declaration of the validity of the transfer; he has not instituted a suit in which he claims an order against defendant directing

him to perform any covenant of the transfer. What he is seeking to do is to debar the defendants from interfering with his possession into which he

has entered with the consent of his transferor after the execution of a transfer in his favour. He is, in other words, seeking to defend the rights to

which he is entitled under S. 53-A of the Transfer of Property Act. It is the defendants who are seeking to assert rights covered by the contract.

The plaintiff seeks merely to debar them from doing so; the plaintiff is seeking to protect his rights. In a sense, in the proceedings he is really a

defendant and we see nothing in the terms of S. 53-A of the Transfer of Property Act to disentitle him from maintaining the present suit.

and held that S. 53-A does not either expressly or by necessary implication indicate that the rights conferred on the transferee thereunder can only

be invoked as a defendant and not as a plaintiff, that under the terms of the Section the transferor is debarred from enforcing against the transferee

any rights in respect of the property and this bar does not depend upon the array of parties. According to the learned Judges in that case the

transferee can resist any attempt on the part of the transferor to enforce his right in respect of the property whatever position he may occupy in the

appeal or litigation; in one sense it is a statutory recognition of a defensive equity and it enables the transferee to use it as a shield against any

attempt on the part of the transferor to enforce his rights against the property, and the utility of the section or the rights conferred thereunder should

not be made to depend on the manoeuvring for position in a Court of Law as otherwise a powerful transferor can always defeat the salutary

provisions of the Section by dispossessing the transferee by force and compelling him to go to a Court as plaintiff. In their view though the right

conveyed under the Section can be relied upon only as a shield and not as a sword, the protection is doubtless available to the transferee both as a

plaintiff and as a defendant so long as he uses it as a shield. They also approved the following reasoning in the decision in Ewaz Ali v. Firdous

Johan 1944 Oudh. 212.

The words of the Section do not warrant a conclusion that a plaintiff as such is necessarily debarred from the benefit of the rule, whereby the

nature of the case, as disclosed by the pleadings or otherwise it is apparent that the transferee comes to defend his possession against the invasion

of it by the transferor, he is entitled to invoke the aid of the equitable doctrine therein embodied.

It is not in dispute that the necessary conditions for the application of S. 53-A are satisfied in this case and the transferor or persons claiming under

him are debarred from enforcing against the plaintiff transferee any right in respect of the suit property. The only dispute is whether the plaintiff

transferee can assert his rights under S. 53-A and seek a declaration that he is entitled to possession of the suit properties and for an injunction

restraining the transferor and his alienee from interfering with his possession. Normally a person in lawful possession is entitled to maintain a suit for

declaration of his possession and for injunction against the defendant who is a trespasser. But this principle will have no application to a case where

the defendant claims under a colour of title. In this case the transferor and the persons claiming him are statutorily debarred from enforcing their

rights to the property. Though the S. 53-A confers no active title on the transferee, it gives him a right to protect his possession. Though the

transferee is the plaintiff in this case, he is a person who is trying to defend his possession upon the doctrine of part performance against the

invasion thereof by the transferor and his representative. Under S. 53-A, a transferee can resist any attempt on the part of the transferor to enforce

his right in respect of the property whether he is a plaintiff or a defendant. As pointed out by Subba Rao, C.J. (as he then was) in Achayya v.

Venkatasubba Rao 1957 A.P. 854 the utility of the Section and the rights conferred thereunder can easily be nullified by the transferor by

dispossessing the transferee by force and compelling him to go to a Court as plaintiff, if it is taken that the transferee cannot assert his rights under

the Section as a plaintiff. Hence, the correct view seems to be not to consider whether the S. 53-A is invoked by the plaintiff or the defendant, but

to see as to what are the rights claimed by the plaintiff in the suit, if the right is claimed to enforce the contract or to assert the rights to protect or

sustain the possession which the transferee got by way of part performance. As pointed out by their Lordships of the Privy Council in Mohamed

Moosa v. Aghor Kumar Ganguli 42 I.A. 1 = 28 M.L.J. 548, when a contract has been partly performed the matter has advanced beyond the

stage of contract and the equities which arise out of the stage which it has reached cannot be demonstrated unless the contract is regarded as one

which had been completed according to law. It has been held in Vizagapatnam Sugar Co. v. Muthurama Reddi 46 Mad. 919 = 45 M.L.J. 528,

that a relief by way of equity was available to the transferee even after the period of the limitation for specific performance was over, though on this

question there is still a conflict of judicial opinion. Having regard to the language used in the section it has to be held that wherever the transferee

seeks to assert his rights under the Section with a view to protect his possession, the Court can grant the relief sought for by him in accordance

with the Section. To say that the rights under S. 53-A cannot be availed of by a plaintiff is to take away the benefit of the section to a large number

of cases where the transferee may not be able to sustain his possession as against his transferor. The observations of the Privy Council in Probodh

Kumar Das v. Dantmara Tea Co., Ltd. (1940) 1 M.L.J. 75 = 66 I.A. 293, and of the Supreme Court in Delhi Motor Co. v. V.A. Basrurkar 1968

S.C 794, that S. 53-A can be raised only in defence have to be understood as saying that the Section cannot be used to have his title to the

property declared or to seek recovery of possession. If the transferee comes forward with a suit to sustain his possession which he had already as

part performance of the contract, he is entitled to maintain such a suit. As pointed out by their Lordships of the Privy Council S. 53-A conferred no

right of action on a transferee in possession under an unregistered contract of sale as it confers no active title on the transferee; but the section

having conferred on him certain rights and having put the transferor under certain disabilities, can it be said that the transferee will have no right of

action to seek the assistance of the Court to protect his possession? I am inclined to interpret the observations of their Lordships of the Privy

Council when they said that S. 53-A conferred no right of action on a transferee in possession as meaning that he cannot have a right of action to

enforce his title to the properties in his possession or to seek recovery of possession. The Supreme Court in Delhi Motor Co. v. V.A. Basrurkar

1968 S.C. 794 has specifically left open the question whether a person, who sues as a plaintiff, may still be regarded as defending the rights sought

to be conferred upon him by an unregistered deed. It is true that a suit to enforce the rights on the basis of the agreement of sale by resort to S. 53-

A of the Transfer of Property Act, cannot be maintained unless the transferee files a suit for specific performance of the contract of sale. But where

he files a suit in defence of his rights under the agreement on the basis of S. 53-A and seeks to protect his possession, there cannot, in my opinion,

be any objection. I am, therefore, of the opinion that the order of the lower Court holding that the suit is maintainable is correct. The Civil Revision

Petition is, therefore, dismissed but in the circumstances no costs.