Supreme Court Upholds Importance of Written Contracts in Property Disputes: A Case of Failed Part Performance.

The case originated from a suit for declaration of title and recovery of possession filed in 1988. The petitioners (original defendants) argued that while the respondents (original plaintiffs) may be the legal owners of the disputed property, the petitioners had been in possession and enjoyment of the property since a sale agreement was executed in their favor in 1968. The High Court of Karnataka dismissed the petitioners’ appeal, finding that the petitioners had failed to prove the existence and execution of the sale agreement. The petitioners appealed to the Supreme Court.

The Supreme Court while upholding the High Court’s decision held that in order to receive protection under Section 53A of the Transfer of Property Act, which allows for the enforcement of contracts for the sale of immovable property that have not been completed in the legally prescribed manner, several preconditions must be met. These preconditions include a written contract signed by the transferor and evidence that the transferee has taken possession of the property and has performed or is willing to perform their part of the contract. Since the petitioners failed to establish these preconditions, the Supreme Court found that they were not entitled to protection under Section 53A.

The Apex Court held that "13. Section 53-A of the Transfer of Property Act was inserted partly to set at rest the conflict of views in this country, but principally for the protection of ignorant transferees who take possession or spend money in improvements relying on documents which are ineffective as transfers or on contracts which cannot be proved for want of registration. The effect of this section, is to relax the strict provisions of the Transfer of Property Act and the Registration Act in favour of transferees in order to allow the defence of part performance to be established.
14. Section 53-A is an exception to the provisions which require a contract to be in writing and registered and which bar proof of such contract by any other evidence. Consequently, the exception must be strictly construed."

Coram:Justice J.B Pardiwala and Justice Mahadevan
Between: Giriyappa & Anr Vs Versus Kamalamma & Ors.
Date of Judgment: 20-12-2024