[Transfer Of Property Act] Protection U/s 53A Available To Person Put In Possession And Has Agreement Of Lease In His Favour: SC [Read Judgment]

The Supreme Court has observed that protection under Section 53A of the Transfer of Property Act, 1882 is available to a person who is put in possession pursuant to an agreement of lease in his favour though no lease has been executed and registered.

In this case, the Government acquired a land which belonged to Gaon Sabha Luhar Heri, Delhi. M/s. K.C. Sharma & Co. claimed compensation on the ground that the land was given to them on lease by Gaon Sabha. They claimed that, as the land was not fit for cultivation, it was granted on lease to them by the Gaon Sabha to remove the "shora" and to make the land fit for cultivation. The Civil Court, which heard the reference in this regard, held that KC Sharma & Co were entitled for compensation to the extent of 87% and remaining 13% is to be paid to the panchayat/Gaon Sabha.  Later, a suit was filed by the Government seeking a declaration to the effect that this judgment and decree is obtained by playing fraud. The suit was decreed by the Trial Court which was later set aside by the High Court.

Agreeing with the High Court view, the bench comprising Justices Ashok Bhushan, R. Subhash Reddy and MR Shah observed:

"It is fairly well settled that fraud has to be pleaded and proved. More so, when a judgment and decree passed earlier by the competent court is questioned, it is necessary to plead alleged fraud by necessary particulars and same has to be proved by cogent evidence. There cannot be any inference contrary to record. As the evidence on record discloses that fraud, as pleaded, was not established, in absence of any necessary pleading giving particulars of fraud, we are of the view that no case is made out to interfere with the well reasoned judgment of the High Court."

Another contention taken by the appellant was that,in absence of any lease deed executed by the Gram Panchayat in favour of the respondents, at best it can be treated as a licence for removal of "shora" only and same cannot be treated as a lease.

In this regard, the bench noted Section 53A of Transfer of Property Act which deals with doctrine of part performance. The said provision reads as follows: "Where any person contracts to transfer for consideration any immoveable 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." 

The bench, while dismissing the appeal, observed:

"It is clearly held by this Court that defence under Section 53A of the Transfer of Property Act, 1882 is available to a person who has agreement of lease in his favour though no lease has been executed and registered. Similar proposition is also approved in the judgment of this Court in the case of Hamzabi  wherein this Court has held that Section 53A of the Transfer of Property Act, 1882 protects the possession of persons who have acted on a contract of sale but in whose favour no valid sale deed is executed or registered. As it is clear that respondents were put in possession and the Panchayat has acted upon their proposal for grant of lease said case law supports the case of the respondents."

Case details
Case no. : CIVIL APPEAL NO.9049-9053 OF 2011
Case name: Union of India vs. M/s. K.C. Sharma & Co.
Coram: Justices Ashok Bhushan, R. Subhash Reddy and MR Shah
Counsel: ASG Aishwarya Bhati, Sr. Adv Jayant Bhushan 

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