Property Law; Mool Chand Bakhru Vs. Rohan [Supreme Court of India, 29-01-2002]

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

Property Law

AIR 2000 SC 745 : (2000) 2 SCC 528 : 2002 (1) SCR 702 : 2002 (1) SCALE 507 : JT 2002 (1) SC 465 : 2000 AllLJ 491

IN THE SUPREME COURT OF INDIA

V.N. Khare and Ashok Bhan, JJ.

January 29, 2002

Appeal (civil) 5920 of 1998

PETITIONER: MOOL CHAND BAKHRU & ANR.

Vs.

RESPONDENT: ROHAN & OTHERS

JUDGMENT:

Bhan, J.

Point for consideration in this appeal is as to whether:

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

The relevant facts are :

1. Plaintiffs/appellants (hereinafter referred to as “the appellants”) Mool Chand and Leela Ram were the owners of the property known as ‘Dayal Villa’ situated in Khasra Nos. 1195, 1196, 1198, 1200, 1201 and 1202 measuring 613 sq. meters in Solan Town, specifically described in the plaint (hereinafter referred to “the property in dispute”). Leela Ram above-named died during the pendency of the suit before the trial court and his name was substituted by his widow and two sons as plaintiffs. Widow died during the pendency of this appeal. The title of Leela Ram is represented through his two sons as the appellants.

2. The appellants filed the suit with the averments that Late Bhagwan Dass (predecessor in interest of the defendants) was their real uncle (father’s brother). Because of the partition of the country in 1947 Bhagwan Dass who was living in Sindh Province migrated to India. The appellants permitted him to occupy their house at Solan as a licensee in 1948-49. In spite of repeated requests to vacate the property Bhagwan Dass failed to handover the possession of the property to the appellants. In 1974 Bhagwan Dass agreed to vacate the property after six months. On his failure to vacate the property he was required to pay damages by way of use and occupation at the rate of Rs. 20/- per day till the date of actual vacation. As Bhagwan Dass failed to vacate the property and to pay the damages as agreed upon, a suit was filed for possession of the property as well as for recovery of Rs. 43,200/- as mesne profits for the use and occupation of the property at the rate of Rs. 1200/- per month.

3. The defendants/respondents (hereinafter referred as ‘the respondents’) while resisting the suit averred that the appellants agreed to sell the property in dispute to Bhagwan Das in the year 1968 for a consideration of Rs. 30,000/- out of which Rs. 10,000/- was paid to the appellants. A sum of Rs. 1,100/- was kept by Bhagwan Dass with Kishni, mother of the appellants, at their instance. A further sum of Rs. 10,000/- was deposited with one Gulab Singh, brother of the appellants, in the year 1969, as part of the sale consideration. Bhagwan Dass continued to occupy the property till 1968 as a permissive user and thereafter in part performance of the agreement to sell. That the property at the time of lease was in a dilapidated condition. Suitable improvements in the property by reconstructing the walls, floors, roof of Balcony and by providing flush latrines at a cost of Rs. 35,000/- were carried out. No objection was raised by the appellants at any time to the improvements carried out by the respondents. It was further pleaded that they have always been ready and willing to perform their part of the agreement to sell and pay the remaining amount of the sale consideration. Alternatively, it was pleaded that the respondents acquired title to the property in dispute by way of adverse possession as they were continuing in possession since 1968. The claim of the appellants for mesne profits was denied.

4. The appellants in their rejoinder pleaded that plaintiff No. 1 Mool Chand in the year 1968 had agreed to sell his half share in the property in dispute to Bhagwan Dass on the letter’s representation that the market value of the entire property in dispute at that time was Rs. 30,000/- The value of half share was Rs. 15,000/-. It was admitted that Mool Chand had received Rs. 10,000/- as part of the sale consideration. It was, however, pleaded that since Bhagwan Dass failed to pay the balance sale consideration, the deal fell through and the amount received as part of the sale consideration, was forfeited and appropriated towards use and occupation charges. It was averred that Leela Ram, the other plaintiff, had no intention to sell his half share in the property in dispute nor any agreement to sell was arrived at between him and Bhagwan Dass. The claim of adverse possession set up by the respondents was controverted. The so-called improvements made by the respondents were also denied.

5. The trial court dismissed the suit of Mool Chand to the extent of his half share. The suit of Leela Ram for possession of his half share and the claim for mesne profits was decreed. He was awarded mesne profit at the rate of Rs. 20/- per day amounting to Rs. 21,600/-. The trial court came to the conclusion that Mool Chand alone had entered into an agreement to sell his half share in the property in dispute in favour of Bhagwan Dass for a consideration of Rs. 15,000/- out of which a sum of Rs. 10,000/- was received by Mool Chand. It was held that Bhagwan Dass was placed in possession of half share of the property in dispute by Mool Chand as part performance of the agreement to sell. Benefit of Section 53-A of the Transfer of Property Act, 1982 (for short ‘the Act’) was however denied on the ground that the respondents had failed to prove that they were and are ready and willing to perform their part of the agreement. The respondents were found to have perfected their title to the property in dispute by way of adverse possession to the extent of half share of the Mool Chand. So far as the share of Leela Ram is concerned the respondents were held to be in permissive possession as a licensee.

6. Both the parties being aggrieved by the judgment and decree of the trial court preferred two separate appeals before the District Judge. The appeal filed by the respondents was dismissed. The finding recorded by the Trial Court in so far as the same was in respect of the share of Leela Ram was confirmed. The appeal preferred by the appellants was allowed and the finding of the trial court that the respondents had perfected their title to the extent of half share by way of adverse possession was set aside. Consequently, the suit of the appellants for possession of the entire property in dispute was decreed along with mesne profits to the tune of Rs. 43,200/- at the rate of Rs. 1200/- per month.

7. The respondents filed the second appeal before the High Court. The case projected before the High Court was that as the respondents had been put in possession of the property in part performance of the agreement to sell in the year 1968 on payment of a part of the sale consideration and therefore they were entitled to protect their possession under Section 53-A of the act. Alternatively, their case was that they had become the owners of the property by way of adverse possession as they were in continuous possession of the same since 1968.

8. The High Court relying upon a judgment of this Court in