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

1. there must be a contract to transfer for consideration any immovable property;
2. the contract must be in writing, signed by the transferor, or by someone on his behalf;
3. the writing must be in such words from which the terms necessary to construe the transfer can be ascertained;
4. the transferee must in part performance of the contract take possession of the property, or of any part thereof;
5. the transferee must have done some act in furtherance of the contract; and
6. 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