# [1970] 2 S.C.R. 854

- **Citation:** [1970] 2 S.C.R. 854
- **Court:** Supreme Court of India
- **Decided:** 1969-10-16
- **Bench:** J. C. Shah, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1970-2-s-c-r-854-4954
- **Pages:** 7

## Headnote

Transfer of Property Act 4 of 1882, ss. 4 and 53A-Defence of part
perfonnance under s. 53A--Conditions for-Wh::n defendant is deen1ed
to be ready and willing to perform his part of contract-Effect of s. 4 on
provisions of Indian Contract Act, 1872-Sequence in which parties to
agree1nent are to cc.'rry oi~t their parts of contract-Effect of ss. 10( 4)
and 70(8) of Madhya Pradesh Land Revenue and Tenancy Act 66 of,
1950-Repeal of Act 66 of 1950 by Madhya Pradesh Land Revenue Code
1959 1rhether retrospective.
The appellant agreed in writing to sell a ginning factory situated in
· Madhya Pradesh and the agricultural land on which it stood, to the respondent for a sum df Rs. 43,077. The land in question stood entered in
the revenue records in the name of the appellant's brother. The respondent f!Jade part payment at the time of the execution of the agreement
and promised to pay the balance by a fixed date.
On the ground that
the balance was not paid on the c'ue date, the appellant rescinded the
contract and commenced an action in the Court of the District Judge.
Th• defence of the respondent was that he had made arrangements to
pay the balance of the agreed amount and had offered to pay it; it was
the appellant who had failed to fulfil his pa'rt of the agreement inasmuch
as he had not taken steps to get deleted the name of his brother from the
revenue records.
The trial court decreed the suit but the High Court
reversed the decree.
The appellant filed the present appeal with certificate. Dismissing the appeal,
HELD : The respondent was entitled to rely on the doctrine .of part
performance in s. 53A of the Transfer of Property Act, and s. 70(8) of
the Madhya Pradesh Land Revenue and Tenancy Act, 1950 was not a
bar to that defence. Section 70(8) only ,·equires that not only the conditions pre·scribed by s. 70 but registration of sale deed in accordance with
the land of !registration for the tir.ie being in force is a condition required
to be complied with before a sale is deemed valid.
There was no sale in
the present case and the respondent was not relying on any sale. He was
retying upon a contract of sale and the equity for defending his possession
against the claim made by the appellant.
[858 B-D]
There \Vas in the present case a contract to transfer for consideration
immovable property by writing signed by the appellant from which the
terms necessary to constitute th~ transfer could
be
ascertained
with
reasonable certainty.
In part perfo'rm:inc.-e of the contract the respondent
had taken possession of the property and h: had . in pursuance thereof
paid an amount of Rs. 22,011.
The contention ra1Sed on behalf of the
aopeltant that the act done in pursuance of the contract must be independent of the terms of the contract could not be accepted.
The fir~t three
conditions for the defence of part performance to be effectively set up by
the respondent therefore existed. [859 BJ
The fourth condition in s. 53A-that the transferee has performed or
is willing to perform his part of the contract-was also satisfied in the
case because :
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NATHULAL v, PHOOLCHAND (Shah, /,)
855
(i) Jn considering whether a pelrson is willing to perform his part of
the colilliact the sequence in which the obli~ations undelr a contract are
to be performed μmst be taken into account. By virtue of s. 4 of the
Tral)sfer of Property Act the chapters and •ections of the Transfer of
Property Act which relate to contracts are to be taken as part of the
Indian Contract Act, 1872. If therefore under the terms of the contract
obligations of the parties have to be performed in a certain sequence, one
of the parties to the contract cannot require compliance with the obligati<!_ns by the other party without in the first instance performing his own
part of the contract which in the sequence of obligation is performable by
him earlier.
(i;) The appellant had expressly undertaken to have the revenue
records rectified by securing the deleiion o

## Text

854
NATHULAL
y,
PHOOLCHAND
October 16, 1969
(J. C. SHAH AND K. S. HEGDE, JJ.J
Transfer of Property Act 4 of 1882, ss. 4 and 53A-Defence of part
perfonnance under s. 53A--Conditions for-Wh::n defendant is deen1ed
to be ready and willing to perform his part of contract-Effect of s. 4 on
provisions of Indian Contract Act, 1872-Sequence in which parties to
agree1nent are to cc.'rry oi~t their parts of contract-Effect of ss. 10( 4)
and 70(8) of Madhya Pradesh Land Revenue and Tenancy Act 66 of,
1950-Repeal of Act 66 of 1950 by Madhya Pradesh Land Revenue Code
1959 1rhether retrospective.
The appellant agreed in writing to sell a ginning factory situated in
· Madhya Pradesh and the agricultural land on which it stood, to the respondent for a sum df Rs. 43,077. The land in question stood entered in
the revenue records in the name of the appellant's brother. The respondent f!Jade part payment at the time of the execution of the agreement
and promised to pay the balance by a fixed date.
On the ground that
the balance was not paid on the c'ue date, the appellant rescinded the
contract and commenced an action in the Court of the District Judge.
Th• defence of the respondent was that he had made arrangements to
pay the balance of the agreed amount and had offered to pay it; it was
the appellant who had failed to fulfil his pa'rt of the agreement inasmuch
as he had not taken steps to get deleted the name of his brother from the
revenue records.
The trial court decreed the suit but the High Court
reversed the decree.
The appellant filed the present appeal with certificate. Dismissing the appeal,
HELD : The respondent was entitled to rely on the doctrine .of part
performance in s. 53A of the Transfer of Property Act, and s. 70(8) of
the Madhya Pradesh Land Revenue and Tenancy Act, 1950 was not a
bar to that defence. Section 70(8) only ,·equires that not only the conditions pre·scribed by s. 70 but registration of sale deed in accordance with
the land of !registration for the tir.ie being in force is a condition required
to be complied with before a sale is deemed valid.
There was no sale in
the present case and the respondent was not relying on any sale. He was
retying upon a contract of sale and the equity for defending his possession
against the claim made by the appellant.
[858 B-D]
There \Vas in the present case a contract to transfer for consideration
immovable property by writing signed by the appellant from which the
terms necessary to constitute th~ transfer could
be
ascertained
with
reasonable certainty.
In part perfo'rm:inc.-e of the contract the respondent
had taken possession of the property and h: had . in pursuance thereof
paid an amount of Rs. 22,011.
The contention ra1Sed on behalf of the
aopeltant that the act done in pursuance of the contract must be independent of the terms of the contract could not be accepted.
The fir~t three
conditions for the defence of part performance to be effectively set up by
the respondent therefore existed. [859 BJ
The fourth condition in s. 53A-that the transferee has performed or
is willing to perform his part of the contract-was also satisfied in the
case because :
A
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E
F
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NATHULAL v, PHOOLCHAND (Shah, /,)
855
(i) Jn considering whether a pelrson is willing to perform his part of
the colilliact the sequence in which the obli~ations undelr a contract are
to be performed μmst be taken into account. By virtue of s. 4 of the
Tral)sfer of Property Act the chapters and •ections of the Transfer of
Property Act which relate to contracts are to be taken as part of the
Indian Contract Act, 1872. If therefore under the terms of the contract
obligations of the parties have to be performed in a certain sequence, one
of the parties to the contract cannot require compliance with the obligati<!_ns by the other party without in the first instance performing his own
part of the contract which in the sequence of obligation is performable by
him earlier.
(i;) The appellant had expressly undertaken to have the revenue
records rectified by securing the deleiion of his brothelr's name from the
revenue records, and it was further an implied condition of the contract
that the appellant would secure the sanction of the Collector to the
transferor under s. 70( 4) of the Madhya Bharat Land Revenue and
Tenancy Act, 66 of 1950.
The first condition was not fulfilled in due
time and the second condition was never fulfilled. The repeal of Act 66
of 1950 by the Madhya Pradesh Land Revenue Code, J 959 did not have
retrospective operation.
·
(iii) In view of the arrangement made by the respondent it was clear
that he had at all relevant times made necessary arrangements for paying
the amount due, but so Jong as the appellant did not carry out h'.s part
of the contract the respondent could not be called upon to pay the
· b'alance of the price. It must therefore be held that the respondent was
·at all times ready and willing to carry out his part of th' econtract. [859
E'H]
Motilal & oOrs . . v. Nanhelal and Anr. L.R. 57 I.A. 333, Mrs. Chandhee
Widya Vat! Madden v. Dr. C. L. Katia! & Ors. [1964] 2 S.C.R. 495 and
Bank of India Ltd. & Ors. v. Jamsetji A, H. Chino,v and Ml s. Chinoy
and Co., L.R. 77 I.A. 76, 91, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No, 2345 of
1966.
Appeal from the judgment and decree dated December 3,
1965 of the Madhya Pradesh High Court, Indore Bench in First
Appeal No. 56 of 1961.
I. N. Shroff and B. L. Joshi, for the appellant.
R. Gopalakrishnan, for the respondent.
The Judgmen{ of the Court was deliverecl by
Sh~, ~· Nathulal-appellant in this appeal-was. the owner
of a. Gmnmg Factory constructed on a plot of agricultural land
beanng Khasra No. 259I1.
The land stood entered in the
revenue records in the name of Chittarmal--brother of Nathulal.
On February 26, 1951, Nathulal agreed to sell to Phoolchand
the land and the Ginning :;"actory for Rs. 43,0J 1/-. He received
in part payment Rs. 22,011/-, and put Phoolchand in possession
of the property.
Phoolchand · agreed to pay the balance on or
before May 7, 1951. The terms of the agreement were reduced
. to writing in counter-part and were duly signed by the parties. .
856
SUPREME COURT REPORTS
[1970] 2 s.c.R'..
On the plea that Phoolchand had failed 10 pay on the due date
the balance of price, Nathulal rescinded the contract on October 8, 1951 and commenced _an action in May, 1954 in the
Court of the District Judge, Nimar, for a decree for possession
of the land and the factory and for mesne profits from the date
of delivery till possession was restored io him, alleging that
Phoolchand .was a trespasser because he had contrary to 'the
express tcrms of the agreement made default in payment of the
balance of the purchase price on or before May 7, 1951. Phoolchand contended that Nathulal had failed to get the name of
Chittarmal "deleted" from the revenue record according to the
terms of the agreement, that he, Phoolchand.. was ready and
willing to pay the balance of Rs. 21,000/-, that he had sent a
tr.legram on May 7, 1951, offering to pay the balance against
execution of the sale deed, that the agreement had been unlawfully altered by Nathulal after ex;ecution by adding a clause by
which the possession of Phoolchand in default of payment of
money on or before May 7, 1951, was declared unlawful.
The Trial Court decreed the suit holding that Phoolchand
committed breach of contract in that he failed to pay the palance
due by him on or before the due date. In appeal the H'.igh Court
of Madhya Pradesh reversed the decree.
The High Court declared that Nathulal was entitled to the balan_cr. of the conside111>·
tion as also 'mesnu profits" at the rate of Rs. 1,500/- per annum
from May 7, 1951 till the date on which Rs. 21,000/- were
deposited by Phoolchand within two months of the passing of the
decree.
Subject to this direction Phoolchand was allowed to
retain possession of the entire property, i.e.,
land Khasra
No. 259/1 including the Ginning Factory and structures standing
on the land.
It was directed that if Phoolchand, committed
default Nathulal may claim possession of the entire property with
mesne profits at the rate of Rs. 3,000/- per annum from the date
he was out of possession and till the date on which possession was
delivered.
The cross-objections filed by Nathulal relating to
mesne profits were disposed of in the light of the directions given
in the decree.
With certificate granted by the High Court this
appeal has been preferred by Nathulal.
In the view of the Trial Court Phoolchand was unable to
procure the amount of Rs. 21,000/- which he had agreed to
pay on or before May 7, 1951 and on that account he had committed breach of the contract. The High. Court held that Nathulal was not guilty of breach of contract, for, Phoolchand had
arrancred with a Bank to borrow upto Rs. 75,000/-, when needed
by hi~, and Phoofchand had on that account sufficient resour~es
at his disposal to enable him to pay the amount due. The Tnal
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NATHULAL V. PHOOLCHAND (Shah, /.)
857
Court and the High Court have held ·Jiat Phoolchand failed to
pay the amount on or before May 7, 1951. The have also held
that he had not made the tender as pleaded by him.
Under the terms of the agreement Nathulal had undertaken
to get the name of his brother Chittarmal removed from the
revenue records and to get his own name entered, but the lands.
continued to stand recorded in the name of Chittarmal till October 6, 1952, and before that date Nathulal rescinded the contract. Again by virtue of s. 70 ( 4) of the Madhya Bharat Land
Revenue and Tenancy Act 66 of 1950, Phoolchand not being an
agriculturist the land could not be sold to him without the sanction of the State Government.
In the absence of any specific
clause dealing with this matter, a condition that Nathulal will
secure the sanction under s. 70 ( 4) after paying the appropriate
fee must be implied in the agreement for it is well-settled that
whereby statute property is not transferable without the permission of the authority, an agreement to transfer the propery must
be deemed subject to the implied com:lition that the transferor
will obtain the sanction of the authority concerned : see Motilal
and Others v. Nanhe/al and Another(') and Mrs. Chandhee
Widya Vati Madden v. Dr. C. L. Katia! & Others(").
Phoolchand could be called upon to pay the balance of the
price only after Nathulal performed his part of the contract.
Phoolchand had an ~mtstanding arrangement with his Banker to
enable him to draw the amount needed by him for payment to
Nathulal.
To prove himself ready and willing a purchaser has
not necessarily to produce the money or to vouch a concluded
scheme for financing the transaction : Bank of India Ltd. & Ors.
v. Jamsetji A. H. Chinoy and Messrs. Chinoy and Company(').
The High Court proceeded to dee; de the case largely upon
the view that Nathulal committed breach of contract.
But the
question whether 'Nathul~l had committed the breach is not of
much significance. Nathulal was the owner of the land : he had
executed no conveyance in favour of Phoolchand in the land or
the factory.
Nathulal had sued for possession relying upon his .
title, and Phoolchand could defeat that claim if he established his
defence of part-performance under s. 53A of the Transfer of
Property Act.
The argument raised by counsel for Nathulal, that by virtue
of s. 70(8) of the Madhya Bharat Land Revenue and Tenancy
H
Act, the plea of part performance is not available to a person put
(I) L.R. 57 l.A.333
(2) (1964] 2 S.C.R. 495.
(3) l..R. 77 I.A. 76, 91.
858
SUPREME COURT REPORTS
[1970] 2 s.c.R.
in possession of the property under a contract of sale, has, in our
judgment, no force.
Section 70 ( 8) provides :
"No sale under this section shall be deemed to be
valid until the sale deed effecting such a sale has been
registered in accordance with the law of registration in
force for the time being".
But this clause only requires that not only the conditions presci:ibed by s. 70, but registration of sale deed in accordance with
the law of registration for the time being in force is a condition
required to be complied with before a sale is deemed valid. There
is no sale in the present case, and Phoolchand is not relying upon
any sale.
He is relying upon a contract of sale and equity
which he may set up to defend his possession against the claim
made by Nathulal. To the making of such a claim, relying upon
the doctrine of part performance in s. 53A of the Transfer of
Property Act, there is nothing in s. 70 ( 8) of the Madhya Bharat
Land Revenue and Tenancy Act 66 of 1950 which may operate
as a bar.
The c. nditions necesSat)' fer making out the defence of part
perfomance to an action in ejectment by the owner are :
( 1) that the transferor has contracted 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;
(2) that 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;
(3) that the transferee has done some act in furtherance of the contract; and
( 4) that the transferee has performed or is willing
to perform his part of the contract.
·
~
If these conditions· are fulfilled then 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 therefor by the
Jaw for the time being in force, the transferor or any person
claiming under him is debarred from enforcing against the
transferee any right in respect of the property of which the
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NATHULAL V. PHOOLCHAND (Shah, J.)
859
A transferee has taken or continued in possesion, other than a
right expressly provided by the terms of the contract.
There is in this case a contract to transfer for consideration
immoveable property by writing signed by Nathulal from which
the terms necess;uy to constitute the transfer can be asctrtained
11 with reasonable certainty.
In part performance of the contract,
Phoolchand has taken possession of the property and he had in
pursuance thereof paid an amount of Rs. 22,011/-. The argument raised by counsel for Nathulal that the act done in pursuance of the contract must be independent of the terms of the
contract cannot be accepted.
The first three conditions for the
_,, defence of part performance to be effectively set up by Phoolchand
"' exist. Mr. Shroff for Nathulal however contends that Phoolchand was not wiiling to perform his part of the contract.
Nathulal had expressly undertaken to have the revenue
records rectified by securing the deletion of Chittan:n,al's name,
and it was an implied condition of the contract that Nath)ilal will
D secure the sanction of the Collector to the transfer under s: 70 ( 4)
of the Madhya Bharat Land Revenue and Tenancy Act 66 of
1950. The first condition was not fulfi!:d till October 6, 1952
and the second condition was never fulfilled.
We are unable 10
agree with Mr. Shroff that the repeal of the Madhya Bharat
Act 66 of 1950 by the Madhya Pradesh Land Revenue Code,
E 1959, has retrospective operation.
In considering whether a person is willing to perform his part
of the contract the sequence in which the obligations under a
contract are to be ptrformed must be taken into account.
The
argument raised by Mr. Shroff that Nathulal was bound to perform the two conditions only after the amount of Rs. 21,000 -
:F was paid is plainly contrary to the terms of the agreement.
By
virtue of s. 4 of the Transfer· of Property Act the chapters and
sections of the Transfer of Prdperty Act which relate to contracts
are to be taken as part of the Indian Contract Act, 1872.
If,
therefore, under the terms, of the contract the obligations of the
parties have to be performed in a certain sequence, one of the
.C parties to the contract cannot require compliance with the obligations by the other party without in the first instance performing
his own part of the contract which in the sequence of obligations
is performable by him earlier.
In view of the arrangement made by Phoolch~1•d it was clear
that he had at all relevant times made necessary arrangements for
lH paying the amount du~. but so Jong as l'\athulal did not carry out
his part of the contq1ct, Phoolchand could not be called upon to
pay the balance of !!he price.
It must, therefore, be held, that
860
SUPREME COURT REPORTS
[1970]2 S.C.R.
Phoolchand was at all relevant times willing to carry out his part
A.
of the. contract.
The appeal fails and is dismissed with cost.
Appeal dismissed.
Y.P.