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1956 Supreme(AP) 45

HIGH COURT OF ANDHRA PRADESH
SUBBA RAO, J.
K. Venkatasubbayya
Versus
K. Rosayya
Second Appeal No. 1176 of 1953 against decree of Sub-J., Bapatla, in A.S. No. 2 of 1951.
Decided On : 09-02-1956

Advocates:
N.C. Raghavachari and S. Srinivasan, for Appellant; G. Venkataramasastry, for Respondents.

A defendant in possession cannot rely on S. 53-A, Transfer of Property Act, if he has not performed or is not willing to perform his part of the contract.

Headnote:

TRANSFER OF PROPERTY ACT, 1882 - SECTION 53-A - SALE OF IMMOVABLE PROPERTY - PART PERFORMANCE - DOCTRINE OF PART PERFORMANCE - APPLICABILITY - CONDITIONS - TRANSFEROR'S RIGHT TO ENFORCE AGAINST TRANSFEREE - BONA FIDE PURCHASER FOR CONSIDERATION - RIGHTS - PRIOR AGREEMENT TO SELL - KNOWLEDGE OF SUBSEQUENT PURCHASER - TITLE - PASSING OF TITLE - SUBSEQUENT PURCHASER'S RIGHTS - ENFORCEABILITY OF PRIOR AGREEMENT - SPECIFIC PERFORMANCE - LIMITATION - LACHES - EFFECT.

Fact of the Case:

Plaintiffs purchased property from defendant 5 under Ex. A-1 dated 14-5-1943. Defendant 1 had an earlier agreement to purchase the same property from defendant 5 under Ex. B-3 dated 11-7-1942 and was in possession. Defendant 1 filed a suit for specific performance of the agreement, which was dismissed by all three courts. Plaintiffs filed a suit for possession and mesne profits, alleging dispossession by defendants 1 to 4 on 17-8-1946. Defendant 1 claimed possession under S. 53-A, Transfer of Property Act, arguing that plaintiffs had knowledge of the prior contract.

Finding of the Court:

The trial court and appellate court found that plaintiffs had knowledge of the prior contract but held that defendant 1 could not rely on S. 53-A due to his laches and abandonment of the contract. The court also held that the doctrine of part performance was not applicable in India and that S. 53-A was the only statutory recognition of the doctrine.

Issues: 1. Whether S. 53-A, Transfer of Property Act applies to a defendant in possession whose suit for specific performance was barred by limitation or dismissed due to laches. 2. Whether a subsequent purchaser with knowledge of a prior agreement to sell acquires title to the property.

Ratio Decidendi: 1. S. 53-A, Transfer of Property Act is the only statutory recognition of the doctrine of part performance in India. 2. A subsequent purchaser with knowledge of a prior agreement to sell acquires title to the property, but the title is subject to the obligation under S. 91, Indian Trusts Act, to hold the property for the benefit of the person in whose favor the prior agreement was made. 3. A defendant in possession cannot rely on S. 53-A if he has not performed or is not willing to perform his part of the contract.

Final Decision: The appeal was dismissed, and the decree of the lower court was confirmed.

JUDGMENT :- The plaintiffs purchased the plaint schedule property from defendant 5 under Ex. A-1 dated 14-5-1943 for a sum of Rs. 500/-. The same property was agreed to be sold to defendant 1 by defendant 5 under Ex. B-3 dated 11-7-1942 and he was put in possession of the property on the said date. Defendant 1 filed O. S. No. 175 of 1945 on the file of the Court of the District Munsif, Bapatla for specific performance of the said agreement. That suit was dismissed by the first Court and it was confirmed on appeal by the Sub-Court and on Second Appeal by the High Court.

The plaintiffs filed at an earlier stage O. S. No. 357 of 1943 on the file of the Court of the District Munsif, Bapatla, alleging that they were in possession and for an injunction restraining defendants 1 to 4 from obstructing their possession but the first Court as well as the two Appellate Courts held that they were not in possession and, therefore, their claim was rejected. The present suit was filed by the plaintiffs on the basis of title lor possession and for mesne profits. They alleged that defendants 1 to 4 dispossessed them on 17-8-1946.

2. Defendants 2 to 4 were ex parte.

3. Defendant 1 pleaded, inter alia, that he had been in possession pursuant to the agreement in his favour and that he was entitled to continue in possession under S. 53-A, Transfer of Property Act.

4. The learned District Munsif found that the plaintiffs took the sale deed with knowledge of the prior contract in favour of defendant 1. that defendant 1 was guilty of laches and had abandoned his right under the suit contract and that he was not anxious to perform his part of the contract. In this view, he held that defendant 1 could not rely upon S. 53-A, Transfer of Property Act.

The appellate Court agreed with the learned District Munsif that the plaintiffs took Ex. A-1 with knowledge of the prior contract. He accepted the finding of the District Munsif that defendant 1s conduct amounted to waiver and abandonment of the contract. He came to the conclusion that, as defendant 1 had not only not performed his part of the contract but, on the other hand, had been trying to avoid performing his part, he was disentitled to any equitable defence under S. 53-A of the Act. In the result, he confirmed the decree of the first Court. Hence, the appeal.

5. Learned counsel for the appellant contends that, as both the Courts found that the plaintiffs had purchased the property with knowledge of the prior agreement of sale in favour of defendant 1, they could not recover possession from defendant 1 and that the mere fact that the suit for specific performance was dismissed earlier would not affect his rights, as the decision in that suit was held to be not res judicata between the parties.

In support of his contention reliance is placed upon the decision of the Calcutta High Court in Puchha Lal v. Kunj Behari Lal, 18 Cal WN 445 : (AIR 1914 Cal 21) (A). There, a purchaser of immovable property under an unregistered kobala paid Rs. 500/- the agreed price to his vendor and was placed in possession. A subsequent purchaser of the same property under a registered conveyance with knowledge of the prior unregistered kobala, filed a suit for recovery of possession. At page 447 (of Cal WN) : (at p. 22 of AIR), the learned Judges observed :

"There are cases, of which Walsh v. Lonsdale (1882) 21 Ch. D 9 (B) is a type, which establish the protection to which in a Court of Equity a person in the position of the defendants is entitled it is quite true that the question whether the defendants, 1st party, were entitled to bring a suit for specific performance In vindication of their rights was not debated before the lower Appellate Court, but there is no matter brought to our notice which can throw any serious doubt upon the defendants right to complete their right by such a suit."

6. In that case, if the defendants had brought a suit for specific performance of the contract, they would have succeeded. In the present case,



























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