Doctrine of part performance under the transfer of property Act, 1882

Subhash S. Kasbe1

Abstract

Doctrine of part performance The Doctrine of Past Performance, based on principle of equity,
developed in England and was subsequently added to the Transfer of Property Act, 1882 via the
Amendment Act of 1929. As per Section 54 of the Transfer of Property Act, 1882, the transfer
of immovable property valued over Rupees. ALDERSON is one of the major case that have
helped develop the doctrine of part performance in England. The doctrine of part performance
deals with the provision where one party has performed his part of the contract and the other
party breaches the contract. The doctrine of part performance works on the principle of equity.
It was held that the act of part performance could not be proof of the contract since the
performance was a condition precedent to the contract.

Introduction

There are some instances while performing a contract for sale. The doctrine of part performance
deals with the provision where one party has performed his part of the contract and the other
party breaches the contract. This is essential on the part of the transferee because he had already
done his part of the contract and now wishes that the transferor also does the same.

Section 53A of the Transfer of Property Act, 1882 states when any person contracts to transfer
for consideration any immovable property by writing signed by him or on his behalf and the
transferee has in done a part performance of the contract by taking the possession or by doing
any act in furtherance of the contract. Then the transferor is under a legal obligation to debarred
from enforcing against the transferee and persons claiming under him any right in respect of the
property of which the transferee has taken or continued in possession, other than a right
expressly provided in the terms of the contract.

The doctrine of part performance works on the principle of equity. “The person who seeks
equity must do equity to other persons”. As per the section, a mere ground of absence of
formality in the evidence or contract of such transfer cannot make a contract void.

E.g. X contracts with Y to sell his plot for A amount of money. X accepts the advance from Y
towards the sale of the plot and hands over the possession of the said plot to Y. After some
time, Y is ready to pay the remaining sale amount but X refuses to accept the same. Further, X
asks Y to hand over the plot back to him. In such a case, Y can bring a case against X for
specific performance.

As per Section 54 of the Transfer of Property Act, 1882, the transfer of immovable property
valued over Rs. 100 has to be registered. But strict compliance of this rule will lead to many
problems. In such a situation, one party has already performed his part and the other party will
breach the contract. In the same way, in the above-mentioned example, Y cannot be evicted
from the plot just because the sale agreement was not registered.

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Subhash S. Kasbe S.Y. LLB KLE Law College Navi Mumbai
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 Essentials of the doctrine of Part Performance
1. There must be a valid contract between the transferor and the transferee. The transferor must
have signed the contract. This doctrine will not apply to the void contracts or where there is no
contract.
2. There must be a consideration.
3. The transferee must have taken the possession of the property or must have continued to be in
possession, if already in possession.
4. The transferee must have done some part in the furtherance of the contract.
5. The transferee should be willing to perform the rest of the contract.
The section does not confer a title upon the transferee in possession but it imposes a statutory
bar on the transferor. It tries to prevent fraud on the mere basis of ineffective evidence of the
transfer. Even if the transfer is not complete in the manner prescribed or the contract has not
been registered, the contract still becomes valid. It is a defence as well as right on the part of the
transferee.

Examples of Acts Considered Part Performance

 There are some acts which are generally considered good examples of part
performance

 Deposit/taking possession of title deeds - a lender would usually take the borrower's
title deeds for security.

 Equity views this transaction as effective to create a mortgage.

 It sees the deposit as evidence of an agreement to create a mortgage. It is

considered to be part performance by both parties.

 Improvements to the property by the lessor at the request of the lessee.

 Payment of the purchase price and making improvements.

 Taking possession of land.

Doctrine of part performance 2

The Doctrine of Past Performance, based on principle of equity, developed in England and
was subsequently added to the Transfer of Property Act, 1882 via the Amendment Act of
1929. In law of contracts (for e.g., a contract for sale), no rights pass to another till the sale is
complete But if a person after entering into a contract performs his part or does any act in
furtherance of the contract, he is entitled to reimbursement or performance in case the other
party drags its feet.

Section 53A says that if a person makes an agreement with another and lets the other person
act on the behalf of the contract; such a person creates an equity himself that cannot be
resisted on the mere grounds of absence of formality in the evidence or contract of such a
transfer. Thus, if the contract has not been registered or completed in the prescribed manner,
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 the transferor can still not go against the transferee or anyone claiming under him. However,
the deed should not be unsigned or unstamped. Nothing in this section affects the rights of a
transferee for consideration even if he had no notice of contract of part performance.

Essentials of the doctrine of part performance

There must be a written contract for transfer of an immovable property signed by or on

behalf of the transferor. The doctrine cannot be applied if there is a void agreement or no
agreement.

a) There must be consideration;

b) The contracts should give out the terms of the transfer with reasonable certainty;

c) The transferee must have taken possession as a result of this contract or continued in
possession if he was already in possession of the property;

d) The transferee must have done some act in furtherance of the contract. Acts done prior to
the agreement or independent of it cannot be deemed to be part performance of the contract;
and

e) The transferee should have performed his part of the deal or be willing to perform it.
MADDISON vs. ALDERSON is one of the major case that have helped develop the doctrine
of part performance in England. In India, this doctrine has been enacted with a few
modifications.

MADDISON vs. ALDERSON 18883

B was A’s servant. A had promised B a certain property as life estate, meaning B could
enjoy the property during his life time. B served A for years upon this promised life estate.
The will bequeathing such interest and property to B failed due to want for proper attestation.
After A died, one of his heirs brought action to recover the property from B.
It was held that the act of part performance could not be proof of the contract since the
performance was a condition precedent to the contract. The heir of A was able to recover the
said property.

When its Part Performance – Where any person contracts to transfer for consideration any
immoveable property by writing signed by him or on his behalf from which the terms
necessary to constitute the transfer can be ascertained with reasonable certainty, and the
transferee has, in part performance of the contract, taken possession of the property or any
part thereof, or the transferee, being already in possession, continues in possession in part
performance of the contract and has done some Act in furtherance of the contract, and the
transferee has performed or is willing to perform his part of the contract, then,
notwithstanding that where there is an instrument of transfer, that the transfer has not been
completed in the manner prescribed therefore by the law for the time being in force, the
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transferor or any person claiming under him shall be debarred from enforcing against the
transferee and persons claiming under him any right in respect of the property of which the
transferee has taken or continued in possession, other than a right expressly provided by the
terms of the contract.

The proviso is an exception of sorts stating that the interests and rights of a subsequent
transferee for consideration will be protected as long as he had no notice of the contract
leading to the part performance due or the part performance thereof.

In India, the doctrine is used only as a shield and not to enforce rights as laid down by the
Supreme Court in Delhi Motors case. But it must be noted that the aggrieved party can either
be the plaintiff or the defendant in a suit as the case maybe.

English and Indian law

The English Law of Part Performance:-

1) The contract need not be written or signed by the transferor

2) The right under the doctrine is an equitable right

3) It can be used for enforcing the right as well as defending the right; and

4) It creates a title in the transferee.

The Indian Law of Part Performance

1) Section 53A deals with the Doctrine and state that the contract has to be written as
well as signed by the transferor

2) It is a statutory right;

3) It can only be used to defend the possession of the transferee; and

4) It does not create a title in the transferee.
After 2001 amendment to Section 53A, the application of the section has seen dilution – it no
longer serves as a ‘substitute’ for registration. It should still hold good for defects other than
registration. But, registration of sale of immovable property is compulsory and Section 53A
has been amended to incorporate the same.

Object of the doctrine of Part Performance is to prevent fraud.

Section 53A of the Transfer of Property Act lays down that where any person contracts to
transfer ---

a) For consideration,

b) Any immovable property,

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c) By writing signed by him or on his behalf from which the terms necessary to constitute
the transfer can be ascertained with reasonable certainty, and the transferee

a) Has, in part performance of the contract, taken possession of the property or any part
thereof, or

b) The transferee, being already in possession, continues in possession in part performance

of the contract and has done some act in furtherance of the contract, and

c) The transferee has performed or willing to perform his part of the contract, Then not

withstanding that where there is an instrument of transfer, that the

transfer has not been completed in the manner prescribed therefor by the law for the
time being in force

a) The transferor or any person claiming under him shall be debarred from enforcing
against the transferee and persons claiming under him any right in respect of the property

b) Of which the transferee has taken or continued in possession, other than a right expressly
provided by the terms of the contract.
It has also been provided by the section 53A, as an exception to this rule, that nothing in
this section shall affect the rights of a transferee for consideration

i) Who has no notice of the contract or

ii) Of the part performance thereof.

The doctrine of part performance requires the following conditions to come into play

1) There should be a contract, to transfer any immovable property, for consideration, duly
written and signed by the transferor or on his behalf, from which the terms necessary to
constitute the transfer can be ascertained with reasonable certainty.

2) The transferee must have taken possession of the property or any part thereof or if already
in possession should have continued in possession in part performance of the contract and
should have done some act in furtherance of the contract.

3) The transferee must have performed or is ready and willing to perform his part of the
contract.

4) The rights of any other subsequent transferee for value without notice will not be affected
by this doctrine.

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There is difference in between the English and Indian doctrine of part performance.

i) According to the English law even oral agreement comes within the purview of this
doctrine on the strength of equity but it is not so in India.
ii) According to the English law both the plaintiff and defendant can avail of the doctrine
whereas it is not so in India. In India this doctrine is used as a shield and not as a sword.

Conclusion:

Hence, although historically the cases on part performance fall into two groups, fraud and
possession, the reasons behind the possession group are purely historical, and that
consequently those cases should have no influence as precedents upon modern cases.

The phrase "part performance" is a misnomer. Cases should not be taken out of the statute
because of certain types of acts of part performance, but solely to prevent fraud. In other
words, the golden thread running through the cases on part performance and the Statute of
Frauds is the prevention of fraud. American

Courts are showing a marked tendency to rest the doctrine upon equitable fraud, insisting,
however, that the acts in question be referable to a contract, in order to prevent the very evil
which the statute was passed to prevent. There should not be a case of equitable fraud unless
the plaintiff will be placed in a position

Where he will suffer irreparable injury if specific performance is refused. This result is in
accord with general equitable principles and does not thwart the policy of the statute.