Holding

A written agreement containing the essential terms of the sale, from which the terms can be ascertained with reasonable certainty, is indispensable for invoking Section 53-A; mere letters admitting an oral agreement do not satisfy this requirement.

Summary

The appellants, owners of a house in Solan, had allowed their uncle Bhagwan Dass to occupy the property as a licensee. Bhagwan Dass later claimed that the appellants had agreed to sell him half of the property and that, under Section 53-A of the Transfer of Property Act, he could retain possession in part performance of that agreement. The respondents relied on a series of letters from one appellant admitting an oral agreement to sell, arguing that these letters satisfied the statutory requirement of a written agreement. The Supreme Court held that the letters merely acknowledged an oral agreement and did not constitute a written agreement containing all essential terms, which is a prerequisite for invoking the doctrine of part performance under Section 53-A. Consequently, the respondents could not protect their possession, and the High Court's decision was set aside. The appeal was allowed, and the suit for possession and mesne profits was decreed in favour of the appellants.

Issues considered

Whether a proposed vendee can invoke Section 53-A of the Transfer of Property Act to protect possession based solely on an oral agreement not reduced to writing
Whether letters admitting an oral agreement satisfy the statutory requirement of a written agreement with ascertainable terms under Section 53-A
Whether the doctrine of part performance can be invoked when the alleged agreement lacks essential terms such as time frame and payment of registration charges

Legislation cited

Transfer of Property Act, 1882s. 53-A

Subjects

Section 53-Apart performanceagreement to sellwritten agreementoral agreementadverse possessionpossessionmesne profitsTransfer of Property Act

Judgment

A MOOL CHAND BAKHRU AND ANR.
v.
ROHAN AND ORS.

JANUARY 29, 2002

B [V.N. KHARE AND ASHOK BHAN, JJ.]

Transfer of Property Act, 1882-Section 53-A-Agreement to sell-Part
performance of contract-Claim for-Written agreement to sell-Necessity
of-Letters written by transferor agreeing to sell his part of the share in
c property-Letters not spelling out the terms of the agreement or time frame
within which the sale deed was to be executed-High Court holding that the
letters constitute a valid agreement to sell, allowing the claim for par/-
performance of contract-Validity of-Held, letters written by transferor could
not be construed to be an agreement to sell within the meaning of Section 53-
D A of the Act-Order of the High Court set aside.

The issue involved in the present appeal is whether a proposed
vendee could protect his possession of an immoveable property on the plea
of part performance under Section 53-A of the Transfer of Property Act,
1882 on the basis of an oral agreement. Plaintiff-appellants were owners
E of the property in dispute. They had permitted the predecessor-in-interest
of respondent to occupy the suit property as a licensee. When respondent
failed to vacate the property, the appellants filed a suit for possession of
the property and for recovery of mesne profit. Respondent resisted the
suit contending that appellant No. 1 wrote several letters agreeing to sell
F his half share of property had also received certain sale consideration.
Thus, they claimed protection under section 53-A of T.P. Act and also
alternatively claimed title by adverse possession. Trial Court held that the
respondents have perfected the title to the property in dispute by way of
adverse possession to the extent of half share of appellant No. 1 and
dismissed the suit to that extent. However, on appeal the First Appellate
G Court decreed the suit of appellants for possession of entire property in
dispute alongwith mesne profits. On second appeal, High Court held that
respondents were entitled to protect the possession under section 53-A of
the Act. Hence the present appeal by plaintiff.

Allowing the appeal, the Court
H 702
M.C. BAKHRU v. ROHAN 703

HELD : 1.1. Section 53-A of the Transfer of Property Act, 1882 A
provides that where any person contracts to transfer for consideration any
immoveable property, in writing signed by him or on his behalf from which
the terms necessary to constitute the transfer can be ascertained with
reasonable certainty and the transferee has, in part performance of the
contract, taken possession of the property or any part thereof, or the B
transferee, being already in possession, continues any possession in part
performance of the contract, and has done some act in furtherance of the
contract and the transferee has performed or is willing to perform his part
of the contract then he is entitled to protect his possession in respect of
the property of which he was put in possession in part performance of
the agreement to sell. [707-E-F] c
Nathulal v. Phool Chand, [1969] 3 SCC 120 and Sardar Govindrao
Mahadik v. Devi Sahai, [1982] l SCC 237, relied on.

Mohan Lal (deceased) through his LRs. Kachru and Ors. v. Mirza Abdul
Gaffar and Anr., [1996] l SCC 639 and Roop Singh v. Ram Singh, [2000] 3 D
sec 708, referred to.
1.2. In the instant case, the letters written by appellant No. l cannot
be termed to be agreement to sell within the meaning of Section 53-A
spelling out the terms of the agreement for sale. At the most it is an E
admission of an oral agreement to sell and not a written agreement.
Statutorily the emphasis is not on written agreement only. In addition the
emphasis is on the terms of the agreement as well which can be ascertained
with reasonable certainty from the written document. In the instant case,
there was no meeting of minds. Admission made by appellant No. l of an
oral agreement to sell does not spell out other essential terms of agreement F
to sell such as time frame within which the Sale Deed was to be executed
and as to who would pay the registration charges etc. Written agreement
has to precede the putting of the proposed vendee in possession of the
property. In the instant case, the predecessor in interest of the respondents
was never put in possession of the property pursuant to the written G
agreement arrived at between the parties. Thus, High Court fell in error
in coming to the conclusion that the letters written by appellant No. l
constituted an agreement to sell. The suit filed by plaintiff/appellants for
possession of property and mesne profit is decreed. [709-E-H; 710-A-B)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5920 of H
704 SUPREME COURT REPORTS [2002] I S.C.R.

A 1998.

From the Judgment and Order dated 7.4 .. 98 of the Himachal Pradesh
High Court in R.S.A. 321 of 1996.

In-person for the Appellant.
B
K.L. Janjani for L.Rs. of Appellant No. 2

Narendra M. Sharma and R.K. Sanghi for R.P. Singh for the Respondents.

'(
The Judgment of the Court was delivered by
c ...
BHAN, J. Point for consideration in this appeal is as to whether:

"A person (claiming to be a proposed vendee) can protect his
possession of an immovable property on the plea of part performance
D under Section 53-A of the Transfer of Property Act on the basis of
an oral agreement, the terms of which have not been reduced in
writing."
"'
The relevant facts are : ...

E I. Plaintiffs/appellants (hereinafter referred to as "the appellants") Moo!
Chand and Leela Ram were the owners of the property known as 'Dayal
Villa' situated in Khasra Nos. 1195, 1196, 1198, 1200, 1201 and 1202
measuring 613 sq. meters in Solan Town, specifically described in the plaint
(hereinafter referred to "the property in dispute"). Leela Ram above-named

F
died during the pendency of the suit before the trial court and his name was ~
...
substituted by his widow and two sons as plaintiffs. Widow died during the
pendency of this appeal. The title of Leela Ram is represented through his
two sons as the appellants.

2. The appellants filed the suit with the averments that Late Bhagwan
Dass (predecessor in interest of the defendants) was their real uncle (father's
G
brother). Because of the partition of the country in 1947 Bhagwan Dass who
was living in Sindh Province migrated to India. The appellants permitted him
to occupy their house at Solan as a licensee in 1948-49. In spite of repeated
requests to vacate the property Bhagwan Dass failed to handover the possession
of the property to the appellants. In 1974 Bhagwan Dass agreed to vacate the
H property after six months. On his failure to vacate the property he was required
)-
M.C. BAKHRU v. ROHAN [BHAN, J.] 705

to pay damages by way of use and occupation at the rate of Rs. 20 per day A
till the date of actual vacation. As Bhagwan Dass failed to vacate the property
- -' and to pay the damages as agreed upon, a suit was filed for possession of the
property as well as for recovery of Rs. 43,200 as mesne profits for the use
and occupation of the property at the rate of Rs. 1200 per month.

3. The defendants/respondents (hereinafter referred as 'the respondents') B
while resisting the suit averred that the appellants agreed to sell the property
in dispute to Bhagwan Das in the year 1968 for a consideration of Rs. 30,000
out of which Rs. I 0,000 was paid to the appellants. A sum of Rs. 1, 100 was
kept by Bhagwan Dass with Kishni, mother of the appellants, at their instance.

. A further sum of Rs. 10,000 was deposited with one Guiab Singh, brother of C
the appellants, in the year 1969, as part of the sale consideration. Bhagwan
Dass continued to occupy the property till 1968 as a permissive user and
thereafter in part performance of the agreement to sell. That the property at
the time of lease was in a dilapidated condition. Suitable improvements in the
property by reconstructing the walls, floors, roof of Balcony and by providing
flush latrines at a cost of Rs. 35,000 were carried out. No objection was D
raised by the appellants at any time to the improvements carried out by the
respondents. It was further pleaded that they have always been ready and
willing to perform their part of the agreement to sell and pay the remaining
amount of the sale consideration. Alternatively, it was pleaded that the
respondents acquired title to the property in dispute by way of adverse
possession as they were continuing in possession since 1968. The claim of E
the appellants for mesne profits was denied.

4. The appellants in their rejoinder pleaded that plaintiff No. 1 Moo!
Chand in the year 1968 had agreed to sell his half share in the property in
dispute to Bhagwan Dass on the letter's representation that the market value F
of the entire property in dispute at that time was Rs. 30,000. The value of
half share was Rs. 15,000. It was admitted that Moo! Chand had received Rs.
I 0,000 as part of the sale consideration. It was, however, pleaded that since
Bhagwan Dass failed to pay the balance sale consideration, the deal fell
through and the amount received as part of the sale consideration, was forfeited
and appropriated towards use and occupation charges. It was averred that G
Leela Ram, the other plaintiff, had no intention to sell his half share in the
property in dispute nor any agreement to sell was arrived at between him and
Bhagwan Dass. The claim of adverse possession set up by the respondents
was controverted. The so-called improvements made by the respondents were
also denied.
H
706 SUPREME COURT REPORTS (2002) I S.C.R.

A 5. The trial court dismissed the suit of Moo I Chand to the extent of his
half share. The suit of Leela Ram for possession of his half share and the
claim for mesne profits was decreed. He was awarded mesne profit at the rate
of Rs. 20 per day amounting to Rs. 21,600. The trial court came to the
conclusion that Moot Chand alone had entered into an agreement to sell his
half share in the property in dispute in favour of Bhagwan Dass for a
B consideration of Rs. 15,000 out of which a sum of Rs. 10,000 was received
by Moot Chand. It was held that Bhagwan Dass was placed in possession of
half share of the property in dispute by Moot Chand as part performance of
the agreement to sell. Benefit of Section 53-A of the Transfer of Property
Act, 1982 (for short 'the Act') was however denied on the ground that the
C respondents had failed to prove that they were and are ready and willing to
..
perform their part of the agreement. The respondents were found to have
perfected their title to the property in dispute by way of adverse possession
to the extent of half share of the Moot Chand. So far as the share of Leela
Ram is concerned the respondents were held to be in permissive possession
as a licensee.
D
6. Both the parties being aggrieved by the judgment and decree of the
trial court preferred two separate appeals before the District Judge. The appeal
filed by the respondents was dismissed. The finding recorded by the Trial .
Court in so far as the same was in respect of the share of Leela Ram was
E confirmed. The appeal preferred by the appellants was allowed and the finding
of the trial court that the respondents had perfected their title to the extent of
half share by way of adverse possession was set aside. Consequently, the suit
of the appellants for possession of the entire property in dispute was decreed
along with mesne profits to the tune of Rs. 43,200 at the rate of Rs. 1200 per
month.
F
7. The respondents filed the second appeal before the High Court. The
---
case projected before the High Court was that as the respondents had been
put in possession of the property in part performance of the agreement to sell
in the year 1968 on payment of a part of the sale consideration and therefore
G they were entitled to protect their possession under Section 53-A of the Act.
Alternatively, their case was that they had become the owners of the property
by way of adverse possession as they were in continuous possession of the
same since 1968.

8. The High Court relying upon a judgment of this Court in Mohan Lal
H (deceased) through his LRs. Kachru and Ors. v. Mirza Abdul Gaffar and
M.C. BAKHRU v. ROHAN [BHAN, J.) 707
Anr., [1996] I sec 639, came to the conclusion that since the respondents A
were claiming to be in possession of the property in part performance of the
--" agreement to sell, the plea of acquisition of title by adverse possession was
not available to them. Learned counsel appearing for the respondents did not
assail this finding of the High Court. The view expressed in Mohan Lal
(deceased) through his LRs. Kachru and Ors. case (supra) has been reiterated B
by this Court in Roop Singh v. Ram Singh, [2000] 3 SCC 708. It has been
held in the latter judgment that the pleas of adverse possession and retaining
the possession by operation of Section 53-A of the Act are inconsistent with
each other. Such a plea is not available to a proposed vendee.

. 9. Relying upon few letters written by Moo! Chand admitting that he
had agreed to sell the property, the appeal filed by the respondents to the
C

extent of Moo! Chand' s share was allowed. It was held that the respondents
could protect their possession under Section 53-A of the Act. The appeal qua
the share of Leela Ram's half share was dismissed. It was held that respondents
continued to be in joint possession of the property to the extent of half share
but he was not entitled to actual possession till partition of the property in D
dispute. Since the possession was joint Leela Ram was not entitled to the
mesne profits as well.

10. Section 53-A provides that where any person contracts to transfer
for consideration any immovable property by writing signed by him or on his
behalf from which the terms necessary to constitute the transfer can be E
ascertained with reasonable certainty and the transferee has, in part
performance of the contract, taken possession of the property or any part
thereof, or the transferee, being already in possession, continues in possession
in part performance of the contract and has done some act in furtherance of
the contact, and the transferee has performed or is willing to perform his part F
of the contract then he is entitled to protect his possession in respect of the
property of which he was put in possession in part performance of the
agreement to sell.

11. This Court in Nathulal v. Phoo/ Chand, [1969] 3 SCC 120, while
interpreting Section 53-A culled out the following conditions to be fulfilled G
for making out the defence of part performance to an action in ejectment by
the owner, as under:

"(!) that the transferor has contracted to transfer for consideration
any immovable property by writing signed by him or on his
behalf from which the terms necessary to constitute the transfer H
708 SUPREME COURT REPORTS [2002] I S.C.R.

A can be ascertained with reasonable certainty;

(2) that the transferee has, in part performance of the contract, taken
possession of the property or any part thereof, or the transferee,
being already in possession continues in possession in part
performance of the contract; '
B (3) that the transferee has done some act in furtherance of the contract;
and

(4) that the transferee has performed or is willing to perform his part
of the contract."
'Y

c After culling out the aforesaid conditions, it was held:
...
"If these conditions are fulfilled then notwithstanding that the contract,
though required to be registered, has not been registered, or, where

D
there is an instrument of transfer, that the transfer has not been
completed in the manner prescribed therefor by the law for the time
being in force, the transferor or any person claiming under him is
-
debarred from enforcing against the transferee any right in respect of
the property of which the transferee has taken or continued in
,.
possession, other than a right expressly provided by the terms of the .
contract."

E 12. In' Sardar Govindrao Mahadik v. Devi Sahai, [1982] 1 sec 237,
it was reiterated that to qualify for the protection of the doctrine of part
performance it must be shown that there is an agreement to transfer immovable
property for consideration and the contract is evidenced by a writing signed
by the person sought to be bound by it and from which the terms necessary ~
to constitute the transfer can be ascertained with reasonable certainty. ....
F
13. In view of the authoritative view expressed by this Court the learned
counsel appearing for the respondents on being called upon did not dispute
the proposition that a proposed vendee could not protect his possession of an
immovable property on the basis of an oral agreement. He conceded that
G written agreement was sine qua non for the applicability of the equitable
doctrine of part performance enshrined in Section 53-A of the Act.

14. Learned counsel appearing for the respondents by referring to the
letters written by Moo! Chand aated 14th January, 1969 - Ex. Pl2, 24th
January, 1969 Ex. Pl!, 5th February, 1969 - Ex. PIO, 18th February, 1969
H Ex. P9, 8th March, 1969 Ex. PS, 28th March, 1969 Ex. P7 and 14th May,
M.C. BAKHRU v. ROHAN [BHAN, J.) 709
1969 Ex. P5 submitted that Moo! Chand having admitted that he had agreed A
to sell his half share of the property, the letters written by him be deemed to
be the written agreement to sell in terms of Section 53A of the Act. We have
perused these letters and on their perusal find that Moo! Chand in these
letters has admitted that he had agreed to sell his half share of the property
for a sum of Rs. 15,000 out of which Rs. 10,000 was received by him. In B
each of these letters Moo! Chand has called upon Bhagwan Dass to pay the
balance amount of Rs. 5,000 as he was in urgent need of the money. Bhagwan
Dass failed to do so. Ultimately, on 21st May, 1970 Moo! Chand wrote a
letter, Ex. P3, repudiating the so called agreement to sell as Bhagwan Dass
had failed to carry out his part of the agreement. It was further stated in this
letter that the amount received by him as advance was appropriated by him C
towards the use and occupation of the property at the rate of Rs. 20 per day
from 1st May, 1970 onwards. He categorically stated that he was no longer
interested in selling the property. From the admission made by Moo! Chand
that he had agreed to sell his half share in these letters, learned counsel for
the respondents argued that the letters written by him be taken to be the
agreement to sell in which the terms of the agreement have been spelt out. D
We do not find any substance in this submission. The letters written by Moo!
Chand cannot be termed as an agreement to sell, the terms of which have
been reduced into writing. At the most it is an admission of an oral agreement
to sell and not a written agreement. Statutor_ily the emphasis is not on a
written agreement only. In addition the emphasis is on the terms of the E
agreement as well which can be ascertained with reasonable certainty from
the written document. There was no meeting of minds. Admission made by
Mool Chand of an oral agreement to sell does not spell out the other essential
terms of the agreement to sell such as the time frame within which the sale
deed was to be executed and as to who would pay the registration charges
etc. The letters written by Mool Chand cannot be taken to be an agreement F
to sell within the meaning of Section 53-A spelling out the tenns of an
agreement for sale. In our view, the High Court fell in error in coming to the
conclusion that the letters written by Moo! Chand, referred to above, constituted
an agreement to sell the terms of which have been reduced in writing. Terms
necessary to constitute the transfer with reasonable certainty could not be G
ascertained from the letters written by Moo! Chand to his uncle. At the most
it is an acknowledgment that there was an oral agreement to sell but the same
could not be construed to be a written agreement to sell the terms of which
have been reduced into writing. Written agreement has to precede the putting
of the proposed vendee in possession of the property. Bhagwan Dass was
never put in possession in pursuance of the property to the written agreement H
710 SUPREME COURT REPORTS [2002) I S.C.R.

A arrived at between the parties.

15. For the reasons stated above, the appeal is accepted. Judgment of
the High Court is set aside and the suit filed by the plaintiff/appellants for
possession and mesne profits of their property is decreed.

B 16. Respondents have deposited a sum of Rs. 1,47,000 towards the
mesne profits, which are lying deposited in the High Court at Shimla. The
mesne profits are restricted to the amount already deposited by the respondents.
Out of this amount a sum of Rs. 55,000 is stated to have been withdrawn by
Moo! Chand. The balance amount lying deposited in the High Court be
disbursed to the appellants along with interest, if any. There will be no orders y
c as to costs.

S.K.S. Appeal allowed.