VERY IMPORTANT POINT
If the conditions enumerated in Section 53A of Transfer of Property Act, 1882 are complied with the law of limitation does not come in the way of a defendant taking plea under Section 53A of the Act to protect his possession of the suit property even though a suit for specific performance of contract is barred by limitation.

Headnote:Transfer of Property Act, 1882-Section 53A-Doctrine of part performance-Applicability-Whether in a suit brought by a transferor for recovery of possession of the suit property, a defendant transferee can defend or protect his possession over the suit property obtained in pursuance of a part performance on an agreement to sell under Section 53A of the Transfer of Property Act, even if a suit for specific performance of an agreement to sell is barred by limitation? High Court holding no -Whether correct? (No)-Appeal allowed-Case remanded.
       Held : The Special Committee s report which is reflected in the aims and objects of amending Act 1929 shows that one of the purposes of enacting Section 53A was to provide protection to a transferee who in part performance of the contract had taken possession of the property even if the limitation to bring a suit for specific performance has expired. In that view of the matter, Section 53A is required to be interpreted in the light of the recommendation of Special Committee s report and aims, objects contained in amending Act 1929 of the Act and specially when Section 53A itself does not put any restriction to plea taken in defence by a transferee to protect his possession under Section 53A even if the period of limitation to bring a suit for specific performance has expired. But there are certain conditions which are required to be fulfilled if a transferee wants to defend or protect his possession under Section 53A of the Act. The necessary conditions are :-
        (1) there must be a contract to transfer for consideration any immovable property;
        (2) the contract must be in writing, signed by the transferor, or by someone on his behalf;
        (3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained;
        (4) the transferee must in part performance of the contract take possession of the property, or of any part thereof;
        (5) the transferee must have done some act in furtherance of the contract; and
        (6) the transferee must have performed or be willing to perform his part of the contract.
       We are, therefore, of the opinion that if the conditions enumerated above are complied with, the law of limitation does not come in the way of a defendant taking plea under Section 53A of the Act to protect his possession of the suit property even though a suit for specific performance of a contract has barred by limitation. (Paras 15, 16 and 17)
       The matter may be examined from another angle. The established rule of limitation is that law of limitation is not applicable to a plea taken in defence unless expressly a provision is made in the statute. The law of limitation applies to the suits and applications. The various articles of the Limitation Act show that they do not apply to a defence taken by a defendant in a suit. Thus, the law of limitation bars only an action in a court of law. In fact, what the Limitation Act does is, to take away the remedy of a plaintiff to enforce his rights by bringing an action in a court of law, but it does not place any restriction to a defendant to put forward any defence though such defence as a claim made by him may be barred by limitation and cannot be enforced in a court of law. On the said principle, a defendant in a suit can put forward any defence though such defence may not be enforceable in a court of law, being barred by limitation. (Para 18)
       It is, therefore, manifest that the Limitation Act does not extinguish a defence, but only bars the remedy. Since the period of limitation bars a suit for specific performance of a contract, if brought after the period of limitation, it is open to a defendant in a suit for recovery of possession brought by a transferor to take a plea in defence of part performance of the contract to protect his possession, though he may not able to enforce that right through a suit or action. In the present case, it is not disputed that the transferee has taken possession over the property in part performance of the contract. It is also not disputed that the transferee has not brought any suit for specific performance of the agreement to sell within the period of limitation. It is also not disputed that the transferee was always and still ready and willing to perform his part of the contract. Further, the view taken by the High Court in judgment under appeal was overruled by the Full Bench of the Bombay High Court in the case of Mahadeo Nathuji Patil v. Surajbai Khushal Chand Lakkad & Ors. - 1994 Maharashtra Law Journal, 1145, which, according to our view, lay down the correct view of law. In that view of the matter these appeals deserve to be allowed. Since the High Court has allowed the appeals solely on the ground that the remedy for bringing a suit for specific performance is lost, therefore, the defendant is not entitle to protect his possession under Section 53A of the Act, we, after setting aside the judgment under challenge, send the matters back to the High Court to decide any other question of law, if arises in these appeals. Consequently, the appeals are allowed. There shall be no order as to costs. (Paras 20, 21, 22 and 23)

Judgement Key Points

Key Points: - The Court holds that Section 53A allows a transferee to defend possession even if the suit for specific performance is barred by limitation, provided certain conditions are met (!) (!) (!) . - There are six necessary conditions for protection under Section 53A: (1) there is a contract for transfer of immovable property; (2) contract in writing signed by transferor or on his behalf; (3) writing contains terms to construe the transfer; (4) transferee takes possession in part performance; (5) transferee has done some act in furtherance of the contract; (6) transferee has performed or is willing to perform his part (!) – (!) . - The Limitation Act bars the remedy for specific performance but does not extinguish a defendant’s right to defend under Section 53A; law of limitation applies to actions/suits, not to defenses in a suit (!) (!) . - The judicial approach to Section 53A should consider legislative history and the Special Committee’s recommendations, which supported protection for transferees in part performance even after expiry of the limitation period (!) (!) (!) (!) . - The Bombay High Court Full Bench’s view (Mahadeo Nathuji Patil v. Surajbai Khushal Chand Lakkad) is cited as correct, supporting the appellate decision to allow the appeals and remand for further questions of law (!) (!) . - The judgment ultimately allows appeals and remands for further questions of law without cost, clarifying the protection under Section 53A where conditions are fulfilled (!) (!) . - The "Very Important Point" emphasizes that if conditions of Section 53A are complied with, limitation does not bar a defendant from pleading 53A to protect possession, even if specific performance is barred by limitation (!) .

What is the effect of Section 53A of the Transfer of Property Act, 1882 on a defendant transferee’s right to protect possession in a suit for recovery of possession when a suit for specific performance is barred by limitation?

What are the conditions required for a transferee to defend or protect possession under Section 53A of the Act?

Whether the limitation period for filing a suit for specific performance affects a transferee’s defense under Section 53A to protect possession in a suit for possession?

JUDGMENT

V.N. Khare, J.-In this group of appeals the question that arises for our consideration is "whether in a suit brought by a transferor for recovery of possession of the suit property, a defendant transferee can defend or protect his possession over the suit property obtained in pursuance of a part performance on an agreement to sell under Section 53A of the Transfer of Property Act (hereinafter referred to as `the Act ), even if a suit for specific performance of an agreement to sell has barred by limitation".

2. Since common question of law is involved in these appeals, we are deposed to notice the facts which have given rise to Civil Appeal No. 2706/1991.

3. The appellants herein were the defendants in the suit brought by the plaintiff-respondents for recovery of the suit property and for mesne profit. On 9th July, 1964, respondent No. 3 executed an agreement for sale of an agricultural land in favour of appellant No. 1 for a total consideration of Rs. 9,000/-. Appellant No. 1 paid a sum of Rs. 5,700/- towards earnest money. The appellants in pursuance of the said agreement for sale was put in possession over the said property. After the execution of the said agreement, it came to the notice of the appellant that the transferor is negotiating for sale of the said land in favour of respondent No. 1. Under such circumstances, the appellant brought a suit on 2nd August, 1965 for injunction restraining the transferor from selling the said land in favour of respondent No. 1. On 30th April, 1966 the trial court granted injunction as prayed for. It is the case of the appellants that despite the said injunction order, the transferor sold the said property through a registered sale deed dated 24th May, 1966 in favour of respondent No. 1.

4. After the sale deed was executed, the plaintiff-respondent No. 1 on the strength of the said sale deed brought a suit for recovery of possession of the land. The appellants filed a written statement wherein the suit claim was resisted on the ground that they are in possession of the property in pursuance of agreement entered into on 9th July, 1964 and their possession is protected as they are always and still willing and ready to perform their part of the contract. Another contention raised was that the decree passed by the civil court in a suit for injunction operates as res judicata and the sale deed which is the basis of the title of the appellant has not been proved. The trial Court dismissed the suit. The Learned Single Judge of Bombay High Court dismissed the appeal preferred by the plaintiff-respondents. However, the Letters Patent Bench allowed the Letters Patent Appeal filed by the plaintiff-respondents. The view taken by the Letters Patent Bench was that the protection as regards possession is not available to the defendant-appellants as the suit for specific performance of agreement for sale is barred by limitation. It is against the said judgment of the Letters Patent Bench, the appellants are in appeal before us.

5. The first question that arises for consideration is whether the defendant-appellants are entitled to protect their possession of the suit property obtained in pursuance to part performance of agreement for sale even after the suit for specific performance of contract for sale is barred by limitation.

6. The argument of learned counsel appearing for the appellants is that even though the suit for specific performance of the agreement for sale is barred by limitation, still a transferee in a suit for recovery of possession by the vendor, can defend his possession under Section 53A of the Act so long as he is willing and ready to perform his part of the contract. Whereas, the contention raised on behalf of the respondents counsel is that, once a remedy for specific performance of an agreement for sale is lost by limitation, the equitable relief of protection of possession of the suit property under the agreement for sale also comes to an end and is lost. In other wo

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2002 Supreme(SC) 100

What is the effect of Section 53A of the Transfer of Property Act, 1882 on a defendant transferee’s right to protect possession in a suit for recovery of possession when a suit for specific performance is barred by limitation?

What are the conditions required for a transferee to defend or protect possession under Section 53A of the Act?

Whether the limitation period for filing a suit for specific performance affects a transferee’s defense under Section 53A to protect possession in a suit for possession?

Cases Referred (2)