The doctrine of part performance under Section 53A of the Transfer of Property Act, 1882: An overview of Joginder Tuli v. State NCT of Delhi & Ors
Author: Anubha Kumar, a student at Symbiosis Law School, Hyderabad
Abstract
The paper discusses and analyses the doctrine of part performance under section 53A of the Transfer of Property Act,1882 in reference to Joginder Tuli v. State NCT of Delhi and Ors. It focuses on the importance of the judgment rendered concerning the rights of the transferor and transferee of the property. The safeguard measures and the main objective of the section have been showcased in the paper. It highlights its legal framework and the required documents to protect the interests of the transferee. It also briefly studies the agreement to sell under section 54 of the transfer of property,1882, and its compliance with section 17 of the Registration Act. The analysis and the arguments of the parties in giving the verdict following the title deeds and the registration process are some of the key importance of the paper. The validity of the agreement issues of the possession of the property and lack of legalities are also added. It aims to provide an analysis of the recent cases that have been challenged in a court of law. The research paper aims to prepare a study of the revolvement around the topic. The challenges faced and their key takeaways have been discussed with analysis and proper evaluation has been done in the research paper.
Introduction
Any act of transferring the rights and possession of an immovable property shall be considered under the Transfer of Property Act. The transfer can vary in various methods such as a sale deed, gifts, lease, etc. The person transferring the property is known as the transferor and on the other hand, the one taking possession is the transferee. There have been cases where there is a lack of transparency and trust between the buyer and the seller. Often conflicts and disputes arise due to malicious activities, dishonest intentions, or fraud which leads to infringing the rights of the transferee. To safeguard such interests and debar the transferor for the misuse of the title of the property, section 53A of the Transfer of Property Act was added by the Amending Act of 1929. The mandatory registration processes were also encompassed due to the section. In the question of the possession of the property and the rights of the transferee, the protection under the section was challenged in Joginder vs State of Delhi leading it to one of the most important property law judgments.
Section 53A of Transfer of Property Act
Section 53A of the Transfer of Property Act of 1882 states that there is no right on the part of the transferor to claim the transferred property against the transferee aside from the rights given under the terms of the contract or the agreement made. The applicability of the limitation on the transferor is only in the case of an immovable property possession that is under partial fulfillment of a written contract, and he has either signed the document previously or is prepared to do so. It shall also be taken into consideration that a transferor cannot eject the transferee out of the property on the mere grounds that the legal title to the property has not been transferred to the transferee and legal formalities are lacking in the documentation and proof, such as in a registered contract of transfer of sale. The transferee consequently has the right to defend their possession and ownership of the property as section 53A limits the transferor’s claim of such legal title. Nonetheless, the contract needs to be stamped or preferably signed. The main aspect of this section being added was to prevent any fraudulent and malicious activities taking place in transferring the property from one to another and to protect the rights of the transferee in the property of sale. The main reliance is that no benefit is taken up wrongfully by the owner in cases of an absence of registered document titles and other legalities. It is not solely relinquishing ownership, but also in the transferor’s desire to provide the transferee ownership rights as a basis for the necessary payments. The legal perspective of the transfer deed is the essential element under section 53A of the Transfer of Property Act of 1882.
Relation with Section 17(1) A of Registration Act,1908
The validity of the documents and the title deeds shall be registered to make them valid under the law. Section 17(1)A of the act encompasses a provision for the registration of the contracts relating to the transfer of properties in coherence with section 53A of TOPA,1882. This act was added to prevent any misuse of the title of property by the owners in an agreement to sell or purchase property unlawfully or fraudulently. It was added to bridge the gap of transparency between the transferor and the transferee. To protect the enjoyment of rights and interests in a duly recorded manner and to maintain its validity. It is stated that no transferor may cancel the transferor of a title deed due to the registered documents and keeping a record of it. To protect the claim of rights, one needs to register the documents and the benefit of section 53A shall take place.
Validity of an agreement to sell
An agreement made for the purpose of sales from the seller to the buyer providing as a means of evidence and ownership or possession of that particular property. The validity of the agreement to sell lies in a registered sale deed. Section 54 of the Transfer of Property Act,1882 states that the transfer of the ownership of the property shall only be registered by a legal instrument. It becomes crucial for a property to be registered under the sale deeds. It shall be noted that an agreement to sell cannot be valid unless it is registered. In addition, Section 53A of TOPA,1882 renders the protection for a part performance. It is necessary for a valid agreement to sell to fulfill the essentials under section 53A and substantiate the registration titles of the sale deed.
Facts of the case
The petitioner with Ravinder Kumar had purchased a shop in New Delhi worth 7.2 lakhs by entering an agreement to sell. The petitioner had also entered into a Memorandum of Understanding with him stating that he had taken possession of the shop. It was also known that the family of Ravinder Kumar did not give him possession of the property since the builder, M/s Rock Contractors Pvt Ltd. had a collaboration agreement with the family, and the latter company could not build the premises. According to the Memorandum of Understanding, the petitioner had vacant possession of the property in question. After various questions over the possession of the property, the police came over to the place, and the petitioners were asked to show the title documents of the possession of the property and the purchase of the shop which were absent by the petitioners. It was also claimed by the petitioner that the Police in turn had harassed them and had used derogatory language thereby threatening them at the police station. The respondents claimed that there was no Memorandum of Understanding and that the petitioners had no right to claim the property of the shop and there was a fabrication of the title documents. Additionally, the respondents also stated that there was a false charge of harassment as they did not have any rights over the shop. The respondents also claimed that the petitioners cannot claim their right under section 53A of the Transfer of Property Act, of 1882.
Issues:
1. Can unregistered documents of property be benefitted under Section 53A of the Transfer of Property Act,1882?
2. Whether the petitioner had lawfully entered into the actual possession of the property?
Analysis and Judgment
The petitioner claimed title of the sealed portion of the property, which was resealed in 2008 under the Municipal Corporation of Delhi’s judgment and resealed following the monitoring committee’s guidelines, which were set by the Honourable Supreme Court. The police have not responded to the petitioner’s issues, even though they have provided all the documentation showing that the petitioner has a rightful claim to the contested property. It was also known that there was a negotiation between the property by claiming it in consideration with the petitioner’s Memorandum of Understanding.
On the other hand, the respondents relied on the subject that the documents produced by the petitioners were unstamped and there was an unregistered deed of the title. Additionally, there was no evident value of the MoU produced and a lack of documentation over the property cannot be claimed as a right by the petitioner. It was further included in the argument against the Municipal Corporation of Delhi judgment that the petitioner has not submitted any paperwork attesting to his ownership of the property, such as power bills, MCD tax receipts, details on the tenant’s monthly rent payments, etc, that required legal documentation demonstrating the property’s legal ownership had been presented by them. There was also a lack of reference to the amount of consideration that was received in the Memorandum stating that such evidence is uncertain in nature.
After considering both the arguments of the parties, it was held that Section 53A of the Transfer of Property Act could not be invoked by the petitioner for protection or defence if there is no documentation or other concrete proof that the petitioner was in possession of the said property. The Delhi High Court ruled that the document that was depended upon had to be registered for Section 53A of the Transfer of Property Act to be valid. Section 17(1A) read with Section 49 of the Registration Act restricts the court from looking into, relying upon, or admitting into testimony any unregistered document. As a result, the respondent ought to have been eligible for the benefit of Section 53A if and when the purported Agreement to Sell including receipt complied with Section 17(1) A of the Registration Act. If the petitioner had been in lawful possession, he would have filed a lawsuit within the allotted six months under Section 6 of the Specific Relief Act. The Court had ruled that the petitioner appeared to be attempting to get ownership of the property and circumvent the statute of limitations for launching a lawsuit leading to the dismissal of the writ petition by the petitioner.
Challenges in property-related cases:
- For buyers and sellers to develop trust, there must be lucidity in transactions of property or any transfer. There are many challenges like dishonesty, or any malicious activities taking place between the buyer and the seller in a contract for sale. Lack of paperwork, documentation necessary, disclosure of important variables, or any information is faced by the majority of the disputes in the property distribution.
- Significant financial factors in property transfers include stamp duty and registration fees of the required documents. There are likely to be difficulties in predicting the total expense due to the differing stamp duty rates in various states. The lack of stamps and registration increases the cases of determining the rights of the buyer of the property resulting in the conflict of documents and its legalities over the enjoyment of the rights of the property.
- There is also a lack of an updated record of the land or the property. Conflicts between the title deeds and legal records result in delayed litigation processes. Often the parties lose the right that they shall be attained due to the lack of material evidence or correct ownership titles. This also leads to encroachment of a third party which becomes challenging due to non-records of the title of the possession of the land.
Other related Case laws:
- In Ghanshyam vs Yogendra Rathi (2019), the court stated that an agreement to sell a property shall not be interpreted as a sale or as a transfer of the proprietary rights to the property in question. It was also further added that the transferee having done its lawful part in the property will also be protected under the benefit under section 53A of the Transfer of Property Act,1882 as it was a valid contract and lawful in consideration.
- In Imtiaz Ali vs Nasim Ahmed (1986), it was argued that an agreement to sell cannot be considered a legal document for the transfer of property for claiming a right over it except in cases where a document as stated by Section 54 of the Transfer of Property Act, 1882, is completed and registered following Section 17 of the Indian Registration Act, 1908. Any immovable property needs a registration deed or title under the aforementioned section elsewhere it can be considered to be a property in question and the the transferee may lose his right over the property over the lack of registration of the documents.
- In Hamzabi Ors. Vs Syed Karimuddij & Ors.(2000), the court held that section 53A of The Transfer of the Property, 1882 safeguards the ownership of individuals who have acted under a contract of sale, but for whom no legitimate sale document has been completed or recorded. It was also evident that the respondents were placed in possession and that the Panchayat had taken action pursuant to their application for a lease and therefore protecting the rights of the transferee.
Conclusion
The transfer of property should be taken into consideration with immovable property and shall have an essentiality of the registration of the titles of the ownership. In addition to the definition, it also offers the execution and registration modalities. Although it is sufficiently flexible to enable the parties to agree on different terms at their discretion, it also offers a framework of rights and obligations to which the seller and purchase will be bound. A comprehensive study of the aforementioned section shall take place to determine the rights of the transferor and the transferee as well. The main objective that shall be ascertained is that no dishonest means shall be used against the transferee while taking possession of the property and protection of their rights shall be considered in a question of enjoyment of right over the property. In many cases, it was observed that no plain readings of the section shall be taken into account and the validity of the registration deeds with reasonable certainty of the matter. This section of the act has an important relevance that is carried out legally in ascertaining the validity of the transfer of the immovable property.
Sources:
- https://www.godrejproperties.com/blog/challenges-and-solutions-in-property-transfer-in-india
- https://blog.ipleaders.in/section-53a-of-transfer-of-property-act-an-analysis/
- https://www.lawinsider.in/judgment/landmark-judgement-ghanshyam-v-yogendra-rathi-2023#:~:text=Yogendra%20Rathi%20(2023),-2%20min%20read&text=Honourable%20Supreme%20Court%20of%20India,rights%20in%20an%20immovable%20property.
- https://primelegal.in/2022/01/19/in-order-to-get-benefits-of-section-53a-of-the-transfer-of-property-act-the-document-relied-upon-must-be-a-registered-document-high-court-of-delhi/