Case Study: Giriyappa & Anr. V. Kamalamma & Ors.

“The Supreme Court emphasized that protection under Section 53A of the Transfer of Property Act, 1882, applies only when a valid written contract exists, possession is taken in part-performance of the contract, and the transferee performs or is willing to perform their obligations. The provision cannot be invoked to justify unlawful possession or unproven agreements. Strict compliance with statutory prerequisites is mandatory for its application.”

Citation: Special Leave Petition (Civil) No.30804 Of 2024 [Diary No(S). 56304/2024]

Date of Judgment: 20^th December, 2024

Court: Supreme Court of India

Bench: J.B. Pardiwala (J) and R. Mahadevan (J)

Facts

• The dispute concerned 2 guntas of land from Survey No. 24/9, located in Tumakuru, Karnataka. The Petitioners-Defendants claimed possession of the land based on an alleged sale agreement dated 25.11.1968, purportedly executed by the Respondent-Plaintiff. According to the Petitioners, the Respondent agreed to sell the land for a total consideration of ₹850 and allowed them possession of the property as prospective transferees in part-performance of the contract.
• The Respondent, however, denied the execution of any such agreement. Instead, she asserted her ownership and claimed that the Petitioners had unlawfully occupied the property. She filed Original Suit No. 364/1988 in the Trial Court, seeking a declaration of title and recovery of possession.
• The Petitioners invoked Section 53A of the Transfer of Property Act, 1882 (TPA), contending that they were entitled to retain possession as prospective transferees who had fulfilled their obligations under the alleged contract.
• The case raised significant questions about the applicability of Section 53A, including whether possession could be protected in the absence of a proven written agreement.

Decision of the Trial Court

The Trial Court ruled in favor of the Respondent-Plaintiff. It examined the oral and documentary evidence presented by both sides and made the following observations:

1. The Petitioners-Defendants failed to produce any credible evidence proving the execution of the sale agreement dated 25.11.1968. The alleged document was neither registered nor substantiated by corroborating testimony.
2. The Respondent-Plaintiff demonstrated that she had built a shed on the disputed property in 1982-83, which was later unlawfully occupied by the Petitioners in 1983-84. This suggested that the Petitioners' possession was not based on any valid contract.
3. The Petitioners had approached the Land Tribunal, Tumakuru, seeking occupancy rights over the property. However, their claim was rejected, and the decision became final.

Based on these findings, the Trial Court decreed the suit in favor of the Respondent, declaring her title to the property and ordering the recovery of possession.

Decision of the First Appellate Court

The First Appellate Court upheld the Trial Court’s judgment, agreeing with its factual and legal conclusions. In its detailed analysis, the court noted:

1. The Petitioners could not provide any reliable evidence to prove the existence of the alleged sale agreement. Their claims were unsupported by either direct or circumstantial evidence.
2. The Respondent's title to the property was established through valid documents and credible testimony, which outweighed the Petitioners’ unsubstantiated assertions.
3. The Petitioners’ claim under Section 53A of the TPA was untenable as they failed to satisfy the statutory prerequisites, particularly the existence of a written and signed contract.

The Appellate Court dismissed the appeal, affirming the Trial Court’s decree for the declaration of title and recovery of possession.

Decision of the High Court

The High Court of Karnataka also dismissed the Second Appeal filed by the Petitioners, holding that the concurrent findings of the lower courts were based on proper evaluation of evidence. The High Court observed:

1. The Petitioners failed to prove that the Respondent executed the alleged sale agreement and handed over possession in part-performance of the contract.
2. The Respondent had consistently established her ownership and lawful entitlement to the property.
3. Section 53A of the TPA could not be invoked without fulfilling the necessary conditions, particularly the existence of a valid written agreement.

The High Court rejected the Petitioners’ reliance on Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi[1], noting that the factual circumstances of that case were entirely different and inapplicable. 

Decision of the Supreme Court

The Supreme Court, while dismissing the Special Leave Petition filed by the Petitioners, upheld the judgments of the High Court, First Appellate Court, and Trial Court. It emphasized that the Petitioners failed to satisfy the statutory conditions required to invoke Section 53A of the Transfer of Property Act, 1882 (TPA).

The Court outlined the prerequisites requirements for invoking Section 53A of the TPA and provided a detailed explanation of their application:

1. Existence of a Written Contract

• Requirement: There must be a contract in writing, signed by the transferor, clearly outlining the terms necessary to constitute the transfer. The terms must be ascertainable with reasonable certainty from the written agreement.
• Application in This Case: The Petitioners failed to produce any valid written agreement. The alleged sale agreement dated 25.11.1968 was not proven through credible documentary evidence or testimony. Without a valid, written, and signed contract, the foundational requirement of Section 53A was unmet.
• Court’s Observation: Section 53A is explicitly clear that the protection is available only when the contract is in writing and signed by the transferor. The absence of such a document renders the provision inapplicable. In paragraph 11 court recorded that “From the aforesaid, it is evident that the protection of a prospective purchaser/transferee of his possession of the property involved, is available subject to the following prerequisites: (a) 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;….”

Furthure in paragraph 13 court observed that “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. 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.”

2. Possession in Part-Performance of the Contract

• Requirement: The transferee must have taken possession of the property or continued in possession in part-performance of the contract. Possession must be a direct result of the contractual agreement.
• Application in This Case: The Petitioners claimed possession based on the alleged sale agreement, but the evidence showed that their possession was unlawful. The Trial Court found that they occupied the property without any valid legal basis, and their claim under Section 53A was unsupported by any credible evidence of part-performance.
• Court’s Observation: The court held that Possession under Section 53A must be lawful and directly traceable to the contract in question. In this case, the Petitioners' possession was unlawful and cannot be shielded under this provision.

In paragraph 12 court noted 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 5 is carved out qua a transferee for consideration, who has no notice of the contract or of the part-performance thereof.”

Further in paragraph 14 the court observed that “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.”

3. Acts in Furtherance of the Contract

• Requirement: The transferee must have performed or be willing to perform their part of the contract. This includes actions such as payment of consideration or other obligations stipulated in the agreement.
• Application in This Case: The Petitioners failed to show that they performed or were ready to perform their contractual obligations. There was no evidence of payment or any act that could substantiate their claims of part-performance.
• Court’s Observation: The court held that willingness to perform one's part of the contract is a fundamental requirement under Section 53A. The Petitioners failed to demonstrate their readiness or any actions in furtherance of the purported contract." Court in paragraph 11 observed “From the aforesaid, it is evident that the protection of a prospective purchaser/transferee of his possession of the property involved, is available subject to the following prerequisites: ….(b) 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; (c) The transferee has done some act in furtherance of the contract and has performed or is willing to perform his part of the contract.”

4. Protection Limited to Rights Under the Contract

• Requirement: Section 53A restricts the transferor from enforcing any rights against the transferee other than those explicitly provided by the contract.
• Application in This Case: Since the Petitioners failed to establish the existence of a valid contract, they could not claim any protection under Section 53A. The Respondent-Plaintiff, as the rightful owner, retained the full right to recover possession of the property.
• Court’s Observation: Court held that the protection under Section 53A is a defense mechanism, not a tool to establish ownership or possession in the absence of a valid contract.

Court in paragraph 12 observed 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 5 is carved out qua a transferee for consideration, who has no notice of the contract or of the part-performance thereof.”

In context to same court in paragraph 13 court observed that “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. 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.”

Key legal issues discussed

1. Can the Petitioners invoke the protection of Section 53A of the Transfer of Property Act (TPA), 1882?

No

The Court held that the Petitioners (defendants) could not invoke the protection of Section 53A as they failed to satisfy the required conditions. Section 53A mandates the following prerequisites:

• A written contract signed by the transferor that clearly outlines the terms necessary to constitute a transfer.
• The transferee must have taken possession or continued possession in part-performance of the contract.
• The transferee must perform or be willing to perform their part of the contract.

The Petitioners alleged possession based on a sale agreement dated 25.11.1968, but they failed to prove the execution of the agreement. Neither documentary evidence nor credible testimony substantiated their claim. The High Court and lower courts found the Petitioners’ possession to be unlawful, as the purported sale agreement lacked authenticity. The absence of any demonstrable act in furtherance of the agreement or readiness to perform their obligations invalidated their claim under Section 53A.

Court in Paragraphs 13 observed the condition that “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. 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.”

2. Does the existence of Section 53A protect possession without a proven written agreement?

No

Section 53A serves as a shield, not a sword, protecting transferees who have acted in part-performance of a valid and enforceable contract. However, the provision explicitly requires the contract to be in writing and signed by the transferor. The Petitioners failed to demonstrate that the Respondent (plaintiff) executed such a document. The Court underscored that Section 53A is not a tool to validate unlawful possession but a safeguard for transferees acting in good faith based on a legitimate agreement. Without a written and proven contract, the Petitioners’ possession was deemed without legal basis. Court in paragraph 14 craved the rule that “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.”

3. Was the High Court correct in rejecting the Petitioners’ appeal?

Yes

The Supreme Court affirmed the High Court's findings, which were consistent with those of the Trial Court and the First Appellate Court. All three courts concluded that the Petitioners failed to prove the execution of the sale agreement, a prerequisite for invoking Section 53A. The High Court also noted discrepancies in the Petitioners’ claims regarding possession and pointed to previous legal proceedings where the Petitioners’ claims over the property were dismissed. The absence of credible evidence supporting their possession or agreement further strengthened the High Court's conclusion. Court in paragraph 9 observed that “…no error not to speak of any error of law could be said to have been committed by the High Court in passing the impugned judgment and order.”

4. Does Section 53A relax the requirement for written contracts under property law?

No

The Court clarified that while Section 53A creates an exception to the strict requirements of property law, including registration, this exception must be strictly construed. The provision protects only those transferees who act in good faith and fulfill all specified conditions. In this case, the Petitioners attempted to misuse Section 53A to justify possession without fulfilling the statutory prerequisites. The Court reiterated that the provision's purpose is to protect innocent transferees who rely on genuine agreements, not to validate unlawful claims.Court in paragraphs 13 noted that “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. 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”

While dealing with the same question, the court in paragraph 14 pointed out that “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.”

[1] 2002 (3) SCC 676.

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