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1934 Supreme(SC) 40
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD TOMLIN, LORD MACMILLAN, AND SIR JOHN WALLIS.
PIR BAKHSH - Appellant
Versus
MAHOMED TAHAR - Respondents
On appeal from the Court of the Judicial Commissioner of Send,
Decided On : July. 23. 1934.
Solicitors for appellant:T. L. Wilson & Co. Solicitors for respondent: Sharpe, Pritchard & Co.
An unregistered agreement to sell immovable property creates no interest in the land and cannot defend against an ejectment action by the registered owner, as the English doctrine of part performance does not override the statutory requirement for a registered transfer instrument.
Headnote:(A) Transfer of Property Act, 1882 - Section 54 - Sale of immovable property - Requirement of registered instrument - A contract for the sale of immovable property does not of itself create any interest in or charge on such property - In an action for ejectment brought by a registered proprietor, a plea that the plaintiff had agreed to sell the land to the defendant is not a relevant defense. (Paras 18, 19)
(B) English equitable doctrine of part performance - Inapplicability in India (prior to the 1929 Amendment) - The doctrine cannot be used to create an interest in land without a writing where the law requires a registered instrument - The function of part performance in English law is to overcome the Statute of Frauds regarding proof of contract, which is not applicable to the statutory requirements of the Transfer of Property Act. (Paras 21, 22)
(C) Specific Performance - Remedy against ejectment - A defendant possessing land under an agreement to sell may apply for a stay of ejectment proceedings to compel the execution of a registered instrument - If the agreement becomes unenforceable due to the law of limitation, the defendant cannot resist ejectment based on part performance. (Paras 20, 23)
Facts of the case:
The registered proprietor of a plot of land entered into an agreement to sell the property to another party at cost price, contingent upon the proprietor receiving permission to reside permanently in another location. Although the condition was met and the proprietor left the area, he failed to execute the conveyance. Subsequently, a government authority cancelled the proprietor's grant and granted the land to the other party, who entered into possession. The registered proprietor then instituted a suit for ejectment. The defendant resisted the suit by pleading the agreement to sell and his current possession of the land.
Findings of Court:
The court found that the defendant held no registered instrument of transfer. Since the property value exceeded the statutory threshold, a registered instrument was mandatory for the transfer of title. The defendant had not sought a stay of proceedings to pursue specific performance while the contract was still enforceable, and by the time the matter progressed, the action for specific performance was barred by limitation.
Issues: Whether an unregistered agreement to sell, coupled with possession of the property, constitutes a valid defense against an action for ejectment brought by the registered owner.
Ratio Decidendi: Under the law applicable at the time, a contract for sale does not create any equitable interest in the property. The English doctrine of part performance cannot be applied by analogy to override the express statutory requirement for a registered instrument of transfer. The only available remedy for a purchaser under such an agreement is to seek specific performance; if that remedy is lost due to limitation, the agreement and the resulting possession provide no defense to ejectment.
Result: Appeal dismissed.
Legal Category Hierarchy
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property law
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transfer of property
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sale of immovable property
- registration requirements
- part performance
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sale of immovable property
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transfer of property
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civil procedure
- ejectment
- specific performance
Judgement
Appeal (No. 36 of 1933) from a decree of the Court of the Judicial Commissioner (January 19, 1931) reversing a decree of the District Judge of Sukkur (September 11, 1926).
On December 20, 1921, the respondent, in circumstances which appear from the judgment of the Judicial Committee, instituted a suit against the Secretary of State for India in Council and the appellant claiming a declaration of his title to, and possession of, a plot of land. The Secretary of State did not defend the suit. The appellant by an amendment to his written statement pleaded " as the plaintiff has agreed to convey this plot to the defendant, and as possession is with him, he could not legally be evicted."
The trial judge dismissed the suit. Upon appeal to the Court of the Judicial Commissioner the decision was reversed on the ground that the defendants possession could not be referred to the agreement to sell to him. A decree was made for possession and mesne profits, and that compensation be paid to the defendant for improvements effected by him.
1934. June 25, 26. Dunne K.C. and Pringle for the appellant. The plaintiffs agreement to sell the property to the defendant was capable of being specifically enforced when the suit was instituted, and furnishes a valid defence to the claim to eject him Puccha Lal v. Kunj Behari Lal (( 1913) 18 C. W.
N. 445.); Bapu Apaji v. Kashinath Sadoba (( 1916) I. L. R. 41 Bom. 438.); Venkatesh Damodar v. Mallappa Bhimappa (( 1921) I. L. R. 46 Bom. 722.); Karalia Nanubhai v. Mansukhram . (( 1900) I. L.
R. 24 Bom. 400.) The plaintiff, as vendor, was in the position of a trustee for the defendant, and upon principles enacted by the Trusts Act, 1882, ss. 3, 14, 91, could not set up a title adverse to him. The decision of the Board in Ariff v. Jadunath Majumdar (( 1931) L. R. 58 I. A. 91.) is distinguishable, because in that case enforcement of the contract by specific performance was barred by limitation when the suit was instituted, and that fact was made the basis of the judgment. In Currimbhoy & Co. v. Greet (( 1932) L. R. 60 I. A. 297.), the alleged contract was in 1920 and the suit in 1924, so that there also specific performance was barred ; further, as it was held that there was no completed contract any observations relevant to the present question were obiter.
De Gruyther K.C. and Godfrey for the respondent. The appellant was not put into possession under the agreement; he was in possession under the invalid order of the collector, and was a mere trespasser. The English equitable doctrine of part performance, therefore, even if applicable in India at the date of this suit, has no bearing ; nor in the circumstances of the case can the plaintiff be regarded as being in the position of a trustee for the defendant. The decisions in India with regard to a defendant in an ejection suit who is in possession under an agreement by the plaintiff were con flicting before the judgment of the Board in Ariffs case. (( 1931) L. R. 58 I. A. 91.) That judgment, however, makes it clear that, having regard to provisions of the Transfer of Property Act, 1882 (which had not been materially amended when the present suit was proceeding), the defendant can avail himself of the agreement only if it is still enforceable, and only by bringing a suit for specific performance. In the present case no suit was brought, nor did the defendant apply for a stay for that purpose. Moreover, apart from limitation, specific performance could not have been obtained, because the defendant, having obtained a cancellation of the grant, could not show that he was ready and willing to pay the plaintiff the price ; that is essential in a suit for specific performance Ardeshir Mama v. Sassoon . (( 1928) L. R. 55 I. A. 360, 375.) The observations in Currimbhoy & Co. v. Creel (( 1932) L, R. 60 I. A. 297.) show that the principles of Ariffs case apply even if specific performance is not barred when the suit for eject ment is brought ; in that case,
