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Andhra Pradesh High Court
Judges : GOPALRAO EKBOLE
Somireddy Veeraiah - Appellant
Versus
Nagabandi Ranganaikulu - Respondent
Decided On : 10-10-66
PART PERFORMANCE - AGREEMENT TO SELL - REQUIREMENTS - POSSESSION AND ACT IN FURTHERANCE OF CONTRACT - SECTION 53-A, TRANSFER OF PROPERTY ACT - INTERPRETATION AND APPLICATION.
Fact of the Case:
Plaintiff filed a suit for possession of land and redemption of usufructuary mortgage. Defendants 4 and 5, mortgagees, resisted the suit claiming that their debt was discharged and that they were in possession under an agreement to sell executed by defendants 1 to 3 in their favor. The trial court decreed the plaintiff's suit for possession, holding that the entire loan amount was discharged and that the agreement to sell was unenforceable due to limitation. The District Judge remanded the case for fresh disposal, directing the trial court to omit consideration of the amendment allowed to the plaintiff's plaint. On appeal, the High Court set aside the remand order and directed the District Judge to dispose of the appeals on merits.
Finding of the Court:
The High Court held that the agreement to sell executed by defendants 1 to 3 in favor of defendants 4 and 5 was enforceable as a defense under section 53-A of the Transfer of Property Act, even though a suit for specific performance would be time-barred. The court found that all the requirements of section 53-A were satisfied, including possession by the transferee in part performance of the contract and payment of part consideration.
Issues: 1. Whether the agreement to sell executed by defendants 1 to 3 in favor of defendants 4 and 5 was enforceable as a defense under section 53-A of the Transfer of Property Act, even though a suit for specific performance would be time-barred. 2. Whether the requirements of section 53-A were satisfied in the present case.
Ratio Decidendi: 1. The law of limitation does not apply to defenses set up by the defendant, including a defense under section 53-A of the Transfer of Property Act. 2. Section 53-A requires four conditions to be satisfied: (1) a written contract to transfer immovable property; (2) possession taken by the transferee or continued possession with an act in furtherance of the contract; (3) performance or willingness to perform by the transferee; and (4) no rights of other transferees for consideration without notice are affected. 3. In the present case, the agreement to sell satisfied the first condition. The second condition was satisfied because the transferee was already in possession as a mortgagee and continued in possession after the agreement to sell was executed, and also paid part of the consideration. The third condition was satisfied because the transferee was willing to perform the contract. The fourth condition was not in issue. 4. Therefore, all the requirements of section 53-A were satisfied, and the agreement to sell was enforceable as a defense to the plaintiff's suit for possession.
Final Decision: The High Court allowed the second appeal, set aside the judgments and decrees of the courts below, and dismissed the plaintiff's suit. The parties were left to bear their own costs throughout.
( 2 ) DEFENDANTS 1 to 3, the mortgagors at first admitted the claim of the plaintiff in their written statement of 24th December, 1952. They however filed another written statement on 25th April, 1953 contending that the suit of the plaintiff should be dismissed. Their contention is that the plaintiff got his mortgage deed by fraud and that the plaintiff paid only Rs. 1,100. On 17th December, 1955 the defendants. 1 to 3 and the plaintiff filed a compromise memo. In that compromise defendants 1 to 3 confirmed the written statement which they had filed on 24th December, 1952 and alleged that the plaintiff s suit may be decreed. Defendants 4 and 5, who are the main contestants, resisted the suit on various grounds. They contended that the mortgage in favour of the plaintiff was without consideration and was nominal, and that the Sub-Court had no jurisdiction to entertain the suit. They also denied that their debt was discharged and that they should hand over possession to the plaintiff. They also resisted the claim of mesne profits. It was stated by them that defendants 1 to 3 executed an agreement of sale in favour of defendants 4 and 5 in respect of 6 acres of land agreeing to sell the same for a sum of Rs. 6,000. The agreement was executed on 20th April, 1952. It was therefore contended that the plaintiff was not entitled to recover possession of the suit lands. The 4th defendant Seshagiri Rao filed a petition on 26th July, 1956 stating that he gives up his defence and that the plaintiff s suit therefore may be decreed. The plaintiff seems to have filed a rejoinder but nothing particular is mentioned therein.
( 3 ) IN view of these pleadings, the learned Subordinate Judge framed appropriate issues and recorded the evidence of the parties. On that evidence he held that the agreement of sale was executed by defendants 1 to 3 in favour of defendants 4 and 5 on 20th April, 1952, but found that as no suit could be filed for specific performance on that agreement since it would be time-barred the agreement was unenforceable in a Court of law. He consequently decreed the plaintiff s suit for possession he held that the entire loan amount was discharged in so far as defendants 4 and 5 were concerned. The trial Court did not grant the mesne profits to the plaintiff. Aggrieved by that decision, both the plaintiff as well as the 5th defendant preferred separate appeals to the District Judge, Warangal. The plaintiff was dissatisfied because he was not given mesne profits. The 5th defendant was dissatisfied because although the agreement of sale was declared to have been executed by def
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