2004 (8) TMI 688 - SC - Indian Laws

Whether a mere contract of sale is incapable of creating any right or title in favour of the transferee?

Summary

Issues Involved:
1. Validity of the appellant's claim to the suit land under Section 53-A of the Transfer of Property Act.
2. Whether the appellant can protect his possession based on an agreement of sale executed by a third party (Pishorrilal) who did not have a registered sale deed.

Detailed Analysis:

1. Validity of the appellant's claim to the suit land under Section 53-A of the Transfer of Property Act:
The central issue was whether the appellant could claim the benefit of the equitable doctrine of part performance under Section 53-A of the Transfer of Property Act to protect his possession of the suit land. The trial court held that a mere contract of sale does not create any right or title in favor of the transferee, and since the original agreement of sale was not proved, the appellant could not defend his possession under Section 53-A. The first appellate court, however, concluded that the appellant had an equitable/possessory title to the suit land based on the agreement of sale executed by Pishorrilal and was entitled to protect his possession under Section 53-A.

2. Whether the appellant can protect his possession based on an agreement of sale executed by a third party (Pishorrilal) who did not have a registered sale deed:
The High Court reversed the first appellate court's decision, holding that the appellant could not claim the benefit of the equitable doctrine of part performance under Section 53-A because Pishorrilal did not have a registered sale deed and thus no title in the property. The Supreme Court upheld this view, stating that the doctrine of part performance could only be availed of by the transferee or any person claiming under him, and since the appellant was not the transferee within the meaning of Section 53-A, he could not invoke this doctrine against the respondent.

The Supreme Court emphasized that Section 53-A provides protection to the proposed transferee against the transferor, preventing the transferor from disturbing the possession of the transferee who has taken possession in part performance of the contract. However, this protection does not extend to third parties with whom there is no privity of contract. The court reiterated that an agreement to sell does not create an interest in the property, and title can only be conveyed through a registered sale deed as per Section 54 of the Transfer of Property Act.

The court also referred to previous judgments, including Shrimant Shamrao Suryavanshi & Anr. Vs. Pralhad Bhairoba Suryavanshi and State of U.P. Vs. District Judge & Ors., to underline that the doctrine of part performance is an equitable estoppel that operates against the original owner but does not affect the ownership of the property until a registered sale deed is executed.

In conclusion, the Supreme Court dismissed the appeal, holding that the appellant, not being the transferee within the meaning of Section 53-A, could not protect his possession against the respondent. The appellant did not acquire any possessory or equitable title to the suit land through Pishorrilal, who himself did not have any right in the property. The court ruled that the appellant's claim lacked merit and dismissed the appeal with costs.