# SARDAR GOVINDRAO MAHADIK & ANR v. DEVI SAHAI . & ORS

- **Citation:** [1982] 2 S.C.R. 186
- **Court:** Supreme Court of India
- **Decided:** 1981-12-15
- **Case number:** Civil Appeal No. I 145 of 1969
- **Bench:** D.A. Desai, R.B. Misra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sardar-govindrao-mahadik-anr-v-devi-sahai-ors-8889
- **Pages:** 41

## Headnote

Transfer of Property Act, S.Cctio11 53A-Scope of
The appellant mortgagor took a loan by mortgaging his house property to
the respondent mortgagee. The mortgage was a mortgage with possession.
According to the mortgagee sometime thereafter the mortgagor agreed to sell the
property to him and that pursuant to !his agreement requisite stamps were
purchased and a draft sale deed was drawn up. The sale deed was however not
registered.
A few days later the mortgagor sold the property to another person and the
mortgagor and the subsequent purchaser filed a suit against the mortgagee for a
deeree for redemption.
In the written statement the mortgagee claimed that even though the sale
deed was not registered, since he was in possession of the property in part performance of the contract of sale and continued to be in possession and did
several acts attributable to the contract, the mortgagor was debarred from enforcing any right against him in respect of the property. It was also claimed
that since the mortgagor himself had no subsisting title to the property on the
date of sale, he could not have transferred the property to the subsequent
purchaser.
The trial court held that though the sale deed was executed but since it
was net registered the transaction of sale was not complete. The Court further
held that benefit of section 53 A is not available to the mortgagor defendant
because the mortgage being a mortgage with possession, continued possession of
the mortgogee after the date of contract would not be in part performance of the
contract, and also the payment made for the purchase of stamps and for expenses
of registration could not be said to be in furtherance of the contract because that
amount was paid before the execu1ion of the contract.
Ia the mortgagee's appeal the High Court held that he was entitled to the
benefit of section 53A against the mortgagor and the subsequent purchaser for the
reason that he was in possession of the property and paid Rs. 1000 in furtherance
of the contract,
The appellant 1n Civil Appeal No. I 145 of 1969 filed a suit against the
!nortgaiior for reco\er)' of a cJcbt owed to him and obtained attachment of the
-
\
•
.. '
-
--
. ....,
s. GOViNb RAO v. DEVi SAHAi
187
suit property before judgment. The suit eventually ended in~a decree in his
favour. In the aution of the suit property since there were no bidders the decree
holder's bid was accepted with the permission of the Court.
The High Court allowed the decree holder to be impleaded as a respondent
in the mortgagee's appeal which was then pending in the High Court.
A
It was contended on behalf the mortgagor that the deeree bolder could not
II
maintain an application under Order XXII, Rule 10 of the Code of Civil Procedure because be could not be said to be claiming under the mortgagor. (Rule 10
of order XXJI CPC provides for continuance of any action by or against a person
who acquires any interest either by assignment, creation or devolution during
the pendency of the suit with the leave of the Court.)
'
HELD : To qualify for the protection of the doctrine of part performance it
must be shown that there is a con tract to transfer immovable property for
consideration and the contract is evidenced by a writing signed by the person
sought to be bound by it and from which the terms necessary to constitute the
transfer can be ascertained with reasonable certainty. After establishing these
circumstances, it must be further shown that a transferee had in part performance
of the contract either taken possession of the property or any part thereof or
the transferee being already in possession, continued in possession in part
performance of the contract and had done some· act in furtherance of
the contract. The acts claimed to be in part performance must be unequivocally referable to the pre-existing contract and the acts of part performance
must unequivocally point in the direction of the existence of contract and
evidencing
implemention
or
performance o

## Text

_Characters 0–39,978 of 102,647. This is a partial read: ask again with offset=39978 for what follows._

A
186
B
c
D
E
F
G
H
SARDAR GOVINDRAO MAHADIK & ANR.
v
DEVI SAHAI . & ORS.
December 15, 1981
[D.A. DESAI AND R.B. MISRA,JJ.J
Transfer of Property Act, S.Cctio11 53A-Scope of
The appellant mortgagor took a loan by mortgaging his house property to
the respondent mortgagee. The mortgage was a mortgage with possession.
According to the mortgagee sometime thereafter the mortgagor agreed to sell the
property to him and that pursuant to !his agreement requisite stamps were
purchased and a draft sale deed was drawn up. The sale deed was however not
registered.
A few days later the mortgagor sold the property to another person and the
mortgagor and the subsequent purchaser filed a suit against the mortgagee for a
deeree for redemption.
In the written statement the mortgagee claimed that even though the sale
deed was not registered, since he was in possession of the property in part performance of the contract of sale and continued to be in possession and did
several acts attributable to the contract, the mortgagor was debarred from enforcing any right against him in respect of the property. It was also claimed
that since the mortgagor himself had no subsisting title to the property on the
date of sale, he could not have transferred the property to the subsequent
purchaser.
The trial court held that though the sale deed was executed but since it
was net registered the transaction of sale was not complete. The Court further
held that benefit of section 53 A is not available to the mortgagor defendant
because the mortgage being a mortgage with possession, continued possession of
the mortgogee after the date of contract would not be in part performance of the
contract, and also the payment made for the purchase of stamps and for expenses
of registration could not be said to be in furtherance of the contract because that
amount was paid before the execu1ion of the contract.
Ia the mortgagee's appeal the High Court held that he was entitled to the
benefit of section 53A against the mortgagor and the subsequent purchaser for the
reason that he was in possession of the property and paid Rs. 1000 in furtherance
of the contract,
The appellant 1n Civil Appeal No. I 145 of 1969 filed a suit against the
!nortgaiior for reco\er)' of a cJcbt owed to him and obtained attachment of the
-
\
•
.. '
-
--
. ....,
s. GOViNb RAO v. DEVi SAHAi
187
suit property before judgment. The suit eventually ended in~a decree in his
favour. In the aution of the suit property since there were no bidders the decree
holder's bid was accepted with the permission of the Court.
The High Court allowed the decree holder to be impleaded as a respondent
in the mortgagee's appeal which was then pending in the High Court.
A
It was contended on behalf the mortgagor that the deeree bolder could not
II
maintain an application under Order XXII, Rule 10 of the Code of Civil Procedure because be could not be said to be claiming under the mortgagor. (Rule 10
of order XXJI CPC provides for continuance of any action by or against a person
who acquires any interest either by assignment, creation or devolution during
the pendency of the suit with the leave of the Court.)
'
HELD : To qualify for the protection of the doctrine of part performance it
must be shown that there is a con tract to transfer immovable property for
consideration and the contract is evidenced by a writing signed by the person
sought to be bound by it and from which the terms necessary to constitute the
transfer can be ascertained with reasonable certainty. After establishing these
circumstances, it must be further shown that a transferee had in part performance
of the contract either taken possession of the property or any part thereof or
the transferee being already in possession, continued in possession in part
performance of the contract and had done some· act in furtherance of
the contract. The acts claimed to be in part performance must be unequivocally referable to the pre-existing contract and the acts of part performance
must unequivocally point in the direction of the existence of contract and
evidencing
implemention
or
performance of contract.
There
must be
a real nexus between the contract and the acts done in pursuance of the contraact or in furtherance of the contract and must be unequivocally referable to
the contract. When series of acts are done in part performance one such may
be payment of consideration. Any one act by itself may or may not be of such
a conclusive nature as to conclude the point one way or the other but when taken
with many others, payment or part of the consideration or the whole of the consideration may as well be shown to be in furtherance of the contract. [209 D-H]
The view of the House of Lords that one must not first look at the oral
contract and then see whether the alleged acts of part performance are consistent
with it but that one must look at the alleged acts of part performance and see
whether they prove that there must have been a contract and that it i~ only if
they do so prove that one can bring in the oral contract may not be wholly
applicable to the situation in India because an oral contract is not envisaged
by section 53A, Even for invoking the equitable doctrine of part performance
there has to be a contract in writing from which the terms necessary to constitute
the transfer can be ascertained with reasonable certainty. The correct view would
be to look at that writing that is offered as a contract for transfer for consideration of any immovable property, examine the acts said to have been done in
furtherance of the contract and find out wet her there is a real nexus between the
contract and the acts pleaded as in part performance so that to refuse relief would
be perpetuating the fraud of the party who, after having taken advantage or
benefit of the contract, backs out and pleads non-registration as defence. [210A-D]
Foxcroft v. Lester, 2 Vern. P. 456; Elizabeth Meddison v. John Alderson,
Lord Se/borne (1882-1183) 8 A.C. 467; Clinan & Anr. v. Cooke & Ors. 1775-1802
c
E
F
G
H
A
B
c
D
E
F
G
H
188
SUPllEMil coullt llEPOlltS
[1982) 2 s.c.l.
All. E.R. (Reprint) 16; Chapronierse v. Lambert 1916·17 All. E.R. (Reprint) 1889;
Steadman v. Steadman [1974) 2 All. E.R. 977, referred to.
In short, acts preliminary to the contract would be hardly of any assistance
in ascertaining whether they were in furtherance of the contract. Anything done
in furtherance of the contract postulates the pre-existing contract and the acts
done in furtherance thereof. Thereofore, the acts anterior to the contract or
merely idcidential to the contract would hardly provide any evidence of part
performance. [210 E)
Although the mortgagee's claim regarding payment of Rs. 1000 to the
mortgagor for the purchase of stamps and for expenses incidential to registration
was not in dispute, there is no evidence on record to show that there was an oral
contract anterior to the unregistered sale deed, nor was there a draft agreement
prior to the drawing up of the sale deed. Out of the sum of Rs. 1000 a sum of
Rs. 700 was paid prior to the agreement. It was not subsequently claimed that
the balance of Rs. 300 was paid in furtherance of the contract.
The High Court was in error in holding that the act envisaged by the phrase
·'in furtherance of the contract" should be in pursuance of the contract and not
that it should either precede or follow the agreement or the contract. If a written
contract is a sine gua non for the application of the equitable doctrine of part
performance any act preceding the contract could never be in furtherance of that
contract which was yet to materialise. Negotiations for a contract and a concluded contract stand apart from each other. Anything at the negotiating stage
cannot be claimed as a contract unless the contract is concluded between the
parties, that is the parties are ad idem. The contract should be a written contract
from which the necessary ingredients constituting the transfer could be ascertained
with resonable certainty. [203 A-Bl
There is no material on record to substantiate the mortgagee's claim that
out of the total consideration payable to the mortgagor he had retained in deposit
with him a sum of Rs. 17000 odd for being paid to other creditors of the mortgagee and that out of this amount a sum of Rs. 541 due to him had been adjusted.
Assuming that he could reimburse himself there is no evidence to show that he
gave discharge or gave credit in his books of account to this sum. Also there
is nothing to show that the mortgagor had in his possession a list of the mortgagee's creditors or that he had made any attempt to procure the list or that he
issued a public notice iuviting the creditors of the moatgagor to claim payment
from him to the extent of the consideration retained by him. Neither did he pay
any creditor nor did he make any attempt to pay any creditor including those
whose,names were known to him. [211 G]
Induction into possession of an immovable property for the first time subsequent 10 the contract touching the property, may be decisive of the plea of part
performance. But merer possession ceases to be of assistance when the person
claiming benefit of part performance is already in possession prior to the contra~:!
and continues to retain posscssian. There is an understandable and noteworthy
difference in the probative value of entering into possession for the first time and
continuing in possession coupled with a claim of change in character. Where a
person claiming benefit of part performance of a contract was already in posses-
-
,:·-
-
,;::"II.,,
, .... v-.
•
-
s. GOVJNO RAO v. DEVI SAHAi
189
sion prior to the contract, the Court would expect something independent of the
mere retention of possession to evidence part performance. Mere retention of
possession, quite legal and valid, if mortgage with possession is not discharged,
could hardly be said to be an act in part performance unequivocally referable to
the contract of sale. [213 D-E, 215 E-F]
In the instant case retention of possession is of no consequence because the
A
mortgage was not discharged and was subsisting and the mortgage being a
B
mortgage with possession, the mortgagee was entitled to retain possession. The
fact that immediately a sale deed was executed in favour of the subsequent purchaser by the mortgagor would show that he was not willing to accept the contract as offered by the mortgagor. The subsequent purchaser had taken a conditional sale and this reinforces the stand of the mortgagor. The existence of the
dispute, about the nature of the transactiop, is not in dispute. Therefore the
conduct of the mortgagor is consistent with bis case.
l217 D-F]
C
The mortgagee bad failed to prove that he did any act in furtherance of the
contract, continued retention of possession being a circumstance of neutral
character in the facts and circumstances of the case and it being further established that the mortgagee was not willing to perform his part of the contract, he is
not entitled to the benefit of the equitable doctrine of part performance. (217 HJ
(2) A persual at the chronological events of. the case would clearly show
that the decree holder bad mor~ than a mere semblance of title. Even if tbe
application would not fall under Order 22 Rule 10 CPC. section 146 of the Code
enables him to maintain the application. Smt. Saila Balo Desai v. Smt. Nirma/a
Sundari Dassi and another, [1958J S.C.R. 1287 at 1291, referred to. [221-D-E]
The decree bolder did not acquire under the sale certificate the equity of
redemption of the mortgage. The suit property was sold subject to subsisting
mortgage in favour of the mortgagee. At a Court auction what is sold is right,
title and interest of the judgment debtor who in this case was the mortgagor.
Subject to other conditions, his right is the right to redeem the mortgage. Much
before the proclamation of sale was issued the equity of redemption held by the
mortgagor was sold by him to the subsequent purchaser. Therefore, even on the
date of decree as also on the date of filing of the execution application the mortgagor had no subsisting interest in the property which could be sold at the Court
auction. [222 A-BJ
The object behind the order levying an attachment before judgment is to
give an assurance to the plaintiff that his decree, if made, would be satisfied.
Where an attachment has been made, any private transfer or delivery of the
property attached would be void as against all claims enforceable under the
attachment. What is claimed enforceable is claim for which the decree is made.
A dismissal of the suit may terminate the attachment and would not be revived
even if the suit is restored
As a corollary, if attachment before judgment is
obtained in a suit which ends in a decree but if in appeal the decree is set aside,
the attachment of necessity must fall. It at an intermediate stage pursuant to the
decree of the trial Court the attached property is sold at a Court aution and where
an appeal is preferred, an attempt should be made to obtain stay of the execution
of the decree of the trial court. If the execution proceeds and the property is
D
E
F
G
H
\
r
A
B
c
D
E
i90
s1jptuMiJ couRt iti:lPoR.ts
(1982) 2 S.C.R
sold at a court auction before the appeal is disposed of, the equity in favour of a
person as a auction purchaser may come into eidstence. In such a case if the
auction purchaser is an outsider and if the execution of the decree was not stayed,
the auction purchaser would be protected even if the decree in execution of which
the auction sale had been held is set aside because the equity in favour of the
stranger sholud be protected. [223 C-E]
If on the other hand the auction purchaser is the decree holder himself, he
should not be entitled to any protection because when he proceeds with the execution he was aware that an appeal against the original decree was pending and
that if the appeal was allowed the decree which he sought to execute might be
set aside. He could force the place by executing the decree, taking advantage of
the economic disability of the judgment debtor in a money decree by making the
situation irreversible. Therefore, where the auction purchaser was none other
than the decree holder who purchased the property for a meagre sum, this results
in an atrocious situation, but yet by a technicality he wants to protect himself. To
such an auction purchaser, who is not a stranger and who is none other than
the decree holder, the Court should not lend its assistance. (224 G·H]
Janak Raj v. Gurdial Singh & Anr. (1967] 2 S.C.R. 77 at 86, followed.
,-
In the instant case the High Court was right in holding that the auction
{. '
purchaser decree holder was entitled to recover only the decrelal amount and
proportionate costs. (225 DJ
But yet the conduct of the mortgagor, the subsequent purchaser and the
mortgagee in not paying a small debt and allowing the property to be auctioned
and forcing the decree holder to fight a never ending litigation was inequitous
in the facts and circumstances of this case. Taking into consideration the conduct
of the parties the decree holder should be paid a sum of Rs. 7,000 inclusive of
decretal amount, interest,
proportionate costs and costs
of litigation so
far. [225 E-F]
•
F
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1144-1145
G
H
of 1969.
From the judgment and decree dated the 5th March, 1964 of
the Madhya Pradesh High Court in First Appeal No. 14 of
1959.
S.S. Ray, G.S. Solanki, S. Kachwah and K.J. John for the
Appellant in C.A. 1144/69 and for Respondent Nos. 2 and 3 in
C.A. 1145/69.
G.L. Sanghi. A.G. Ratnaparkhi and K.K. Gupta, for the Appellant in C.A. J 145/69 and for Respondent No. 2 in C.A. 1144of 1969.
-
•
..•.
. -.....-
s. GOVIND RAO v. DEVI SAHAI (Desai, J.)
191
V.S. Desai and Dr. Y.S. Ch/tale, Rameslnvar Nath, K.A.
Chitale and Mrs. S. Ramachandran for Respondent No. 1 in both
the Appeals.
The Judgment of the Court was delivered by
DESAI, J. What constitutes
part performance within the
meaning of the expression in Section 53-A of the Transfer of Property Act ('Act' for short) so as to clothe a mortgagee in possession
with the title of ownership which would defeat the suit of the erstwhile mortgagor for redemption, is the question canvassed in these
two appeals by common certificate.
Facts first.
Sardar Govindrao Mahadik original plaintiff 1
(now deceased prosecuting these appeals through his legal representatives) and Gyarsilal original plaintiff 2 (appellant 2) filed Civil
Suit No. 14/51 in the Court of the District Judge, Indore, for
redemption of a mortgage in respect of house No. 41 more particularly described in plaint paragraph l, dated February 22, 1951.
A loan of Rs. 10,000 was secured by the mortgage. The mortgage
was mortgage with possession. Plaintiff I was the mortgagor and
the sole defendant Devi Sahai was the mortgagee. Plaintiff 2 is a
purchaser of the mortgaged property from plaintiff I under a
registered sale deed Ex. P-1, dated October 14, 1950. Plaintiff 1 will
be referred to as mortgagor. Defendant Devi Sahai as a mortgagee
and plaintiff 2 Gyarsilal as subsequent purchaser in this judgment.
Even though the mortgage was mortgage with possession, it was
not a usufructuory mortgage but an anomalous mortgage in that the
mortgagor had agreed to pay interest at the rate of 12% and the
mortgagee was liable to account for the income of the property
earned as rent and if the mortgagee himself occupied the same he
was bound to account for the rent at the rate of Rs. 515 per
annum.
Mortgagor
served
notice dated October 5, 1945,
calling upon the mortgagee to render true and full account
of the mortgage transaction. The mortgagee failed to comply
with the
notice.
Subsequently it
appears that there were
some negotiations between the mortgagor and the mortgagee which
according to the mortgagee, culminated in a sale of the mortgaged
property in favour of mortgagee for Rs. 50,000.
Account of
the mortgage transaction was made and
the consideration 9f
A
B
\
c
D
E
F
G
H
A
B
c
D
E
F
G
H
192
SUPREME COURT REPORTS
[1982] 2 S,C.R
Rs. 50,000 for the sale of the house which would mean sale of
equity of redemption was worked out as under :
Rs. 25,000
Rs. 17,735
Rs. 1,000
Rs. 6,265
Rs. 50,000
Principal mortgage money plus the amount
found due as interest on taking accounts of
mortgage.
Given credit for the amounts taken from time
to time by the mortgagor from the mortgagee
for domestic expenses. This is disputed as
incorrect and it was suggested that the entry be
read as amount retained to pay off other credi·
tors of the mortgagor.
Taken in advance for purchasing stamps and
incurring registration expenses.
To be paid in cash at the time of registration
before the Sub-Registrar.
Requisite stamps were purchased and the draft sale deed was
drawn up on October IO, 1950, but it was never registered. On
October 14, 1950, 1st plaintiff mortgagor sold the suit house by a
.registered sale deed to plaintiff 2 Gyarsilal for Rs. 50,000 with an
agreement for resale. Thereafter the mortgagor and the subsequent
purchaser as
plaintiffs I and
2 respectively filed a suit on
February 22, 1951 against mortgagee defendant Devi Sahai for
taking accounts of the mortgage transaction and for a decree for
redemption.
The mortgagee Devi Sahai defended the suit on diverse
grounds but the principal and the only defence canvassed was one
under section 53A of the Act, namely, that even though the sale
deed purporting to sell equity of redemption having not been
registered would not clothe the mortgagee with title of owner to
the mortgaged property, yet he could defend his possession as
transferee owner under the doctrine of part performance in. as much
as not only is the mortgagee in possession in part performance of
the contract of sal~ bμt !las cmHinμ~d in possession in part perfor-
-
.1
-
-
s. GOVIND FAO v. DEVI SAHA! (Desai, J.)
193
mance of the contract and has done several acts unequivocally
referable or attributable to the contract and that the morgagee as
transferee has not only performed but is willing to perform his
part of the contract and, therefore, the mortgagor is debarred from
enforcing against the mortgagee any right in respect of the mortgaged property. As a necessary corollary, it was also contended
that plaintiff 2 has acquired no right, title or interest in the mortgaged property under the alleged sale deed dated October 14, 1950,
in view of the fact that the transferor, viz., original mortgagor had
no sub~isting title to the property on the date of the sale which he
could have transferred to the 2nd plaintiff.
Arising from the pleadings of the parties, trial court framed
five issues.
The trial court held that plaintiff I executed a sale deed
of the mortgaged property in favour of the defendant mortgagee
but as the sale deed was not registered the transaction of sale is not
complete.
On the issue of protection of section 53A claimed by
the defendant mortgagee the trial court held against him. It was
held that the mortgage being mortgage with possession, continued
possession of the mortgagee after the date of the contract dated
October IO, 1950, would not be in part performance of the contract. The trial court further held that no payment was made
could remotely be said to be in part performance of the contract.
With regard to the payment of Rs. 1,000 for purchase of stamps
and expenses of registration, it was held that the same was paid
before the execution of the contract, and therefore, could not be
said to be in furtherance of the contract. On these findings the
trial court held that section 53A of the Act was not attracted and
the mortgage was accordingly held to be subsisting and a preliminary decree for taking accounts was passed.
A Commissioner
was appointed for taking accounts.
Defendant mortgagee Devi Sahai preferred Civil First Appeal
No. 14/66 to the Indore Bench of the Madhya Pradesh High Court.
When this appeal was pending, appellant Motilal in cognate Civil
No. 1145/69 applied under Order 22, rule I 0, Code of Civil Procedure, for being joined as a party to the appeal claiming that under
the sale certificate dated March 25, 1953, issued by the Additional
City Civil Judge First Class, Indore, he had purchased the equity of
redemption in respect of the mortgaged property and that he has a
subsisting interest in the property involved in the dispute and,
therefore, he would contest the rights of the plaintiffs as well as of
the mortgagee defendant to claim any right, title or interest in the
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
194
SUPREME COURT REPORTS
[ 1982] 2 S.C.R,
property. In his application Motilal alleged that he had filed Civil
Suit No. 243/47 dated November 3, 1947 for recovering a
c~rtain
amount against the !st plaintiff mortgagor and had secured attachment before judgment of the mortgaged property on November 6,
1947. His suit was decreed to the extent of Rs. 2500 by the trial
court. He filed execution application No. 216/51 and in this proceeding the mortgaged property was sold subject to mortgage and
he purchased the same for Rs. 300. The auction sale was confirmed
on September 25, 1953. It may also be mentioned that the mortgagor 1st plaintiff had preferred appeal against the decree of the
trial court and the appellate court by its judgment dated March 27,
1953, allowed the appeal and dismissed the suit of Motilal in
entirety.
Against the appellate decree Motilal filed Second Appeal
No. 78/53 in the High Court and by its judgment dated September
4, 1958, Motilal's claim to the tune of Rs. 500 against the Ist
plaintiff mortgagor along with proportionate interest and costs was
decreed. The application of Motilal for being impleaded as a party
was contested by the Ist and the 2nd plaintiffs as well as by the
defendant mortgagee.
The High Court allowed the application of
Motilal for being joined as party to the appeal and examined the
contentions advanced on his behalf on merits.
The only contention canvassed by the mortgagee in his appeal
in the High Court was that he is entitled to the protection conferred by Section 53A of the Act.
In order to attract section 53A
it was urged that Rs. 1,000 advanced to mortgagor for purchase of
stamps etc. was in furtherance of the contract. The only such act
pleaded was payment of Rs. 1,000 and no other act or circumstance was relied upon. The High Court was of the opinion that
original mortgagee Devi Sahai was entitled to the benefit of the
doctrine of part performance as against the Ist plaintiff mortgagor
Govindrao Mahadik and his subsequent transferee Gyarsilal because
he was in possession and continued to be in possession and paid
Rs. 1,000 in furtherance of the contract. While so holding the
High Court imposed a condition that the mortgagee must pay or
deposit in the court an amount of Rs. 24,000 with interest at the
rate of 4% per annum from the date of delivery of possession to
him as vendee till the date of payment or deposit on the footing
that that was the balance consideration promised but not paid by
the mortgagee. The deposit was directed to be made in the trial
court within thtee months from the date of the judgment of the
High Court for payment to the 2nd respondent which would enable
("
-
-
-
s. GOVIND RAO v. DEVI SAHAI (Desai, J.)
195
the mortgagee to retain possession of the mortgaged property.
The High Court gave a further direction that if the payment or
deposit as directed in the judgment was not made, the appeal of the
mortgagee would stand dismissed and if the amount directed in the
judgmept of the High Court was paid or deposited in the trial court
within the stipulated time the appeal of the mortgagee would stand
allowed and in that event the suit of the mortgagor would stand
dismissed. In respect of Motilal's claim the High Court directed
that in either event he shall be entitled to recover the balance of his
decretal amount and interest at the rate of 4% per annum from
the date of the auction sale till the date of realisation and to the
extent of that amount there shall be a charge on the mortgaged
property enforceable at the instance of Motilal.
In the circumstances of ;the case the High Court did not award costs to either side.
Both the original plaintiffs and Motilal made separate applications for certificate under. Article 133 (1) (a) and (b) of the ConstituA
8
c
tion which were granted.
Hence these two appeals.
D
The Appeal (CA 1144/69) preferred by the original plaintiffsplaintiff 1 being the mortgagor, may be dealt with first. In this
appeal Ist defendant (mortgagee) seeks to non-suit the plaintiff on
the only ground that he is entitled to the benefit of equitable
doctrine of part performance as enacted in section 53A of the Act.
According to the defendant-mortgagee the mortgagor agreed to sell
the mortgaged property to the mortgagee for consideration of
Rs. 50,000 made up in the manner set out in the sale deed Ex. D 1
dated October 10, 1950 and purusuant to the agreement he has given
Rs. 1,000 being part of the consideration for purchasing stamps
and for expenses of registration and after stamps were purchased,
sale deed Ex. D 1 was drawn up and executed and since then he
being in possession retained the same as a vendee and accordingly he
is entitled to the protection of section 53A of the Act.
This necessitates focussing of the attention on the requirements
what constitutes part performance as enacted in section 53A.
Even though at the hearing of the appeals what was the state of
law prior to the introduction of section 53A in the Act by the
Transfer of Property (Amendment) Act, 1929, was canvassed at
length, we would like to steer clear of this confusing mass of legal
squabble and, proceed to analyse the contents of section 53A, subsequently referring to legislative cum legal history so far as it is
E
F
G
H
196
SUPREME COURT REPORTS
(1982] 2 S.C.R
A
relevent for interpretion of the section.
Section 53A reads as
under:
8
c
D
E
F
G
H
"53A. Where any person contracts to transfer for consideration any immovable
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 partthereof, 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,
not withstanding 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
law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing
against the transfered and persons claiming under him any
right in respect of the property of which the transferee has
taken or continues in possession, other than a right expressly
provided by the terms of the contract ;
Provided that no'.hing in this section shall affect the
rights of a transferee for consideration who has no notice
of the contract or of the part performance thereof."
In order to qua\ify for the protection conferred by the equitable
doctrine of part performance as enacted in section 53A, the following
facts will have to be established :
(1) That the transferor has contracted to transfer for
consideration any immovable 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,
...
> /.
-
-
s. GOVJND RAO v. DEVI SAHA! (Desai, J.)
197
continues in possession in part performance of the
A
contract;
(3) That the transferee has done some act in furtherance
of the contract; and
( 4) That the transferee has already or is willing to perB
form his part of the contract." (see Nathulal v. Phool
Chand.(1)
There was no dispute that the aforementioned conditions have to
be satisfied to make good the defence of part performance. The
controversy is on their application to the facts of the case.
C
The High Court which accepted the defence of part performance as canva,sed on behalf of the mortgagee who claimed to
have purchased the property under a sale deed Ext. D 1 dated
October 10, 1950, found that payment of Rs. 1,000 for purchase of
stamps was an unequivocal act in furtherance of the contract.
The defendant mortgagee did not invite the High Court to consider
any other act as having been done by him under the contract
or in furtherance of the contract, or unequivocally referable to the
contract. However, when the matter was heard in this Court,
Mr. V.S. Desai, learned counsel appearing for the respondent mortgagee urged the following acts as having been done by the mortgagee in furtherance of the contract which would constitute part
performance ;
(a) payment of Rs. 1,000 as agreed to under the contract
for purchase of stamps for drawing up and registering
the sale deed;
(b) discharge of a debt of Rs. 541 which was included in
the amount of Rs. 17, 735 retained by the mortgagee
from the total consideration payable for discharging
other debts ;
(c) mortgagee agreed to discharge the mortgage subsisting
on the property in his favour
on settlement of
accounts ;
(!) [1970] 2 SCR 854 at 858.
0
E
F
G
H
)
A
B
c
D
E
F
G
H
198
SUPREME COURT REPORTS
fl 982] 2 s.c.R
(d) all dues owed by the mortgagor to the mortgagee may
have to be taken as cleared on completion of the
contract;
(e) nature and character of possession changed as recited
in the contract;
A few more circumstances were relied upon to show that the mortgagee was willing to perform his part of the contract and the
ommissions pointed out are not fatal to bis case.
They are :
(f) failure to offer the amount agreed to be paid before
the Registrar and/or not discharging debts agreed to
be discharged as having been given credit in the consideration for the sale would not detract from part
performance because they have to be evaluated in the
facts and circumstances of the case ;
(g)
conduct of the l st plaintiff mortgagor in executing
and registering a sale deed in respect of the mortgaged
property in favour of the 2nd plaintiff Gyarsilal and
thereby frustrating the contract of sale in favour of
the defendant mortgagee evidence that the I st plaintiff
mortgagor was aware of the contract in favour of the
defendant mortgagee and he was retaining possession
in furtherance of the contract;
(h)
defendant mortgagee made
all attempts to get
the deed registered by approaching the Sub-Registrar ;
(i)
the defendant mortgagee intiated criminal proceedings
against the I st plaintiff mortgagor for misusing the
stamp papers.
Ordinarily this Court would be loath to examine contentions of facts based on evaluation of evidence advanced for the first
time before this Ccurt v. ithout any attempt at inviting the adjudication of the same by the High Court. However, as all the contentions arise from the record and proceedings, we propose to examine
them on merits more so because we do not propose to rest this
judgment on a technical ground and also because we are inclined
to reverse the decision of the High Court which is in favour of
1st defendant mortgagee.
-
-
-
s. GOVIND RAO v. DEVI SARAI (Desai, J.)
199
Section 4 of the Statute of Frauds, 1677 of United Kingdom
provided that no person shall be charged upon any contract for
sale of lands or any interest in land etc. unless the agreement or
some memorandum or some note thereof shall be in writing and
signed by the party to be charged thereunder or some other person
there unto by him lawfully authorised.
This provision has been
substantially re-enacted in section 40 (i) ol the Law of Property
Act, 1925 with this departure that sub-section 2 specifically provides
that the substantive provision in sub-section I does not effect the law
ralating to part-performance or sales by the court.
As no action
could be brought on oral agreement the doctrine of part performance
was devised by the
Chancery Court with a view
to mitigating the hardship arising out of an advantage taken by a person
under an o~al contract and failure to enforce it would permit such
person to retain the undeserved advantage by the Equity Court
enforcing the contract. The situation must be such that not to
enforce the contract in face of the defence of Statute of Frauds
after taking advantage of oral contract would perpetuate the fraud
which the statute sought to prevent.
The party who altered its
position under the contract must have done some act under the
contract and it would amount to fraud in the opposite party to
take advantage of the contract not being in writing.
Such a situa·
tion arose where one of the parties to the oral agreement altered
its position and when specific performance was sought after taking
advantage under oral contract, set up the defence available under
the Statute of Frauds. The Chancery Court while granting relief of
specific
performance wanted to
be
wholly
satisfied that the
pleaded oral contract exists and is established to its utmost satisfaction and in order to ascertain the existence of the oral contract
before granting a relief of specific performance the court wanted
to be satisfied that some such act has been done which would be
unequivocally referable to the oral contract as would prove the
existence beyond suspicion, meaning part performance of the contract. The departure under our law is that when giving its statutory
form in section 53A of the Act the existence of a written contract
has been made sine qua non and simultaneously the statute also
insists upon proof of some act having been done in furtherance of
the contract. The act relied upon as evidencing part performance
must be of such nature and character that its existence would
establish the contract and its implentation. Each and every act
subsequent to contract by itself may not be sufficient to establish
part performance. The act must be of such a character as being
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
200
SUPREME COURT REPORTS
(1982] 2 s.c.R.
one unequivocally referable to the contract and having been per·
formed in performance of the contract. In Lady Thynne v. Earl
of Glengall (1) it was observed that: "part performance to take the
case out of the Statute of Frauds, always supposes a completed
agreement. There can be no part performance where there is no
completed agreement in existence. It must be obligatory, and what
is done must be under the terms of the agreement and by force of
the agreement."
This approach would necessitate that the act
relied upon as being in the part-performance of the contract was
such as by its own force would show the very same contract as is
alleged
by
the person
seeking
the protection of part-per·
formance.
In the fact situation as it unfolds itself in this case. continued
possession of the mortgagee hardly offers any clue to the question
of part performance.
Defendant mortgagee was in possession of
the mortgaged property. Therefore,. physical possession having
not changed hands, it would be for the mortgagee to show that he
continued to retain possession in part performance of the contract and
has done some act in furtherance of the contract. Where physical and
actual possession was already with the person claiming the benefit
of the doctrine of part performance its continued retention by itself
without anything more would hardly be indicative of an act unequi·
vocally referable to part performance of the contract. He must
further establish that he has done some act in furtherance of the
contract. This was not disputed and, therefore, th<: mortgagee
defendant urged before the High Court and reiterated before us that,
payment of Rs. 1,000 inter alia to the 1st plaintiff mortgagor for
purchase of stamps and for expenses incidental to registeration was
an act unequivocally done in furtherance of the contract.
Before evaluating the submission a few relevant facts may be
noticed.
By letter Ext. P-3 dated October 9, 1950, 1st plaintiff
wrote to defendant mortgagee portion of which may be extracted
as it has some bearing on the question under consideration :
" ... It is requested that we have entered into a contract
with you for the sale-condition of our house No. 12
situated in Kalai Mohalla. Therefore to buy stamps etc.
for the sale you should pay Rs. 1,000 (Rupees one thousand
(I) H.L. Cases, 158.
' ...
-
...
-
'r
•·
-
s. GOVIND RAO v. DEVI SAHAI (Desai, J.)
201
only) to our Mukhtiar Shri Madhavraoji Vishnu Joshi, 82,
Ada Bazar,
Indorewale, I agree for tbs same and
shall deduct the amount at the time of registration."
Purusuant to this letter defendant mortgagee paid Rs. 700 to
the Muktiar and an endorsement to that effect is found as Ext. P·4.
On the next day that is October 10, 1950, a further amount of
Rs. 300 was given and stamps were purchased and on the same day
sale deed Ext. D I was drawn up. While reciting the consideration
for the sale deed a credit was given for Rs. 1,000 paid by the mortgagee for purchase of stamp. So far there is no dispute. The
grievance is that according to the 1st plaintiff mortgagor he had
agreed to sell the house to the mortgagee but the sale was to be a
conditional sale with a right to repurchase and that was agreed to
between the parties.
Subsequently when the sale deed Ext. D-1 was
drawn up he found that it was an absolute sale in breach of the
agreement and therefore he did not complete the transaction and
sold the house
subsequently on October 14, 1950 to the 2nd
plaintiff, under Ext. P-1 which is a conditional sale with a right to
repurchase.
It would thus transpire that payment of Rs.