1 IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA RSA No. 192 of 1998 Reserved on : 14th October, 2009 Date of Decision: 24th November, 2009 Shri Dinesh Kumar Appellant Versus Shri Dharam Dass (now deceased) through LRs Smt. Lachhami and others Respondents Coram The Hon’ble Mr. Justice Sanjay Karol,J. Whether approved for reporting1? Yes. For the appellant: Ms. Seema K. Guleria, Advocate. For respondents: Mr. Ajay Kumar Sood, Advocate. No. 1(a) to 1(j) Sanjay Karol, J. This is the plaintiff’s Regular Second Appeal filed under Section 100 of the Code of Civil Procedure, 1908, assailing the judgment and decree dated 18.2.1998 passed by the District Judge, Shimla, in Civil Appeal No. 6-S/13 of 1993, titled as Shri Dharam Dass vs. Shri Dinesh Kumar and another, reversing the judgment and decree dated 10.12.1992 passed by the Sub Judge, Ist Class (3), Shimla, in Civil Suit No. 38/1 of 1990 titled as Shri Dinesh Kumar vs. Shri Dharam Dass. For the purpose of deciding the appeal, the appellant herein is referred to as the plaintiff. Respondents No. 1(a) to 1(j) herein, are legal heirs of original defendant No.1 Shri Dharam Dass and were impleaded as parties after his death. Shri Dharam Dass is referred to as defendant Whether the reporters of Local Papers are allowed to see the Judgment? 2 No.1 and proforma respondent No.2 herein is referred to as defendant No.2, however, his name stands deleted in terms of order dated 9.10.2009 passed by this Court. On 19.4.1990 plaintiff filed a suit for permanent prohibitory injunction restraining defendant No.1 from interfering with his possession on land measuring 5 Bighas 8 Biswas, comprised in Khasra Nos. 233/38, 226/87, 228/87 and 229/87 entered in Khewat No.1, Khatauni No.18. An alternate relief of possession was also prayed for. According to him, the land in question owned by defendant No.2 was gifted to him in terms of registered gift deed dated 23.3.1990 and possession thereof delivered to him was being interfered with by defendant No.1. Defendant No.1 contested the suit, inter alia, pleading that in the year 1974 land in question was allotted as a grant by the Government of Himachal Pradesh under the Nautor Rules to defendant No.2, who in the year 1978 created a tenancy in his favour when possession was also handed over to him. Since then he is in continuous, uninterrupted, cultivable possession of the same and has also planted fruit growing trees thereupon. After the land was fully developed by him, defendant No.2 started claiming back the same. Ultimately the matter was amicably settled between them and defendant No.2 agreed to transfer Khasra No.233/98 (old khasra number 333/38) in his favour for a consideration of Rs.3000/- and an agreement to the said effect was also executed on 17.6.1981. Part consideration of a sum of Rs.2000/- was paid at the time of execution of the agreement and the other documents, including a Will and the balance sale consideration of Rs.1000/- was paid 3 to defendant No.2 in the month of November, 1981. Thereafter, he constructed his own house on the land in question. Based on the pleadings of the parties, the trial Court framed the following issues:- “1. Whether the plaintiff is owner in possession of the suit land? OPP 2. Whether the defendant No.1 was inducted as a tenant by proforma defendant No.2 on suit land as alleged? OPD. 3. Whether the proforma defendant No.2 executed writing dated 17.6.81 in favour of the defendant No.1 and defendant No.1 continued to be in possession of the suit land as alleged? OPD. 4. Whether the suit is not maintainable? OPD. 5. Whether the plaintiff has suppressed material facts if so its effect? OPD. 6. Whether the suit has not been properly valued for purpose of court fee and jurisdiction? OPD. 7. Relief. The trial Court held the agreement to have been validly executed between the defendants and defendant No.1 having been put in possession of 3 Bighas 17 Biswas of land. However, since limitation period for enforcing the said agreement by filing a suit for specific performance was over and the protection of Section 53-A of the Transfer of Property Act, 1882 (hereinafter referred to as the Act) wasnot available to defendant No.1 and that the agreement had been executed by defendant No.2 within a period of 15 years of the grant of the land made to him under the Nautor Rules a decree for possession was passed in favour of the plaintiff as against defendant No.1. 4 The first Appellate Court, after considering the material on record framed the following points for consideration:- 1. Whether the appellant/defendant has made out a case for the amendment of the written statement? 2. Whether the appellant is entitled to the protection of Section 53-A of the Transfer of Property Act as alleged? Both the points were answered in the negative. The first Appellate Court, based on the statement of Shri Dharam Dass (DW-1), Shri Uma Dutt (DW-3) and defendant No.2 Shri Ram Singh (PW-2), came to the conclusion that not only the agreement in question stood executed inter se between the defendants but also the entire sale consideration stood paid. All of the terms of the agreement having been specifically complied with by defendant No.1, no part of the agreement was left to be performed by the parties. Importantly, the Court found that the factum of the execution of the agreement (Ext.DW-1/A) or his signatures thereupon was not denied by defendant No.2. The agreement was voluntarily executed between the parties and after the performance of all the terms of the agreement, defendant No.1 had constructed three rooms single storeyed house and installed an electric meter in his own name. The said fact stood corroborated by the statements of Shri Roop Lal (DW-4) and Shri Amar Singh (DW-3). Importantly it was held that defendant No.1 had been put in possession of the land in question pursuant to the agreement Ext.DW- 1/A entered into between the defendants. On the plea of Section 53-A of the Act not being available to defendant No.1 in view the of H.P. Nautor Rules, 1968, the first Appellate Court held that “Neither of the two reasons given by the trial 5 court for denying the benefit of Section 53-A of the Transfer of Property Act, is well founded. H.P. Nautor Rules, 1968, nowhere bar the transfer of land granted in accordance with the said Rules nor do they provide anywhere that such transfer will be void or illegal. The only thing provided in the Rules, vide Rule 12, is that if the grantee or his successors alienate the land within fifteen years from the date of the Patta, the grant shall be cancelled and the State Government will have the power to resume the land without payment of any compensation to the grantee or to the alienee. That means the Rules simply give power to the State Government to cancel the grant and resume the land. This power of the State government cannot be construed to mean, by any stretch of imagination, as legal bar to the alienation of the natuor land by the grantee within fifteen years, nor can this provision be taken to mean that the alienation by the grantee will be void. Therefore, the reasoning adopted by the learned trial court, is bad on the face of it”. Further relying upon the decisions of the various High Courts as reported in Baruna Giri and others vs. Rajakishore Giri and others, AIR 1983 Orissa 107, Chaman Lal vs. Smt. Surinder Kumari, AIR 1983 P&H 323, Nana Saheb Gujaba Bankar vs. Appa Ganu Bankar, AIR 1957 Bombay 138, the first Appellate Court held that since no part of the agreement was required to be performed as defendant No.1 had fulfilled all obligations set up in the agreement and having been put in possession of the suit land pursuant to the agreement, therefore, he was entitled to the statutory protection of Section 53-A of the Act. The plea that plaintiff was a bonafide transferee was rejected for the reason that admittedly defendant No.2 had gifted the land 6 in question to the plaintiff on 23.3.1990. The plaintiff has merely stepped into his shoes. The appeal was admitted on the following substantial questions of law:- “1. Whether an agreement entered into between the parties of land granted under nautor Rules within a period of 15 years, is not hit under the provisions of Section 23 of the Contract Act? 2. Whether a party put in possession under unlawful agreement is protected under the provisions of Section 53-A of the Transfer of Property Act? 3. Whether a party setting up the plea of tenancy can set up a plea of sale in view of the facts and circumstances of the case. 4. Whether the learned lower appellate Court has appreciated the evidence in a right perspective? 5. Whether a party whose claim for specific performance has become time barred, can take the benefit of provisions of Section 53-A of the Transfer of Property Act? The matter was heard partly on 7.10.2009 when learned counsel for the plaintiff agreed that substantial questions of law No.1 to 3 do not arise for consideration for the simple reason that the same did not arise out of the pleadings of the parties and also for the reason that validity of the agreement entered into inter se between the defendants was not subject matter of challenge in the suit. In fact the plaintiff had not even referred to the said agreement entered into between the parties. On 9.10.2009, learned counsel for the plaintiff urged for framing of following additional substantial questions of law:- 7 1. Whether the possession of a party given under a contract to sell which has become time barred can be protected under Section 53-A of Transfer of Property Act? 2. Whether the benefit of protection under Section 53- A of Transfer of Property Act is available to the defendant who has remained passive and has not cared to get the sale deed registered in his favour? 3. Whether the defendant has any right, title or interest in the suit land on the basis of a time barred contract to sell? Evidently, question No.5 originally framed has been re- framed. Learned counsel have also addressed arguments on the same. The matter was further heard on 9.10.2009 and adjourned to enable the learned counsel for the parties to explore the possibility of amicable settlement. Even during the course of hearing an endeavour was made to have the matter resolved, but, however, the parties could not arrive at an out of court of settlement. Record reveals that agreement to sell (Ext.DW-1/A) and Will dated 17.6.1981 (Ext.DX) were executed by defendant No.2 in favour of defendant No.1. Importantly plaintiff is the grand son of defendant No.2 who executed a gift deed dated 23.3.1990 (Ext.P-1). From the material on record, the findings of fact by the first appellate Court with regard to execution of the agreement, implementation of its terms and possession having been handed over to defendant No.1 pursuant thereto stands proved. It could not be shown from the record as to how the findings of facts recorded by the first Appellate Court are erroneous or not borne out from the record in any manner. Importantly, defendant No.2 is alive and has not, in any manner assailed the transaction 8 entered into inter se between the defendants. Why no such action was taken by him is also not borne out from the record. He has not denied his signatures. In Chaliagulla Ramachandrayya and others vs. Boppana Satyanarayana and others, AIR 1964 SC 877, the Apex Court after considering the decision of the Privy Council in Ariff vs. Jadunath,.AIR 1931 PC 79 held that Section 53A had been enacted to introduce in a limited form the doctrine of equity of part performance. After S. 53A was enacted, the only case in which the English doctrine of equity of part performance could be applied in India is where the requirements of S. 53A are satisfied. The Apex Court in Maneklal Mansukhbhai vs. Hormusji Jamshedji Ginwalla and sons, AIR 1950 SC 1, held that where in an action to eject a lessee on the ground that he had no registered deed of lease executed in his favour the lessee takes the plea of part performance and proves a written and signed contract of lease in his favour whereby possession was taken and after building a factory thereupon had been paying rent regularly would be entitled to retain possession of the leased land in spite of absence of the registration of the deed. Similar view is taken by the Full Bench of the Andhra Pradesh High in Muthabathula Arjayya v. Rambala Venkata Surya Gopala Krishnamurthy and another, AIR 1974 A.P. 240 and the Division of the High Court of Bombay in Nanasaheb Gujaba Bankar v. Appa Ganu Bankar and others, AIR 1957 Bombay 138. The Federal Court in Thota China Subba Rao and others vs. Mattapalli Raju and others, AIR 1950 F.C. 1, held that Section 53-A clearly requires that transferee has either to be put in possession or has to 9 continue in possession in part performance of the agreement which is sought to be enforced. In Sardar Govindrao Mahadik and another vs. Devi Sahai and others, (1982) 1 SCC 237, the Apex Court held that Section 53-A insists upon proof of some acts having been done in furtherance of the contract. The acts claimed to be in part performance must be unequivocally referable to pre-existing contract and evidence of implementation or performance thereof. In Hemraj v. Rustomji, AIR 1953 SC 503, the Court held that “the right of a transferee for consideration who has no notice of the contract of which there was part performance, that is to say, any rights which the transferee under the unregistered document may have on the strength of part performance of the contract against the transferor would not be of any avail against a bonafide transferee for value from the transferor who had no notice of the transaction”. Where parties had not been put in possession in part performance of the agreement to sell, the Apex Court in A.Lewis and another vs. M.T.Ramamurthy and others, AIR 2008 SC 493 and Ranchhodda Chhanganlal vs. Devaji Supdu Dorik and othes, AIR 1977 SC 1517, has held that the benefit of protection under Section 53-A was not available to a transferee who remained passive and also did not perform contractual obligations. The transferee is obliged to plead and prove that he has been willing to perform the contract in order to seek protection of the provisions of the Section. To the same effect is the decision of the Punjab and Haryana High Court in Chaman Lal vs. Smt. Surinder Kumari, AIR 1983 P&H 323 and Teja Singh v. Ram Parkash Talwar (deceased by L.R’s) and others, AIR 1984 P& H 95. 10 That Section 53-A is only available as a defence and does not confer a right to the title on the basis thereof, has been held to be so by the Apex Court in Delhi Motor Co. and others vs. U.A. Basrurkar (dead) by his legal representatives and others, AIR 1968 SC 794 and Subsequently in Patel Natwarlal Rupji vs. Kondh Group Kheti Vishayak and another, (1996) 7 SCC 690, the Apex Court has held that though the doctrine of part performance embodied in Section 53-A of the Act is part of equitable doctrine in English Law, but it gives a statutory right which is available to the transferee for consideration in possession of the property under the contract. So long as the transferee has done and is willing to perform his part of the contract or, is always ready to abide by the terms of the contract and has performed or is always ready and willing to perform his part of the contract, the transferee is entitled to avail this statutory right of protection of his possession as a shield but not as a sword. The right to retain possession of the property rests on the express provisions of the Act and on his compliance thereof. Section 53-A confers no title on the transferee but imposes a statutory bar on the transferor to seek possession of the immovable property from the transferee. Equally, it does not confer any title on the defendant in possession nor can he maintain a suit on title. This view was reiterated in Hamzabi and others vs. Syed Karimuddin and others, (2001) 1 SCC 414 and State of U.P. vs. District Judge and others, (1997) 1 SCC 496. The Apex Court in Rambhau Namdeo Gajre vs. Narayan Bapuji Dhotra (dead) through LRs, (2004) 8 SCC 614, has held as under:- “It is seen that many a times a transferee takes possession of the property in part performance of the contract and he is willing to perform his part of the contract. However, 11 the transferor somehow or the other does not complete the transaction by executing a registered deed in favour of the transferee, which is required under the law. At times, he tries to get back the possession of the property. In equity the Courts in England held that it would be unfair to allow the transferor to take advantage of his own fault and evict the transferee from the property. The doctrine of part performance aims at protecting the possession of such trans- feree provided certain conditions contemplated by Section 53- A are fulfilled. These essential conditions are: (1) there must be a contract to transfer for consideration of 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. If these conditions are fulfilled then in a given case there is an equity in favour of the proposed transferee who can protect his possession against the proposed transferor even though a registered deed conveying the title is not executed by the proposed transferor. In such a situation equitable doctrine of part performance provided under Section 53-A comes into play. Protection provided under Section 53-A of the Act to the proposed transferee is a shield only against the transferor. It disentitles the transferor from disturbing the possession of the proposed transferee who is put in possession in pursuance of such an agreement. It has nothing to do with the ownership of the proposed transferor who remains full owner of the property till it is legally conveyed by executing a registered sale deed in favour of the transferee. 12 The doctrine of part-performance as contemplated by Section 53-A can be availed of by the transferee or any person claiming under him against his transferor or any person claiming under him and not against a third person with whom he does not have a privity of contract.” The question as to whether the protection of Section 53-A could be made available to a transferee merely because a suit for specific performance at the instance of transferee had become barred by limitation came up for consideration before the Supreme Court in Mahadeva and others vs. Tanabai, (2004) 5 SCC 88. The Court framed the following question, "Whether the defendant can continue to be in possession notwithstanding the facts that they have not chosen to enforce the agreement of sale till now?" and after due deliberation and consideration held that merely because a suit for specific performance at the instance of vendee had become barred by limitation that by itself is not enough to deny the benefit of plea of part performance of agreement to sell to the person in possession. The said finding was returned on the basis of earlier decision rendered by the Apex court in Shrimant Shamrao Suryavanshi and another vs. Pralhad Bhairoba Suryavanshi, (2002) 3 SCC 676, wherein it was held as under:- “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 13 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. Thus 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. 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.” (Emphasis supplied) Importantly in Huvappa Irappa Ballari vs. Basava and another, (2005) 12 SCC 164, the Apex Court framed the following question for consideration "Whether the courts below committed an illegality in refusing the decree for possession when they found that the respondent had failed to enforce the agreement of sale within the period allowed by law under Article 54 of the Limitation Act?" and by relying upon the earlier decisions of the Apex Court, reiterated the view taken in Shrimant Shamrao Suryavanshi (supra). In Ramesh Chand Ardawatiya vs. Anil Panjwani, (2003) 7 SCC 350, the Apex Court has held as under:- 14 “Under Section 54, TP Act, a contract for sale does not confer title in immovable property. However, still, if a person has entered into possession over immovable property under a contract for sale and is in peaceful and settled possession of the property with the consent of the person in whom the title vests, he is entitled to protect his possession against the whole world, excepting a person having a title better than what he or his vendor possesses. If he is in possession of the property in part- performance of a contract for sale and the requirements of Section 53A TP Act are satisfied, he may protect his possession even against the true owner. Therefore, in view of Section 53-A TP Act, Section 6 of the Specific Relief Act, 1963 and Section 64 of the Limitation Act, 1963, the person in possession may not have title to the property yet if he has been inducted into possession by the rightful owner and is in peaceful and settled possession of such property he is entitled in law to protect the possession until dispossessed by due process of law by a person having a title better than what he has. A person in possession of the property cannot be forcibly dispossessed by another rank trespasser and even