Dismissed

Kesavan v. Rajan

Kerala HC23 Feb 2012AS/292/2000

Case brief

AI extract

What is this about?

The High Court dismissed an appeal against a decree for recovery of possession. The court upheld Section 53A protection for a subsequent transferee, ruling that an insufficiently stamped unregistered deed cannot be used for collateral purposes. Mere continued possession without acts in furtherance of the contract is insufficient.

What did the court decide?

Appeal dismissed; original decree and judgment of the trial court upheld.

Kesavan Vs Rajan — Property and Title | Kerala HC (2012)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE P.BHAVADASAN

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THURSDAY, THE 23RD DAY OF FEBRUARY 2012/4TH PHALGUNA 1933

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AS.No. 292 of 2000 (C)

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OS.249/1992 of SUB COURT, OTTAPPALAM

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APPELLANT:(DEFENDANTS 1 TO 3 & 5 TO 10) DE DIED

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1. KESAVAN, S/O. NEERANKANNI CHAMI,

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2. THATHAN W/O. KESAVAN.

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3. HARIDASAN, S/O. KESAVAN.

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4. RATNADAS, S/O. -DO-

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5. PUSHPADAS, S/O. -DO-

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6. PUSHPALATHA, D/O. -DO-

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7. SUNILDAS, S/O. -DO-

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8. SREEMATHI, W/O. DECEASED 4TH DEFENDANT - MOHANDAS

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9. STHUTHI, MINOR, 9 ½ YEARS, D/O. SREEMATHI. 9TH APPELLANT IS REPRESENTED BY HER GUARDIAN 8TH APPELLANT.

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ALL THE APPELLANTS ARE RESIDING IN PULAPPATTA AMSOM, UMMANAZHI DESOM IN OTTAPALAM TALUK.

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BY ADVS.SRI.A.P.CHANDRASEKHARAN (SR.)

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SMT.PRABHA R.MENON SRI.PUSHPARAJAN KODOTH SMT.K.R.KRISHNAKUMAR SRI.K.JAYESH MOHANKUMAR

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RESPONDENT: (PLAINTIFF)

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RAJAN, S/O. NEERANKANNI MADHAVAN, PULAPPATTA AMSOM, UMMANAZHI DESOM IN OTTAPALAM TALUK.

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BY ADVS. SRI.P.G.PARAMESWARA PANICKER (SR.) SRI.SANTHEEP ANKARATH

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THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 10-01-2012, THE COURT ON 23-02-2012 DELIVERED THE FOLLOWING:

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svs

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P. BHAVADASAN, J.

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- - - - A.S. No. 292 of 2000

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Dated this the 23^rd day of February, 2012.

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JUDGMENT

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Defendants 1 to 3 and 5 to 10, who suffered a decree for recovery of possession at the hands of the trial court, i.e., Sub Court, Ottapalam in O.S.249 of 1992 are the appellants. Parties and facts are hereinafter referred to as they are available before the trial court.

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Narayanan, brother of the first defendant in

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the suit obtained the plaint schedule property as per Ext.A1 partition deed dated 10.2.1975. Eversince Ext.A1, it is claimed that Narayanan was in absolute possession and enjoyment of the property. By Ext.A2 dated 9.10.1992 the said Narayanan assigned the plaint schedule property to the plaintiff. In pursuance to the sale deed, he obtained possession of the property and was in enjoyment of the same. Alleging that the defendants trespassed into the property on 12.10.1992 and forcibly occupied the house in

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the property, he sought for recovery of possession on the strength of his title.

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The defendants resisted the suit. It was conceded by them that the plaint schedule property except the house therein was allotted to the share of the first defendant, namely Narayanan. As per the stipulation in the partition deed, namely, Ext.A1, the building had to be dismantled and removed by the first defendant. They contended that even at the time of partition Narayanan had agreed to assign the plaint schedule property to the first defendant. Thereafter fixing a price of Rs.1250/- as sale consideration a document was executed, whereby the property was assigned to the first defendant on 20.2.1975 as could be seen from Ext.B2. In pursuance to Ext.B2, the first defendant obtained possession of the property and had been residing there ever since then. In the amended written statement, it was also contended that the document by which the first defendant came into possession of the

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property being an unregistered one, it could be treated as an agreement for sale and the first defendant is entitled to the benefit of Section 53A of the Transfer of Property Act. He claimed to have effected valuable improvements in the property. It was also contended that the plaintiff was fully aware of the transaction and the document executed in his favour can have no effect. The claim of the plaintiff that he had obtained possession of the suit property in pursuance to Ext.A2 was disputed and it was contended that even before and after the partition deed, the first defendant has been in possession of the property and has been residing in the building therein. On the basis of these contention, he prayed for a dismissal of the suit.

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On the basis of the above pleadings, issues were raised by the trial court. The evidence consists of the testimony of P.Ws.1 and 2 and documents marked as Exts.A1 to A14 from the side of the plaintiff. Defendants examined D.Ws.1 and 2 and had Exts. B1 to B26 marked.

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Exts.X1 to X6 are third party exhibits. On an evaluation of the evidence, the trial court found that (i) Ext.B2 being an unregistered document cannot have the effect of a sale deed and does not confer title on the first defendant, (ii) it was found that Ext.B2 could be treated as an agreement for sale and that the first defendant had obtained possession of the property in pursuance thereof, (iii) the first defendant and his family have been residing in the building in the property, (iv) first defendant had been ready and willing to perform his part of the contract and (v) it was also found that the plaintiff was a bonafide transferee without notice of the agreement for sale in favour of the first defendant. Based on the above findings, the suit was decreed. It is the said judgment and decree that are assailed before this court.

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Learned counsel appearing for the appellants contended that the court below has erred in coming to the conclusion that the transferee plaintiff was unaware of the

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agreement for sale in favour of the first defendant and that he was a bonafide transferee for consideration without notice of the transaction between the first defendant and his brother Narayanan. Learned counsel drew the attention of this court to the fact that the burden of proof was wrongly cast on the defendant and that is not sustainable in law. It is well settled, according to learned counsel that the initial burden is on the plaintiff to show that he had no notice of the transaction between Narayanan and the first defendant and unless and until that burden is discharged, there is no burden on the defendant to show that the plaintiff had notice of the transaction. Learned counsel went on to point out that the court below had found that the claim of the plaintiff that he had been put in possession pursuant to Ext.A2 document and the story of trespass put up by him are false. It has been found that the first defendant and his family have been residing in the suit for a long time. Learned counsel also pointed out that the

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plaintiff resides nearby and is closely related to the first defendant. It is difficult to believe, says the counsel, he would have been unaware of the transaction between Narayanan and the first defendant. At any rate, according to learned counsel, when it was found that the first defendant was occupying the building and is residing there with his family, it was incumbent on the part of the plaintiff to have enquired about the status of the defendants and it could not be presumed that he was unaware of the transaction between Narayanan and the first defendant. In support of his contention, learned counsel relied on the decisions reported in Bhup Narain v. Gokul Chand (AIR 1934 PC 68), Ramachander v. Bibi Asghari (AIR 1957 Patna 224), Md. Mustafa v. Haji Md. Isa (AIR 1987 Patna 5), Mahadei Haluai v. Ram Krishna (AIR 1960 Patna 354) and Jagan Nath v. Jadish Rai (AIR 1998 SC 2028). For the proposition that occupation of the first defendant and his family in the house should amount to notice, learned

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counsel relied on the decisions reported in M.K. Lingarkar v. S.B. Kesarkar (AIR 1972 Bombay 100), Yella Reddi v. Subbi Reddi (AIR 1954 Andhra 20) and Ram Niwas v. Bano (AIR 2000 SCW 2996).

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Learned counsel appearing for the respondent on the other hand pointed out that Ext.B2 is of no value and cannot help the first defendant at all. Learned counsel pointed out that execution of Ext.B2 was specifically disputed by Narayanan who was examined as P.W.2 and inspite of the specific denial, there was no attempt from the side of the first defendant to prove the due execution of Ext.B2. Ext.B2 has two attesting witnesses and for reasons best known to the first defendant, he chose to examine neither of them even when the execution was disputed. Learned counsel went on to point out that the court below has analysed the evidence and had come to the conclusion that the plaintiff had no notice of the transaction between the first defendant and Narayanan, who was the vendor of

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the plaintiff. The burden was rightly cast on the defendants and the finding in that regard cannot be said to be wrong. It was also contended that the court below was wrong in coming to the conclusion that the first defendant had done something in furtherance of the contract and he was and is ready and willing to perform his part of the contract. Referring to the evidence of D.W.1, who is none other than the first defendant, it was pointed out that he was always aware that Ext.B2 was totally insufficient to confer rights on him and that something more had to be done to complete the transaction. His evidence would reveal that it was he who had to purchase the stamp papers and to get the draft sale deed prepared. It was contended that he had never expressed his readiness and willingness to perform his part of the contract and had done nothing in the matter. He was fully aware that he had to obtain a regular sale deed to get rights over the property. It was also contended that the court below was not justified in relying on Ext.B2 for the

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collateral purpose of treating it as an agreement for sale in view of Section 34 of the Kerala stamp Act which prohibits insufficiently stamped document for being relied on for any purpose. Learned counsel went on to point out that cases in which sale deeds which were not registered were treated as agreement for sale, were sufficiently stamped and insufficiently stamped sale deed cannot be used even for the purpose of ascertaining the nature of possession of the first defendant or to clothe him with the right to defend the suit under Section 53A of the Transfer of Property Act.

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The findings of the lower court have already

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been referred to. Before going further into the details of the case and entering upon the rival contentions, one aspect needs to be noticed. Learned counsel appearing for the respondent had specifically challenged the act of the court below in using Ext.B2 for collateral purposes and in coming to the conclusion that Ext.B2 is a genuine document. To be precise, learned counsel contended that the grounds on the

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basis of which a finding has been rendered against him, should have gone in his favour. It was contended on behalf of the contesting respondent that the court below had grievously erred in relying on Ext.B2 and also in coming to the conclusion that except for notice, all other ingredients of Section 53A of the Transfer of Property Act are satisfied.

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At this juncture, learned counsel appearing for

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the appellant took objection to the conduct of the learned counsel for the respondent in supporting the decree on grounds which went against him on the ground that the respondent has neither filed a cross appeal or cross objection as would be necessary in the case on hand. Without doing so, according to learned counsel for the appellant, the respondent cannot assail the finding against him entered into by the court below.

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The view expressed by the learned counsel for the appellants may not be correct in view of Order 41 Rule 22 C.P.C. One has to remember that the suit was decreed.

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That being the position, the plaintiff could not have appealed against the decree and no appeal lies against the findings. Appeal lies only against a decree. order 41 Rule 22 reads as follows:

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“ 22. Upon hearing respondent may object to decree as if he had preferred separate appeal .- (1) any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the Court below in respect of any issue ought to have been in his favour; and may also take any crossobjection to the decree which he could have taken by way of appeal, provided he has filed such in the Appellate Court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow.

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Explanation .- A respondent aggrieved by a finding of the Court in the judgment on which the decree appealed against is based may, under this rule, file cross-objection in respect of the decree

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in so far as it is based on that finding, notwithstanding that by reason of the decision of the Court on any other finding which is sufficient for the decision of the suit, the decree, is, wholly or in part, in favour of that respondent.

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(2) Form of objection and provisions applicable thereto .- Such cross-objection shall be in the form of a memorandum, and the provisions of rule, so far as they relate to the form and contents of the memorandum of appeal, shall apply thereto.

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(3) .......

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(4) Where, in any case in which any respondent has under this rule filed a memorandum of objection, the original appeal is withdrawn or is dismissed for default, the objection so filed may nevertheless be heard and determined after such notice to the other parties as the Court thinks fit.

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(5) The provisions relating to the pauper appeals shall, so far as they can be made applicable, apply to an objection under this rule.

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A plain reading of the above provision clearly

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shows that the respondent in this case can challenge the finding which went against him, though ultimately the decree ended in his favour. As already noticed, even if some of the findings go against him since the ultimate decree was in his favour, he could not have filed an appeal since he is not aggrieved by the decree. It is well settled that no appeal lies against mere findings of facts.

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The issue has been considered in the decision reported in Muhammed v. Chandrik a (2010(3) K.L.T. 306), wherein it was held as follows:

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“Rule 22 of O.XLI provides that any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the Court below in respect of any issue ought to have been in his favour. The Rule also provides that the respondent may also take any cross objection to the decree which he could have taken by way of appeal Explanation to Rule 22 reads thus:

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“Explanation:- A respondent aggrieved by a

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finding of the Court in the judgment on which the decree appealed against is based may, under this rule, file cross-objection in respect of the decree in so far as it is based on that finding, notwithstanding that by reason of the decision of the Court on any other finding which is sufficient for the decision of the suit, the decree, is, wholly or in part, in favour of that respondent.”

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An appeal is not maintainable against a finding. A person who has succeeded in the suit, but against whom the Court rendered certain findings, cannot file an appeal challenging those findings. He could file an appeal only if the ultimate decision is against him. A successful party cannot file an appeal challenging certain findings rendered by the Court against him. However, if the defeated party files an appeal, the opposite party may support the decree and at the same time, challenge a finding against him made by the court below.

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In Superintending Engineer & Ors. v. B.Subba Reddy (AIR 1999 SC 1747), it was held: “Respondent even though he has not appealed

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may support the decree on any other ground but if wants to modify it, he has to file cross objection to the decree which objection he could have taken earlier by filing an appeal.”

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In Ravinder Kumar Sharma v. State of Assam & Ors. (AIR 1999 SC 3571), the Supreme Court held:

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“We hold that the respondent-defendant in an appeal can, without filing cross-objections attack an adverse finding upon which a decree in part has been passed against the respondent, for the purpose sustaining the decree to the extent the lower Court had dismissed the suit against the defendants-respondents. The filing of crossobjection, after the 1976 Amendment is purely optional and not mandatory.......

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The respondents before us are, therefore, entitled to contend that the finding of the High Court in regard to absence of reasonable and probable cause or malice - (upon which the decree for pecuniary damages in B and C Schedules was based) can be attacked by the respondents for the purpose of sustaining the decree of the High Court refusing to pass a

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decree for non-pecuniary damages as per the A Schedule. The filing of cross-objections against the adverse finding was not obligatory. There is no res judicata. ...”

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The respondent in an appeal is entitled to support the judgment and decree passed by the trial court in his favour. The trial court would have arrived at several findings in the judgment - some in favour or against the plaintiff and some others in favour of or against the defendant. If the ultimate decision of the trial court is in favour of the defendant, he would have no right to file an appeal against the judgment and decree of the Trial Court. But in the appeal filed by the plaintiff against that decision, the respondent-defendant would be entitled to support the decision of the trial court and to challenge the correctness of the findings rendered by the trial court against him, in order to support the decision of the trial court. The respondent-defendant need not file a Memorandum of Cross Objection for that purpose. There may be cases where the finding on each issue may lead to the ultimate conclusion in the judgment. For example, in a suit for money

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based on promissory note, the trial court finds that the promissory note is genuine, that the defendant borrowed money from the plaintiff on the foot of the promissory note and that the amount was not repaid by the defendant. On another issue, the trial court finds that the defendant did not acknowledge the liability as alleged by the plaintiff and therefore the suit is barred by limitation. The net result would be dismissal of the suit. In the appeal filed by the plaintiff, the defendant-respondent may support the judgment by even challenging the finding of the trial court that the promissory note is genuine and that money is payable to the plaintiff. The respondent can do so without filing a Memorandum of Cross Objection, in view of R.22 of O.41 of the Code of Civil Procedure. However, in view of the Explanation to sub-rule (1) of R.22 of O.41, the respondent would be entitled to file a Memorandum of Cross Objection as well and it is only optional.

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In the decision reported in S. Nazeer Ahmed

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v. State Bank of Mysore (AIR 2007 SC 989), it was held as follows:

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“The High Court, in our view, was clearly in error in holding that the appellant not having filed a memorandum of cross-objections in terms of O. XLI, R. 22 of the Code, could not challenge the finding of the trial Court that the suit was was not barred by O. 2, R. 2 of the Code. The respondent in an appeal is entitled to support the decree of the trial Court even by challenging any of the findings that might have been rendered by the trial Court against himself. For supporting the decree passed by the trial Court, it is not necessary for a respondent in the appeal, to file a memorandum of cross-objections challenging a particular finding that is rendered by the trial Court against him when the ultimate decree itself is in his favour. A memorandum of crossobjections is needed only if the respondent claims any relief which had been negatived to him by the trial Court and in addition to what he has already been given by the decree under challenge. We have therefore no hesitation in accepting the submission of the learned counsel for the

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appellant that the High Court was in error in proceeding on the basis that the appellant not having filed a memorandum of cross-objections, was not entitled to canvass the correctness of the finding on the bar of O. 2, R. 2 rendered by the trial Court.”

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The necessity to file cross objection in an appeal arises when a part of the decree is against the person concerned and he wants to get it reversed in an appeal by the other party. A typical example would be in a suit for recovery of possession with mesne profits, if a decree for recovery of possession is granted and mesne profits is declined, then, the defendant prefers an appeal against the decree for recovery of possession, the plaintiff will have to necessarily file an appeal against the decree which went against him and to get the decree against him for mesne profits reversed. At the risk of repetition, one may notice that as long as no portion of the decree is against the person concerned, it is not necessary for him to file cross objection or cross appeal to assail the findings and

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support the decree. It is true that that the respondent herein could have filed a cross objection. But the mere fact that he had no done so going by the provision and the decisions mentioned above does not preclude him from assailing the findings which went against him in the judgment of the court below. Therefore this contention of the appellant has necessarily to fail.

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Coming back to the facts of the case, the definite contention taken by the appellant is that the court below was wrong in casting the burden of proof on the defendant in the suit to show that the plaintiff had notice of Ext.B2 between him and his brother Narayanan. It must be borne in mind at this juncture hat the only finding which went against the first defendant which resulted in declining relief to him under Section 53A of the Transfer of Property Act is that he was unable to prove that the plaintiff had notice of Ext.B2. One may now refer to the decisions relied on by the appellants in this regard. In the decision reported

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in Bhup Narain v. Gokul Chand (AIR 1934 PC 68), it was held as follows:

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“Section 27 lays down a general rule that the original contract may be specifically enforced against a subsequent transferee, but allows an exception to that general rule, not to the transferor, but to the transferee, and therefore it is for the transferee to establish the circumstances which will allow him to retain the benefit of a transfer which prima facie, he had no right to get.”

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In the decision reported in Ramachander v.

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Bibi Asghari (AIR 1957 Patna 224), it was held as follows:

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“...It is true that the plaintiff in a suit for specific performance of contract for sale has to establish the contract of sale between him and the vendor; but as soon as the plaintiff establishes the prior contract, the onus of proof that a third party has subsequently purchased the property bona fide, and without notice, is on the party who claims to be such purchaser. It is not for the plaintiff to show that the subsequent purchaser had notice of the previous contract in favour of

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the plaintiff. The onus of such a negative issue of proving that the subsequent purchaser had no notice of a prior claim is ordinarily discharged by a denial and by a negative evidence.”

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In the decision reported in Md. Mustafa v.

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Haji Md. Isa (AIR 1987 Patna 5), it was held as follows:

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“The principle of constructive notice, as incorporated in Illustration II of S.3 of the TP Act cannot be extended to a case in which the person basing his claim on the basis of a prior agreement is in possession of only a small fraction of the property which has been purchased by the purchasers and in such a case the purchasers cannot be said to be bound to make enquiry about the previous contract from the plaintiff or any other tenant in occupation of a portion of the house. In such an event the deeming clause of Illustration II of S.3 cannot be attracted at all and the court cannot presume that the purchaser will have the notice of the title, if any, of any person who is for the time being in actual possession of only a small fraction of the property sold. So, far the burden of proof regarding the plea of the

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purchasers being bona fide purchasers without notice of the prior contract is concerned, it is well settled that to defeat a suit for specific performance of contract, the burden initially lies on the subsequent purchasers to prove want of notice, but this burden is somewhat light and even a mere denial may suffice for shifting the burden upon the plaintiff to prove that the purchasers had the knowledge about his prior contract before he purchases the property. In any event when both the parties have given evidence, the question of burden loses its importance and the question is ultimately one of appreciating evidence.”

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In the decision reported in Mahadei Haluai

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v. Ram Krishna (AIR 1960 Patna 354), it was held as follows:

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“Where in a suit for eviction of the defendant, the latter relied upon S.53A in defence, it is incumbent upon the plaintiff to allege and prove that defendant could not invoke the protection of S.53A because the plaintiff had no notice of the contract in her favour, or of the

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part performance of the contract.

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Where the defendant was in actual possession by virtue of the alleged transfer, and the question of actual notice of the contract was not pleaded by either party, the plaintiff must be deemed to have notice of the defendants title.”

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In the decision reported in Jagan Nath v.

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Jagdish Rai (AIR 1998 SC 2028), it was held as follows:

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“In order to appreciate the rival contentions centering round this limited controversy it is necessary to note the well settled legal position governing the same. Section 19 of the Specific Relief Act, 1963 lays down that, 'except as otherwise provided by this Chapter, specific performance of a contract may be enforced against - (a) either party thereto; (b) any other person claiming under him by a title arising subsequently to the context, except a transferee for value who has paid his money in good faith and without notice of the original contract;'. We are not concerned with other sub-clauses of Section 19. It is not in dispute between the contesting parties that defendant No. 2 was

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partly claiming through defendant No. 1 who is a party to the suit agreement and was partly through defendant No. 3 who in his turn was claiming through defendant No. 3 who was admittedly party to the suit agreement. As ultimately the entire suit property came to be vested in defendant No. 2 prior to the date of the suit, the moot question examined by the trial Court as well as by the Appellate Court as to whether defendant No. 2 was a transferee for value without notice of the original contract requires resolution in the light of the evidence on record. It is well settled that the initial burden to show that the subsequent purchaser of suit property covered by earlier suit agreement was a bona fide purchaser for value without notice of the suit agreement squarely rests on the shoulders of such subsequent transferee. In the case of Bhup Narain Singh v. Gokul Chand Mahton, AIR 1934 PC 68 the Privy Council relying upon earlier Section 27 of the Specific Relief Act of 1877 which is in pari materia with Section 19 (1) (b) of the present Act, made the following pertinent observations at page 70 of the Report in

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this connection :

"Section 27 lays down a general rule that the original contract may be specifically enforced against a subsequent transferee, but allows an exception to that general rule, not to the transferor, but to the transferee, and therefore it is for the transferee to establish the circumstances which will allow him to retain the benefit of a transfer which prima facie, he had no right to get :"

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However, it has to be kept in view that once evidence is led by both the sides the question of initial onus of proof pales into insignificance and the Court will have to decide the question in controversy in the light of the evidence on record. Even this aspect of the matter is well settled by a decision of Privy Council in the case of Mohammad Aslam Khan v. Feroze Shah, AIR 1932 PC 228 wherein it was observed with reference to the very same question arising under Section 27 (b) of the earlier Specific Relief Act of 1877 that it is not necessary to enter upon a discussion of the question of onus where the whole of the evidence in the case is before the

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Court and it has no difficulty in arriving at a conclusion in respect thereof. Where a transferee has knowledge of such facts which would put him on inquiry which if prosecuted would have disclosed a previous agreement, such transferee is not a transferee without notice of the orginal contract within the meaning of the exception in Section 27 (b)'.”

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A reading of the above decisions leaves one in no doubt that the initial burden to show that there was no notice is on the plaintiff who claimed to be a bonafide transferee or valuable consideration. The quantum of proof required is a different matter. It cannot be disputed that the initial burden has to be discharged by a person who claimed to be the bonafide purchaser. Learned counsel for the appellant drew the attention of this court to Section 3 of the Transfer of Property Act, where notice is defined as follows:

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“a person is said to have notice” of a fact when he actually knows that fact, or when, but for wilful abstention from an enquiry or search

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which he ought to have made, or gross negligence, he would have known it.

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Explanation I.- Where any transaction relating to immoveable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such property shall be deemed to have notice of such instrument as from the date of registration or, where the property is not all situated in one subdistrict, or where the registered instrument has been registered under sub-section (2) of section 30 of the Indian Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any Sub Registrar within whose subdistrict any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated:

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Provided that-

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(1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1908 (16 of 1908), and the rules made thereunder,

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(2) the instrument or memorandum has been duly entered or filed, as the case may be, in books kept under section 51 of that Act, and

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(3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under section 55 of that Act.

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Explanation II.- Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.”

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Explanation III.-A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material:

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Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.”

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Emphasis is laid on Explanation II in support

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of the contention that the plaintiff should be deemed to

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have notice of the right of the first defendant over the suit property. In the decision reported in M.K. Lingarkar v. S.B. Kesarkar (AIR 1972 Bombay 100), it was held as follows:

¶174

“.... A subsequent purchaser of an immovable property would be affected with notice of the interest of a tenant who is in possession of the property in part performance of an unregistered agreement with the lessor and consequently with notice of such agreement and would not succeed in defeating the tenant's claim to retain possession under the protection given to him by Section 53A of the Act. “

¶175

In the decision reported in Yella Reddi v. Subbi Reddy (AIR 1954 AP 20) it was held as follows:

¶176

“The notice contemplated by S.27(b) cannot be confined to actual notice, but extends to constructive notice as well., It follows that where a subsequent transferee has the knowledge of actual possession of a certain person as a tenant over the property, he cannot be said to be a person purchasing the property without notice.”

¶177

A.S.292/2000.

¶178

¶179

In the decision reported in Ram Niwas v. Bano (AIR 2000 SCW 2996), it was held as follows:

¶180

“It may be noted here that 'notice' may be (i) actual, (ii) constructive or (iii) imputed.

¶181

Section 3 of the Transfer of Property Act defines, inter alia, “a person is said to have notice” of a fact when he actually knows that fact, or when but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it. And Explanation II appended to this definition clause says: “Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.”

¶182

Thus, it is seen that a statutory presumption of 'notice' arises against any person who acquires any immovable property or any share or interest therein of the title, if any, of the person who is for the time being in actual possession thereof.

¶183

The principle of constructive notice of any title which a tenant in actual possession may

¶184

A.S.292/2000.

¶185

¶186

have, was laid down by Lord Eldon in Daniels v. Davison. The learned law Lord observed, “Upon one point in this cause there is considerable authority for the opinion I hold; that, where there is a tenant in possession under a lease or an agreement, a person, purchasing part of the estate, must be bound to inquire, on what terms that person is in possession.”

¶187

A consideration of the evidence in this case shows that the allegation of trespass made by the plaintiff on 12.10.1992 may not be correct. The first defendant and his family has been residing in the building for some time. As per Ext.A1 partition deed, the building was set apart to the first defendant and the property to P.W.2 Narayanan, the brother of the first defendant. The case of the first defendant in the suit is that even at the time of partition there was an agreement with P.W.2 to transfer the property involved in these proceedings, which was set apart to P.W.2, to the first defendant. It was in pursuance to that agreement that Ext.B2 was executed. The first defendant

¶188

A.S.292/2000.

¶189

¶190

had specifically contended that even before and after partition he has been in possession of the building and has been residing therein.

¶191

Learned counsel appearing for the appellant

¶192

relied on the decisions cited by him and also the factum of possession of the building as found by the trial court contended for the position that all the ingredients necessary to attract Section 53A are available in the case on hand and the court below was not justified in holding that the plaintiff was a bonafide purchaser without notice.

¶193

In the case on hand an unregistered sale deed is sought to be used for a collateral purpose for contending that it should be treated as an agreement for sale. Not only execution of Ext.B2 has been denied by P.W.2, the question arises whether the ingredients of Section 53A have been satisfied. The first defendant examined himself as D.W.1 claimed to be in possession of the property before and after Ext.A1. On the other hand the plaintiff would say

¶194

A.S.292/2000. 34

¶195

that the first defendant trespassed into the property on 12.10.1992. The evidence shows that both are wrong. Assuming that the plea of trespass claimed by the plaintiff is found to be untrue, that does not mean that the possession of D.W.1 on the basis of Ext.B2 is true, even assuming that it could be looked into for collateral purposes. There is nothing to show that the first defendant came into possession pursuant to Ext.B2 and that he has done any act in furtherance of the contract.

¶196

The evidence of D.W.2 was referred to by the learned counsel for the respondent in this appeal and contended that it would clearly show that he was aware that he had to take a deed from P.W.2. He was also aware that he had to purchase stamp papers and got the document prepared, he did nothing in the matter nor did he demanded execution of deed by P.W.2.

¶197

On the above basis, it is contended that the ingredients of Section 53A are not satisfied. Therefore it is

¶198

A.S.292/2000. 35

¶199

contended that one need not go into the burden of proof, notice etc and the decisions relied on by the appellants have no application.

¶200

Learned counsel for the respondents also pointed out that Ext.B2 being insufficiently stamped cannot be looked into for any purpose. It was also contended that collateral purpose does not mean that the recital in the deed can be taken to spell out the terms of the agreement, but at best it can only mean that there was an oral agreement for sale. The act of relying on Ext.B2 culling out the terms and conditions for an agreement for sale is tabooed in law. If Ext.B2 can be used only for the purpose of showing the existence of an oral agreement for sale, then Section 53A has no application.

¶201

Section 53A of the Transfer of Property Act is infact a modified statutory recognition of the equity of part performance developed in England. The applicability of equity of part performance in India was a matter of

¶202

A.S.292/2000.

¶203

¶204

considerable dispute, and confusion prevailed regarding its applicability. The courts in India took different views in the matter. Along with the amendment of the Transfer of Property Act in 1929 by inserting Section 53A the Registration Act as well as Specific Relief Act were correspondingly amended. Section 17 of the Registration Act mentions the documents which are compulsory for registration of a document. Section 49 deals with the consequence of non-registration. Section 49 stipulates that no document which is not registered affecting any immovable property cannot be received in evidence. However, the proviso is incorporated permitting such a document to be received in evidence in a suit for part performance of contract for the purpose of Section 53A of the Transfer of Property Act. Therefore such a document can be received in evidence to show that such acts are done in performance of an agreement.

¶205

Subsequently the provision has been

¶206

A.S.292/2000.

¶207

¶208

amended in 2001 and by the amendment brought out to Transfer of Property Act and Registration Act the use of such unregistered document for the purposes mentioned above had been withdrawn.

¶209

It is well settled that even if a suit for specific performance is barred by limitation, the transferee can defend his possession on the basis of Section 53A of the Transfer of Property Act. (See 2002(3) SCC 676 - para 20)

¶210

In order to attract Section 53A of the Transfer of Property Act, the following conditions will have to be satisfied:

¶211

(i) There must be a contract to transfer for consideration any immovable property.

¶212

(ii) The contract must be in writing, signed by the transferor, or by someone on his behalf.

¶213

(iii) The writing must be in such words from which the terms necessary to construe the transfer can be ascertained.

¶214

A.S.292/2000.

¶215

¶216

(iv) The transferee must in part performance of the contract take possession of the property, or of any part thereof.

¶217

(v) The transferee must have done some act in furtherance of the contract.

¶218

(vi) The transferee must have performed or be willing to perform his part of the contract.

¶219

While considering the ingredients under Section 53A of the Act, it becomes necessary to consider the applicability of the proviso which states that the provision shall not affect the rights of a transferee for consideration who had no notice of contract or part performance thereof, or in other words it protects the bonafide transferee for consideration without notice. It cannot be disputed that the initial burden to show that there was no notice is on the person who sets up the bonafide purchase. The quantum of proof required to discharge the obligation is a different matter.

¶220

A.S.292/2000.

¶221

¶222

One may now come back to the facts of the case. The respective contentions of the parties have already been referred to. One may now have a look at the evidence in the case. The plaintiff is examined as P.W.1. He is an assignee as per Ext.P2. P.W.2 admittedly obtained the plaint schedule property as per Ext.A1. P.W.1 would assert that as per Ext.A2 document the property belongs to him. D.W.1 is the brother of P.W.2. P.W.1 would say that at the time of Ext.A2 no one was residing in the house. His complaint is that the defendants broke open the lock and trespassed into the property. Exts.A7 and A8 are the basic tax receipts paid in respect of the property. First defendant is the son of the brother of the father of P.W.1. In cross examination, P.W.1 stated that the plaint schedule property is within visible distance from his house. He specifically denied that before the execution of Ext.A1 partition deed, the first defendant was residing in the house of the property. He would depose that he had no reason to

¶223

A.S.292/2000.

¶224

¶225

doubt the title of P.W.2 at the time of execution of Ext.A2. He claims to have obtained possession on 9.10.1992. His specific case both in the plaint as well as at the time of evidence is that on 12.10.1992 defendants trespassed into the property. He would also say that the first defendant had dismantled the house in the property and removed the materials therein. He would assert that the present building has no number and no building tax is being received by the local authority. The old building had a building number and was assessed to tax. He admitted that in Ext.B3 the northern boundary of item No.3 which is shown as 'Kesavan vaka thodika' is the plaint schedule property. He also admits that the eastern boundary of the suit property set apart to Krishnan which is shown as 'Kesavan Kudiyiruppu' also is the plaint schedule property. He would conclude by saying that from the written statement he found that the first defendant asserted that he had purchased the property from P.W.2. He had enquired

¶226

A.S.292/2000.

¶227

¶228

with P.W.2 about the said fact, and P.W.2 denied of having executed any such document.

¶229

P.W.2 is the vendor of P.W.1. He says that he

¶230

got the plaint schedule property as per Ext.A1. There was a building at that point of time which was demolished and the materials were taken away by the first defendant. He claimed that the existing structure was put up by him. According to him, D.W.1, the first defendant has no manner of right over the suit property and he denied having executed Ext.B2 document. In cross examination, he admitted that his sister Ammuthayi had instituted a partition suit in 1993. In that suit, he conceded that he had no mention about Ext.A2 document. He would assert that from 1975 onwards, that is from Ext.A1 till Ext.A2, he has been in absolute possession and in enjoyment of the property and he has been paying tax in respect of the property.

¶231

The first defendant was examined as D.W.1.

¶232

A.S.292/2000.

¶233

¶234

According to him, the plaint schedule property is in his possession. He had paid Rs.1250/- to P.W.2 in 1975 and had obtained Ext.B2 by virtue of which he obtained rights over the property. He has always been ready and willing to get the registered sale deed executed. He says that the building which was in the suit property at the time of Ext.A1 was not demolished by him as stated by P.Ws. 1 and 2. He resides in the said house along with his family. At the time of examination he was residing in his wife's house as maintenance of the building was going on in the plaint schedule property. He claimed to have made considerable improvements in the property. He would say that he was in military service and therefore the tax was paid in the name of his wife. Exts.B4 to B25 are the notices of tax demanded and receipt of tax paid by him during the relevant period. Ration card is marked as Ext.B26. In cross examination, he admitted that at the time of Ext.A1 there was a building in the suit property, which had to be

¶235

A.S.292/2000.

¶236

¶237

demolished and removed by him. Surprisingly he says that all the recitals in Ext.A1 are not correct. He says about an agreement prior to Ext.A1 which was not produced. He then would say that the document produced in the suit is the said agreement. He asserts that since there was a prior agreement to Ext.A1 to the effect that the property which was set apart to the share of P.W.2 would be assigned to D.W.1. He would say that the said agreement between him and P.W.2 was only four days prior to the date of execution of Ext.B2. The agreement was that soon after Ext.A1 partition is executed, the property would be assigned to D.W.1. He would say that there was a dispute between him and his brother Kunjan over the property and therefore the property was set apart to the share of P.W.2. The dispute infact relates to the building in the property. He says that the building now in existence was put by him and his brother Kunjan. According to him by virtue of Ext.B2 he became the owner of the property. He says that he was

¶238

A.S.292/2000.

¶239

¶240

aware of the fact that it was his duty to purchase stamp paper and to get the sale deed prepared.

¶241

D.W.1 would say that he believed that as per

¶242

Ext.B2 he became the owner of the property. But at the same time, he says that he knew that something more had to be done in the matter. He was aware of the fact that P.W.2 had to execute a proper deed on a stamp paper and get it registered. He would depose that even prior to Ext.B2 he was aware that a sale deed had to be obtained, but he retained possession of the property for the last 25 years. The sale deed had to be executed by P.W.2. He would admit that it was his obligation to meet the scribe and make preparations to draw the sale deed. He would say that P.W.2 had promised to execute a sale deed in favour of D.W.1. In no less terms he says that there is no agreement that he would purchase the property executed by him in favor of P.W.2. According to him there was an oral agreement prior to Ext.A1. He then says that the

¶243

A.S.292/2000.

¶244

¶245

number of the house in the property at the time of Ext.A1 was 317. He claims to have put up that building. According to him, even 4-5 years prior to Ext.A1 he and his family resides therein. He asserts that this would be clear from the voters' list in the constituency.

¶246

He was confronted with Exts.A9, A10 and A11 voters' list. In Ext.A9 the building number 200 shown belongs to his wife. Serial No.556 shown as Thatha is his wife. In Ext.A10 Serial Nos. 369 and 370 the name of his wife and son are shown respectively. But he feigns ignorance regarding the building shown as item No.250. Similar is the answer given to Exts.A11, A12 and A13. He admitted that the number of the house in Ext.B26 is shown as 226 and that is the correct number.

¶247

D.W.2 is the Secretary of the Panchayat

¶248

concerned. He co-related house Nos. 266 and 377. He created some confusion regarding the buildings.

¶249

A.S.292/2000.

¶250

¶251

One cannot omit to note that P.W.2 had specifically disputed the existence of Ext.B2 apart from being a non-registered document, which is insufficiently stamped also. Ext.B2 shows that it is attested by two witnesses. As per the evidence, one of them is not alive. The other was alive and available for examination. For reasons best known to D.W.1, he chose not to examine that person. The lower court held Ext.B2 to be genuine based on a comparison of the signature in Ext.A1 and Ext.B2 , in the vakalath and depositions etc.

¶252

It is true that Section 73 of the Evidence Act

¶253

does enable the court to make a comparison of signatures. But that is only an enabling provision. It is well settled that while the court is the expert of all experts. But a conclusion based solely on the comparison of signature may not be safe. It is at best treated only as a corroborative item of evidence.

¶254

As already noticed, one of the witnesses to

¶255

A.S.292/2000. 47

¶256

Ext.B2 is alive and there is nothing to show that he was not available for examination. No reasons are given for his nonexamination. The signature in Ext.B2 was disputed by P.w.2. Therefore the burden was on the first defendant to establish the due execution of Ext.B2.

¶257

One may now have a look at Ext.B2. The stamp papers used does not contain the seal and date of issue. It appears that there was a contention raised that Ext.B2 had to be impounded for want of stamp papers of sufficient value. That contention seems to have been repelled by the court below that Ext.B2 cannot be validated as a sale deed for want of registration and that it is only to be treated as an agreement for sale. The approach does not appear to be correct.

¶258

The contention that Ext.B2 is inadmissible in evidence seems to have been taken as would be seen from paragraph 21 of the lower court judgment. Sufficiency of

¶259

A.S.292/2000. 48

¶260

stamp value as required under the Stamp Act stands on a different footing from non-registration of a sale deed. Even if the sale deed is not registered under Section 49, it may be possible to be use the deed for collateral purposes. But Section 34 of the Kerala Stamp Act is not subject to Section 49 of the Registration Act. Section 34 of the Kerala Stamp Act reads as follows:

¶261

“ 34. Instrument not duly stamped inadmissible in evidence, etc .- No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped:

¶262

Provided that-

¶263

(a) any such instrument not being an instrument chargeable with a duty of twenty paise or less than twenty paise shall, subject to all just exceptions, be admitted in evidence on

¶264

A.S.292/2000.

¶265

¶266

payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion;

¶267

(b) any such instrument, when presented to a Registering Officer for registration, shall be registered, if the party agrees to pay the duty and penalty due thereon as decided by the Registering Officer and pays the same within seven days from the date of such decision;

¶268

(c) where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped;

¶269

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¶270

¶271

(d) nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court, other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;

¶272

(e) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of the Government, or where it bears the certificate of the Collector as provided by Section 32 or any other provision of this Act.”

¶273

The prohibition contained in the above section is absolute. A reading of Section 34 of the Kerala Stamp Act and Section 49 of the Registration Act would indicate that in case of a document properly stamped and not registered though compulsorily registrable, it maybe used for collateral purposes. But that does not mean that an insufficiently stamped deed can be used for collateral purposes in view of the specific prohibition, i.e.. Section 34 of the Kerala Stamp Act.

¶274

A.S.292/2000.

¶275

¶276

In this regard it may be useful to refer to the decision reported in Avinash Kumar Cauhan v. Vijay Krishna Mishra (AIR 2009 SC 1489). In the said decision, it was held as follows:

¶277

“The unregistered deed of sale was an instrument which required payment of the stamp duty applicable to a deed of conveyance. Adequate stamp duty admittedly was not paid. The Court therefore, was empowered to pass an order in terms of S.35. The plea that the document was admissible for collateral purpose would not be tenable. Thus, order directing impounding of said document was not liable to be interfered with.”

¶278

So Ext.B2 in the strict sense cannot be used for collateral purposes also.

¶279

Even assuming that it can be used for the purposes made mention of under Section 49 of the Registration Act, it will be necessary to consider whether the ingredients necessary to attract Section 53A of the Transfer of Property Act are satisfied. Here, it will be

¶280

A.S.292/2000. 52

¶281

useful to refer to the decisions relied on by the learned counsel for the respondent. In the decision reported in Sardar Govindraw Mahadik v. Devi Sahai (1982 KHC 394) the issue considered was whether any act anterior to the contract or merely incidental to the contract would be evidence of part performance.

¶282

On going through the facts of the case it is seen that a draft sale deed on the requisite stamp paper was prepared, but it was not registered. The sale deed was by the mortgagor in favour of the mortgagee. Later on, the mortgagor sought for redemption. The suit was sought to be registered under Section 53A of the Transfer of Property Act with intention to safeguard the possession of the mortgagee. The mortgagee also claimed that he had done several acts unequivocally referable or attributable to the contract and also contended that that the transferee mortgagee had performed or willing to perform his part of the contract. The trial court held that the mortgagee is not

¶283

A.S.292/2000.

¶284

¶285

entitled to the benefit of Section 53A as his possession continued to be as a mortgagee and Rs.1000/- paid for purchase of stamp papers and registration was before the execution of the contract and not in furtherance of the contract. In appeal by the mortgagee, the High Court held that the mortgagee is entitled to the benefit of Section 53A. The matter was carried in appeal to the Supreme Court. In paragraph 1 of the decision, the ingredients of Section 53A are mentioned. The contentions highlighted before the Apex Court to claim the benefit of Section 53A are stated in paragraph 11 of the judgment. The Apex Court traced the legislative sanction of Section 53A and referred to the Statue of Frauds of United Kingdom and Section 40 of the transfer of Property Act. The Apex court considered the various circumstances highlighted before it and came to the conclusion that there was no sufficient materials to conclude that anything was done in furtherance of the contract. It was held as follows:

¶286

A.S.292/2000.

¶287

¶288

“Having, therefore, examined all the contentions canvassed on behalf of the mortgagee we unhesitatingly reach the conclusion that the mortgagee has failed to prove that he did any act in furtherance of the contract, continued retention of possession being a circumstance of neutral character in the facts and circumstances of the case and it being further established to our satisfaction that the mortgagee was not willing to perform 'his part of the contract, it is clear that the mortgagee is not entitled to the benefit of the equitable doctrine of part performance.”

¶289

In the decision reported in D.S.

¶290

Parvathamma v. Srinivasan (2003 KHC 992), it was held as follows:

¶291

“....in view of his suit for specific performance having been dismissed, it cannot be said that he had performed or was willing to perform his part of contract.

¶292

Lastly, as held in the civil suit, the respondent is a transferee for consideration who has no notice of the contract or of the part performance thereof infavour of the appellant. In

¶293

A.S.292/2000.

¶294

¶295

Sardar Govindraw Mahadik v. Devi Sahai, AIR 1982 SC 989, this Court has held that there is a understandably and noteworthy difference in the probative value of entering into possession for first time and continuing in possession with a claim of change in character. Where a person claiming benefit of part performance of a contract was already in possession prior to to the contract, the Court would expect something independent of the mere retention of possession to evidence part performance and some act done in furtherance of the contract and same act done in furtherance of the contract.

¶296

Strong reliance was placed by the learned senior counsel for the appellant on a recent decision of this Court in Shrimant Shamrao Syryavanshi v. Prahlad Bhairoba Suryavanshi wherein this court has held that a person obtaining possession of the property in part performance of an agreement of sale, can defend his possession in a suit for recovery of possession filed by the transferor or by subsequent transferee of the property claiming under him, even if a suit for specific performance of the

¶297

A.S.292/2000.

¶298

¶299

agreement of sale. Excepting that his suit had gone barred by limitation there was nothing else to deny the benefit of the plea to the person in possession. The court proceeded on the reasoning that the law of limitation barred the remedy but did not bar the defence. The distinguishing features of that case are that: (i) it was admitted that the transferee had taken possession over the property in part performance of the contract, (ii) that the transferee had not brought any suit for specific performance of the agreement to sell, and (iii) the transferee was always and still ready and willing to perform his part of the contract. These three significant actual features are missing in the case before us and therefore the appellant's effort to find support from the authority of Shrimant Shamrao Suryavanshi's case must fail. Bar of limitation alone does not bar the plea of part performance being raising if all other requisite of S.53A of T.P.Act are available.”

¶300

A.S.292/2000.

¶301

¶302

In the decision reported in Thomas v. Laila

¶303

Beevi (1993 KHC 526), it was held as follows:

¶304

“The essentials of S.53A are(1) a contract to transfer immovable property; (2) the transfer should be for consideration; (3) the contract must be in writing; (4) it should be signed by or on behalf of the transferor; (5) the terms of the contract can be ascertained with reasonable certainty from the writing; (6) the transferee takes possession of the whole or part of the property or if already in possession continues in possession; (7) such taking of or continuance in possession should be in part performance of the contract (8) the transferee should do some act in furtherance of the contract and (9) he should have performed, or be willing to perform, his part of the contract. The bone of contention between the parties is regarding conditions 7, 8 and 9. While the plaintiffs appellants would contend that they are not satisfied, the defendant would contend that they are also satisfied.

¶305

S.53A requires that the transferee should take possession of the property, or if he is already in possession, he should continue in possession in

¶306

A.S.292/2000.

¶307

¶308

part performance of the contract, and should also do some act in furtherance of the contract. These conditions should be satisfied before the transferee becomes entitled to the protection of S.53A. The defendant was admittedly in possession of the property under the mortgage Ext.A1 which ensured for a period of five years upto February 10, 1972. He continued in possession even thereafter, something which he was entitld to do under the terms of the mortgage Ext.A1. The question is whether the possession after the execution of Ext.B1 was referable to and was in part performance thereof.

¶309

The doctrine of part performance incorporated in S.53A is the importation into India of the equitable doctrine of part performance in the English law. The rational behind the rule and the purpose for which it was devised by the Court of Chancery in, England have been traced by the Supreme Court in para.13 of the judgment in Govindrao Mahadik v. Devi Sahai AIR 1982 SC 989. S.4 of the Statute of Frauds provided that no person could be charged upon any contract for sale of lands

¶310

A.S.292/2000.

¶311

¶312

unless the agreement of some memorandum or note thereof was in writing and signed by the party to the charged. As no action could be brought on an oral agreement, the doctrine of part performance was devised by the Court of Chancery to mitigate the hardship arising out of the advantage taken by a person under an oral contract, as failure to enforce it would permit such person to retain the undeserved advantage. The situation was such that not to enforce the contract because of the defence under the Statute of Frauds after the transferee took advantage of the oral contract, would perpetuate the very fraud with the statue was intended to prevent. But before granting the relief of specific performance of such a contract, the Chancery court wanted to be absolutely certain about the existence of the contract and for that purpose, wanted that some act had been done by the transferee, which would unequivocally be referable to the oral contract as would prove its existence beyond suspicion, meaning part performance of the contract. This doctrine was incorporated in S.53A but with a difference that a

¶313

A.S.292/2000.

¶314

¶315

written contract was made a 'sine qua non' for its application. But the act relied on as evidencing part performance must be of such a nature and character that its existence would establish the contract and its implementation. Each and every act subsequent to the contract by itself may not be sufficient to establish part performance, but it must be of such a character as to be unequivocally referable to the contract and as having been done in performance of the contract. Therefore one of the essential conditions for the doctrine of part performance to apply was that the act done by the transferee must be unequivocally referable to the contract and not to anything else. The fact that the act is consistent with the contract is not by itself sufficient to make it an act of part performance. There should be a real nexus between the contract and the act relied as in part performance of the contract. Thus it has been held that while the taking of possession by the transferee can be considered as unequivocally referable to the contract Morphett v. Jones, the continuance in possession of the transferee already in possession under a previous

¶316

A.S.292/2000.

¶317

¶318

arrangement, is by its nature equivocal and cannot, by itself and without anything more, be accepted as in part performance of a new agreement with the transferor. The mere holding over of a tenant, unless qualified by payment of a different rent, was held not to be enough to spell out possession under a new agreement with the landlord the continued possession being in its nature equivocal. Wills v. Steadling. Thus a person claiming the benefit of the doctrine, when he is already in possession prior to the contract, should do something independent of the mere retention of possession to evidence part performance. Mere continued possession though quite legal and valid by itself could hardly be an act of part performance unequivocally referable to the subsequent contract....”

¶319

In the decision reported in FGP Ltd. v. Saleh Hooseini Doctor (2009 KHC 5168), it was held as follows:

¶320

“The submission by the appellant's counsel on part performance of the contract under S.53A of the Transfer of Property Act also cannot be

¶321

A.S.292/2000.

¶322

¶323

accepted. S.53A of the Transfer of Property Act is based upon the equitable doctrine of part performance in English Law. Initially s.53A was not incorporated in the Transfer of Property act but the same came by way of an amendment for the first time by the Transfer of Property Amendment act, 1929 (Act of 1929). The amendment had to be made in view of some divergence in judicial opinion on the application of the aforesaid equitable doctrine by various courts in India.

¶324

S.53A of the Transfer of Property Act has certain ingredients and, in our judgment, those are:

¶325

(1) a contract to transfer immovable property;

¶326

(2) the transfer should be for consideration;

¶327

(3) the contract must be in writing;

¶328

(4) it should be signed by or on behalf of the transferor;

¶329

(5) the terms of the contract can be ascertained with reasonable certainty from the writing;

¶330

(6) the transferee takes possession of the whole or part of the property or if already in possession continues in possession;

¶331

A.S.292/2000.

¶332

¶333

(7) such taking of or continuance in possession should be in part performance of the contract;

¶334

(8) the transferee should do some act in furtherance of the contract and

¶335

(9) he should have performed, or be willing to perform, his part of the contract.

¶336

The rationale of the equitable doctrine of part performance in English Law has been traced in S.53A by this Court in the case of Sardar Govindrao Mahadik v. Devi Sahai 1982 (1) SCC 237.

¶337

In paragraph 13, page 249 of the report while tracing the said equitable doctrine in the way it has been assimilated in S.53A of the Transfer of Property Act, the learned Judges held that the act or action relied upon as “evidencing part performance” must be of such nature and character that its existence would establish the contract and its implementation. The learned Judges further held that the crucial act or action must be of such a character as to be unequivocally referable to the contract as having been performed in performance of the contract. In support of the said conclusion, the learned

¶338

A.S.292/2000.

¶339

¶340

Judges referred to an Old English decision rendered in the case of Lady Thynne v. Earl of Glengall. In referring to the said case, the learned Judges quoted the observations thereform and which are reproduced herein below:

¶341

“....part performance to take the case out of the Statute of Frauds, always supposes a completed agreement. There can be no part performance where there is no completed agreement in existence. It must be obligatory, and what is done must be under the terms of the agreement and by force of the agreement.....”

¶342

Relying on the aforesaid principle, the learned Judgesin Sardar Govindrao Mahadik reiterated that the act relied upon by the party invoking the said doctrine must be such as by its own force to show the very existence of the same contract.

¶343

Applying the aforesaid tests, as we must, to the present situation we find that no case for part performance of the contract has been made out. Here in the plaint filed in the specific performance suit, the case of the appellant is that it was put in possession of the suit premises

¶344

A.S.292/2000.

¶345

¶346

pursuant to the tenancy agreement dated 16.7.1981 and not on the basis of any other agreement. If we look at the tenancy agreement, we will not find that the appellant was put in possession under the same. In the said suit no evidence appears to have been led by the appellant to show how it came to the possession of the suit premises. This aspect of the case is quite vague.

¶347

Apart from that according to the appellant it allegedly paid Rs.5 lacs as sale consideration for the suit premises. As already pointed out in para 2 of the plaint in the specific performance suit, it has been clearly averred that the said amount of Rs.5 lacs was kept in deposit with the original owner of the premises by way of security deposit in terms of tenancy agreement dated 16.7.1981.

¶348

In any event, the appellant is required to show that it either performed or is willing to perform its part of the contract. But admitted facts of the case are to the contrary. After the execution of the alleged agreement for sale dated 20.7.1981, the appellant was totally silent and it is only after more than 10 years thereafter i.e. on

¶349

A.S.292/2000.

¶350

¶351

19.8.1991, for the first time, it asked the owner to complete the sale and that too after the ejectment suit was filed in February 1991 by the owner. Thus, in the facts and circumstances of this case, the doctrine of part performance under S.53A cannot be invoked. Therefore, there is no merit in the argument advanced on behalf of by the appellant on that score.”

¶352

The contention taken by the counsel for the respondent is that if Ext.B2 is to be treated as an agreement for sale, the first defendant had to show that he has done something in furtherance of the contract. His case was that he was residing in the building in the property even prior to Ext.A1 and also after Ext.A1. It is highlighted that the first defendant has no case that he had shifted his residence after Ext.A1 and came into possession as per Ext.B2. Even assuming that he obtained possession as per Ext.B2, he had not done anything in furtherance of the contract. Ingredient No.5 of Section 53A, noticed earlier, reads as follows:

¶353

A.S.292/2000.

¶354

¶355

“The transferee must have done some act in furtherance of the contract.”

¶356

There is nothing in the evidence of D.W.1 to show that he had made any improvements in the property. There is absolutely no evidence to show that he had taken any steps to have the sale deed executed. He remained silent till the suit was laid. His evidence shows that he had to arrange for the stamp paper and to get the sale deed drafted. His evidence shows that he was fully aware that his brother had to execute a regular sale deed. His evidence would show that he is not sure whether he is claiming on the basis of an oral agreement or on the basis of Ext.B2. There is absolutely no evidence on the side of D.W.1 to show that he had called upon P.W.2 to execute the sale deed in his favour and get it registered. It will be useful to refer to the decision reported in S. Kaladevi v. V.R. Somasundaram ((2010) 5 SCC 401 ) in this regard, wherein it was held as follows:

¶357

A.S.292/2000.

¶358

¶359

“11. Section 49 gives teeth to Section 17 by providing effect of non-registration of documents required to be registered. Section 49 reads thus:

¶360

“49. Effect of non-registration of documents required to be registered.- No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall-

¶361

(a) affect any immovable property comprised therein, or

¶362

(b) confer any power to adopt, or

¶363

¶364

unless it has been registered:

¶365

Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (1 of 1877), or as evidence of of any collateral transaction not required to be effected by registered instrument.”

¶366

A.S.292/2000.

¶367

¶368

The main provision in Section 49 provides that any document which is required to be registered, if not registered, shall not affect any immovable property comprised therein nor such document shall be received as evidence of any transaction affecting such property. The proviso, however, would show that an unregistered document affecting immovable property and required by the 1908 Act or the Transfer of Property act, 1882 to be registered may be received as an evidence to the contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by registered instrument. By virtue of the proviso, therefore, an unregistered sale deed of an immovable property of the value of Rs.100 and more could be admitted in evidence as evidence of a contract in a suit for specific performance of the contract. Such an unregistered sale deed can also be admitted in evidence as an evidence of any collateral transaction not required to be effected by registered document. When an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof

¶369

A.S.292/2000.

¶370

¶371

of an oral agreement of sale, the deed can be received in evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of the 1908 Act.”

¶372

So, going by the principles laid down in the above decisions, Ext.B2 in the strict sense can be used only for the purpose that there was an oral agreement for sale. If that be so, Section 53A can have no application. In the light of the above discussion, it follows that the first defendant, who is the appellant herein is not entitled to the benefit of Section 53A.

¶373

However, the issue found against by the trial court, to which objection is taken by the appellant in this appeal shall also be considered. The question is whether the court below was justified in casting the burden of proof on the defendant.

¶374

A.S.292/2000.

¶375

¶376

As per the decisions already referred to and subject to legal principles, the initial burden is on the plaintiff to show that he is a bonafide purchaser without notice. In the case on hand, he has sworn to that effect as P.W.1. It is true that the allegation of trespass made by him is open to serious doubt. But the plaintiff has been able to produce certain documents which would show that atleast immediately after Ext.B2, the first defendant and his family have not been residing in the property. Merely because some building tax notices and receipts are produced, that will not prove possession over the property. All those receipts and notices are in the name of the second defendant. The documents produced by the plaintiff was discarded by the court below on the ground that those were in the name of Visalakshy, the daughter of P.w.2 while it had no hesitation in accepting the document produced by the first defendant which stood in the name of his wife. Moreover, the tax receipts and other documents produced

¶377

A.S.292/2000.

¶378

¶379

do not conclusively show that the building in the plaint schedule property was occupied by the defendants especially when Thatha had another building.

¶380

A perusal of Ext.B2 would show that it is open to serious doubt. Not only that the survey number appears to be subsequently inserted, the boundaries of the properties said to have been assigned under Ext.B2 are also not mentioned. There is no justification for the crude description of the property shown in Ext.B2. One must remember that the execution of Ext.B2 is after the execution of Ext.A1 partition deed and if as a matter of fact there was any intention to assign the property as per Ext.B2, noting prevented the parties from properly describing the property. Conveniently the boundaries are not shown and measurements shown are also incorrect, the court below found solace on the ground that the total extent almost tallies.

¶381

A.S.292/2000.

¶382

¶383

Recalling the evidence of D.W.1, according to him, there was already an agreement before Ext.A1 to assign the property to the first defendant in which case the easiest would have been to set apart the property to the first defendant in the partition deed itself and it was not necessary to set it apart to P.W.2 and directed the first defendant to demolish the building and remove the materials when he was sure that he was getting the property and going to occupy the building. No satisfactory explanation is offered for these ambiguities.

¶384

Even though the first defendant claimed that

¶385

he had made considerable improvements in the property and there was no attempt to establish that fact.

¶386

Therefore even assuming that the burden of proof was wrongly cast on the first defendant by the court below, the conclusion arrived at by the court below that the first defendant is not entitled to the benefit of Section 53A is justifiable on several grounds.

¶387

A.S.292/2000.

¶388

¶389

The result is that this appeal is without merits and is liable to be dismissed. I do so confirming the judgment

¶390

and decree of the trial court.

¶391

P. BHAVADASAN, JUDGE

¶392

sb.

Kesavan v. Rajan

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Kesavan v. Rajan

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