Part Performance

Four, the transferee has done some act in furtherance of the contract. Paying part of the price, spending money on improvements, or taking over the seller's obligations will do.

Five, the transferee has performed or is willing to perform his part of the contract. This is the condition that decides most cases, and it is dealt with next.

Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi, (2002) 3 SCC 676, decided on 22 January 2002 by Khare and Bhan JJ, sets the conditions out and settles a second question with them.

Facts. By an agreement of July 1964 the respondent agreed to sell agricultural land to the appellant for Rs. 9,000. The appellant paid Rs. 5,700 as earnest money and was put in possession. When the transferor moved to sell the land elsewhere the appellant obtained an injunction in August 1965. In spite of it the transferor executed a registered deed in May 1966 in favour of another person, who then sued for possession. By then a suit by the appellant for specific performance of the 1964 agreement would have been barred by limitation.

Held. The transferee could still defend his possession under section 53A. Limitation bars the remedy, not the defence: the expiry of the period for a suit for specific performance does not take away the protection the section gives to a transferee already in possession, because the section confers a shield and not a right of action. The Court set out the conditions of the section as summarised above.

Why it matters here. It is the answer to the standard problem in which the agreement is old and the buyer has been in possession for years. A student who says the buyer is out of time has confused the right to sue with the right to resist.

The fifth condition: willingness to perform

Nathulal v. Phoolchand, AIR 1970 SC 546, decided on 16 October 1969 by Shah and Hegde JJ, is the case on what willingness means.

Facts. Nathulal owned a ginning factory standing on agricultural land which stood in the revenue records in the name of his brother Chittarmal. By an agreement of 26 February 1951 he agreed to sell it to Phoolchand for Rs. 43,011. Phoolchand paid Rs. 22,011 and was put in possession, the balance of Rs. 21,000 to be paid by 7 May 1951. Nathulal was to get his brother's name removed from the revenue records and his own entered. When the balance was not paid by the due date Nathulal treated the contract as rescinded and sued in 1954 for possession, calling Phoolchand a trespasser.

Held. The defence of part performance succeeded. In considering whether a person is willing to perform his part, the sequence in which the obligations under the contract are to be performed must be taken into account: where obligations are to be performed in a sequence, one party cannot demand performance by the other without first performing what falls to him earlier in that sequence. A transferee need not produce the cash; readiness shown by an arrangement to pay is enough.

Why it matters here. Willingness is not tested against the calendar in the abstract. It is tested against the order the contract itself sets, so a buyer is not unwilling merely because money did not change hands on the day named, where the seller had an earlier obligation he had not met.

The effect: a shield, never a sword

The section says the transferor and those claiming under him shall be debarred from enforcing against the transferee any right in respect of the property of which he has taken or continued in possession, other than a right expressly provided by the terms of the contract.

Three consequences follow.

It gives no title. Ownership stays with the transferor until a registered deed is executed.

It cannot found a suit. The transferee cannot sue on section 53A to recover possession or to obtain a declaration of title. He raises it when he is sued.

It protects only the possession he holds under the contract, and it does not touch a right the contract itself expressly gave the transferor.

Suraj Lamp and Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656, decided on 11 October 2011 by Raveendran, Patnaik and Gokhale JJ, is the modern statement.

Facts. The Court examined the practice, widespread in and around Delhi, of transferring immovable property without a registered conveyance: the seller would deliver possession and execute an agreement of sale, a general power of attorney and a will in the buyer's favour, a package the Court called an SA/GPA/WILL transfer. The purpose was to escape stamp duty, registration fees and capital gains tax, and to place undisclosed money in property.

Held. Immovable property can be legally and lawfully transferred or conveyed only by a registered deed of conveyance. An agreement of sale, a power of attorney and a will, singly or together, do not convey title and do not amount to a transfer, nor can they be recognised as a valid mode of transfer. As to section 53A, the Court held that it gives the proposed transferee a limited protection: it disentitles the transferor from disturbing the possession he has given, but it has nothing to do with ownership, which stays with the vendor until a registered deed of sale is executed.

Why it matters here. It is the clearest available statement that possession and title are different things, and it warns a student against the common belief that long possession under an agreement of sale ripens into ownership. It does not.

The proviso: the innocent later purchaser

Nothing in the section affects the rights of a transferee for consideration who has no notice of the contract or of the part performance of it.

So a later purchaser who paid value and knew nothing takes free of the section 53A defence. In practice this is a narrow escape, because the transferee protected by section 53A is by definition in possession, and Explanation II to section 3, taught in [The Interpretation Clause: Attestation, Notice and the Words the Act Runs On], deems a person acquiring immovable property to have notice of the title of anyone in actual possession. A buyer who inspects the property will see him; a buyer who does not is fixed with notice anyway.

The 2001 amendment, and why every other set of notes is wrong

This is the most important thing in the chapter and it is a change in the law that most free material has not caught up with.

As originally enacted, section 53A protected the transferee "notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed". So an unregistered agreement to sell was a perfectly good foundation for the defence.

The Registration and Other Related Laws (Amendment) Act 2001 (48 of 2001) omitted those words. India Code's consolidated text now prints the passage as "then, notwithstanding that", followed by a footnote marker and three asterisks standing for the omitted words, and then "or, where there is an instrument of transfer, that the transfer has not been completed". The asterisks are the Act's own way of showing that something has been taken out, and the footnote names the amending Act.

The same Act inserted section 17(1A) into the Registration Act 1908, which provides that documents containing contracts to transfer for consideration any immovable property for the purpose of section 53A shall be registered if they have been executed on or after the commencement of that Act, and that if such documents are not registered, they shall have no effect for the purposes of section 53A.

The two changes are one reform and must be read together. The result, for any agreement executed on or after the commencement of the 2001 Act, is this:

An unregistered agreement to sell no longer supports a defence of part performance. The document must be registered. Before the amendment it did not have to be.

That is why this chapter is placed last in Module I and cross-linked to [Documents of Which Registration Is Compulsory] in Module IV. It is also why a student must be careful with older textbooks, older question papers and the many online notes that still recite the pre-2001 text. The doctrine survives; its foundation now has to be registered.

A worked example

In 2019 Jyoti agrees in writing, signed by her, to sell her flat at Vashi to Karan for Rs. 80 lakh. Karan pays Rs. 60 lakh, is put in possession, and spends Rs. 6 lakh on renovation. The balance is to be paid when Jyoti produces a no-objection certificate from the society, which she never does. The agreement is registered.

In 2026 Jyoti sues Karan for possession, calling him a trespasser because no sale deed was executed.

Work through the conditions. There is a written contract for consideration signed by her; its terms are certain; Karan took possession in part performance; he has done acts in furtherance, paying most of the price and renovating; and he is willing to perform. On Nathulal v. Phoolchand, AIR 1970 SC 546, his willingness is judged against the sequence of obligations, and the outstanding step was hers. Section 53A debars her from enforcing possession against him.

Suppose a suit by Karan for specific performance would now be time-barred. It makes no difference to the defence. On Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi, (2002) 3 SCC 676, limitation bars the remedy and not the shield.

Does Karan own the flat? No. On Suraj Lamp and Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656, title passes only by a registered deed of conveyance, and section 53A has nothing to do with ownership. He can stay; he cannot claim to be owner, and he cannot give a good title to anyone else.

Now change one fact: the agreement was never registered. It was executed in 2019, after the 2001 Act. By section 17(1A) of the Registration Act 1908 an unregistered document of this kind has no effect for the purposes of section 53A. Karan's defence fails on that ground alone, however completely he has performed. This single fact reverses the entire answer, and it is the fact that older notes will not tell a student to look for.

Change another: Jyoti sold the flat in 2021 to Meera for full value. Meera would take free only if she had no notice of the contract or of the part performance. Karan was living in the flat, so Explanation II to section 3 fixes her with notice, and the proviso does not save her.

What it does NOT mean

It does not transfer title. Ownership remains with the transferor until a registered conveyance is executed.

It is a defence, not a cause of action. The transferee cannot sue upon it.

There is no oral part performance in India. A signed writing is a condition.

Continuing in possession is not enough by itself where the transferee was already in possession. He must also do some act in furtherance of the contract.

Willingness is not tested in the abstract. It is measured against the sequence of obligations the contract sets.

Limitation on a specific performance suit does not destroy the defence.

And, since 2001, an unregistered agreement will not do. Section 17(1A) of the Registration Act 1908 deprives an unregistered document of any effect for the purposes of section 53A.

Distinctions

Quick revision

• Five conditions: a written, signed contract to transfer immovable property for consideration; terms ascertainable with reasonable certainty; possession taken or continued in part performance; some act in furtherance; and the transferee has performed or is willing to perform.
• Effect: the transferor and those claiming under him are debarred from enforcing rights against the transferee's possession, except a right expressly given by the contract.
• It is a shield, never a sword, and it passes no title.
• Nathulal v. Phoolchand, AIR 1970 SC 546: willingness is judged against the sequence of obligations.
• Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi, (2002) 3 SCC 676: limitation bars the remedy, not the defence.
• Suraj Lamp and Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656: only a registered deed conveys title; section 53A has nothing to do with ownership.
• Proviso: a transferee for consideration without notice of the contract or the part performance is unaffected; but Explanation II to section 3 usually fixes him with notice, because the protected transferee is in possession.
• The 2001 amendment: Act 48 of 2001 omitted the words about an unregistered contract from section 53A and inserted section 17(1A) into the Registration Act 1908. An unregistered agreement executed on or after that Act has no effect for the purposes of section 53A.

Test yourself

1. State the conditions for section 53A. A contract to transfer immovable property for consideration, in writing signed by the transferor or on his behalf, from which the necessary terms can be ascertained with reasonable certainty; the transferee having taken possession, or continued in possession and done some act in furtherance of the contract, in part performance; some act done in furtherance of the contract; and the transferee having performed or being willing to perform his part.

2. Does section 53A give the transferee ownership? No. It debars the transferor from enforcing rights against his possession. Title passes only by a registered deed of conveyance, as held in Suraj Lamp and Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656.

3. Can a transferee sue to recover possession relying on section 53A? No. It is a shield and not a sword, and may be raised only in defence.

4. A buyer in possession under an agreement of 1990 is sued for possession in 2010, a specific performance suit being long time-barred. Can he defend? Yes. In Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi, (2002) 3 SCC 676, the Supreme Court held that limitation bars the remedy and not the defence, so the protection of section 53A survives.

5. How is "willingness to perform" judged? Against the sequence in which the contract requires the obligations to be performed. On Nathulal v. Phoolchand, AIR 1970 SC 546, a party cannot demand performance by the other without first performing what falls to him earlier in the sequence, and readiness through an arrangement to pay is enough without producing cash.

6. What did the 2001 amendment change? The Registration and Other Related Laws (Amendment) Act 2001 omitted from section 53A the words protecting a transferee notwithstanding that a contract required to be registered had not been registered, and inserted section 17(1A) into the Registration Act 1908. A document of that kind executed on or after that Act must be registered, and if it is not, it has no effect for the purposes of section 53A.

7. A buyer in possession under an unregistered agreement of sale executed in 2020 is sued for possession. Advise him. The defence under section 53A is not available. By section 17(1A) of the Registration Act 1908 the unregistered document has no effect for the purposes of section 53A, and the agreement was executed well after the 2001 Act. However completely he has performed, he cannot rely on the section, and his remedies lie elsewhere in contract.

8. When does the proviso protect a later purchaser? Where he is a transferee for consideration with no notice of the contract or of the part performance. In practice it rarely helps, because the protected transferee is in possession and Explanation II to section 3 deems a person acquiring the property to have notice of the title of anyone in actual possession.