Supreme Court Sets Clear Boundaries for Property Rights Under Part-Performance Doctrine

Last Updated on December 26, 2024 by Amit Patra

In a landmark judgment, re-writing the contours of property possession rights, the Supreme Court has finally given much-needed clarity on when people can seek protection under Section 53A of the Transfer of Property Act, 1882. The decision comes as a great development for practitioners of property law and those dealing in real estate transactions.

The case arose when the petitioners claimed possession of a 2-guntas land parcel based on an alleged sale agreement from 1968, invoking Section 53A’s protection when faced with the original owner’s suit for possession. The core issue before the Court was whether mere possession claims, without concrete proof of a written agreement, could trigger the part-performance doctrine’s protection.

Justice Pardiwala and Justice Mahadevan, in their judgment, underlined that protection under Section 53A is not accorded to every possession holder. The Court spelt out three prerequisites: a written contract by the transferor with express terms of transfer, possession taken or continued in part-performance and demonstrable acts furthering the contract coupled with willingness to perform the contractual obligations.

The reasoning of the Court was based on the main purpose of the provision – protection of bona fide transferees who act on written agreements but without formal registration. But it held that such protection cannot be extended to cases where the very existence of a written agreement is unproven. As the Court put it, Section 53A was intended to “relax the strict provisions” of property laws to protect “ignorant transferees,” not to legitimize unsubstantiated possession claims.

Herein lies the petitioners’ inability to establish the execution of the alleged 1968 sale agreement proved fatal. The High Court upheld these decrees obtained by the original owner as it said that mere possession, unaccompanied by proof of a written instrument, was not enough for Section 53A.

This decision is a useful reminder that, while Section 53A gives very important protections in relation to property transactions, those are not unlimited. In balancing the rights of property owners against claims of possession, the ruling has made sure that the part-performance doctrine is a shield for genuine transactions, not a tool in the arsenal of unsubstantiated possession claims.

This therefore gives a clear guidance to practitioners in the field of property law and all those who deal in real estate that documentation of property transactions should be done properly; possession without proper documentation will not do to seek protection under the doctrine of part-performance.