PLEA
OF PART PERFORMANCE-WHETHER LAW OF LIMITATION APPLY
The
Doctrine of part performance was added to statute book by the
Transfer of property (Amendment) Act 1929. The Doctrine of part
performance which was enacted in England was partially imported into
India and with the aid of the doctrine, a defendant in an action of
ejectment may, in certain circumstances effectively plead possession
under an unregistered contract of sale in defence to the action.
Before the amendment, the doctrine was considered by the Indian
courts as a principle of equity.
After
amendment of the Act, Sec.53-A is formed as a statutory defence to a
person who has an unregistered sale deed in his favour to maintain
his possession, if he can prove a written and signed contract in his
favour and performance of some action on his part in part performance
of that contract. The privy council held that the right conferred
U/Sec.53-A of T.P.Act is a right available for the defendant, to
protect his possession and the provision is framed to impose a
statutory bar on the transferor, but does not confer any active title
on the transferee. In Maniklal
Mansukhbai Vs. H.J.Ginwalla & Sons(1)
the Hon’ble Supreme Court while considering the previous decisions
of Privy council in Peer
Baksh Vs.Mohamed Tahar and
Prabodh Kumar Das Vs. Dantmara Tea Company Ltd
held that Sec.53-A of T.P. Act furnishes a statutory defence to a
person who has no registered title deed in his favour to maintain his
possession, if he can prove a written and signed contract in his
favour and some action on his part in part performance of that
contract.
The
said principle was reiterated by the Hon’ble Apex Court in
Technicians
Studio Private Ltd Vs. Lila Ghosh(2)
and in Patel
Natwarlal Rupji Vs Shri Kondh Group Kheti Vishayak (3)
where in it was held that Sec.53-A gives a statutory right to a
transferee for consideration in possession of the property under a
contract to defend his possession and it also correspondingly imposes
a bar on the transferor to recover the possession of the immovable
property from the said transferee. It was also held that Sec.53-A
confers no title on the transferee in possession and he cannot
maintain a suit on title. Therefore, Sec.53-A gives a shelter to a
transferee who has performed substantial portion of the contract and
where he has ready and willing to perform his part of the contract.
Thus Sec.53-A acts as a shield but not as a sword. Since, the
provisions of Sec.53-A are equitable in nature the transferee must
perform his part of the contract and then only he is entitled to
claim the benefit of the provision. This is based on classic maxim
that “who
seeks equity must do equity”.
In view of the above law Sec.53-A though, confers no title on the
transferee and he cannot maintain a suit on title, but it imposes a
bar on the transferor to seek for the recovery of the possession.
The
Hon'ble Supreme Court enunciated the principles and conditions to
invoke Sec.53-A in cases of ejectment suits in the land mark decision
between Nathulal
Vs. Phoolchand (4).
In S.S.Surya
Vamsi Vs.P.B.Surya Vamsi (5)
the Hon’ble apex court reiterated the said conditions as follows
- there must be a contract to transfer for consideration any immovable property;
- the contract must be in writing, signed by the transferor, or by someone on his behalf;
- the writing must be in such words from which the terms necessary to construe the transfer can be ascertained;
- the transferee must in part performance of the contract take possession of the property, or of any part thereof;
- the transferee must have done some act in furtherance of the contract; and
- the transferee must have performed or be willing to perform his part of the contract.
In
Ramgopal
Reddy Vs The Addl. Custodian, Evacuee property (6)
the constitutional bench of the Hon’ble apex court held that
Sec.53-A can’t be taken aid of by the plaintiff to establish his
right as owner of the property. Hence, it operates as a shield but
not as a sword or independent claim to a person in either capacity.
In view of the above law, it is clear that so long as the transferor
has done and is willing to perform his part of contract, or is always
ready and willing to abide by the terms of the contract, the
transferee is entitled to avail of this statutory right to protect
his possession as a shield but not as a sword and it operates as a
bar to the transferee to assert his title.
Effect
of law of limitation:
In
the light of above law, it has to be seen that once remedy by way of
suit for specific performance of a contract for sale in respect of
immovable property becomes barred by limitation by the provisions of
Limitation Act, then even statutory right provided under Sec.53-A of
T.P.Act to defend the possession over the property taken or continued
under the said contract has lost, destroyed or extinguished and
whether the transferee can avail the defence of Sec.53-A in any
subsequent suit filed by the transferor against him.
Very
often it is the question before the Indian Courts that whether the
law of limitation defeats the protection available under sec.53-A of
T.P.Act. In most of the ejectment suits the dispute arises when a
defendant fails to bring a suit for specific performance within the
prescribed period as provided under Article 54 of Limitation Act
1963. It was held in some decisions that a person who fails to bring
a suit for specific performance within limitation cannot be given the
protection of Sec.53-A. Various High Courts expressed divergent
opinions basing on two rival principles i.e. (1) Delay defeats
equity. (2) No defence suffers from limitation.
Sec.2(J)
Contract Act:-
A contract which ceases to be enforceable by law becomes void when
ceases to be enforceable.
Article
54 of Limitation Act
provides a prescribed period of three years to sue for the specific
performance of a contract for sale which runs from the date when the
specific performance of the contract is denied.
The
general principle is that law of limitation does not affect a
defence. The law of limitation does not provide any prescribed period
on expiry of which the defence under Sec.53-A will be extinguished.
The Hon’ble Apex Court held that the limitation bars the remedy,
but not the right. Undoubtedly, the doctrine of part performance is a
doctrine of equity. Some of the courts refused to act upon Sec.53-A
basing on the principle of equity that “delay
defeats equity”.
It was held that when the contract of sale becomes un-enforceable by
reason of limitation, the defence of part performance which is found
on such agreement can’t be permitted to be enforced and the
protection of Sec.53-A cannot be given as the contract has lost all
its efficacy as the right to enforce the contract is lost by law of
limitation.
A
view is also taken that the transferee who is seeking the protection
of Sec.53-A must possess a right to enforce under the agreement and
when such right is lost, the protection is also lost.
The
protection of Sec.53-A is available to the transferee as long as he
has done and is willing to perform his part of the contract or, in
other words he is always ready and willing to satisfy the terms of
the contract and to perform his part of the contract. The transferee
is entitled to avail the benefit to protect his possession as a
shield but not as a sword. Though, the doctrine does not create any
active title in the transferee, it operates as a bar on the
transferor to assert his title. Therefore, it imposes a bar on the
transferor to enforce his rights against the transferee. By various
pronouncements, the Hon’ble Supreme Court settled the law in this
regard that the right of a transferee to defend his possession on
fulfilling the statutory conditions contained in the provision cannot
be whistled down on the equitable concept of latches or limitation.
Even
a statutory remedy is extinguished by the operation of law of
limitation the right subsists. This rule was firstly laid by the
Privy Council in Mahanth
Singh Vs.U Ba Yi (7).
In Punjab
National Bank Vs. Surendra Prasad Sinha (8) it
was held that Sec.3
of Limitation Act
bars the remedy, but not destroys the right of a party.
So,
when the right to bring the suit for specific performance is lost by
virtue of limitation, the transferee can assert his contract as it
remains valid and operative entitling him to exert his right to
retain possession over the property. Law of limitation does not apply
to a defence under Sec.53-A since the section does not provide any
prescribed period on expiry whereof the defence will be lost or will
extinguish.
The
Hon’ble Apex Court resolved the issue as to the applicability of
limitation to the defence under Sec.53-A in the land mark decision
between S.S.Surya
Vamsi Vs.P.B.Surya Vamsi (5).
The Hon’ble Apex Court reiterated the principles and conditions
which are required to be fulfilled by a transferee to defend or
protect his possession under Sec.53-A of the Act.
The
Hon’ble Apex Court further held that Sec.53-A does not permit the
defendant/transferee from taking plea in his defence to protect his
possession over the land obtained in part performance of the contract
even though, the period of limitation to bring a suit for specific
performance has expired. It was also held that Sec.53-A is not
creating any embargo on the transferee to protect his possession in
respect of the purchased property taken in part performance of the
contract, if the period of limitation to bring a suit for specific
performance is expired. The Hon’ble Apex Court while settling the
law, considered the legislative history while incorporating Sec.53-A
into statute book.
In
the said decision, the Hon’ble Apex further held as follows:” It
is, therefore, manifest that the Limitation Act does not extinguish a
defence, but only bars the remedy. Since the period of limitation
bars a suit for specific performance of a contract, if brought after
the period of limitation, it is open to a defendant in a suit for
recovery of possession brought by a transferor to take a plea in
defence of part performance of the contract to protect his
possession, though he may not able to enforce that right through a
suit or action.
In
the same decision, the Hon’ble Apex Court held that the law of
limitation is not applicable to a plea taken in defence unless,
expressly the provision is made in the statute. It was held that the
law of limitation applies to the suits and applications, but not to
the defences available to a person in a suit. Thus the law of
limitation bars only the action in a court of law, but it does not
restricts the defendant to put forth any defence though such defence
is barred by limitation in the shape of a claim.
CASE LAW
1.
AIR 1950 SC 1
2.
AIR 1977 SC 2425
3.
AIR 1996 SC 1088
4.
AIR 1970 SC 546
5.
AIR 2002 SC 960
6.
AIR 1966 SC 1438(CB)
7.
AIR 1939 PC 110
8.
AIR 1992 SC 1815
