Doctrine of Part Performance Under Section 53-A TPA Not Applicable Without Proof of Possession: Andhra Pradesh High Court

Unregistered Sale Agreement Does Not Confer Rights Without Acts in Furtherance of Contract - In a landmark judgment, the Andhra Pradesh High Court dismissed an appeal seeking protection under Section 53-A of the Transfer of Property Act, 1882 (TPA), ruling that mere reliance on an unregistered sale agreement without proof of possession or acts in furtherance of the contract is insufficient to invoke the doctrine of part performance.

Justice Venuthurumalli Gopala Krishna Rao, presiding over the case K. Bhagya Lakshmi & Others v. B. Veera Venkatarao & Others, upheld the Trial Court's decision to order recovery of possession of the suit property, emphasizing that the appellant failed to establish possession under the alleged agreement of sale and did not act in furtherance of the contract for over a decade.

"Mere Existence of an Agreement Does Not Confer Protection – Possession Must Be Proven"
The appellant/defendant claimed that she was in possession of the suit property under an unregistered sale agreement dated April 14, 1977, and sought protection under Section 53-A TPA, which bars the transferor from disturbing the possession of a transferee who has acted in furtherance of a contract.

The respondents/plaintiffs, the original owners of the property, argued that possession was never delivered under the agreement and that the appellant had trespassed into the land in 1987, nearly a decade after signing the agreement.

The Court found that the possession clause in the agreement appeared to have been inserted later with different ink and handwriting, raising doubts about its authenticity. Additionally, the appellant failed to produce any concrete evidence to prove possession, relying instead on property tax receipts that did not establish a direct connection to the suit land.

Rejecting the appellant’s claim, the Court held: “For the defense of part performance to succeed, the transferee must prove possession under the agreement and that acts in furtherance of the contract were performed. In this case, the appellant has failed to meet these requirements.”

"Failure to Show Readiness and Willingness to Perform Contract Weakens Defense"
The Court further noted that the appellant had remained silent for over a decade after executing the agreement and failed to take any legal action for specific performance.

Citing Nathulal v. Phoolchand (SC) and Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi (SC), the Court reiterated that to claim protection under Section 53-A, the transferee must continuously express readiness and willingness to perform contractual obligations.

The judgment emphasized: “Mere payment of a paltry advance amount of ₹50 out of the total ₹2,527 agreed consideration, without further efforts to complete the transaction, negates the claim for protection under Section 53-A.”

The appellant's failure to issue any legal notice to the plaintiffs seeking execution of the sale deed or depositing the balance sale consideration in court further weakened her defense. The Court observed:
“A transferee who has come into possession under an agreement must not only prove such possession but also demonstrate efforts to fulfill contractual obligations. The appellant’s silence for ten years speaks against her claim.”

"Unregistered Sale Agreement Does Not Confer Title – Property Tax Receipts Are Insufficient"
The appellant relied on property tax receipts as evidence of possession. However, the Court ruled that payment of tax does not confer ownership or validate possession under an unregistered sale agreement.

The Court referred to S.F. Muniswami Gounder v. Erusa Gounder (Madras HC) and Mohan Lal v. Mirza Abdul Gaffar (SC), holding: “A tax receipt is merely an acknowledgment of tax paid and does not establish title or possession. The burden was on the appellant to prove lawful possession, which she failed to discharge.”

The plaintiffs, as undisputed owners, had the superior claim over the property. Since the appellant failed to show possession under the agreement or acts in furtherance of it, her claim under Section 53-A was denied.

"Court Orders Recovery of Possession – Appellant Given Three Months to Vacate"
Given the failure of the appellant’s defense, the Court upheld the Trial Court’s decree for recovery of possession, directing the appellant to vacate the suit property within three months.

The judgment concluded: “Since the appellant’s defense under Section 53-A fails, the plaintiffs are entitled to recovery of possession. The appeal is dismissed, and the appellant is directed to vacate the suit property within three months.”

While no costs were imposed, the Court clarified that if the appellant failed to vacate within the stipulated period, the plaintiffs could initiate legal proceedings for enforcement of the decree.

Date of Judgment: February 18, 2025