Section 53A TP Act Relaxes Strict Provisions In Favor Of Transferees; Must Be Strictly Construed: Supreme Court

The Apex Court was considering a petition arising from the order passed by the Karnataka High Court in a Regular Second Appeal by which the appeal filed by the petitioners (original defendants) came to be dismissed thereby affirming the judgment of the First Appellate Court and also the decree of the Trial Court.

The Division Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan said, “Section 53-A of the Transfer of Property Act was inserted partly to set at rest the conflict of views in this country, but principally for the protection of ignorant transferees who take possession or spend money in improvements relying on documents which are ineffective as transfers or on contracts which cannot be proved for want of registration.”

Senior Advocate Anand Sanjay M. Nuli represented the Appellants.

The Bench noted that the respondents (original plaintiffs) had instituted an Original Suit for declaration of title and recovery of possession. The suit came to be decreed in favour of the respondents (original plaintiffs). The Regular First Appeal filed by the petitioners came to be dismissed and so also the Second Appeal by the High Court.

One of the issues formulated in the second appeal was whether the Courts below were justified in decreeing the suit of the plaintiff, despite the defendant seeking the protection under Section 53A of the Transfer of Property Act.

It was the case of the petitioners that the respondents (original plaintiffs) may be the lawful owners of the suit scheduled property but they executed a sale agreement in their favour agreeing to sale a plot of land for a total consideration of Rs 850 and since then the petitioners came to be in possession and enjoyment of the same. The High Court while dismissing the second appeal observed that when the defendant failed to prove that the plaintiff executed the Sale Agreement agreeing to sell the land and he came in possession and occupation of suit schedule property by virtue of the same, question of providing protection under Section 53A of the T.P. Act does not arise.

Referring to Section 53-A of the TP Act and Section 16 of the Specific Relief Act, 1963, the Bench observed that protection of a prospective purchaser/transferee of his possession of the property involved, is available subject to the following prerequisites:

• There is a contract in writing by the transferor for transfer for consideration of any immovable property signed by him or on his behalf, from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty;
• 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
• The transferee has done some act in furtherance of the contract and has performed or is willing to perform his part of the contract.

The Bench further explained that in terms of this provision, if the above preconditions stand complied with, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and person(s) claiming under him, any right in respect of the property of which the transferee has taken or continue in possession, other than a right expressly provided by the terms of the contract, notwithstanding the fact, that the transfer, as contemplated, had not been completed in the manner prescribed therefor by the law for the time being in force. Noticeably, an exception to this restraint is carved out qua a transferee for consideration, who has no notice of the contract or of the part-performance thereof.

“The effect of this section is to relax the strict provisions of the Transfer of Property Act and the Registration Act in favour of transferees in order to allow the defence of part performance to be established”, the Bench said.

The Bench observed, “Section 53-A is an exception to the provisions which require a contract to be in writing and registered and which bar proof of such contract by any other evidence. Consequently, the exception must be strictly construed.”

The Bench thus dismissed the Special Leave Petition.

Cause Title: Giriyappa & Anr. v. Kamalamma & Ors. (Neutral Citation: 2024 INSC 1043)

Appearance:

Appellants: Senior Advocate Anand Sanjay M. Nuli, Advocates Akash Kukreja, Samina S., Abhishekh Singh, M/s.Nuli & Nuli, AOR

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