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The Limitation Act does not extinguish the defence, but only bars the remedy: Bombay HC.

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BOMBAY HIGH COURT

Kashiram S/o Wadgu Mundale Vs Mansaram S/o Tulshiram Mundale

A.B.Chaudhari, J.

Second Appeal No. 163 of 2001.  Date :- 24/2/2016

LAWS :- TRANSFER OF PROPERTY ACT- 1882 Section – 53A

JUDGMENT :-

(1) Being aggrieved by the judgment and decree dated 14th March 2001 in Regular Civil Appeal No. 30/2000 made by the learned 7th Additional District Judge, Nagpur, by which the lower Appellate Court reversed the judgment and decree dated 29.11.1999 in Regular Civil Suit No. 32/1994 passed by the Civil Judge, Jr. Dn., Kuhi and decreed the suit filed by the respondents/plaintiffs, the present Appeal was filed by the original defendants.

(2) Field Survey No. 22(old) Gut No.11 admeasuring 6.44 acres situated at Mouza Savangi, Tah. Kuhi, District: Nagpur was originally owned by Mansaram, along with his father Tulshiram and uncle Bala. The appellants agreed to purchase the said suit field vide an agreement of sale dated 17.9.1967 for a consideration of Rs. 4,000/- and the said agreement was executed by all the owners – Mansaram, Tulshiram and Bala. The entire amount of consideration, namely, Rs. 4000/- was paid and was received by the respondents and the possession was also handed over to the appellants. Regular Civil Suit No. 93/1975 was filed by the appellants for specific performance of contract of sale dated 17.9.1967 but the suit was dismissed; so also the Appeal preferred before the lower Appellate Court. It is the case of the respondents that after dismissal of their Suit for specific performance of contract, they filed Suit for possession as the appellants refused to hand over the possession and, therefore, the suit in question, namely, RCS No. 34/1994 was filed for possession and damages, on the ground that the appellants had no right to retain the possession. The trial Court dismissed the Suit. The lower Appellate Court, in Appeal preferred by the respondents, allowed the Appeal and held that the appellants were not entitled to retain the possession after having lost in the suit for specific performance of contract and, therefore, the decree for possession in favour of respondents was required to be passed and accordingly the suit was decreed. Hence this Second Appeal.

ARGUMENTS:

(3) In support of the Appeal, Mr A.C. Dharmadhikari, learned counsel for the appellants vehemently argued that though it is true that the appellants took the plea of adverse possession as well as Section 53-A of the Transfer of Property Act,1882 (“T.P. Act” in short) to remain in possession, by way of shield, and though it is a fact that their suit for specific performance was dismissed, the lower Appellate Court could not have decreed the suit for possession as admittedly the entire amount was paid and there was nothing further to be done, except registration of the sale deed. The payment by the appellants of entire amount of Rs. 4000/- towards total consideration and voluntary acceptance thereof by respondent was a clear indication that the appellants had already performed their part of the contract and that the entire payment made by the appellants clearly answered the requirement of Section 53A of the T.P.Act. He relied on the decision of the Hon’ble Supreme Court in the case of Shrimant Shamrao Suryawanshi and another v. pralhad Suryawanshi : (2002) 3 SCC 676 and single Judge of this Court in the case of Sakharam Dhale (Died) through LRs v. Parasram Narayan Shahagadkar in Second Appeal No. 317/1990 dated 21.08.2013. He submitted that the decision of the Supreme Court in the case of S.S. Suryawanshi (supra) came after the lower Appellate Court delivered its judgment in the year 2001. Therefore, there was no occasion to cite the said judgment before the lower Appellate Court.

(4) None appears for the respondents though served.

(5) The substantial questions of law, in my opinion, that arise for consideration is as under :-

“(i) Whether the appellants by way of shield were entitled to protect their possession under section 53-A of the T.P. Act, having paid the entire amount of consideration of Rs. 4000/- and received the possession of the suit property despite their failure in their earlier suit for specific performance of the same contract? ..Yes

(ii) Whether the appellants satisfy the requirements/ingredients of Section 53A of the T.P. Act to enable him to claim the protection? ..Yes.

(iii) What order : The Second Appeal is allowed.”

(6) With the assistance of learned counsel for the appellants, I have perused the reasons recorded by the lower Appellate Court. At the outset, I agree with the learned lower Appellate Court that the plea of adverse possession set up by appellant was rightly rejected and needs no further consideration. However, insofar as the legal question as to the right to remain in possession of the suit land in part performance of contract claimed by the appellants, I find that there is no dispute about the fact that the appellants were put in possession under the written agreement of sale voluntarily by the respondents and they are in possession since the date of agreement i.e.17.09.1967. It is further not in dispute that the total consideration agreed was Rs. 4000/- and the entire amount was paid to the respondents, which the respondents admitted to have received. It is thus clear that nothing further except registration of sale deed remained to be done, for the obvious reason that the entire amount of consideration was paid and possession was given. The question of registration of sale deed would have arisen had the respondents offered to execute the sale deed, since in that case, the appellants having paid the entire amount of consideration of Rs. 4000/- nothing further was required to be paid, except the stamp duty and registration charges, which would have been paid to Government, had the respondents offered to execute the sale deed. It is thus clear that the appellants had performed the part of their contract, since they had paid the entire amount of consideration which fact is not in dispute. In this connection, the Apex Court, in the case of Maneklal Mansukhbai v. Hormusji Ginwala reported in AIR 1950 SC 1, held thus :

“The defendant and his predecessor in interest were willing to perform their part of the contract. As a matter of fact, they have performed the whole of it. All that remains to be done is the execution of a lease deed by the lessor in favour of the lessee and of getting it registered.”

(7) The lower Appellate Court framed the following points for determination in this context :

“(iv) Whether the respondents are entitled for protection under Section 53A of the Specific Relief Act? ..No” The lower Appellate Court decided the point by holding that since the suit for specific performance of contract filed by the appellants was dismissed and that decree had become final, it was liable to be presumed that the appellants were not ready and willing to perform part of their contract. It is not in dispute that the appellants have been admittedly in possession pursuant to agreement of sale in their favour inasmuch as they have paid the entire amount of consideration.

Section 53-A of the T.P. Act reads thus:

“53-A : Part performance – Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract:

Provided that nothing 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.)”

Section 16(c) of the Specific Relief Act, 1963 reads thus:

“16(c) : who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.

Explanation : for the purposes of clause (c)-

(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court;

(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.”

(8) It is clear, in the instant case, as per Section 53-A of the T.P. Act the transferee in part performance of contract took the possession of the suit property and had done some act in furtherance of the contract and the transferee also had performed his part of the contract by paying the entire consideration of Rs.4,000/-. Thus, the language used in the context of the facts of the present case, in Section 16(c) of the Special Relief Act and u/s 53-A of the T.P. Act differs. The requirement of Section 53-A is that the transferee is required to do some act in furtherance of the contract and the transferee has performed his part of the contract. Upon examining the legal position in the light of the above and applying the same in the facts of the present case, I find that the appellants admittedly are in possession of the suit property pursuant to the contract and have done some act of cultivating the field in furtherance of the contract and fully performed their part of the contract by paying the entire amount of Rs. 4,000/- i.e. total consideration which the appellants admittedly received and it is only thereafter they were put in possession. It is unfathomable as to what more required to be done by the transferee in possession of the suit property since it was for the respondents to thereafter formally execute the sale deed by registering the same with the registering authority. But then admittedly, the respondents did not register the sale deed. In this connection, I think the decision in the case of Shrimant Suryawanshi (supra) would be apt and it will be useful to reproduce the relevant paragraphs from the said judgment. In the facts of that case, the suit for specific performance of contract and agreement was barred by limitation, but the Apex Court protected the possession u/s 53-A of the T.P. Act. I quote the following paragraphs :

12.In England, the provisions of the law of the Statute of Fraud provided that no suit or action would be brought on agreement relating to a property which was not in writing signed by the parties. The aim and object of the statute was to protect a party against fraud. However, certain difficulties were experienced when it was found that under an oral agreement a party has performed his part of the contract, yet he was unable to bring any action or suit against other party viz., transferor for a specific performance of the agreement which was not in writing in view of the provisions contained in the Statute of Fraud. Under such situations, transferors managed to play fraud on innocent buyers who entered into an oral agreement and performed their part of the contract. In view of such prevailing circumstances in England, the Court of Equity intervened on the ground of equity and took action to enforce specific performance of a parole agreement. The view taken by the Court of Equity was that the object behind the Law of Property of the Statute of Fraud was to protect against a fraud, but the provisions of Law of Property of Statute of Fraud were being used as an instrument to help and protect fraud. Thus, the Court of Equity did not permit the Statute of Fraud to be used as an instrument to cover the fraud by the transferors where there was a part performance of a parole agreement.

13.When the Transfer of Property Act was enacted, Section 53-A did not find place in it. In the absence of Section 53-A, there arose difference of opinion between various courts in India as regards the application of English doctrine of part performance of contract as it was then prevailing in England. Since there was a difference of opinion on question of the application of English equitable doctrine of part performance in various courts of India, the Govt. of India resolved to set up a Special Committee for making recommendations amongst others whether the British equitable doctrine of part performance be extended in India also. The Special Committee was of the view that an illiterate or ignorant buyer who had partly performed his part of contract required statutory protection. The Committee was of the further view that where a transferee in good faith that lawful instrument i.e. a written contract would be executed by the transferor takes possession over the property, the equity demanded that the transferee should not be treated as trespasser by the transferor and subsequently evict him through process of law in the absence of lawful transfer instrument. The Special Committee also considered the question whether protection under the proposed Section 53-A to a transferee would also be available even if the period of limitation for bringing an action for specific performance of an agreement to sell has expired. On the said question, the Committee was of the view that even after expiry of period of limitation, the relationship between the transferor and transferee remains the same as it was within the period of limitation and, therefore, the possession over the property taken in part performance of an agreement is required to be protected even if the period of limitation for bringing an action for specific performance has expired.

14.The aforesaid recommendation of the Special Committee were accepted by the Govt. of India as the same is well reflected in the aims and objects of amending Act 1929 whereby Section 53-A was inserted in the Act.

15.The Special Committee’s report which is reflected in the aims and objects of amending Act 1929 shows that one of the purposes of enacting Section 53-A was to provide protection to a transferee who in part performance of the contract had taken possession of the property even if the limitation to bring a suit for specific performance has expired. In that view of the matter, Section 53-A is required to be interpreted in the light of the recommendation of Special Committee’s report and aims, objects contained in amending Act 1929 of the Act and specially when Section 53-A itself does not put any restriction to plea taken in defence by a transferee to protect his possession under Section 53-A even if the period of limitation to bring a suit for specific performance has expired.

16.But there are certain conditions which are required to be fulfilled if a transferee wants to defend or protect his possession under Section 53-A of the Act. The necessary conditions are

(1) there must be a contract to transfer for consideration any immovable property;

(2) the contract must be in writing, signed by the transferor, or by someone on his behalf;

(3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained;

(4) the transferee must in part performance of the contract take possession of the property, or of any part thereof;

(5) the transferee must have done some act in furtherance of the contract; and

(6) the transferee must have performed or be willing to perform his part of the contract.

17.We are, therefore, of the opinion that if the conditions enumerated above are complied with, the law of limitation does not come in the way of a defendant taking plea under Section 53-A of the Act to protect his possession of the suit property even though a suit for specific performance of a contract has barred by limitation.

18.The matter may be examined from another angle. The established rule of limitation is that law of limitation is not applicable to a plea taken in defence unless expressly a provision is made in the statute. The law of limitation applies to the suits and applications. The various articles of the Limitation Act show that they do not apply to a defence taken by a defendant in a suit. Thus, the law of limitation bars only an action in a court of law. In fact, what the Limitation Act does is, to take away the remedy of a plaintiff to enforce his rights by bringing an action in a court of law, but it does not place any restriction to a defendant to put forward any defence though such defence as a claim made by him may be barred by limitation and cannot be enforced in a court of law. On the said principle, a defendant in a suit can put forward any defence though such defence may not be enforceable in a court of law, being barred by limitation.

19.In M.K. Venkatachari & Ors. v. I.A.R. Arunachalam Pillai & Ors. AIR 1967 Madras, 410, it was held, thus:

“that defence to limitation is a creature of a positive law and, therefore, cannot be extended to cases which do not strictly fall within the enactment. It is an established canon of construction of law of limitation not to enlarge the scope of statutory provisions of limitation by analogy or logic”.

20.It is, therefore, manifest that the Limitation Act does not extinguish a defence, but only bars the remedy. Since the period of limitation bars a suit for specific performance of a contract, if brought after the period of limitation, it is open to a defendant in a suit for recovery of possession brought by a transferor to take a plea in defence of part performance of the contract to protect his possession, though he may not able to enforce that right through a suit or action.

21.In the present case, it is not disputed that the transferee has taken possession over the property in part performance of the contract. It is also not disputed that the transferee has not brought any suit for specific performance of the agreement to sell within the period of limitation. It is also not disputed that the transferee was always and still ready and willing to perform his part of the contract. Further, the view taken by the High Court in judgment under appeal was overruled by the Full Bench of the Bombay High Court in the case of Mahadeo Nathuji Patil v. Surajbai Khushal Chand Lakkad & Ors. – 1994 Maharashtra Law Journal, 1145, which, according to our view, lay down the correct view of law. In that view of the matter these appeals deserve to be allowed.

22.Since the High Court has allowed the appeals solely on the ground that the remedy for bringing a suit for specific performance is lost, therefore, the defendant is not entitle to protect his possession under Section 53-A of the Act, we, after setting aside the judgment under challenge, send the matters back to the High Court to decide any other question of law, if arises in these appeals.”

In my opinion, the suit for specific performance being time-barred, as in the facts of Shrimant Suryawanshi (supra), and the suit for specific performance having been dismissed in the case at hand for want of readiness and willingness (for not paying Rs. One thousand extra over and above the agreed price), would stand on the same footing. Hence, the said Apex Court decision will have application this case.

(9) In the light of the above decision, I think both the substantial questions of law will have to be answered in the affirmative, in favour of the appellants. At any rate, the respondents received the entire amount of consideration way back in the year 1967 and thereafter appellants were put in possession and the appellants have obviously developed the property by putting their efforts and by investing for so many years. They are therefore entitled to protect their possession by way of shield as held by the Apex Court, supra. In the result,the Appeal must succeed. Hence, I make the following order:

ORDER

(1) Second Appeal No. 163/2001 is allowed.

(2) The impugned judgment and decree dated 14th March l,2001 in Regular Civil Appeal No. 30/2000 made by the learned 7th Additional District Judge, Nagpur, is set aside.

(3) The judgment of decree dated 29.11.1999 in Regular Civil Suit No. 32/1994 made by the learned Civil Judge, Junior Division, Kuhi, is restored.

(4) No order as to costs.

 

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