Yenugu Achayya and Another vs Ernaki Venkata Subba Rao and Others

Subba Rao, C.J.—Defendants 1 and 2 have preferred this appeal against the decree and judgment of the Court of the Subordinate Judge of Kakinada confirming that of the District Munsif, Kakinada, in Order Section No. 266 of 1951 a suit filed by Respondents 1 and 2 for a declaration that they were entitled to the surplus sale proceeds in Court deposit in Order Section No. 124 of 1945 on the file of the same Court.

The facts, that gave rise to the appeal, may be briefly stated. 10 acres of Zamindari jeroiti land in Chinnayapalem village known as Peddagaruvu originally belonged to the father-in-law and the husband of the second Defendant, Yenugu Achayya and Apparao. On 18th February 1939, they executed a sale deed Exhibit A-8 conveying the said land in favour of the Plaintiffs and put them in possession thereof. It is not disputed that the consideration was also paid to the vendors. As the second Defendant''s husband Apparao suddenly died, the document could not be registered within the time prescribed.

After his death, though an attempt was made to get it compulsorily registered, for one reason or other, it could .not be done. Subsequent to the sale the Plaintiff''s and the other members of their family, Defendants 3 to 6, partitioned their family properties including the said and (missing) and in the partition the land was allotted to the Plaintiffs'' share and they were enjoying the same. They leased it out to tenants and also paid the faxes due thereon. Mean while the rest Defendant, who was interested in the holding of which the aforesaid land formed part paid the taxes due on the entire holding and tiled Order Section No 124 of 1945 on the file of the District Munsifs contribution. To that suit first Defendant mid Defendants 2 to G were made parties. The first Defendant alleged therein that the Plaintiff''s were in possession and.

enjoyment of Peddacheruvu in pursuance of the sale deed executed by the husband of the second Defendant. Though the decree was for a sum of Rs. 321/-, the land in the possession oil the Plaintiffs was sold and a sum of Rs. 1025/-, was realised. The first Defendant drew out a sum of Rs. 321, from the sale proceeds and the balance of Rs. 704, was in Court. The second Defendant filed an application under Rule 165 of the Civil Rules of Practice for drawing out the amount. The Plaintiffs resisted that application on the ground that the sale proceeds related to the property that was sold to them by the second Defendant''s husband and her father-in-law and that they were in possession thereof at the time when it was sold in Court auction.

The learned District Munsifs directed the parties to a separate proceeding to establish their right to the land to enable them to claim the money in Court deposit. The Plaintiff''s thereafter filed Order Section No. 206 of 19a 1 for a declaration that they were entitled to the surplus proceeds in Court deposit. Both live Courts; relying upon the provisions of Section 53 A of the Transfer of Property Act decreed the Plaintiff''s suit. Hence the appeal.

Learned Counsel for the Appellants contends that Section 53-A.of the Transfer oil Property Act gave statutory recognition to a defensive- equity act that the said provisions can, therefore, be relied .upon by a transferee as a Defendant but not as a Plaintiff. As the arguments turn upon the provision of Section 53A, it would be convenient to read tin; section.

Section 53A. "Where any person contracts 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 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 the contract, though required to be 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 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 performance thereof.

It is not necessary to consider the preexisting law of part-performance as it obtained in India or in England, fur after the enactment of Section 53A laying down the limits of the doctrine, we are only governed by the said provisions. The necessary conditions for the application of the section are (i) there is a contract to transfer immovable property for consideration, (ii) the contract is signed by or on behalf oil the transferor, (iii) the terms can be ascertained with reasonable certainty from the document, (iv) the transferee is put in possession or if he has been already in possession continues in possession, (v) he has done some act in furtherance of the contract and (vi) the transferee has performed or is willing to perform his part of the contract.

If the aforesaid conditions are fulfilled 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 that property. This section does not, even if the conditions laid down therein are complied with, convey title to the transferee. Notwithstanding the section, title can be transferred only after the registration of the document. Provision prevents a transferor from enforcing his rights in respect of the property against the transferee but enables him to sue the transferee upon the covenants contained in the document. In short, the mutual covenants will be operative, though title does not pass under the document.

The section does not either expressly or by necessary implication indicate that the rights conferred on the transferee there under can only be invoked as a Defendant and not as a Plaintiff. Under the terms of the section the transferor is debarred from enforcing against the transferee] only rights in respect of the property and this bar do not depend upon the array of the parties. The transferee can resist any attempt on the part of the transferor to enforce his rights in respect of the property whatever position he. may occupy in the field of litigation, In one sense, it is a statutory recognition of the defensive equity. 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.

Whether the transferee occupies the position of a Plaintiff or a Defendant, he can resist the transferor''s claim against the property. Conversely, whether the transferor is the Plaintiff or the Defendant, he cannot enforce his rights in respect of the property against the transferee. The utility of the section or the (missing) conferred there under should not be made to depend on the maneuvering for positions in a Court of law, otherwise a powerful transferee can always defeat the salutary provisions of be region by dispossessing the transferee by force and compelling him to go to a Court as Plaintiffs'' countless, the right conveyed under the section can be relied upon only as a should and not as a sword but the protection is available to the transferee both ay a Plaintiffs'' and as a Defendant so long as ho uses it as a shield.

On the question raised in the case there is a decision of (missing) then was) in Veera Rarhava Pao v. Gopala Rao AIR 1942 Mad 125 (A). The feast t ere were: The Appellant and the Respondent were two of the five brothers who originally formed a joint Hindu family. Two of the brothers separated earlier but, subsequently, there was a partition among the rest. The Respondent''s face was that the property in suit was allotted lo his and that the Appellant unlawfiriy trespassed it shortly before the suit. The should was for possession of the said nroixnrties.

The learned Judge held that, the document, where under the partition was effected was not registered and therefore, if was not admissible in evidence. The learned Judge further held that on the basis the parties were any of the co. owners could not file a suit, for eviction on the ground that he was in possession. It was then contended before the judge that the Plaintiff was entitled to possession u/s 53A of the Transfer of Property Act. In dealing with that argument, the learned Judge made the following observations:

The limits of the application of the doctrine of wart-performance have now been denned in Section 3A of the Act and it is plain that that provision only entitles a person in possession to invoke the doctrine as a shield protect (missing) possess no if the conditions therein (missing) to are satisfied and doss not enable a person who has lo''-it possession to sue for recover of it, Mr. Somasundiram frankly (missing) doctrine in the of this case.

Apart from the fact whether Section 53-A can be invoked in the case of partition documents, the after observations do not lay down that the statutory protection cannot, be invoked by a transferee as a Plaintiff. The learned Judaic only stated that a transferee cannot file a suit and recover possession of the property from the owner on the; basis of section IV-A. If so understood that decision docs not really support the extreme contention of the learned Counsel for the Appellants.

The observations of Lord Meamillan in AIR 1934 235 (Privy Council) , are relied upon. There, the question fell to be considered on the preexisting law, i.e., the law prior to the enactment of Section 53-A pending the suit section 53A came into force. Their Lordships noted that fact and remarked:

It remains to take note of the fact that, since the present suit was brought, the law in India has been altered by the Transfer of Property (Amendment) Act. XX of 19l19 which has inserted a new Section 53-A in the principal Act where by a (missing) an action of ejectment may, m certain circumstances elfctively plead possession under an unregistered contract of sale in defence to the action. Their Lordships'' views, as expressed in the present case, must therefore be understood to be referable to the State of the low before ibis partial importation into India of the; English equitable deed vine of part perform

The observation namely that under the amended section a Defendant in an action of (missing), in certain circumstances, effectively pared possession under an unregistered contract of sale,, apart from the fact that it is only an obiter, dot''s not indicate that the Judicial Committee laid down that, under no other circumstance, could a transferee defend his possession. We do not understand the observation as circumscribing the limits of the defensive equity recognized by statute or as laying down an exhaustive enumeration of all the circumstances under which the said defence could be raised.

Strong reliance is placed upon the decision of the Judicial Committee in AIR 1940 1 (Privy Council) . There, the; Plaintiffs were in possession of an estate under unregistered documents from the previous owners. Subsequently, the Defendants got a registered continence- of the estate in their favour from the same owners. The; real contention between the par has restated to the right to exposits quota under the India Tea Control. Act (Act XXIV of. (missing) which was passed to regulate: the export of, "tea from India. The licensing committee re demised the Defendants as the persons entitled to the expert equate rights of he stale The Plaintiffs filed the suit for a declaration .that the Defendant had no right or title to the estate angel that they were debarred from enforcing any rigid to the estate including the right to sell tea under the export quota allotted to them or it transfer the quota rights to any other person. They also asked for an injunction. The suit was dismissed on the ground that the Plaintiffs could not rely upon Section 53-A of the Transfer of Properly Act, in regard to the reliefs claimed by them in the suit. In the course of the judgment, Lord Macmillun made the following remarks:

Their Lordships agree with the view expressed by Mitter, J., in the High Court that "the; right conferred by Section 53-A''is a right available only to the Defendant to protect his possession." They note that this was also the view it their late distinguished colleague Sir Dinshari Mulla, as stated in the second edition of his tie arise on the Transfer of Property Act, at page: 202. 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 or: the whole scheme of the Transfer of Property Act.

No doubt, the observations are the wide and, if literally understood, they support the Appellants'' contention. But, we do not think that the Judicial Committee intended to by down, irrespective of the nature of the re lie! Claimed, that, under no circumstances, could the transferee rely upon the provisions of the Act as a Plaintiff. We respectfully accept the statement of law that the section imposes a statutory bar on the- transferor but it confers to active title on the transferee In that case, two reliefs were asked for by the transferee. One was that the Defendants had no title. This they could not ask for the obvious reason that title did not pass to the Plaintiffs. The second relief asked for, namely, the relief of injunction against the Defendants not to sell tea under the export quota did not pertain to a right enforceable in respect of the property.

The right to export did not depend upon the ownership of the property but only on the export quota right issued by the Licensing Community. As the Plaintiff''s in via declaration of their tide, which they old not acquire, the Privy Council rightly dismisses the suit. In that context, the question whether die rights conferred u/s 53-A, without assorting title to the property were available to this Plaintiffs did not arise for considerate in that case, and, therefore, the upon could not he accepter as a considered on the question not raised or argued in the cases.

The scope of .Section 53 vis-a-vis the rights of the transferee to defend his rights as a Plaintiff was considered in Kern Chancier ''v. Maharaj Kumvar ILR (1939) All HOP : AIR 1939 All (ill) (D). There, the Plaintiff was a lessee of a house under a ''registered lease. But the lease was defective as was not by It other the parties as required by Section 1.07 of the Transfer of Property Act. The suit was instituted against the subsequent purchaser of (she house for an injunction restraining him from demolishing the house or otherwise interfering with the Plaintiff''s right as lessee. The learned Judges held that although the lease: was defective and inoperative, the provisions of Section 53-A 1 the Transfer of Property and annoyed to the these and that the Plaintiff had right of suit. They also held that not only were be benefits that section open to the transferee where he is a Defendant but they (missing) to a case in which he is the Rohmer. (missing)An pare 815 (of ILR All) (at p. (i!3 of Mil) the learned Judges observed:

Now, in the present case, what is it that the Plaintiff is attempting to do. He hs not a.ttempting to set up a transfer which is invalid; he ha''". not instituted a suit for the dec(missing)araUer.i of the validity of the transfer; he has not instituted a suit in which he claims an order (missing) the 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. Tie is, in (missing) words,, seeking to tie fend the rights to which he is entitled u/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 seek-in to protect his rights. In a sense?, in the proceedings he is really a Defendant a-id (missing)&2 nothing in the terms of Section 53-A of the Transfer of Property Act to disentitle him from maintaining the present suit.

Were spec fully agree with the aforesaid observations.

When the scope of Section 53A of the Transfer of Property Act was sought to be limited as in the present case, the Chief Court of Oudh in Flwnr, Ali v, Firdaus Johan TT 19 Luck 565 : AIR 1944 Cuidh 212) (V,), rejected the contention. That case related to a house situated in the city of Lucknow. It was owned by one Dr. Mohammad Yunnus. He obtained a decree for eviction against the tenant Habib Ullah (3rd. Defendant). When the application for eviction was pending, the wife of Habib U Uah approached the doctor and agreed to purchase the same for a sum of. Rs. 7,800. An advanca was paid and ''the doctor executed a receipt in her favour agreeing to convey the property. Subsequently, the doctor ex ruled a registered sale deed in respect of the same oroporty in favour of Ewaz Ali, the second Defendant.

The purchaser brought himself on record in the execution petition. The wife of liabib Ullah,, who had an agree merit in her favour and was also in possession filed objections under Order 21, rides ''is) and 100, CPC Code, relying upon her rights u/s Sections-Article- the Act. Her objections being overruled, she filed a suit under Order 31, Rule 103, CPC Code, imp leading there in the doctor, the purchaser and her husband as Defendants. She should a declaration that she was in possession of the house in suit on her own account and that she could not be dispossessed in execution of the ejectment decree.

The learned Judges held that her possession was referable to the contract in her favour. It was than contended that the equitable right con (missing) on her u/s 53-A was not available in her as she was the Plaintiff in that ease. The learned Judge held that, in a suit under Order 21, Rule 103, CPC the object of the suit was to protect possession and the capacity in which the Plaintiff came to Court was in reality one of defence. The learned Judges expressed their view of Section 53-A thus at page 575 (of ILR Luck): (at P. 218 of AIR):

It is clear to our mind that the section can not be used as a weapon of attack, and that it confers upon the transferee the privilege of in-vole in the doctrine embodied therein only as a shield against any invasion of his rights by the transferor or persons claiming under him. The words of the section do not warrant a conclusion that a Plaintiff as such is necessarily debarred from the benefit of the rule. Where by the nature of the case, as disclosed by fete pleadings or otherwise it is apparent that the transferee conies 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.

Having considered the facts of that case, they held that the position of the Plaintiff there was that of a person who was trying to defend her possession upon the doctrine of part performance against the invasion thereof by the transferor and his representative. When the observations of the Judicial Committee (already extracted above) in ILR (1940) Cal 250 : AIR 1040 PC 1) (c), were relied upon, the learned Judges (missing) the following remarks at page 579 (of ILR Luck): (at P. 219 of AIR):

We are unable to consider that their Lordships of the Privy Council by the use of the word. Defendant in the above observation intended to mean that the right conferred by Section 53-A was not available to a person in the position of Mst. Firdaus Jahan and that the mere position of a party in the heading of a suit would determine whether he is or is not entitled to- benefits of the section The subsequent sentence makes this clear. Whew they use the word ''Defendant'' they use it to describe the position of a parson who pleads Section 53-A and they say his position must be that of a person who invoke it for defending himself against this transferor.

This judgment is rather instructive and, with great respect to the learned Judges, we accept and follow their reasoning.

A Division Bench, of the Paina High Court in Madhuban Ganda and Others Vs. Basanta Khetri, dismissed the Plaintiffs'' claim for declaration of their title and for possession against a purchaser for valuable consideration but in whose favour a registered document vessel executed. At page 420, Meredith, observed.

Where a sale is void for recantation u/s 54, Transfer of Property does not give ii: any validity. The that section do not confer any pilfered. They can be used only in d'' for attack, and moreover they can, ! fence only against the irausiaras person, claiming under him.

These observations do not support the Respondents. The statement that the pre Act could be used only in deism-attack deceit necessarily indicate be available only to a Defendant and not to a Plaintiff.

The defensive use of the provision may as well be by a transferee as Plaintiff in a suit against attack by a transferor or ins representatives.

Nor does the decision of Allahabad High Court in Pearey Lal and Another Vs. Prithi Singh and Others, law down a contrary view. There, the Collector acting u/s 5 of the U.P. Regulation of Sales Act, H)31, granted to the Plaintiffs a sale certificate.

Though they got symbolical possession of the properties, they did not get actual possession. Thereafter, they instituted a suit for actual possession of the properties in dispute on tire basis of the sale certificate. The Defendants, inter alia, contended that the Plaintiffs cannot base the suit on an unregistered document, whereas on behalf of the Plaintiffs, reliance was placed on Section 53-A of the Transfer of Property Act. In negative the contention, Wali-ullah J., observed at page 912 (of ILR All): (at p. 423 of AIR):

Learned Counsel for the Appellants has; tried to base his arguments on the equitable doctrine of part performance as embodied in S. 53-A of the Transfer of Properly Act but it is perfectly clear that the Plaintiffs-Appellants who have instituted the present suit, for possession and who take their stand upon they purport to have acquired by Called transfer made by the Coll. ed in the sale certificate advantage of the rule laid clown > Tenser of Property Act. The \\ 53-A are meant only to be used choate deed of transfer has? failed to secure good title. The benefit of the doctrine of cart performance is not available to the Plaintiff who seeks to acquire a valid title to the property dealt with under a transaction which'' remains inchoate.

No exception can be taken to these observations. The Plaintiffs in that ease were seeking to recover possession of the property on the assertion of a title which they did not possess. They relied upon the provisions of Section 53A not as seeks to enforce his rights against the property. The learned Judges did not lay down that the defensive equity could not be relied upon by the transferee as a Plaintiff to defend his right against the attacks of a transferor.

It is not necessary to multiply cases. It is settled law that u/s 53A of the Transfer of Property Act, no title passes to a transferee, lie cannot-file a suit for a declaration of his title to the property or seek to recover possession of the same on the basis of any title conferred on him. But, if the conditions laid down in the section are complied with, it enables the transferee to defend his possession if the transferor seeks to enforce his rights against the property. This statutory right he can avail himself both as a Plaintiff and as a Defendant provided he is using his right as a shield and not as a sword. Or to put it in other words, Tic cannot seek to enforce his title but lie can resist the attack made by-a transferor.

In the present case, it is clear from the facts that Plaintiff were put in possession pursuant of an unregistered sale deed. There v/as a partition among the members of the family and the Plaintiffs were in actual enjoyment of the same Paying'' taxes. The decree-holder in O.S. No. 124 of. .1945 brought the property in the possession of the Plaintiff to sale and the sale, proceeds were deposited in Court. The second Defendant applied for payment to her of the balance of the amount deposited in Court. The Plaintiffs relied upon Section 53A of the Transfer of Property Act as a defence to her claim.

As the District Munsif directed the parties to get their rights decided in a suit, the Plaintiffs filed the present suit, wherein they claimed that they were in possession, that the properties in their possession were sold and that the second Defendant was seeking to enforce her rights against the properties by drawing out the sale proceeds. Though they were Plaintiffs in the suit, in effect and substance, they were only defending their right when the transferor''s representative was attempting to enforce her rights against the property. In this view, the Plaintiffs are not claiming any title to the property but are only relying upon the statutory rights as a shield against the transferor.

Even so, it is contended that as the Plaintiffs are not in possession of the property, they cannot rely upon the provisions of. Section 53A Section 53A does not say that the transferee should be in possession on the date when the transferor seeks to enforce her right against the property. The essential condition for invoking the doctrine is that he should have taken possession of the property in part performance of the contract and has done some act in furtherance of the contract. The Plaintiffs were admittedly put in possession and the fact that subsequently they lost possession could not deprive them of their rights which they are entitled to under the section. The transferor could recover the money now in Court deposit only by enforcing her right against the property and the Plaintiffs could prevent her from doing so and that is what they are now seeking to do in the suit. If the transferor could not enforce her right against the property and, therefore against the money in Court representing that property, the money would automatically be paid to her as the property was sold by Court as her property.

Learned Counsel then contends that the transferor is not enforcing her right -against the property but only against the money and, therefore, the provisions of Section 53A will not, in terms, apply. We cannot appreciate this argument also. Unless the transferor can enforce her right against the property, she cannot enforce her right against the money, for the money in Court is really a substitution for the property. The rights of the parties in regard to the money could only be decided having regard to their rights in. respect of the property. If they had no right to the property they would have none to the money.

To illustrate if the Plaintiffs had drawn out the money and thereafter the second Defendant filed a suit to recover the money she could not obviously succeed for, if allowed, she would be enforcing her rights against the property which she is prohibited u/s 53A. So too, if the property was acquired by the Government and compensation was paid to the transferee the Plaintiff''s suit for recovery of the compensation from transferee would be defeated by reason of. Section 53A and the fact that money was in Court would not make any difference, for it repressors the value of the property in the possession of the transferee sold in Court-auction.

For the aforesaid reason, we hold'' that the Plaintiffs were only relying upon the defensive equity statutorily recognised u/s 53A of the Transfer of Property Act.

In the result, we agree with the view expressed by the Courts below and dismiss the appeal with costs.