Section 53A Of Transfer Of Property Act Not Applicable To A Void Agreement For Sale: Kerala High Court

The Kerala High Court has ruled that Section 53A of the Transfer of Property Act, 1882 is not applicable in respect of an agreement for sale which is void in nature.

Justice Anil Kumar while dismissing a second appeal, remarked: 

"It may be noted that Section 53A of the Transfer of Property Act is applicable only where the contract for transfer is valid in all respects. It must be an agreement enforceable by law under the Indian Contract Act, 1872." 

Factual Background:

One C.L.Mathachan, along with the 1st defendant, his wife, had entered into an agreement to sell out their property to the plaintiff and one Susan P.Aliyattukudy in 1984.

Simultaneously, the power of attorney was also executed by the assignors in favour of the father of Susan.P.Aliyattukudy to do everything including selling the said properties. 

No time was specifically fixed and it was tentatively agreed to execute the sale deed after 10 years.

The plaintiff agreed to purchase 28.672 cents out of the said property and the rest was taken by Susan. The said 28.672 cents is the plaint schedule property. Since 1984, the plaintiff has been in exclusive possession and enjoyment of the said property.

Over time, A.K.Poulose and C.L.Mathachan expired. In the meanwhile, the respondents expressed their willingness to execute the purported sale deed. 

However, they demanded more payment although the entire amount was already paid to them earlier.

In the above circumstances, they became a nuisance which ultimately resulted in filing a suit before the trial court for a permanent prohibitory injunction against the defendants.

The trial court decreed the suit. The defendants carried the matter in appeal. The first appellate court allowed the appeal, setting aside the judgment and decree of the trial court.

Challenging the divergent findings, the plaintiff filed a Regular Second Appeal.

Contentions Raised:

Before the Court, the appellant argued that the finding made by the first appellate court in tendering evidence was legally unsustainable. 

It was further submitted that in a suit for an injunction, the material question to be considered was whether she has been in possession of the scheduled property on the date of the suit and the plaintiff has a valid cause of action to institute the suit.

Elaborating on the submission, the appellant urged that she was entitled to protect her possession in accordance with Section 53A of the Transfer of Property Act, 1882.

However, Government Pleader for Revenue submitted that once the Government land is characterised as an assigned land, the same continues and remains to be an assigned land. 

He submitted that even the appellant who allegedly came into possession on the strength of an agreement for sale is bound by the provisions contemplated under the Kerala Government Land Assignment Act, 1960.

It was further asserted that any contract for sale between the predecessor of the defendant and the plaintiff is void under the Act and the Kerala Land Assignment Rules, 1964. 

Key Findings:

The main question for consideration was whether the finding of the lower appellate court that the appellant/plaintiff is not entitled to have the benefit of Section 53A of the Transfer of Property Act, 1882 was legally correct?

Placing reliance on the Apex Court decision in Papaiah v. State of Karnataka & Ors [(1996) 10 SCC 533], the Court noted that the lands originally assigned continue to be assigned lands even assuming that there was a contract for sale in favour of the plaintiff and possession was passed thereunder. 

In the same ruling, the Supreme Court had categorically held that such contract for sale is opposed to public policy under Section 23 of the Contract Act. Thereby, any alienation made in violation thereof is void and the purchaser does not get any valid title or interest thereunder. 

Going by the Rules, the Court found that it is within the realm of the competent authority to take appropriate action to resume the assigned land.

Therefore, it was held that Section 53A of the Transfer of Property Act, 1882 is not applicable in respect of an agreement for sale which is void in nature.

"It may be noted that Section 53A of the Transfer of Property Act is applicable only where a contract for transfer is valid in all respects. It must be an agreement enforceable by law under the Indian Contract Act, 1872." 

Accordingly, the second appeal was dismissed. 

Advocate Sajan Vargheese for the petitioner, Advocate P.Thomas Geeverghese for the respondents and Government Pleader for Revenue Sajeevan appeared in the matter.

Case Title: Ligy Paul v. Mariyakutty & Ors,

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