Holding

Section 53A requires a written contract and a clear act in furtherance of that contract; mere possession and pre‑contract payments do not satisfy the doctrine of part performance, so the mortgagee’s claim under Section 53A was rejected.

Summary

The mortgagor, Sardar Govindrao Mahadik, mortgaged his house to Devi Sahai and later agreed to sell it to the mortgagee, but the sale deed was never registered. The mortgagee claimed protection under Section 53A of the Transfer of Property Act, arguing that his possession and a Rs 1,000 payment for stamp duties constituted part performance. The Supreme Court held that the mortgagee failed to prove any act in furtherance of the contract, noting that the payment preceded the contract and that mere continued possession of a mortgagee with possession does not satisfy the requirements of Section 53A. Consequently, the mortgagee’s defence of part performance was rejected and the mortgagor’s appeal was allowed, restoring the trial court’s decree. The Court also examined the decree holder Motilal’s attempt to be impleaded under Order 22 Rule 10 CPC and held that, although he could not claim the equity of redemption, he was entitled only to the decretal amount, interest and costs. Finally, the Court limited the decree holder’s relief to Rs 7,500 and set aside the High Court’s judgment in favour of the mortgagee.

Issues considered

Whether the mortgagee is entitled to the protection of Section 53A of the Transfer of Property Act in respect of an unregistered sale deed.
Whether the payment of Rs 1,000 for stamp purchase constitutes an act in furtherance of the contract of sale.
Whether continued possession by a mortgagee with possession can be treated as part performance.
Whether the decree holder Motilal can be impleaded under Order 22 Rule 10 of the CPC as a party claiming under the mortgagor.
Effect of an attachment before judgment on the subsequent sale of the equity of redemption.
Whether a decree‑holder who purchases the property at a court auction is entitled to the same protection as a stranger purchaser.

Legislation cited

Code of Civil Procedures. Order 22 Rule 10, s. Order 31 Rule 11A, s. Section 146, s. Section 64
Transfer of Property Acts. 53, s. 53A

Subjects

part performanceSection 53Amortgage with possessionunregistered sale deedattachment before judgmentdecree holderauction purchaserequity of redemptionCPC Order 22CPC Section 64

Judgment

A 186

SARDAR GOVINDRAO MAHADIK & ANR.
v

DEVI SAHAI . & ORS.
B
December 15, 1981

[D.A. DESAI AND R.B. MISRA,JJ.J

Transfer of Property Act, S.Cctio11 53A-Scope of
c The appellant mortgagor took a loan by mortgaging his house property to
the respondent mortgagee. The mortgage was a mortgage with possession.
According to the mortgagee sometime thereafter the mortgagor agreed to sell the
property to him and that pursuant to !his agreement requisite stamps were
purchased and a draft sale deed was drawn up. The sale deed was however not
-
registered.
D
A few days later the mortgagor sold the property to another person and the
mortgagor and the subsequent purchaser filed a suit against the mortgagee for a
\
deeree for redemption.

In the written statement the mortgagee claimed that even though the sale
deed was not registered, since he was in possession of the property in part per-
E formance of the contract of sale and continued to be in possession and did
several acts attributable to the contract, the mortgagor was debarred from en-
forcing any right against him in respect of the property. It was also claimed
that since the mortgagor himself had no subsisting title to the property on the
date of sale, he could not have transferred the property to the subsequent
purchaser.

F The trial court held that though the sale deed was executed but since it
was net registered the transaction of sale was not complete. The Court further
held that benefit of section 53 A is not available to the mortgagor defendant
because the mortgage being a mortgage with possession, continued possession of
the mortgogee after the date of contract would not be in part performance of the
contract, and also the payment made for the purchase of stamps and for expenses
of registration could not be said to be in furtherance of the contract because that
G amount was paid before the execu1ion of the contract.

Ia the mortgagee's appeal the High Court held that he was entitled to the
•
benefit of section 53A against the mortgagor and the subsequent purchaser for the
reason that he was in possession of the property and paid Rs. 1000 in furtherance
of the contract,
H
The appellant 1n Civil Appeal No. I 145 of 1969 filed a suit against the
!nortgaiior for reco\er)' of a cJcbt owed to him and obtained attachment of the
s. GOViNb RAO v. DEVi SAHAi 187
..' suit property before judgment. The suit eventually ended in~a decree in his A
favour. In the aution of the suit property since there were no bidders the decree
holder's bid was accepted with the permission of the Court.

The High Court allowed the decree holder to be impleaded as a respondent
in the mortgagee's appeal which was then pending in the High Court.

It was contended on behalf the mortgagor that the deeree bolder could not II
maintain an application under Order XXII, Rule 10 of the Code of Civil Proce-
dure because be could not be said to be claiming under the mortgagor. (Rule 10
of order XXJI CPC provides for continuance of any action by or against a person
who acquires any interest either by assignment, creation or devolution during
the pendency of the suit with the leave of the Court.) '
HELD : To qualify for the protection of the doctrine of part performance it
must be shown that there is a con tract to transfer immovable property for c
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. After establishing these
circumstances, it must be further shown that a transferee had in part performance
of the contract either taken possession of the property or any part thereof or
the transferee being already in possession, continued in possession in part
performance of the contract and had done some· act in furtherance of
the contract. The acts claimed to be in part performance must be unequivo-
cally referable to the pre-existing contract and the acts of part performance
must unequivocally point in the direction of the existence of contract and
evidencing implemention or performance of contract. There must be
a real nexus between the contract and the acts done in pursuance of the con-
traact or in furtherance of the contract and must be unequivocally referable to
the contract. When series of acts are done in part performance one such may E
be payment of consideration. Any one act by itself may or may not be of such
a conclusive nature as to conclude the point one way or the other but when taken
with many others, payment or part of the consideration or the whole of the consi-
deration may as well be shown to be in furtherance of the contract. [209 D-H]

The view of the House of Lords that one must not first look at the oral

-- contract and then see whether the alleged acts of part performance are consistent
with it but that one must look at the alleged acts of part performance and see
whether they prove that there must have been a contract and that it i~ only if
they do so prove that one can bring in the oral contract may not be wholly
F

applicable to the situation in India because an oral contract is not envisaged
by section 53A, Even for invoking the equitable doctrine of part performance
....., there has to be a contract in writing from which the terms necessary to constitute
the transfer can be ascertained with reasonable certainty. The correct view would
be to look at that writing that is offered as a contract for transfer for considera- G
tion of any immovable property, examine the acts said to have been done in
furtherance of the contract and find out wet her there is a real nexus between the
contract and the acts pleaded as in part performance so that to refuse relief would
be perpetuating the fraud of the party who, after having taken advantage or
benefit of the contract, backs out and pleads non-registration as defence. [210A-D]
H
Foxcroft v. Lester, 2 Vern. P. 456; Elizabeth Meddison v. John Alderson,
Lord Se/borne (1882-1183) 8 A.C. 467; Clinan & Anr. v. Cooke & Ors. 1775-1802
188 SUPllEMil coullt llEPOlltS [1982) 2 s.c.l.
All. E.R. (Reprint) 16; Chapronierse v. Lambert 1916·17 All. E.R. (Reprint) 1889;
A Steadman v. Steadman [1974) 2 All. E.R. 977, referred to.

In short, acts preliminary to the contract would be hardly of any assistance
in ascertaining whether they were in furtherance of the contract. Anything done
in furtherance of the contract postulates the pre-existing contract and the acts
done in furtherance thereof. Thereofore, the acts anterior to the contract or
merely idcidential to the contract would hardly provide any evidence of part
B performance. [210 E)

Although the mortgagee's claim regarding payment of Rs. 1000 to the
mortgagor for the purchase of stamps and for expenses incidential to registration
was not in dispute, there is no evidence on record to show that there was an oral
contract anterior to the unregistered sale deed, nor was there a draft agreement
prior to the drawing up of the sale deed. Out of the sum of Rs. 1000 a sum of
c Rs. 700 was paid prior to the agreement. It was not subsequently claimed that
the balance of Rs. 300 was paid in furtherance of the contract.

The High Court was in error in holding that the act envisaged by the phrase
·'in furtherance of the contract" should be in pursuance of the contract and not
-
that it should either precede or follow the agreement or the contract. If a written
contract is a sine gua non for the application of the equitable doctrine of part
D performance any act preceding the contract could never be in furtherance of that ,:·-
contract which was yet to materialise. Negotiations for a contract and a con-
cluded contract stand apart from each other. Anything at the negotiating stage
cannot be claimed as a contract unless the contract is concluded between the
parties, that is the parties are ad idem. The contract should be a written contract
from which the necessary ingredients constituting the transfer could be ascertained
with resonable certainty. [203 A-Bl
E
There is no material on record to substantiate the mortgagee's claim that
out of the total consideration payable to the mortgagor he had retained in deposit
with him a sum of Rs. 17000 odd for being paid to other creditors of the mortga-
gee and that out of this amount a sum of Rs. 541 due to him had been adjusted.
Assuming that he could reimburse himself there is no evidence to show that he

F
gave discharge or gave credit in his books of account to this sum. Also there
is nothing to show that the mortgagor had in his possession a list of the mort-
gagee's creditors or that he had made any attempt to procure the list or that he
issued a public notice iuviting the creditors of the moatgagor to claim payment
-
from him to the extent of the consideration retained by him. Neither did he pay
any creditor nor did he make any attempt to pay any creditor including those
whose,names were known to him. [211 G]

G Induction into possession of an immovable property for the first time subse-
quent 10 the contract touching the property, may be decisive of the plea of part
performance. But merer possession ceases to be of assistance when the person
claiming benefit of part performance is already in possession prior to the contra~:!
and continues to retain posscssian. There is an understandable and noteworthy
difference in the probative value of entering into possession for the first time and
H continuing in possession coupled with a claim of change in character. Where a
person claiming benefit of part performance of a contract was already in posses-
s. GOVJNO RAO v. DEVI SAHAi 189
sion prior to the contract, the Court would expect something independent of the A
mere retention of possession to evidence part performance. Mere retention of
,,;::"II.,,
. . v-. possession, quite legal and valid, if mortgage with possession is not discharged,
could hardly be said to be an act in part performance unequivocally referable to
the contract of sale. [213 D-E, 215 E-F]

In the instant case retention of possession is of no consequence because the
mortgage was not discharged and was subsisting and the mortgage being a B
mortgage with possession, the mortgagee was entitled to retain possession. The
fact that immediately a sale deed was executed in favour of the subsequent pur-
chaser by the mortgagor would show that he was not willing to accept the con-
tract as offered by the mortgagor. The subsequent purchaser had taken a condi-
tional sale and this reinforces the stand of the mortgagor. The existence of the
dispute, about the nature of the transactiop, is not in dispute. Therefore the
conduct of the mortgagor is consistent with bis case. l217 D-F] C
The mortgagee bad failed to prove that he did any act in furtherance of the
contract, continued retention of possession being a circumstance of neutral
character in the facts and circumstances of the case and it being further establish-
ed that the mortgagee was not willing to perform his part of the contract, he is
not entitled to the benefit of the equitable doctrine of part performance. (217 HJ

(2) A persual at the chronological events of. the case would clearly show
D
that the decree holder bad mor~ than a mere semblance of title. Even if tbe
application would not fall under Order 22 Rule 10 CPC. section 146 of the Code
enables him to maintain the application. Smt. Saila Balo Desai v. Smt. Nirma/a
Sundari Dassi and another, [1958J S.C.R. 1287 at 1291, referred to. [221-D-E]

The decree bolder did not acquire under the sale certificate the equity of E
redemption of the mortgage. The suit property was sold subject to subsisting
mortgage in favour of the mortgagee. At a Court auction what is sold is right,

• title and interest of the judgment debtor who in this case was the mortgagor.
Subject to other conditions, his right is the right to redeem the mortgage. Much
before the proclamation of sale was issued the equity of redemption held by the
mortgagor was sold by him to the subsequent purchaser. Therefore, even on the \
- date of decree as also on the date of filing of the execution application the mort-
gagor had no subsisting interest in the property which could be sold at the Court
auction. [222 A-BJ
F

The object behind the order levying an attachment before judgment is to
give an assurance to the plaintiff that his decree, if made, would be satisfied.
Where an attachment has been made, any private transfer or delivery of the
property attached would be void as against all claims enforceable under the G
attachment. What is claimed enforceable is claim for which the decree is made.
A dismissal of the suit may terminate the attachment and would not be revived
even if the suit is restored As a corollary, if attachment before judgment is
obtained in a suit which ends in a decree but if in appeal the decree is set aside,
the attachment of necessity must fall. It at an intermediate stage pursuant to the
decree of the trial Court the attached property is sold at a Court aution and where H
an appeal is preferred, an attempt should be made to obtain stay of the execution
of the decree of the trial court. If the execution proceeds and the property is
r
.I
i90 s1jptuMiJ couRt iti:lPoR.ts (1982) 2 S.C.R

A sold at a court auction before the appeal is disposed of, the equity in favour of a
person as a auction purchaser may come into eidstence. In such a case if the
auction purchaser is an outsider and if the execution of the decree was not stayed,
the auction purchaser would be protected even if the decree in execution of which
the auction sale had been held is set aside because the equity in favour of the
stranger sholud be protected. [223 C-E]

B If on the other hand the auction purchaser is the decree holder himself, he
should not be entitled to any protection because when he proceeds with the exe-
cution he was aware that an appeal against the original decree was pending and
that if the appeal was allowed the decree which he sought to execute might be
set aside. He could force the place by executing the decree, taking advantage of
the economic disability of the judgment debtor in a money decree by making the
,-
c situation irreversible. Therefore, where the auction purchaser was none other
than the decree holder who purchased the property for a meagre sum, this results
in an atrocious situation, but yet by a technicality he wants to protect himself. To
such an auction purchaser, who is not a stranger and who is none other than
the decree holder, the Court should not lend its assistance. (224 G·H]

Janak Raj v. Gurdial Singh & Anr. (1967] 2 S.C.R. 77 at 86, followed.
D
In the instant case the High Court was right in holding that the auction {. '
purchaser decree holder was entitled to recover only the decrelal amount and
proportionate costs. (225 DJ

But yet the conduct of the mortgagor, the subsequent purchaser and the
mortgagee in not paying a small debt and allowing the property to be auctioned
E and forcing the decree holder to fight a never ending litigation was inequitous
in the facts and circumstances of this case. Taking into consideration the conduct
of the parties the decree holder should be paid a sum of Rs. 7,000 inclusive of
decretal amount, interest, proportionate costs and costs of litigation so
far. [225 E-F]
•
F CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1144-1145
of 1969.

From the judgment and decree dated the 5th March, 1964 of
the Madhya Pradesh High Court in First Appeal No. 14 of
1959.
G
S.S. Ray, G.S. Solanki, S. Kachwah and K.J. John for the
Appellant in C.A. 1144/69 and for Respondent Nos. 2 and 3 in
C.A. 1145/69.

H
G.L. Sanghi. A.G. Ratnaparkhi and K.K. Gupta, for the Appel-
lant in C.A. J 145/69 and for Respondent No. 2 in C.A. 1144of 1969.
s. GOVIND RAO v. DEVI SAHAI (Desai, J.) 191

A
V.S. Desai and Dr. Y.S. Ch/tale, Rameslnvar Nath, K.A.
Chitale and Mrs. S. Ramachandran for Respondent No. 1 in both
the Appeals.

The Judgment of the Court was delivered by
B
DESAI, J. What constitutes part performance within the
meaning of the expression in Section 53-A of the Transfer of Pro-
perty Act ('Act' for short) so as to clothe a mortgagee in possession
\
with the title of ownership which would defeat the suit of the erst-
while mortgagor for redemption, is the question canvassed in these
two appeals by common certificate. c
- Facts first. Sardar Govindrao Mahadik original plaintiff 1
(now deceased prosecuting these appeals through his legal representa-
tives) and Gyarsilal original plaintiff 2 (appellant 2) filed Civil
Suit No. 14/51 in the Court of the District Judge, Indore, for D
redemption of a mortgage in respect of house No. 41 more parti-
cularly described in plaint paragraph l, dated February 22, 1951.
A loan of Rs. 10,000 was secured by the mortgage. The mortgage
was mortgage with possession. Plaintiff I was the mortgagor and
the sole defendant Devi Sahai was the mortgagee. Plaintiff 2 is a
purchaser of the mortgaged property from plaintiff I under a E
registered sale deed Ex. P-1, dated October 14, 1950. Plaintiff 1 will
be referred to as mortgagor. Defendant Devi Sahai as a mortgagee
and plaintiff 2 Gyarsilal as subsequent purchaser in this judgment.
Even though the mortgage was mortgage with possession, it was
not a usufructuory mortgage but an anomalous mortgage in that the
mortgagor had agreed to pay interest at the rate of 12% and the F
mortgagee was liable to account for the income of the property
earned as rent and if the mortgagee himself occupied the same he
was bound to account for the rent at the rate of Rs. 515 per
annum. Mortgagor served notice dated October 5, 1945,
• calling upon the mortgagee to render true and full account
of the mortgage transaction. The mortgagee failed to comply G
with the notice. Subsequently it appears that there were
some negotiations between the mortgagor and the mortgagee which

..•.
.-.....-
according to the mortgagee, culminated in a sale of the mortgaged
property in favour of mortgagee for Rs. 50,000. Account of
the mortgage transaction was made and the consideration 9f
H
192 SUPREME COURT REPORTS [1982] 2 S,C.R
A Rs. 50,000 for the sale of the house which would mean sale of
equity of redemption was worked out as under :

Rs. 25,000 Principal mortgage money plus the amount
found due as interest on taking accounts of
mortgage.
B
Rs. 17,735 Given credit for the amounts taken from time
to time by the mortgagor from the mortgagee
for domestic expenses. This is disputed as
incorrect and it was suggested that the entry be
read as amount retained to pay off other credi·
c tors of the mortgagor.

Rs. 1,000 Taken in advance for purchasing stamps and
incurring registration expenses.
-
Rs. 6,265 To be paid in cash at the time of registration
D before the Sub-Registrar.

Rs. 50,000

E
Requisite stamps were purchased and the draft sale deed was
drawn up on October IO, 1950, but it was never registered. On .1
October 14, 1950, 1st plaintiff mortgagor sold the suit house by a
.registered sale deed to plaintiff 2 Gyarsilal for Rs. 50,000 with an
agreement for resale. Thereafter the mortgagor and the subsequent
purchaser as plaintiffs I and 2 respectively filed a suit on
F
February 22, 1951 against mortgagee defendant Devi Sahai for
taking accounts of the mortgage transaction and for a decree for
redemption.

The mortgagee Devi Sahai defended the suit on diverse
G grounds but the principal and the only defence canvassed was one
under section 53A of the Act, namely, that even though the sale
deed purporting to sell equity of redemption having not been
registered would not clothe the mortgagee with title of owner to
the mortgaged property, yet he could defend his possession as
H transferee owner under the doctrine of part performance in. as much
as not only is the mortgagee in possession in part performance of
the contract of sal~ bµt !las cmHinµ~d in possession in part perfor-
s. GOVIND FAO v. DEVI SAHA! (Desai, J.) 193

mance of the contract and has done several acts unequivocally A
referable or attributable to the contract and that the morgagee as
transferee has not only performed but is willing to perform his
part of the contract and, therefore, the mortgagor is debarred from
enforcing against the mortgagee any right in respect of the mort-
gaged property. As a necessary corollary, it was also contended
that plaintiff 2 has acquired no right, title or interest in the mort- B
gaged property under the alleged sale deed dated October 14, 1950,
in view of the fact that the transferor, viz., original mortgagor had
no sub~isting title to the property on the date of the sale which he
could have transferred to the 2nd plaintiff.

Arising from the pleadings of the parties, trial court framed
c
- five issues. The trial court held that plaintiff I executed a sale deed
of the mortgaged property in favour of the defendant mortgagee
but as the sale deed was not registered the transaction of sale is not
complete. On the issue of protection of section 53A claimed by
the defendant mortgagee the trial court held against him. It was D
held that the mortgage being mortgage with possession, continued
possession of the mortgagee after the date of the contract dated
October IO, 1950, would not be in part performance of the con-
tract. The trial court further held that no payment was made
could remotely be said to be in part performance of the contract.
With regard to the payment of Rs. 1,000 for purchase of stamps E
and expenses of registration, it was held that the same was paid
before the execution of the contract, and therefore, could not be
said to be in furtherance of the contract. On these findings the
trial court held that section 53A of the Act was not attracted and

- the mortgage was accordingly held to be subsisting and a prelimi-
nary decree for taking accounts was passed. A Commissioner
was appointed for taking accounts.
F

Defendant mortgagee Devi Sahai preferred Civil First Appeal
No. 14/66 to the Indore Bench of the Madhya Pradesh High Court.
When this appeal was pending, appellant Motilal in cognate Civil
No. 1145/69 applied under Order 22, rule I 0, Code of Civil Proce- G
dure, for being joined as a party to the appeal claiming that under
the sale certificate dated March 25, 1953, issued by the Additional
City Civil Judge First Class, Indore, he had purchased the equity of
redemption in respect of the mortgaged property and that he has a
subsisting interest in the property involved in the dispute and, H
therefore, he would contest the rights of the plaintiffs as well as of
the mortgagee defendant to claim any right, title or interest in the
194 SUPREME COURT REPORTS [ 1982] 2 S.C.R,
A property. In his application Motilal alleged that he had filed Civil
Suit No. 243/47 dated November 3, 1947 for recovering a c~rtain
amount against the !st plaintiff mortgagor and had secured attach-
ment before judgment of the mortgaged property on November 6,
1947. His suit was decreed to the extent of Rs. 2500 by the trial
court. He filed execution application No. 216/51 and in this pro-
B ceeding the mortgaged property was sold subject to mortgage and
he purchased the same for Rs. 300. The auction sale was confirmed
on September 25, 1953. It may also be mentioned that the mort-
gagor 1st plaintiff had preferred appeal against the decree of the ("
trial court and the appellate court by its judgment dated March 27,
1953, allowed the appeal and dismissed the suit of Motilal in
c entirety. Against the appellate decree Motilal filed Second Appeal
No. 78/53 in the High Court and by its judgment dated September
4, 1958, Motilal's claim to the tune of Rs. 500 against the Ist
plaintiff mortgagor along with proportionate interest and costs was
-
decreed. The application of Motilal for being impleaded as a party
was contested by the Ist and the 2nd plaintiffs as well as by the
D
defendant mortgagee. The High Court allowed the application of
Motilal for being joined as party to the appeal and examined the
contentions advanced on his behalf on merits.

The only contention canvassed by the mortgagee in his appeal
in the High Court was that he is entitled to the protection con-
E
ferred by Section 53A of the Act. In order to attract section 53A
it was urged that Rs. 1,000 advanced to mortgagor for purchase of
stamps etc. was in furtherance of the contract. The only such act
pleaded was payment of Rs. 1,000 and no other act or circum-
stance was relied upon. The High Court was of the opinion that
F original mortgagee Devi Sahai was entitled to the benefit of the
doctrine of part performance as against the Ist plaintiff mortgagor -
Govindrao Mahadik and his subsequent transferee Gyarsilal because
he was in possession and continued to be in possession and paid
Rs. 1,000 in furtherance of the contract. While so holding the
High Court imposed a condition that the mortgagee must pay or
G deposit in the court an amount of Rs. 24,000 with interest at the
rate of 4% per annum from the date of delivery of possession to
him as vendee till the date of payment or deposit on the footing
that that was the balance consideration promised but not paid by
the mortgagee. The deposit was directed to be made in the trial
H court within thtee months from the date of the judgment of the
High Court for payment to the 2nd respondent which would enable
s. GOVIND RAO v. DEVI SAHAI (Desai, J.) 195

the mortgagee to retain possession of the mortgaged property. A
The High Court gave a further direction that if the payment or
deposit as directed in the judgment was not made, the appeal of the
mortgagee would stand dismissed and if the amount directed in the
judgmept of the High Court was paid or deposited in the trial court
within the stipulated time the appeal of the mortgagee would stand
allowed and in that event the suit of the mortgagor would stand 8
dismissed. In respect of Motilal's claim the High Court directed
that in either event he shall be entitled to recover the balance of his
decretal amount and interest at the rate of 4% per annum from
the date of the auction sale till the date of realisation and to the
extent of that amount there shall be a charge on the mortgaged
property enforceable at the instance of Motilal. In the circum- c
stances of ;the case the High Court did not award costs to either side.

- Both the original plaintiffs and Motilal made separate applica-
tions for certificate under. Article 133 (1) (a) and (b) of the Constitu-
tion which were granted. Hence these two appeals. D

The Appeal (CA 1144/69) preferred by the original plaintiffs-
plaintiff 1 being the mortgagor, may be dealt with first. In this
appeal Ist defendant (mortgagee) seeks to non-suit the plaintiff on
the only ground that he is entitled to the benefit of equitable
doctrine of part performance as enacted in section 53A of the Act. E
According to the defendant-mortgagee the mortgagor agreed to sell
the mortgaged property to the mortgagee for consideration of
Rs. 50,000 made up in the manner set out in the sale deed Ex. D 1
dated October 10, 1950 and purusuant to the agreement he has given
Rs. 1,000 being part of the consideration for purchasing stamps
and for expenses of registration and after stamps were purchased, F
sale deed Ex. D 1 was drawn up and executed and since then he
being in possession retained the same as a vendee and accordingly he
is entitled to the protection of section 53A of the Act.

This necessitates focussing of the attention on the requirements
what constitutes part performance as enacted in section 53A.
G
Even though at the hearing of the appeals what was the state of
law prior to the introduction of section 53A in the Act by the
Transfer of Property (Amendment) Act, 1929, was canvassed at
length, we would like to steer clear of this confusing mass of legal
H
squabble and, proceed to analyse the contents of section 53A, sub-
sequently referring to legislative cum legal history so far as it is
196 SUPREME COURT REPORTS (1982] 2 S.C.R

A relevent for interpretion of the section. Section 53A reads as
under:

"53A. Where any person contracts to transfer for con-
sideration any immovable property by writing signed
by him or on his behalf from which the terms
8 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 pro-
perty or any partthereof, 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
c contract and the transferee has performed or is willing to
perform his part of the contract.

then, not withstanding that the contract, though
required to be registered, has not been registered, or, where
...
there is an instrument of transfer, that the transfer has
D not been completed in the manner prescribed therefor by the
law for the time being in force, the transferor or any per-
son claiming under him shall be debarred from enforcing
against the transfered and persons claiming under him any
right in respect of the property of which the transferee has
taken or continues in possession, other than a right expressly
E provided by the terms of the contract ;

Provided that no'.hing in this section shall affect the
rights of a transferee for consideration who has no notice
of the contract or of the part performance thereof."
F In order to qua\ify for the protection conferred by the equitable
doctrine of part performance as enacted in section 53A, the following
facts will have to be established :

(1) That the transferor has contracted to transfer for
consideration any immovable property by writing
G signed by him or on his behalf from which the terms
necessary to constitute the transfer can be ascertained
with reasonable certainty;

H (2) That the transferee has in part-performance of the con-
tract taken possession of the property or any part
thereof, or the transferee, being already in possession,
s. GOVJND RAO v. DEVI SAHA! (Desai, J.) 197

continues in possession in part performance of the A
contract;
> /.
(3) That the transferee has done some act in furtherance
of the contract; and

(4) That the transferee has already or is willing to per- B
form his part of the contract." (see Nathulal v. Phool
Chand.(1)

There was no dispute that the aforementioned conditions have to
be satisfied to make good the defence of part performance. The
controversy is on their application to the facts of the case. C

The High Court which accepted the defence of part per-
- formance as canva,sed on behalf of the mortgagee who claimed to
have purchased the property under a sale deed Ext. D 1 dated
October 10, 1950, found that payment of Rs. 1,000 for purchase of
stamps was an unequivocal act in furtherance of the contract. 0
The defendant mortgagee did not invite the High Court to consider
any other act as having been done by him under the contract
or in furtherance of the contract, or unequivocally referable to the
contract. However, when the matter was heard in this Court,
Mr. V.S. Desai, learned counsel appearing for the respondent mort-
gagee urged the following acts as having been done by the mort- E
gagee in furtherance of the contract which would constitute part
performance ;

(a) payment of Rs. 1,000 as agreed to under the contract
for purchase of stamps for drawing up and registering
F
- the sale deed;

(b) discharge of a debt of Rs. 541 which was included in
the amount of Rs. 17, 735 retained by the mortgagee
from the total consideration payable for discharging
other debts ; G
(c) mortgagee agreed to discharge the mortgage subsisting
on the property in his favour on settlement of
accounts ;
H
(!) [1970] 2 SCR 854 at 858.
)

198 SUPREME COURT REPORTS fl 982] 2 s.c.R
A (d) all dues owed by the mortgagor to the mortgagee may
have to be taken as cleared on completion of the
contract;

(e) nature and character of possession changed as recited
in the contract;
B
A few more circumstances were relied upon to show that the mort-
gagee was willing to perform his part of the contract and the
ommissions pointed out are not fatal to bis case. They are :

(f) failure to offer the amount agreed to be paid before
c the Registrar and/or not discharging debts agreed to
be discharged as having been given credit in the consi-
deration for the sale would not detract from part
performance because they have to be evaluated in the
facts and circumstances of the case ;
-
D (g) conduct of the l st plaintiff mortgagor in executing
and registering a sale deed in respect of the mortgaged
property in favour of the 2nd plaintiff Gyarsilal and
thereby frustrating the contract of sale in favour of
the defendant mortgagee evidence that the I st plaintiff
mortgagor was aware of the contract in favour of the
E defendant mortgagee and he was retaining possession
in furtherance of the contract;

(h) defendant mortgagee made all attempts to get
the deed registered by approaching the Sub-Registrar ;

F (i) the defendant mortgagee intiated criminal proceedings
against the Ist plaintiff mortgagor for misusing the
stamp papers.
-
Ordinarily this Court would be loath to examine conten-
tions of facts based on evaluation of evidence advanced for the first
G
time before this Ccurt v. ithout any attempt at inviting the adjudi-
cation of the same by the High Court. However, as all the conten-
tions arise from the record and proceedings, we propose to examine
them on merits more so because we do not propose to rest this
H judgment on a technical ground and also because we are inclined
to reverse the decision of the High Court which is in favour of
1st defendant mortgagee.
s. GOVIND RAO v. DEVI SARAI (Desai, J.) 199

Section 4 of the Statute of Frauds, 1677 of United Kingdom A
provided that no person shall be charged upon any contract for
sale of lands or any interest in land etc. unless the agreement or
some memorandum or some note thereof shall be in writing and
signed by the party to be charged thereunder or some other person
there unto by him lawfully authorised. This provision has been
substantially re-enacted in section 40 (i) ol the Law of Property B
Act, 1925 with this departure that sub-section 2 specifically provides
that the substantive provision in sub-section I does not effect the law
ralating to part-performance or sales by the court. As no action
could be brought on oral agreement the doctrine of part performance
was devised by the Chancery Court with a view to mitiga-
ting the hardship arising out of an advantage taken by a person c
- under an o~al contract and failure to enforce it would permit such
person to retain the undeserved advantage by the Equity Court
enforcing the contract. The situation must be such that not to
enforce the contract in face of the defence of Statute of Frauds
after taking advantage of oral contract would perpetuate the fraud
which the statute sought to prevent. The party who altered its D
position under the contract must have done some act under the
contract and it would amount to fraud in the opposite party to
take advantage of the contract not being in writing. Such a situa·
tion arose where one of the parties to the oral agreement altered
its position and when specific performance was sought after taking
advantage under oral contract, set up the defence available under E
the Statute of Frauds. The Chancery Court while granting relief of
specific performance wanted to be wholly satisfied that the
pleaded oral contract exists and is established to its utmost satisfac-
tion and in order to ascertain the existence of the oral contract
before granting a relief of specific performance the court wanted
to be satisfied that some such act has been done which would be F
unequivocally referable to the oral contract as would prove the
existence beyond suspicion, meaning part performance of the cont-
ract. The departure under our law is that when giving its statutory
form in section 53A of the Act the existence of a written contract
has been made sine qua non and simultaneously the statute also
insists upon proof of some act having been done in furtherance of
G
the contract. The act relied upon as evidencing part performance
must be of such nature and character that its existence would
establish the contract and its implentation. Each and every act
subsequent to contract by itself may not be sufficient to establish
part performance. The act must be of such a character as being
H
200 SUPREME COURT REPORTS (1982] 2 s.c.R.

A one unequivocally referable to the contract and having been per·
formed in performance of the contract. In Lady Thynne v. Earl ' ...
of Glengall (1) it was observed that: "part performance to take the
case out of the Statute of Frauds, always supposes a completed
agreement. There can be no part performance where there is no
completed agreement in existence. It must be obligatory, and what
B is done must be under the terms of the agreement and by force of
the agreement." This approach would necessitate that the act
relied upon as being in the part-performance of the contract was
such as by its own force would show the very same contract as is
alleged by the person seeking the protection of part-per·
formance.
c
In the fact situation as it unfolds itself in this case. continued
possession of the mortgagee hardly offers any clue to the question
of part performance. Defendant mortgagee was in possession of
-
the mortgaged property. Therefore,. physical possession having
D not changed hands, it would be for the mortgagee to show that he
continued to retain possession in part performance of the contract and
has done some act in furtherance of the contract. Where physical and
actual possession was already with the person claiming the benefit
of the doctrine of part performance its continued retention by itself
without anything more would hardly be indicative of an act unequi·
E vocally referable to part performance of the contract. He must
further establish that he has done some act in furtherance of the
contract. This was not disputed and, therefore, th<: mortgagee ...
defendant urged before the High Court and reiterated before us that,
payment of Rs. 1,000 inter alia to the 1st plaintiff mortgagor for
purchase of stamps and for expenses incidental to registeration was
F an act unequivocally done in furtherance of the contract.

Before evaluating the submission a few relevant facts may be
noticed. By letter Ext. P-3 dated October 9, 1950, 1st plaintiff
wrote to defendant mortgagee portion of which may be extracted
as it has some bearing on the question under consideration :
G
" ... It is requested that we have entered into a contract
with you for the sale-condition of our house No. 12
situated in Kalai Mohalla. Therefore to buy stamps etc.
for the sale you should pay Rs. 1,000 (Rupees one thousand
H
(I) H.L. Cases, 158.
s. GOVIND RAO v. DEVI SAHAI (Desai, J.) 201

only) to our Mukhtiar Shri Madhavraoji Vishnu Joshi, 82, A
Ada Bazar, Indorewale, I agree for tbs same and
shall deduct the amount at the time of registration."

Purusuant to this letter defendant mortgagee paid Rs. 700 to
the Muktiar and an endorsement to that effect is found as Ext. P·4.
On the next day that is October 10, 1950, a further amount of
B
Rs. 300 was given and stamps were purchased and on the same day
sale deed Ext. D I was drawn up. While reciting the consideration
for the sale deed a credit was given for Rs. 1,000 paid by the mort-
gagee for purchase of stamp. So far there is no dispute. The
grievance is that according to the 1st plaintiff mortgagor he had
agreed to sell the house to the mortgagee but the sale was to be a
c
conditional sale with a right to repurchase and that was agreed to

- between the parties. Subsequently when the sale deed Ext. D-1 was
drawn up he found that it was an absolute sale in breach of the
agreement and therefore he did not complete the transaction and
sold the house subsequently on October 14, 1950 to the 2nd
D
plaintiff, under Ext. P-1 which is a conditional sale with a right to
'r repurchase.

It would thus transpire that payment of Rs. 1,000 cons1st1ng
of two separate payments-one of Rs. 700 on October 9, 1950, and
an amount of Rs. 300 on October 10, 1950, by the defendant mort·
gagee to 1st plaintiff mortgagor for purchasing stamps for execution
E
of a sale deed is not in dispute. What is in dispute is whether the
•· payment was made towards some contract anterior to the letter
Ext. P-3 dated October 9,1950, or it was in pursuance to the con-
tract dated October 10, 1950, as reflected in the unregistered sale
deed. In this connection the stand taken by the mortgagee defen-
F
- dant is both equivocal and fluctuating. In the written statement
filed on his behalf on April 10, 1951, there is no specific, clear and
unambiguous plea of part performance. Under the heading 'addi-
tional plea' in para 9 it is contended that the sale deed ·having
been executed in favour of the mortgagee in settlement of mortgage
transaction mutually between the parties and that the mortgaged
property has been given to the mortgagee as an owner, the mortgage
G
transaction does not subsist in law. Ibis has been understood to
mean a plea for the protection of the doctrine of part performance.
Be that as it may, it is not suggested that there was any oral con-
tract anterior to the one as found in the unregistered sale deed
H
Ext. D-1. Nor is there any suggestion of any draft agreement prior
to the drawing up of the sale deed Ext. D- I. What transpires from
202 SUPREME COURT REPORTS f1982} 2 S.C.R.

A the diverse recital is that there was some oral discussion between
the parties prior to the letter Ext. P-3 dated October 9, 1950, at
which the understanding was that there was to be a conditional sale
with a right of repurchase by the mortgagor and that becomes
. "·
evident from the recital in Ext. P-3, "sale condition" which is con-
temporaneous evidence having its intrinsic worth and a stamp of
truthfulnesss because at that time no dispute had arisen
and the mortgagor was seeking to work out and implement
the agreement by seeking a loan of Rs. 1,000 for purchase of stamps
and for expenses incidental to registration so as to complete the
transaction. But there was no written contract. It must be stated
that there was dispute about the nature of transaction is also borne
c out by the parol evidence. Mortgagee Devi Sahai DW I has
deposed in para 6 that mortgagor in Chit Ex. P. :i proposed a con-

D
ditional sale to which he did not agree where11pon mortgagor agreed
to give absolute sale. This establishes that there was a dispute as to
the nature of the transaction. Section 53A postulates a writt(m
contract from which the terms necessary to constitute the transfer
-
can be ascertained with reasonable certainty. There was no concluded
contract prior to Ext. D-1. The only written contract which is relied
on is the unregistered sale deed Ex. D-1 of October 10, 1950. On
the admission of the mortgagee himself it is crystal clear that out
of Rs. 1,000 an amount of Rs. 700 was paid on October 9, 1950,
and that was prior to the agreement. As for the payment of
E Rs. 300 it is not specifically claimed that that was payment in fur-
therance of the contract. In any event, stamps were purchased
prior to the drawing up of Ext. D-1 which is the contract relied
upon for the purposes of section 53A. And it must be shown that
the act has been done in furtherance of the contract, i.e. subsequent
to the contract or at best simultaneously with the contract but un-
F equivocally attributable or referable to the contract. It must follow
that acts anterior to and done previous to the agreement cannot be
presumed to be done in pursuance of it and cannot, therefore, be
considered as acts of part performance (See Whiteread v. Brockhunt
quoted by White and Tudor, leading cases on Equity at
p. 416).
G

The High Court while evaluating the probative value of the
circumstances of payment of Rs. 1,000 started on a wrong premise
when it observed that the act envisaged by the phrase in fur-
H therance of the contract" in section 53A should be in pursuance of
the contract and not that it should either precede or follow the
s. GOVIND RAO v. DEVI SAHAI (Desai, J.) 203

agreement or the contract. If a written contract is a sine qua 11011 A
for seeking coverage of the umbrella of the equitable doctrine of
part performance any act preceding the contract could conceivably
never be in furtherance of that contract which was yet to materialise.
Negotiations for a contract and a concluded contract stand apart
from each other. Anything at the negotiating stage cannot be
claimed as contract unless the contract is concluded between the B
parties, i.e. the parties are ad idem. Coupled with this is
the further requirement that it should be a written contract
in that the contract which would purport to transfer for
consideration the immovable property must be by writing
and the writing must be such that the necessary ingredients
constitute the transfer can be ascertained with reasonable certainty. 0

-
The High Court overlooking the .very important fact situation that
the only contract relied upon by the mortgagee defendant was one
contained in the unregistered sale deed Ext. D-1 dated October 10,
1950, committed an error in holding that the payment of Rs. 1,000
prior to October 10, 1950 would undoubtedly be an act in pursuance
of the contract which is evidenced by the writing Ext. D-1 duly D
signed by the 1st respondent. This approach overlooks a vital
dispute between the parties and the High Court could not have
utilised this circumstance without resolving the dispute in as much
as unquestionably there were some negotiations between the parties
either on October 9, 1950, or some time prior thereto but there was
no concluded contract because the very letter Ext. P-3 which the 1st E
plaintiff mortgagor sought a loan of Rs. 1,000 for purchasing the
stamps etc. was pursuant to a conditional sale and that is totally
denied and repudiated by the mortgagee as shown hereinabove.
Accordingly when the amount of Rs. 1,000 was paid it was the
stage of negotiations and not a concluded contract. And when the
contract was drawn up as evidenced by Ext. D-1 being the unregis- F
tered sale deed dated October IO, 1950, the parties were not ad idem.
beacause the mortgagor declined to agree to registration of the sale
deed as it was contrary to the understanding arrived at between the
\.~.
parties though no doubt he had executed the sale deed. The con-
tention therefore that the amount of Rs. 1,000 was paid in fur-
therance of the contract does not bear scrutiny.

However, assuming that the finding of fact recorded by the
High Court that the amount of Rs. 1,000 was paid in furtherance
of the contract, is a finding of fact recorded on appreciation and
evaluation of evidence and ordinarily not interefered with by this H
Court unless shown to be ·perverse, the alternative con ten ti on that
204 SUPREME COURT REPORTS [ 1982] 2 S.C.R.

A payment of part or even whole of the consideration could not be
said to be in furtherance of the contract and, therefore, not sufficient
to constitute part performance, may now be examined.

How far payment of part or even whole of the consideration
would constitute part performance so as to take the case out of
B section 4 of the Statute of Frauds may now be examined with refe-
rence first to the English decisions because section 53A enacts with
some modification the English equitable doctrine of part-
performance.

In order to mitigate the hardship arising out of the rigorous
c provisions of the Statute of Frauds equitable doctrine of part per-
formance was divised by the Court of Chancery. Commenting upon
section 4 of the Statute of Frauds 1677, Lord Redesdale observed in
FOxcroft v. Lester,(1) (quoted in White & Tudor's Leading cases on
-
Equity, 8th Edn., p. 413) as under:

D
"The Statute of Frauds says that no action or suit
shall be maintained on an agreement relating to lands,
which is not in writing, signed by the party to be charged
with it; and yet the Court is in the daily habit of relieving,
where the party seeking relief has been put into a situation
E which makes it against conscience in the other party to
insist on the want of writing so signed, as a bar to his
relief. The first case (apparently) of this kind was Pox-
cro.ft v. Lyster (1), which was decided on a principle acted
upon in Courts of law, but not applicable to the particular
case. It was against conscience ·to suffer the party who
F had entered and expended his money on the faith of a
parol agreement to be treated as a trespasser, and the other
party to enjoy the advantage of the money he had laid
-
out."
~·-I

The question often arises whether payment of part or even
G whole of the consideration can be unequivocally attributed to the
contract. At 416 the authors observe :

"Payment of part or even of all the purchase-money
will not be considered an act of part performance to take
H
(1) 2 Vern p. 456.
s. GOVIND RAO v. DEVI SAHA! (D<sai, J.) 205

a parol contract out of the Statute of Frauds. Nor will A
payment of the auction duty."

The payment of a part or even a whole of the consideration
was not treated unequivocal act of part performance because it was
believed that money can be repaid or can be reclaimed and, there-
fore, it is not an unequivocal act evidencing an act in furtherance B
of the contract (See Hanbury & Maudsley, Modern Quity, 10th
Edn., p. 37). Similarly, Story's Equity Jurisprudence 14th Edn.;
para 1045, p. 424, neatly sets out the history of the approach to
payment of money as evidence of part performance. It may be
extracted :
c
" ...... It seems formerly to have been thought that a
deposit, or security, or payment of the purchase money,
or of a part of it, or at least of a considerable part of it,
was such a part performance as took the case out of the
statute. But that doctrine was open to much controversy, D
and is now finally overthrown. Indeed the distinction
taken in some of the cases between the payment of a small
part and the payment of a considerable part of the
purchase-money seems quite too refined and subtle,
for independently of the difficulty of saying what shall
be deemed a small and what a considerable part of the E
purchase money, each must, upon principle, stand upon the
same reason, namely, that it is a part performance in both
cases, or not in either. One ground why part payment is
not now deemed a part performance, sufficient to take a
case out of the statute, is that the money can be recovered
back again at law, and therefore the case admits of full F
and direct compensation."

Equity by G.M. Keeton and L.A. Sheridan, 2nd Edn., p. 366
sets out chronologically the approach of the Court to payment of
money as evidencing part performance. Attitude to the payment
of money as an act of part performance bad varied from time to G
time. In Elizabeth Meddison v. John Alderson,(1) Lord Selborne,
L.C. pointed out :

" ... the payment of money is an equivocal act not (in
H
(I) (1882-1883) 8 A.C. 467.
206 SUPREME COURT REPORTS ( 1982] 2 S.C. R.

A itself) unless connection is established by parol testimony
indicative of a contract consisting of land."

In Snell's principles of Equity, 20th Edn., p. 587, under the
heading 'Insufficient Acts to bring the case out of the doctrine of
part performance', it is noted that payment of a part of the pur-
B chase-money, or even apparently the whole, is not sufficient for
part performance of a contract for the sale of land for the payment
of money is an equivocal act (not in itself), until the connection is
established by parol testimony, indicative of a contract concerning
land. Maddison v. Alderson is rehed upon in support of this
statement.
c A few cases to which our attention was drawn may now be
referred to. In C/inan and Anr. v. Cooke and Ors.,( 1 ) Cooke
inserted an advertisement in the public papers inviting offers to let
a piece and parcel of land for the period set out in the advertiment.
In response to this advertisement the plaintiffs applied to Edmund
D Meagher to whom the application was to be addressed and entered
into a treaty with him for lease of land. A memorandum of agree-
ment was entered into between the parties and the intending tenant
deposited 50 guineas which the advertiser received in consi-
deration of the lease on the recommendation of Meagher who also
appeared to have received a sum of 20 guineas from the plaintiffs
for which no receipt was given. Subsequently Mr. Cooke refused
E
to perform the agreement and he granted a new term of lease to the
defendants who entered into the same with the knowledge of the
agreement with the plaintiffs. An action was brought by the plain-
tiffs for specific performance. Declining to grant that relief Lord
Redesdale held as under:
F "But I think this is not a case in which part perfor·
mance appears. The only circumstance that can be con-
sidered as amounting to part performance is the pay-
ment of the sum of fifty guineas to Mr. Cooke.
It has alwa\ s been considered that the payment of money
is not to be deemed part performance to take a case out
G
of the statute."

In Maddison' s case Earl of Selborne, L.C. in unequivocal
terms observed that it may be taken as new settled that part pay-
ment of purchase money is not enough, and judges of high authority
H
ti) (1775-1802] All E.R. (Reprint), 16.
s. GOVJND RAO v. DEVI SARAI (Desai, J.) 207

have said the same even of payment in full. C/inan v. Cooke, (supra) A
Hughes v. Morris(') and Britain v. Rossiter(2 ) were relied upon in
support of this. Again at p. 484 Lord O' Hagan taking note of the
conflict of decisions pertinently observed as under :

"I confess I have found it hard to follow the reasoning
of the judges in some of the cases to which the Lord B
Chancellor has referred to reconcile the rulings, in others
of them-and to regard as entirely satisfactory the state
of the law in which the taking of possession or receipts of
rent is dealt with as an act of part performance, and the
giving and acceptance of any amount of purchase money,
confessedly in pursuance and affirmance of a contract of c
sale, is not. As to some of the judgments prompted no

- doubt by a desire to defeat fraud 1nd accomplish justice, I
am inclined to concur with the present Master of the
Rolls in Britain v. Rossiter ('), when he called them" bold
decisions."
D
It may be noted that in that case an intestate induced a woman to
serve him as his house-keeper without wages for many years and to
give up other prospects of establishment in life by a verbal promise
to make a will leaving her a life estate in land and afterwards signed
a will, not duly attested, by which he left her the life estate. It was
contended on behalf of the woman who worked as house-keeper E
that she had wholly performed her part by serving the intestate as
house-keeper till the intestate's death without wages yet the
Court in its equity jurisdiction dt:clined to hold such an act as
referable to any contract and was not such a part performance as to

-
take the case out of the operation of section 4 of the Statute of
Frauds. This case is being referred to to show how firmly establi- F
shed and entrenched the view was that payment is not enough.
Offer to work without wages was treated as evidencing some pay-
ment not enough to sustain the plea of part performance. The
equity should take such a view of human service and sacrifice is
difficult to appreciate. Modern notions of equity, fairplay and just
approach would stand rudely shaken by the view taken in that case G
and quoting the case is not to be interpreted to mean sharing
the view.

(!) (2 D.M. & G. 356).
H
(2) (11 Q.B.O. 123).
208 SUPREME COURT REPORTS [J 982] 2 S.C.R

A In Chaproniere v. Lambert,(1) the Court of Appeal reinforced
the view which held the field till then that the mere payment of rent
is not such part performance to take the case out of the statute and
even payment of whole of the purchase money has been held not
to be sufficient to take the case out of the statute. In so doing it
reiterated the view taken in Maddison v. Alderson, (supra).
B
In Enland the law took a sharp U·turn in Steadman v.
Steadman,( 2 ) Lord Simon of Claisdale under the heading 'Payment
of momey' observed as under :

"It bas sometimes been said that payment of money
c can never be a sufficient act or part performance to raise
the required equity in favour of the plaintiff-or, more
narrowly, that payment of part or even the whole of the
purchase price for an interest in land is not a sufficient act
of part performance. But neither of the reasons put
-
forward for the rule justifies it as framed so absolutely.
D
The first was that a plaintiff seeking to enforce an oral
agreement to which the statute relates needs the aid of
equity; and equity would not lend its aid if there was an
adequate remedy at law. It was argued that a payment
could be recovered at law, so there was no call for the inter-
vention of equity. But the payee might not be able to re-
E
pay the money (he might have gone bankrupt), or the land
might have a particular significance for the plaintiff (of
the equitable order for specific delivery of a chattel of
particular value to the owner: (Duke of Somersef,v.
Cookson) or it might have greatly risen in value since the
F payment, or money may have lost some of its value. So,
it was sought to justify the rule, alternatively, on the
ground that payment of money is always an equivocal act,
it need not imply a pre-existing contract, but is equally
-
consistent with many other hypotheses. This may be so
in many cases, but it is not so in all cases. Oral testimony
G may not be given to connect the payment with a contract;
but circumstances established by admissible evidence
(other acts of part performance, for case, for example,
what was said (i.e. done) in the magistrates' court in part

H (l) [ 1916-17] All· E.R. (Reprint) 1889.
(2) (1974] 2 All. E.R. 977.

\
s. GOVIND RAO v. DEVI SAHAI (Desai, J.) 209

performance of the agreement makes it plain that the pay- A
ment of the £108 was also in part performance of the
agreement and not a spontaneous act of generosity or
discharge of a legal obligation or attributable to any other
hypothesis."

To some extent, therefore the statement of law in Maddison's 8
case that it may be taken as well settled that payment of part of
purchase money or even the whole of the consideration is not
sufficient act of part performance can be taken to have been shaken
considerably from its foundatiOn.

While text book writers and English decisions may shed some
c
light to illuminate the blurred areas as to whether part payment of

- purchase money or even the whole of the consideration would not . ··
be sufficient act of part performance, it is nece8sary that this aspect
may be examined in the background of statutory recfuirement as
enacted in section 53A. To qualify for the protection of the doctrine D
t , of part performance it must be shown that there is a contract to
transfer for consideration immovable property 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. These are pre-requisites
to invoke the equitable doctrine of part performance. After establi-
E
shing the aforementioned circumstances it must be further shown
that a transferee had in part performance of the contract either
taken possession of the property or any part thereof or the trans-
feree being already in possession continues in possession in part per-
formance of the contract and has done some act in furtherance of F
the contract. The acts claimed to be in part ·performance must be
unequivocally referable to the pre-existing contract and the acts of
part performance must unequivocally point in the direction of the
existence of contract and evidencing implementati0n or performance
of contract. There must be a real nexus between the contract and
the acts done in pursuance of the contract or in furtherance of the G
contract and must be unequivocally referable to the contract. When
series of acts are done in part performance, one such may be pay-
ment of consideration. Any one act by itself may or may not be
of such a conclusive nature as to conclude the point one way or
the other but when taken with many others payment of H
part of the consideration or the whole of the consideration may
as well be shown to be in furtherance of contract. The correct
approach would be, · what lt<?fd- Reid - .. •· said in Steadman's ~l\se
- . .. . ..
210 S\J.l'REME COURT REPORTS (19821 2 s.c.~ .

A that one must not first look at the oral contract and then see whe-
ther the alleged acts of part performance are consistent with it. One
must first look at the alleged acts of part performance and see whe-
ther they prove that there must have been a contract and it is only
if they do so prove that one can bring in the oral contract. This
view may not be wholly applicable to the situation in India because
B an oral contract is not envisaged by section 53A. Even for invoking
the equitable doctrine of part performance there has to be a contract
in writing from which the terms necessary to constitute the transfer
can be ascertained with reasonable certainty. Therefore, the correct
view in India would be, look at that writing that is offered as a
contract for transfer for consideration of any immovable property
c and then examine the acts said to have been done in furtherance of
the contract and find out whether there is a real nexus between the
conrr21.ct and the acts pleaded as in part performance so that to
refuse reli~f w0uld__be perpetuating the fraud of the party who after
having taken advantage or benefit of the contract backs out and
-
pleads non registration as defence, a defence analogous to section
D 4 of the Statute of Frauds.

We may recall here that the acts preliminary to the contract
would be hardly of any assistance
\
in ascertaining whether they were
in furtherance of the contract. Anything dorie in furtherance of the
contract postulates th.e pre-existing contract and the acts done in
E furtherance thereof. Therefore, the acts interior to the contract or
merely incidental to the contract would hardly provide any evidence
of part performance.
.•

The .contention of Mr. Desai that payment of Rs. 1,000 for
F purchase of stamps in an act of part performance unequivocally attri-
butable to the contract dated October 10, 1950, cannot be accepted
for two reasons, one being that Rs. 700 out of the amount
-
of Rs . 1,000 was paid on October 9, 1950, that is prior to the
date of contract. Then there is a serious dispute as to the nature
of contract which was negotiated on October 9, I 950, the day on
G which payment of Rs. 700 was made. Mortgagor was insisting
upon a conditional sale and defendant mortgagee declined to accept
the conditional sale and that is borne out by his evidence also . There
was thus no concluded contract on October 9, 1950, and, therefore,
the payment of Rs. 700 out of Rs. 1,000 in any case could not be
said to be part performance and the same reasons would mutatis
mutandis apply to the payment of Rs. 300 also. In the facts of this
~':1~~ this paynwnt \V??.1~ !?-?~ l>~ an act pf part performance. In
s. GOVIND RAO v. DEVI SAHA! (Desai, J.) 211

,i our opinion, therefore, the High Court recorded an utterly unsus- A
tainable finding without minutely examining the relevant evidence
coupled with the requirements of law and erred in holding that the
payment of Rs. 1,000 was in furtherance of the contract. We would
also add that in the facts and circumstances of the case payment of
Rs. 1,000 was not such an act of part performance which would help
defendant mortgagee in any manner. B

Mr. Desai next contended that the mortgagee discharged a
debt of Rs. 541 which was included in the amount of Rs. 17,735
retained by the mortgagee from the total consideration payable for
discharging other debts and that this payment was in furtherance of
c
- the contract. This contention is being put forward for the first time
in this Court and should be negatived on that account alone. Even
apart from this there is no sufficient evidence to uphold this conten-
tion. In fact, the defendant mortgagee himself has to some extent
prevaricated on the question of retention of Rs. 17,735 out of the
),.
total consideration for the sale transaction agreed at Rs. 50,000.
Consideration of Rs. 50,000 was made up, inter alia, by retaining
D
Rs. 17,735 in discharge of debts owed by mortgagor to mortgagee
by borrowing loans on different occasions for domestic expenses.
It is so stated in Ext. D-1 which had been extracted earlier.

Mortgagee in his evidence gave a go bye to this recital and
E
deposed that the amount of Rs, 17, 735 from the total consideration
payable by him was retained by the mortgagee for payment of other
creditors of the mortgagor. Even apart from this he has not stated
a word that out of the amount of Rs. 17,73 5 he paid Rs. 541 to any

- particular creditor. In his written statement he has stated that the
amount of Rs. 17,735 was kept in deposit for payment to other
creditor~ of the mortgagor. One such creditor was to be paid a
F
sum of Rs. 541. This creditor is none other than the mortgagee
himself. This would mean that he himself was creditor to whom he
paid Rs. 541. Assuming that he could have reimbursed himself,
there is nothing to show that he gave a discharge .or that he gave
credit in his books of accounts. Further, there is no statement in
G
his evidence to that effect. That aspect was never canvassed before
the trial court as well as the High Court and we find no material

• ..l
evidence to substantiate this contention. The contention, has,
therefore, to be negatived.
H
The third act of part performance pleaded on behalf of the
mortgagee is that the nwrtgagee
- - agreed. to
~ .
discharge
. . the mortgage.
212 SUPREME COURT REPORTS [1982) 2 s.c.R.

A subsisting on the property in his favour on settlement of
accounts. The mortgage deed admittedly was not returned to the
mortgagor even after the mortgagor executed Ext. D· 1 the sale deed
which was not ultimately registered. But that is not enough. The
mortgage~ admitted in his evidence that even after Ext. D-1 was
executed he maintained the accounts of mortgage and in that
B
account he debited Rs. 1,000 paid to the mortgagor for purchase of
stamps. Could it be said that he had discharged or agreed to dis-
charge the mortgage subsisting on the property ? There is however
a piece of evidence which completely belies the claim and demons-
trably establishes that mortgagee never claimed to regard himself as
owner from October 10, 1950 the date of contract but till a later
c date continued to regard himself as a mortgagee with subsisting
mortgage. Mortgagee made an application on June 23, 1952 nearly
two years after the contract of sale in the execution proceedings
filed by Motilal seeking to bring mortgage property to court auction
for realising his decretal amount, which decree he had obtained
against the mortgagor. In this application dated June 23, 1952
D
mortgagee has stated that till that date Rs. 27792/2/3 were due under
the mortgage from the mortgagor and that fact must be noted in
the sale proclamation and thereafter property should be sold. Now
if on O.:tober 10, 1950 accounts were made, mortgage was satisfied
and mortgage debt was discharged, how is it that on June 23, 1952
he retained the mortgage account, worked out the amount due and
E
sought its mention in the sale proclamation. This conduct of mort-
gagee is sufficient to negative this contention. -In any event mere
oral agreement to discharge a mortgage could hardly be said to be
an act of part performance unless in fact such an act was done and
that could have been only done by a discharged mortgage deed
being returned to the mortgagor.
-
F

The next act of part performance pleaded by the mortgagee is
that all dues owed by the mortgagor to the mortgagee have be taken
as cleared on completion of the contract. Now, even here his stand
G is equivocal. In the written statement it was stated that at the time
of filing the written statement a sum of Rs. 29,000 was found to be
due from the mortgagor. If on October 10, 1950, all accounts were IA__.......
made up, bow could he continue a mortgage account which mort-
gage according to him came to be satisfied when he took the sale
H deed and continued in possession in part performance of the cont-
ract? Therefore, the submission is without merits.
ii. GOVIND RAO v. DEVI SAHAI (Desai, J.) 213

The next act of part performance pleaded by the mortgagee is A
that the nature and character of possession changed as recited in the
contract. Mortgagee was in possession as mortgagee. Now accor-
ding to him since the date of execution of the sale deed the nature
of possession changed. For this he relies upon a statement in the
sale deed Ext. D-1 wherein it is stated that he is being put in posse-
sion as owner. This mere recital is hardly indicative of the change B
in the nature of possession. There is no evidence to show that he
moved the authorities that he would be liable to pay taxes as owner.
There is no overt act on his part to so assert possession as owner.
A mere recital in the disputed sale deed is of dubious evidentary
i
value and when it would be pointed out that he was never' willing
to perform his part of the contract which is a pre-requisite for c
claiming protection of the doctrine of part performence it will
be shown that he believed himself to be a mortgagee and
\.... acted as such even at a date much later than October 10, 1950, from
which date be claims to be the owner.
D
Induction into possession of an immovable property for the
first time subsequent to the contract touching the property, may be
decisive of the plea of part performance. ·Mere possession ceases to
be of assistance when as in this case the person claiming benefit of
part performance is already in possession, prior to the contract and
continues to retain possession. However a reference to a statement E
of law in Halsbury's Laws of England, 3rd Edition, Vol. 36, para
418 would be instructive. It reads as under :

"Where possession is given to a "tenant" before a
tenancy agreement bas been concluded and the possession
is retained after the conclusion of the agreement, the posse-
ssion, if unequivocally referable to the agreement, is a
F
sufficient part performance but subject to this, acts done
prior to, or preparatory to, the contract will not suffice."

If a person claiming benefit of part performance is inducted into
possession for the first time pursuant to the contract it would be G
strong evidence of the contract and possession changing bands pur-
suant to the contract. in Bedson v. Ileuland (1) it was held that
although the entry into possession was antecedent to the con tract,
yet the subsequent continuance in possession being, under the cir-
cumstances, unequivocally referable to the contract, constituted a H
(1) [1896) 2 Ch. 428.
214 SUPRBMB COURT REPORTS [1982] 2 s.c.i.
A part performance sufficient to take the case out of the Statute of
Frauds.

In Nathulal's case, the fact that Nathulal parted with posses-
sion after receiving part payment of the sale consideration was held
sufficient to constitute part performance. This Court observed that
B in part performance of contract Phoolchand has taken possession of
the property and he had in pursuance thereof paid a part of the
consideration and thereby the first three conditions for making good
the defence of part performance had been satisfactorily shown to
exist. But greater emphasis was laid on the decision of Somnath
Iyer, Acting C.J. in Babu Murlidhar v. Soudagar Mohammad
0 Abdul Bashir and Anr.( 1) In that case an unregistered agreement
of sale executed by the mortgagor in favour of the mortgagee in
possession recited that after the date of the agreement the mort-
gagee who had been in possession as such would become the owner
of the property and that he could get his name mutated into muta-
tion register of the municipality and in implementation of this
D agreement of sale, the mortgagor himself made an application for
mutation to the municipal authorities and the name of the mort-
gagee was mutated as owner of the property, it was held sufficient
to clothe the mortgagee with the protection of section 53A in a
suit for redemption of the mortgage and the mortgagor's suit was
dismissed. The Court attached considerable importance to the
E provision in the unregistered agreement for mutation in favour of
the mortgagee as owner and the subsequent conduct of the mort-
gagor in making an application for mutation was held to be the
clearest indication which is essential for invoking the doctrine of
part performance. The decision can be said to depend more or
less on the facts of the case. However in this connection a refe-
F
rence was also made to Thota China Subba Rao and Ors. v. Matape/li
Raju and Ors.(') That decision is hardly of any importance
because an ext1 eme contention was advanced on behalf of the
mortgagee resisting a suit for redemption that he continued to be
in possession in part performance of the agreement which arrgu-
G ment was repelled by the Court on the observation that the mort-
gagee had never been in possession and the contention that he was
always in constructive possesssion could hardly assist him.

H (1) AIR 1970 Mysore. 203.
(2) A.LR. 1950 FC I at 7
S. ooViNi> RAO v. DEVI SAHA! (Desai, i.)

Jn Jahangir Begum v. Gulam Ali Ahmed,(1) the Court after holding A
that the defendant was in possession and had put up a structure on
it, came to the conclusion that he was not entitled to the benefit of
doctrine of part performance because he was already in possession
before the contract to transfer the property, relied upon by him,
was entered into, and, therefore, it was obligatory upon him to
B
show that he had done some act in furtherance of the contract in
order to constitute a part performance of the contract. In Kukali
v. Basantilal(2) the facts found were that A mortgaged with posses-
sion his house with B. Subsequently A sold the house to B in
consideration of the mortgage debt and the amount spent by A on
improvements and repairs of the house. The deed was not registered.
Subsequently A sold the same property to C under a registered sale
c
deed. C sued B for redemption. B relied on the equitable doctrine
of part performance in defence. Negativing the defence of part
performance the Court held that as B was already in possession
as a mortgagee, unless he shows that he did some act in furtherance
of the contract, over and above being in possession, mere con- D
tinuance in possession would not constitute part performance.
The case is very near to the facts disclosed in the case under discus-
sion. There is an understandable and noteworthy difference in the
probative value of entering into possession for the first ti me and
continuing in possession with a claim of change in character.
Where person claiming benefit of part performance of a contract E
was already in possession prior to the contract, the court would
expect something independent of the mere retention of possession
to evidence part performance. Therefore mere retention of posses-
sion is not discharged, could hardly be said to be an act in part
performance unequivocally referable to the contract of sale.

- Section 53A requires that the person claiming the benefit of
F

part performance must always be shown to be ready and willing to
perform his part of the contract. And if it is shown that he was
not ready and willing to perform his part of the contract he will
not qualify for the protection of the doctrine of part performance.
Reverting to the consideration recited in Ext. D-1 the sale deed, G
even according to the mortgagee it was agreed that he had retained
an amount of Rs. I 7,735 out of the total consideration of Rs. 50,000
for payment to the other creditors of the mortgagor. Barring a
H
(I) AIR 1955 Hyd. 101.
(2) AIR 1955 Madhya Bharat 93.
216 SUPREME COURT REPORTS [1982] 2 s.c.tl.
A claim made in the written statement that he paid himself Rs. 541
which was included in the amount of Rs. 17,735 which allegation
itself is unconvincing, there has not been the slightest attempt on .)
his part to pay up any of the creditors of the mortgagor. There is
nothing to show that he had the list of all the creditors .of the
mortgagor or that he made any attempt to procure the list or that
B he issued a public notice inviting the creditors of the mortgagor to
claim payment from him to the extent of the consideration retained
by him. Not a single creditor has been paid is an admitted posi-
tion. But the more ineq uitous conduct of the mortgagee is that he
had not made the slightest attempt to contact any of the creditors
. /

-. c
of the mortgagor or to pay even the smallest sum. There is no
such statement in the written statement but even in his evidence
'\
at the trial he has not been able to show that he has paid any
creditor or made any attempt to pay any of the creditors including ...
those whose names were admittedly known to him such as Ramkaran
G.b!jsilal, Kajodimal, Motilal Bhagirath and Kanhaiyalal Chagganlal.
~!her shifting stand of mortgagee to suit his convenience is dis-
, cernible here. In Ext. D-1, the entry of Rs. 17,735 is described as
'have been taken from you from time to time for domestic expenses'.
Jn his evidence mortgagee states that this recital is incorrect and
the correct position according to him is that the amount of
Rs. 17, 735 fro:n total consideration payable by him was retained to
pay to other creditors of mortgagor. According to him the only
E amount due to him from mortgagor outside the mortgage transac-
tion was a debt of Rs. 541 only. Mortgagee neither paid himself
nor other creditors and thereby did not perform his part of the
contract. He even did not pay a small decretal amount tof Rs. 500
plus interest and costs to Motilal in 1952 but allowed the property
to be sold. Coupled with this is the fact according to the recital
F in Ext. D-1 he had agreed to pay the balance of the consideration
of Rs 6265 to the mortgagor at the time of registration of the sale
deed. Now, undoubtedly the mortgagor did not agree to get the
sale deed registered because there was a dispute between the parties ._ ~

as to the nature of the tran~action. But the defendant mortgagee
made unilateral attempt to get the sale deed registered by offering
G
it for registration. Thus while attempting to complete his title both
legally and even in equity he was under an obligation to pay
Rs 6265 to the mortgagor. This liability is not disputed yet in
this behalf he bas not stated anything in his examination-in-chief
I' ..
that he made any attempt to pay that amount to the mortgagor.
H
Add to this his failure to return the discharged mortgage deed and
his further averment that he used to m~intain the mortgage account
s. GOViND RAO v. DEVi SAHAI (besai) J.. 217

even after October I 0, I 950: All this would conclusively show A
that the mortgagor _himself was not willing to perform his part of
the contract. In this view of the matter Mr. Desai's contention
that failure to pay the amount agreed to be paid before the
Registrar and/or not discharging debts agreed to be discharged as
having been given credit in the consideration for the sale would not
detract from part performance because they have to be t!valuated
B
in the facts and circumstances of the case cannot be upheld.
j It was next contended on behalf of the mortgagee that the
conduct of the 1st plaintiff mortgagor in executing and registering
a sale deed in respect of the mortgaged property in favour of 2nd
plaintiff Gyarsilal and thereby frustrating the contract of sale in c
- favour of the defendant mortgagee evidence that the Ist plaintiff
was aware of the contract in favour of the defendant mortgagee
and he was retaining possession in furtherance of the contract. The
submission does not constitute any independent act on the part of
mortgagee but it is merely another facet of the fact of permission
being retained by the defendant mortgagee. Retention of posses-
D
sion is of no consequence in this case because the mortgage was
not discharged and was subsisting and the mortgage being a mort-
gage with possession the mortgagee was entitled to retain posses-
sion. The fact that immediately a sale deed was executed in favour
of 2nd plaintiff by Ist plaintiff would show that he was unwilling to
accept the contract as offered by the mortgagee. The subsequent
E
purchaser Gyarsilal has taken a conditional sale and this reinforce
the stand of the mortgagor. The existence of the dispute about the
nature of the trasaction, namely, according to the mortgagor he
wanted an absolute sale and this dispute between the parties as on

- October 10, 1950, is not in dispute. Therefore the conduct of the
mortgagor is c<;msistent with this case.
F

It was next contended that defendant mortgagee· made all
attempts to get the deed registered by approaching the Sub-
Registrar, and that the defendant mortgagee initiated criminal pro-
ceedings against the Ist plaintiff mortgagor for misusing the stamp G
papers need not detain us, as they have no probative value.

Having, therefore, examined all the contentions canvassed on
behalf of the mortgagee we unhesitatingly reach the conclusion that
the mortgagee has failed to prove that he did any act in furthe- H
rance of the contract, continued retention of possession being a
circumstance of neutral character in the facts and circumstances of
218 SUPRBME ccluiT REPORTS [i 982i 2 s.c.ll.
A the case and it being further established to our satisfaction that the
mortgagee was not willing to perform his part of the contract, it
is clear that the mortgagee is not entitled to the benefit of the
equitable doctrine of part performance.

B On the conclusions l.J.ereby indicated the appeal preferred by
the plaintiffs (CA 1144/69) must be allowed and the judgment of
the High Court has to be set aside and the one rendered by the
trial court is restored with costs throughout.

That takes us to the second appeal preferred by Motilal being
c CA 1145/69. First a synopsis of the facts relevant to the dispute
raised by api;ellant Motilal. Motilal filed Civil Suit No. 243/47 on
November 3, 1947, for recovering his debt from mortgagor
Govindrao Mahadik. Jn this suit he obtained attachment before
...
judgment of the suit property on November 6, 1947. The suit of
Motilal ended in a decree in the amount of Rs. 2,500 on March
D 5, 1951. On March 27, 1951, execution application No. 216 of
1951 was mad~ by Motilal. On April 3, 1951, the executing court
made an order that as the suit property of the judgment debtor has
already been attached by an order of attachment before judgment,
steps should be taken for drawing up a proclamation of sale under
order XXI, rule 66, Code of Civil Procedure. The Cour'. directed
E auction sale of the suit property to be held on December 9, 1951.
It appears that the auction sale was stayed. There was some default
on the part of the judgment debtor to comply with the conditional
stay order and on his failure auction sale was directed to be held
on March 23, 1952. After correcting the amount due on the
mortgage of mortgagee in the proclamation of sale, a fresh auction
F was held on August 23, 1952. In the meantime, in the absence of
any bidder at the auction Motilal the decree holder himself obtained
-
permission of the court to bid at the auction and his bid in the
amount of Rs. 300 was accepted and the sale in favour of Motilal
was confirmed on September 23, 1952.
G
In the mean time mortgagor Govindrao Mahadik the judg-
ment debtor in Motilal's suit filed Regular Appeal No. 125/51
which was allowed by the Additional District Judge as per his
judgment dated March 27, 1953 and thereby the suit of Motilal was
H dismissed in entirety. Motilal preferred Second Appeal No. 78/53
in the High Court of Madhya Bharat and by its judgment dated
September 1, 1958, Motilal's appeal was allowed and a decree in
s. GOV1ND RAO v. DEVI SAHA! (Desai, J.) 219

his favour in the amount of Rs. 500 with imerest and proportionate A
costs was passed.

Motilal made an application on April 2, 1962 purporting to
be under Order XXII, rule 10 of the Code of Civil Procdure alleging
that he came to know about the suit filed by the mortgagor for
redemption of the mortgage in December, 1961 and as the decision
B
in the suit is likely to have an impact on his rights and that as he
is the purchaser of the equity of redemption, the mortgagor and
the subsequent purchaser from the mortgagor cannot now maintain
.... the action for redemption of the suit property and he should be
substituted in place of the plaintiffs and be permitted to prosecute
the suit for redemption against mortgagee. This application
c
was contested on behalf of the parties to the suit.

- The High Court was not fully satisfied about the explanation
of delay in making the application by Motilal and was not even
inclined to accept the suggestion that he became a ware of the suit D
in 1961 and that on the ground of gross delay the application was
Jiabl'.'. to be dismissed. The High Court ultimately made on order
as under:

"Therefore, although ordinarily we might not be
inclined to allow Motilal's request to be impleaded in this
Court at the appellate stage, we are of opinion that it
would be desirable to have final decision about the various
points of dispute between all the parties in order to avoid
further unnecessary litigation. From this point of view
only, we would allow Motilal to be impleaded in the
F
- present litigation by addition of his name, and not by
allowing him to replace both the plaintiffs."

Having thus directed Motilal to be impleaded as a party
respondent, the High Court proceeded to ascertain, evaluate and
adjudicate the right claimed by Motilal and ultimately held that in
G
any event the auction purchaser Motilal shall be entitled to recover
the balance of his decretal amount and interest at the rate of 4%
per annum from the date of his auction sale till the date of realisa-
tion or deposit as the case may be either from the appellant or from
the mortgagor or subsequent purchaser, as the case may be, and H
that there shall be a charge on the suit property for the
aforementioned amount which shall be enforceable at the
220 SUPRBMll COURT REPORTS . [ 1982] 2S.C.R.

A instance of Motilal by a sale of the property, Motilal was held
disentitled to costs on account of the delay in filing the application.

Mr. Ray, learned counsel for the 1st plaintiff mortgagor con-
tended that the High Court was in error in allowing the applica-
B tion of Motilal to be impleaded as a party because according to
Mr. Ray Motilal could not be said to be claiming under the mort-
gagor and that, therefore, be could not maintain the application
under Order XXII, rule 10, Code of Civil Procedure.

Rule 10 of Order XXII, provides for continuance by or against
c a person of any action who acquires any interest either by assign-
ment, creation or devolution during the pendency of suit, with the
leave of the court. In ascertaining whether Motilal can maitain the
application bis averments in the application will have to be taken
as the basis for invoking the Court's jurisdiction under Order XXII,
rule 10. The question that will have to be posed would be whether
D Motilal acquired any interest by assignment, creation or devolution
during the pendency of the suit and would, therefore, be entitled to
continue the suit. The suit is primarily a suit for redemption of
mortgage. A suit for redemption of mortgage can be brought by a
person holding the equity of redemption. Motilal contends that the
suit property was sold at a court auction with subsisting mortgage
E thereon and the right, title and interest of the mortgagor was sold at
the court auction and on the sale being confirmed and the sale
certificate being issued he acquired the interest either by assignment
or devolution of the original mortgagor. Now this assertion is con-
tro'Verted on behalf of the original mortgagor and the subsequent
purchaser contending that much before the confirmation of the sale
F on Septembes 23, 1952, the subsequent purchaser had p11rchased the
equity of redemption by the sale deed Ext. P-1 dated October 17,
1950, and that the original mortgagor had no subsisting right, title
and interest in the suit property on August 23, 1952, being the
date of the sale in favour of Motilal. This was countered on
-
behalf of Motilal by his learned counsel Mr. G.L. Sanghi
G
asserting that Motilal had obtained an attachment before
judgment of the suit property by order dated November 6, 1947, and
that this was subsisting till March 5, 1951, when the trial court
decreed the suit of Motilal against the mortgagor in the amount •.
of Rs. 2500 and till the application for execution was filed on March
H
27, 1951, and no reattachment was necessary. These facts are incon-
trovertible but one aspect of law has to be examined as to what is
s. GOVIND RAO v. DEVI SAHA! (Desai, J.) 221

the effect of the judgment of the appellate court in the appeal filed A
by original mortgagor Govindrao Mahadik, the decree obtained by
Motilal, to wit, the appeal was allowed and Motilal's suit was dis-
missed on March 27, 1953. Between March 27, 1953, till the High
Court allowed the appeal of Motilal on September 4, 1958, there
was no subsisting attachment but it must be recalled that by Septem-
ber 23, 1952, the sale was codfirmed and the sale certificate was B
issued on March 25, 1953, that the two days before the appeal of
mortgagor preferred against the decree obtained by Motilal was
allowed on March 27, 1953.

The averments of Motilal in his own application would prima
facie be sufficient to sustain an application under order XXII, rule c
10. The question whether he bas acquired an interest or not in the
property either by assignment or devolution which is the subject
matter of dispute in this appeal would have to be answered on merits
but the narration of chronological events as delineated hereinabove
would clearly show that Motilal has l)lOre than a mere semblance of
title which thi~ Court will have to investigate. And even if stricto
D
sensu the application would not fall under Order XXII, rule. 10, CPC,
yet section 146 of the Code of Civil Procedure would certainly enable
Motilal to maint< in the application (See Smt. Saila Bala Desai v.
Smt. Nirmala Sundari Dassai and another( 1), at 1291, referred to with
I approval in Shew Bux Mohata & Ors. v. Bengal Breweries Ltd &
Ors.(2) Undoubtedly the High Court was reluctant to overlook the
E
gross delay in preferring the application but even after this reluctance
the High Court having granted the application, we would consider it
imprudent to reject the application on the ground of delay.

Once Motilal becomes a party, two contentions advanced on F
his behalf will have to examined : (a) has he become, under the sale
certificate obtained by him, a purchaser of equity of redemption so
as to dissentitle the original mortgagor from bringing the present
action ; (b) What is the effect of the attachment before judgment
secured by him on November 6, 1947, on the sale of equity of redep-
tion in favour of the subsequent purcharser under the sale deed G
Ext. P-1 dated October 14, 1950.

Looking to the proclamation of sale it is crystal clear that the
property was sold subject to subsisting mortgage in favour of Devi
H
(1) [1958] 2 SCR 1287.
(2) [1961] 1 SCR 680.
222 SUPREME COURT REPORTS [1982] 2 s.c.R.
A
Sahai, mortgagee. At a court auction what is sold is the right, title
and interest of the judgment debtor. The judgment debtor in the
decree obtained by Motilal was original mortgagor Sardar Govindrao
Mahadik. Subject to other conditions, his right, title and interest
would be one of a mortgagor, that is the right to redeem the mort·
8 gage style as equity of redemption. According to Motilal this equity
of redemption was sold at the court auction and it was purchased by
him. Subject to the decision on the second contention so as to the
effect of attachment before judgment, there is no substance in this
contention because much before even the proclamation of sale was
issued the equity of redemption held by the mortgagor was sold by
c him under sale deed Ext. P-1 dated October 14, 1950, in favour of
2nd plaintiff Gyarsilal. Therefore, even on the date of the decree as
also on the date of filing of the execution application mortgagor had ....
no subsisting interest in the property which could be sold at the court
auction. On this short ground it can be held that Motilal did not
acquire under the sale certificate equity of redemption of the
D mortgagee.

But Mr. Sanghi, learned counsel for Motilal contended that the
transfer in favour of subsequent purchaser under the sale deed
Ext. P-1, dated October 14, 1950, by the mortgagor is void against
Motilal because in the suit filed by Motilal he had obtained an
E
order of attachment before judgment of the suit property and this
attachment before judgment would cover the right, title and interest
of the mortgagor defendants in that suit and that any private sale
inter vivos of the attached property would under section 64 of the
Code of Civil Procedure be void against the attaching creditor.
F Proceeding further along this line it was contended that as a corollary
if the sale in favour of subsequent purchaser is void against Motilal '
then the equity of redemption continued to remain vested in the
original mortgagor and at the court auction the same was sold and
purchaged by Motilal. This necessitates examination of the elTect
of an order of attachment before judgment in a suit.
G
Order XXXVIII, rule 5, enables the Court to levy attachment
before jugdment at the instance of a plaintiff if the c0nditions therein
prescribed are satisfied. What is the nature of attachment levied in
H this case is not made known save and ellcept saying that the suit
property was attached and the sale proclamation mentioned therein
th~ subsistini mort!la~e. Takin~ the best view in favour of Motil11I,
s. GOVlND llAO v. DEVI SAHA! (Desai, J.) 223

one can say that what was attached was the equity of redemption. A
The attachment was levied and contir.ued to subsist till the date of
the decree. It would, therefore, not be necessary to reattach t_he
property.

What is the effect of attachment before judgment ?
Attachment before judgment is levied where the court on an
application of the plaintiff is satisfied that the defendant, with
intent to obstruct or delay the execution of any decree that
may be passed against him (a) is about tn dispose of the whole
or any palt of his property. or (b) is about to remove the whole
or any part of his property from the local limits of the juris-
diction of the Court. The sole object behind the order levying c
attachment before judgment is to give an assurance to the plaintiff
that bis decree if made would be satisfied. It is a sort of a guaraotee
against decree Lecoming infructuous for want of property available
from which the plaintiff can satisfy the decree. The provision in
section 64 of the Code of Civil Procedure provides that where an
attachment has been made, any private transfer or delivery of the D
property attached or of any interest therein and any payment to the·
judgment debtor of any debt, dividend or other monies contrary to
such attachment, shall be void as against all claims enforceable under
the attachment. What is claimed enforceable is the claim for
which the decree is made. Motilal's suit was for a money claim. It
finally ended in a decree for Rs. 500 by High Court and in between
E
the !st appellate court had dismissed Motilal's suit in entirety. There
is nothing to show that the attachment which would come to an end
on the suit being dismissed would get revived if a second appeal is
filed which ultimately succeeds. In fact, a dismissal of the suit may

- terminate the attachment and the same would not be revived even if
the suit is restored and this becomes manifestly clear from the newly
added provision in sub-rule (2) of rule 11 A of Order XXXIIT, C.P.C_.
F

which provides that attachment before judgment in a suit which is
dismissed for default shall not be revived merely because by reason
of the fact that the order for the dismissal of the suit for default has
been set aside and the suit has been restored. As a corollary it would
G
appear that if attachment before judgment is obtained in a suit which
ends in a decree but if in appeal the decree is set aside the attach-
ment of necessity must fail. There should be no difficulty in reach-
ing this conclusion.
H
The question, however, is what happens if at an intermediate
sta~e punisuant to th~ d~cr<;i~ of the trial court the attached pro-
224 SUPREME COURT REPORTS [1982) 2 s.c.R.

A perty is sold at a court auction ? How would tb.e rights aud obliga-
tions of the auction purchaser be adversely affected if the appeal is
allowed and the suit is dismissed? Ordinarily where the appeal is
preferred an attempt should be made to obtain stay of the execution
of the decree of the trial court. However, it is notorious that the
appellate court is loath or reluctant to grant stay of a money decree
B and the judgment debtor may not be in a position to deposit the
decretal amount and in this situation more often the execution
proceeds and before the appeal is disposed. of an equity in favour
of a third person as auction purchaser who purchases the property
at a court auction may come into existence. If afterwards the appeal
is allowed and the suit is dismissed, would the auction purcha.ser
c be adversely affected ? The emerging situation in this case clearly
demonstrates the dilemma.

Ordinarily, if the aution purchaser is an outsider or a stranger
and if the execution of the decree was not stayed of which he may
have assured himself by appropriate enquiry, the court auction held
D and sale confirmed and resultant sale certificate having been issued
would protect him even if the decree in execution of which the
auction sale has been held is set aside. This proceeds on the footing
that the equity in favour of the stranger should be protected and the
situation is occasionally reached on account of default on the part
of the judgment debtor not obtaining stay of the execution of the
E deeree during the pendency of the appeal.

But what happens if the auction-purchaser is the decree
holder himself? In our opinion, the situation would materially
alter and this decree holder-auction purchaser should not be
F entitled to 'any protection. At any rate when he proceeds with the
execution he is aware of the fact that an appeal against the original
decree is pending. He is aware of the fact that the resultant situa-
-
may emerge where the appeal may be allowed and the decree which
he seeks to execute may be set aside. He cannot force the pace by
executing the decree taking advantage of the economic disability of
a judgment debtor in a money decree and make the situation irre-
G
versible to the utter disadvantage of the judgment debtor who wins
the battle and loses the war. Therefore, where the auction-
purchaser is none other than the decree holder who by pointing out
that there is no bidder at the auction, for a nominal sum purchases
H the property, to wit, in this case for a final decree for Rs. 500,
Motilal purchased the property for Rs. 300, an atrocious ~.ituation,
and yet by a technicality he wants to protect himself. To such an
s. GOYIND llAO v. DEVI SAHA! (Desai, i.) 225

A
auction purchaser who is not a stranger and who is none other than
the decree holder, the court should not lend its assistance. The
view which we are taking is not unknown and to some extent it will
be borne out by the observations of this Court in Janak Raj v.
Gurdial Singlz and Anr.(1) This Court made a pertinent observation
which may be extracted :
B
"The policy of the legislature seems to to be that unless
a stranger auction purchaser is protectec;l against the
vicissitudes of the fortunes of the suit, sales in execution
would not attract customers and it would be to the detri-
ment of the interest of the borrower and the creditor alike C
if sales were allowed to be impugned merely because the

- decree was ultimately set aside or modified."

Viewed from this angle, the order of the High Court that the
auction-purchaser decree holder Motilal would be entitled to recover
the decretal amount of Rs. 500 with interest at the rate of 4% per D
annum and proportionate costs could be styled as manifestly equita-
ble. However the Court cannot overlook the conduct of the mort-
gagor Govindrao Mahadik, his subsequent purchaser Gyarsilal and
even the original mortgagee Devi Sahai in not paying a smail debt
and allowing the property to be auctioned and forcing Motilal to
the logical end of litigation and yet without the slightest recom- E
pense to go on investing into this bottomless pit of unending litiga-
tion. And at best his attachment before judgment is a security that
his decree would be satisfied from the property attached and sale
to the extent of recovery of decretal amount from attached property

- would be, against attaching creditor void. If we assure him pay-
ment of decretal amount and costs the sale in his favour is of no
significance. The logical course for us would have been to leave
Motilal to his own remedy which we consider inequitous in the
F

facts and circumstances of this case. The order made by the High
Court would hardly provide him Rs. 1,500 to recover which he must
have spent at the inflated rate of litigation costs. In our opinion,
while not granting the substantial relief claimed by Motilal and
G
looking to the conduct of an· the parties, we direct tbat Motilal
should be paid Rs. 7,500 inclusive of decretal amount, interest,
proportionate costs and costs of the litigation till today, and for this
amount there will be a charge on this property to be cleared by
H
(I) (1967) 2 SCR 77, 86.
226 SU!iREME COURt REPORtS [1982] 2 s.ctt

A Govindro Mahadik at the time of redemption of the property which
amount will have to be paid by Gyarasilal's heirs in view of the sale-
deed in favour of Gyarsilal.

Accordingly, Civil Appeal No. 1144/69 filed by Govindrao
Mahadik is allowed and the judgment and decree of the High Court
B
are set aside and those of the trial court are restored witl1 costs
throughout.

Civil Appeal No. 1145/69 preferred by Motilal is disposed of
in accordance with direction herein-above indicated with no Qrder
as to costs. CMP 9004/80 and CMP 10593/80 for substitution are
c allowed.

P.B.R. Appeals allowed. -

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