Court Judgments

PETITIONER:
SARDAR GOVINDRAO MAHADIK & ANR.

Vs.

RESPONDENT:
DEVI SAHAI & ORS.

DATE OF JUDGMENT15/12/1981

BENCH:
DESAI, D.A.
BENCH:
DESAI, D.A.
MISRA, R.B. (J)

CITATION:
1982 AIR  989          1982 SCR  (2) 186
1982 SCC  (1) 237      1982 SCALE  (1)191
CITATOR INFO :
E&R        1990 SC1828     (9)
RF        1992 SC 385     (7)

ACT:
Transfer of Property Act, Section 53A-Scope of

HEADNOTE:
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  this  agreement
requisite stamps  were purchased  and a     draft sale deed was
drawn up. The sale deed was however not registered.
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 decree
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 performance  of the
contract of  sale and  continued to be in possession and did
several acts attributable to the contract, the mortgagor was
debarred from  enforcing 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.
The trial    court held  that though     the sale  deed     was
executed but  since it was not 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  mortgagee 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  amount was    paid
before the execution of the contract.
In 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.
The appellant  in Civil Appeal No. 1145 of 1969 filed a
suit against  the mortgagor  for recovery  of a debt owed to
him and obtained attachment of the
187
suit property  before judgment. The suit eventually ended in
a decree  in his favour, In the auction 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
decree holder  could not maintain an application under order
XXII, Rule  10 of  the Code  of Civil  Procedure because  he
could not  be said to be claiming under the mortgagor. (Rule
10 of  order XXII 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 contract
to transfer  immovable property     for 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  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 implementation 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  contract    and  must  be  unequivocally
referable to  the contract.  When series of acts are done in
part performance  one such  may 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 consideration 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     is only  if they  do so prove that one can bring in
the oral  contract may    not  be     wholly     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  consideration of  any  immovable
property, examine  the    acts  said  to    have  been  done  in
furtherance of    the contract  and find out wether 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]
Foxcroft v.  Lester, 2 Vern. P. 456; Elizabeth Meddison
v. John     Alderson, Lord     Selborne (1882-1183)  8  A.C.    467;
Clinan & Anr. v. Cooke & Ors. 1775-1802
188
All. E.R. (Reprint) 16; Chapronierse v. Lambert 1916-17 All.
E.R. (Reprint) 1889; 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.  Therefore,  the    acts
anterior to the contract or merely identical to the contract
would hardly  provide any  evidence of part 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 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 qua non for the
application of    the equitable  doctrine of  part 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 concluded  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 reasonable certainty.
[203 A-B]
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 mortgagee  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 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 mortgagees creditors or that he
had made any attempt to procure the list or that 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. 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]
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.
But mere  possession ceases  to be  of assistance  when     the
person claiming     benefit of  part performance  is already in
possession prior  to the  contract and    continues to  retain
possession.  There   is     an  understandable  and  noteworthy
difference  in     the  probative      value     of   entering    into
possession for    the first  time and 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-
189
sion prior to the contract, the Court would expect something
independent of    the mere retention of possession to evidence
part performance.  Mere retention of 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   mortgage    with
possession, the mortgagee was entitled to retain possession.
The fact that immediately a sale deed was executed in favour
of the subsequent purchaser by the mortgagor would show that
he was    not willing to accept the contract as offered by the
mortgagor. The    subsequent purchaser had taken a conditional
sale and  this reinforces  the stand  of the  mortgagor. The
existence  of    the  dispute,    about  the   nature  of     the
transaction, is not in dispute. Therefore the conduct of the
mortgagor is consistent with his case. [217 D-F]
The mortgagee  had 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
established 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 H]
(2) A  perusal at    the chronological events of the case
would clearly  show that  the decree  holder had more than a
mere semblance    of title.  Even if the application would not
fall under  order 22  Rule 10  CPC. section  146 of the Code
enables him  to maintain  the application.  Smt. Saila    Bala
Desai v.  Smt. Numala  Sundari    Dassi  and  another,  [1958]
S.C.R. 1287 at 1291, referred to. [221-D-E]
The decree     holder     did  not  acquire  under  the    sale
certificate the     equity of  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
mortgagor had  no subsisting  interest in the property which
could be sold at the Court auction. [222 A-B]
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   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 auction and where 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
190
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 existence. 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
should be protected. [223 C-E]
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 execution 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 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.
In the instant case the High Court was right in holding
that the  auction purchaser  decree holder  was entitled  to
recover only  the decretal  amount and    proportionate costs.
[225 D]
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 and forcing the decree
holder to  fight a never ending litigation was iniquitous 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]

JUDGMENT:
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
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.
G. L.  Sanghi. A.G. Ratnaparkhi and K.K. Gupta, for the
Appellant in  C.A. 1145/69  and for Respondent No. 2 in C.A.
1144 of 1969.
191
V.S. Desai     and Dr.  Y.S. Chitale. Rameshwar Nath, K.A.
Chitale and  Mrs. S.  Ramachandran for    Respondent No.    1 in
both the Appeals.
The Judgment of the Court was delivered by
DESAI, J.    . What    constitutes part  performance within
the meaning  of     the  expression  in  Section  53-A  of     the
Transfer of Property Act (‘Act’ for short) so as to clothe a
mortgagee in  possession with  the title  of ownership which
would  defeat  the  suit  of  the  erstwhile  mortgagor     for
redemption, is    the question  canvassed in these two appeals
by common certificate.
Facts first Sardar Govindrao Mahadik original plaintiff
1 (now    deceased prosecuting these appeals through his legal
representatives)  and    Gyarsilal   original   plaintiff   2
(appellant 2) filed Civil Suit No. 14151 in the Court of the
District Judge,     Indore, for  redemption of  a    mortgage  in
respect of  house No.  41  more     particularly  described  in
plaint paragraph  1, 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     registered sale  deed Ex.  P-I, dated    October     14,
1950. Plaintiff I 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 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 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 of
192
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.
Rs. 17,735    Given credit for the amounts taken from time
to time by the mortgagor from the mortgagee s
for domestic  expenses. This  is disputed  as
incorrect and it was suggested that the entry
be read    as amount  retained to pay off other
creditors 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 before the Sub-Registrar.
———-
Rs. 50,000
———-
Requisite stamps  were purchased and the draft sale deed was
drawn up  on October  10, 1950, but it was never registered.
On October  14, 1950,  Ist 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 1 and 2
respectively filed  a suit  on    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
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 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 sale
but has continued in possession in part perfor-
193
mance  of   the     contract   and     has   done   several    acts
unequivocally referable     or attributable to the contract and
that the  mortgage 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  mortgaged
property. As  a necessary  corollary, it  was also contended
that plaintiff 2 has acquired no right, title or interest in
the mortgaged  property under  the alleged  sale deed  dated
October 14,  1950, in  view of the fact that the transferor,
viz., original    mortgagor had  no subsisting  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 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 riot complete on the
issue of  protection of section 53A claimed by the defendant
mortgagee the trial court held against him. It was held that
the  mortgage  being  mortgage    with  possession,  continued
possession of  the mortgagee  after the date of the contract
dated October  10, 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 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     preliminary
decree for  taking accounts  was passed.  A Commissioner was
appointed for taking accounts.
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 10,
Code of     Civil Procedure, for being joined as a party to the
appeal claiming     that under  s 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,  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
property. In  his application  Motilal alleged    that he     had
filed Civil  Suit  No.    243/47    dated  November     3,1947     for
recovering  a  certain    amount    against     the  1st  plaintiff
mortgagor and  had secured attachment 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 proceeding 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  mortgagor  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  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 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 conferred  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 circumstance was relied upon. The
High Court  was of  the opinion that 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    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  was    the  balance
consideration promised    but not     paid by  the mortgagee. The
deposit was  directed to  be made  in the trial court within
three months from the date of the judgment of the High Court
for payment to the 2nd respondent which would enable
195
the  mortgagee     to  retain   possession  of  the  mortgaged
property. 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 judgment 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 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 circumstances  of the case the
High Court did not award costs to either side.
Both the  original plaintiffs and Motilal made separate
applications for  certificate under  Article 133 (l) (a) and
(b) of    the Constitution which were granted. Hence these two
appeals.
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. 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. 1
dated October  10, 1950 and pursuant 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, sale  deed Ex.    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.  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  squabble and,  proceed to
analyse the  contents of section 53A, subsequently referring
to legislative cum legal history so far as it is
196
relevant for  interpretation of     the  section.    Section     53A
reads as under:
“53A. 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 there of, 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, 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   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
transferred 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 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.”
In order to qualify 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
signed by  him or  on his  behalf from  which     the
terms necessary  to constitute the transfer can be
ascertained with reasonable certainty;
(2)  That 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,
197
continues in possession in part performance of the
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
perform his  part of    the contract.” (see Nathulal
v. Phool Chand.
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.
The High  Court which  accepted  the  defence  of    part
performance as    canvassed 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. The defendant mortgagee did not
invite the  High Court    to consider  any other act as having
been done  by him  under the contract or  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
mortgagee urged     the following    acts as     having been done by
the mortgagee  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 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;
(c)     mortgagee    agreed    to  discharge  the  mortgage
subsisting  on  the  property     in  his  favour  on
settlement of accounts;
198
(d)   all dues  owed by  the mortgagor to the mortgagee
may have  to be  taken as cleared on completion of
the
(e)   nature and  character of  possession     changed  as
recited in the contract;
A few  more circumstances  were relied upon to show that the
mortgagee was  willing to  perform his    part of the contract
and the     omissions pointed  out are  not fatal    to his case.
They are:
(f)   failure to  offer 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 evaluated in the facts and circumstances of the
case;
(g)     conduct  of  the  1st  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   1st   plaintiff
mortgagor was     aware of  the contract in favour of
the  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;
(i)     the  defendant   mortgagee     initiated  criminal
proceedings against  the 1st    plaintiff  mortgagor
for misusing the stamp papers.
Ordinarily     this    Court  would  be  loath     to  examine
contentions  of      facts     based    on  evaluation    of  evidence
advanced for  the first     time before  this Court without any
attempt at inviting the adjudication of the same by the High
Court. However, as all the contentions arise from the record
and proceedings,  we propose  to examine them on merits more
so because  we do  not propose    to rest     this judgment    on a
technical around and also because we are inclined to reverse
the decision  of The  High Court  which is  in favour of 1st
defendant mortgagee.
199
Section 4    of the    Statute of  Frauds, 1677  of  United
Kingdom 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) of the Law of Property Act, 1925 with this
departure that    sub-section 2 specifically provides that the
substantive provision  in sub-section  I does not effect the
law relating  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     mitigating the hardship arising out of an advantage
taken by  a person  under an  oral 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
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 situation 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 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
satisfaction 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 unequivocally referable to
the oral  contract  as    would  prove  the  existence  beyond
suspicion, meaning  part performance  of the  contract.     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 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     implantation. 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
200
One unequivocally  referable to the contract and having been
per. formed  in performance  of the contract. In Lady Thynne
v. Earl     of Glengall 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 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-performance.
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 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  unequivocally 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,  the  mortgagee
defendant urged     before the High Court and reiterated before
us that,  payment  of  Rs.  1,000  inter  alia    to  the     Ist
plaintiff mortgagor  for purchase of stamps and for expenses
incidental to  registration was 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,
Ist plaintiff  wrote to defendant mortgagee portion of which
may be    extracted as  it has  some bearing  on the  question
under consideration:
“.. 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
201
only) to  our Mukhtiar  Shri Madhavraoji  Vishnu Joshi,
82, Ada  Bazar, Indorewale,  I agree  for the  same and
shall deduct the amount at the time of registration.”
Pursuant 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  Rs. 300  was  given  and    stamps    were
purchased and on the same day sale deed Ext. 1 was drawn up.
While reciting    the consideration for the sale deed a credit
was given  for Rs.  1,000 paid by the mortgagee for purchase
of stamp.  So far there is no dispute. The grievance is that
according to  the Ist  plaintiff mortgagor  he had agreed to
sell the  house to  the mortgagee  but the  sale was to be a
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 plaintiff, under Ext. P-1 which
is a conditional sale with a right to repurchase.
It would  thus transpire  that  payment  of  Rs.  1,000
consisting 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 mortgagee to Ist plaintiff mortgagor
for purchasing stamps for execution 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 9,195,    or it was in pursuance to the contract dated
October 10,  1950, as  reflected in  the  unregistered    sale
deed. In  this connection  the stand  taken by the mortgagee
defendant 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  ‘additional  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
transaction  does   not     subsist   in  law.  This  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 contract  anterior to     the one  as
found in  the unregistered  sale deed Ext. D-l. Nor is there
any suggestion    of any    draft agreement prior to the drawing
up of the sale deed Ext. D-l. What transpires from
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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 contemporaneous evidence
having its  intrinsic worth  and  a  stamp  of    truthfulness
because at that time no dispute had arisen and the mortgagor
was seeking  tc 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  out  by  the  parol  evidence.
Mortgagee Devi    Sahai DW  1  has  deposed  in  para  6    that
mortgagor in  Chit Ex.    P. 3  proposed a conditional sale to
which he  did not  agree whereupon  mortgagor agreed to give
absolute sale.    This establishes that there was a dispute as
to the    nature of  the transaction. Section 53A postulates a
written     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-
l. The    only written  contract which  is relied     on  is     the
unregistered sale  deed Ex.  D-l 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  Rs. 300  it is not specifically claimed that was
payment in furtherance of the contract. In any event, stamps
were purchased    prior to the drawing up of Ext. D-l 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-
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).
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 furtherance of the contract” in section 53A should
be in  pursuance of  the contract  and not  that  it  should
either precede or follow the
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agreement or  the contract.  If a written contract is a sine
qua  non  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
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. 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
signed by  the Ist  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     Ist
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 unregistered sale deed
dated October  10, 1950,  the  parties    were  not  ad  idem.
because 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 contention  therefore that the
amount of  Rs. 1,000 was paid in furtherance 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 interfered    with  by  this    Court  unless  shown  to  be
perverse, the alternative contention that
204
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 section 4 of the Statute of Frauds may
now  be      examined  with  reference  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 provisions  of     the  Statute  of  Frauds  equitable
doctrine of  part performance  was divised  by the  Court of
Chancery. Commenting upon section 4 of the Statute of Frauds
1677, Lord  Redesdale observed    in  Foxcroft  v.  Lester,(l)
(quoted in  White &  Tudor’s Leading  cases on    Equity,     8th
Edn., p. 413) as under:
“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  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 Foxcroft 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
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.”
The question  often arises     whether payment  of part or
even  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
205
a parol contract out of the Statute of Frauds. Nor will
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, therefore, it is not an unequivocal
act evidencing    an act    in furtherance    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:
“.. 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, 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    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     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     had
varied from  time to  time. In    Elizabeth Meddison  v.    John
Alderson,(1) Lord Selborne, L.C. pointed out:
“.. the  payment of  money is an equivocal act not
(in
206
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 purchase-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  relied  upon  in
support of this statement.
A few cases to which our attention was drawn may now be
referred to.  In Clinan 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 advertisement. In response to this advertisement
the  plaintiffs     applied  to  Edmund  Meagher  to  whom     the
application was     to be    addressed and  entered into a treaty
with him  for lease  of land.  A memorandum of agreement was
entered into  between the  parties and    the intending tenant
deposited  50  guineas    which  the  advertiser    received  in
consideration 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 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:
“But I  think this  is not  a case  in which    part
performance appears.  The only circumstance that can be
considered as  amounting to  part    performance  is     the
payment of     the sum  of fifty  guineas to Mr. Cooke. It
has always been considered that the payment of money is
not to be deemed part performance to take a case out 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 payment  of purchase money is not enough,
and judges of high authority
207
have said the same even of payment in full. Clinan v. Cooke,
(supra) Hughes    v. Morris(1) 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  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 sale, is not.
As to  some of  the judgments  prompted no     doubt by  a
desire to    defeat fraud  and accomplish  justice, I  am
inclined to concur with the present Master of the Rolls
in Britain     v. Rossiter  (1), when he called them” bold
decisions.”
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.  lt     was
contended on  behalf of the woman who worked as house-keeper
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 declined 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    show  how  firstly  established     and
entrenched the view was that payment is not enough. Offer to
work without  wages was     treated as  evidencing some payment
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 & and quoting the case is not
to be interpreted to mean sharing the view.
208
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 Muddison v. Anderson, (supra).
In Enland    the law     took a     sharp U-turn in Steadman v.
Steadman,(2) Lord  Simon  of  Claisdale     under    the  heading
‘Payment of money’ observed as under:
“It has  sometimes been said that payment of money
can never    be a  sufficient act  of 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. 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 intervention of
equity. But  the payee  might not be able to re 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 Somerset v.
Cookson) or  it might have greatly risen in value since
the 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    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
209
performance of  the agreement  makes it  plain that the
payment 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 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 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  necessary     that  this  aspect  may  be
examined in  the  background  of  statutory  requirement  as
enacted in section 53A. To qualify for the protection of the
doctrine 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 r 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 establishing
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    transferee being  already in possession continues in
possession in  part performance of the contract and has done
some act in furtherance of 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 implementation 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     tho  contract    and  must  be  unequivocally
referable to  the contract.  When series of acts are done in
part performance,  one such may 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  of  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 Lord Reid said in Steadman’s case
210
that one  must not  first took at the oral contract and then
see  whether  the  alleged  acts  of  part  performance     are
consistent with     it. One must first look at the alleged acts
of part     performance and  see whether  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 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 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  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, a defence analogous to section 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
done in     furtherance of     the contract  postulates  the    pre-
existing contract  and the acts done in 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 purchase  of  stamps  in  an  act  of  part     performance
unequivocally attributable 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,  1950, the day on 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 case this payment would
not be an act of part performance. In
211
our opinion,  therefore, the  High Court recorded an utterly
unsustainable  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.
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    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 contention.  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 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-l  which  had    been
extracted earlier.
Mortgagee in his evidence gave a go bye to this recital
and 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. 17,735  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 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  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 evidence to substantiate this
contention. The contention, has, therefore, to be negatived.
The third    act of part performance pleaded on behalf of
the mortgagee  is that the mortgagee agreed to discharge the
mortgage
212
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  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  discharge  the  mortgage
subsisting on  the property?  There is    however a  piece  of
evidence which    completely belies the claim and demonstrably
establishes that  mortgagee never  claimed to regard himself
as owner from October 10, 1950 the date of contract but till
a later     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 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  October  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 sought its mention in
the  sale   proclamation.  This      conduct  of  mortgagee  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.
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  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 made up, how could he continue a mortgage account which
mortgage according  to him came to be satisfied when he took
the  sale   deed  and    continued  in    possession  in    part
performance of    the contract  ? Therefore, the submission is
without merits.
213
The  next    act  of     part  performance  pleaded  by     the
mortgagee is  that the    nature and  character of  possession
changed     as  recited  in  the  contract.  Mortgagee  was  in
possession as mortgagee. Now according 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
possession as  owner. This mere recital is hardly indicative
of the    change 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 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 claiming  protection of the doctrine of part performance
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 he claims to be the owner.
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 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 has been concluded and the possession
is retained  after the conclusion of the agreement, the
possession,   if    unequivocally    referable   to     the
agreement, is a 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 strong  evidence of the contract and possession
changing hands    pursuant  to  the  contract.  in  Hedson  v.
Heuland (1)  it     was  held  that  although  the     entry    into
possession  was      antecedent  to   the    contract,   yet     the
subsequent  continuance      in  possession  being,  under     the
circumstances,    unequivocally  referable  to  the  contract,
constituted a
214
part performance  sufficient to     take the  case out  of     the
Statute of Frauds.
In Nathulal’s  case, the fact that Nathulal parted with
possession  after   receiving  part   payment  of  the    sale
consideration  was   held  sufficient    to  constitute    part
performance. This  Court observed  that j,, 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     tor
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 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 mortgagee who had
been in     possession as    such would  become the    owner of the
property and  that  he    could  get  his     name  mutated    into
mutation register  of the municipality and in implementation
of this     agreement of  sale, the  mortgagor himself  made an
application for     mutation to  the municipal  authorities and
the name  of the  mortgagee 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 provision in
the unregistered  agreement for     mutation in  favour of     the
mortgagee  as  owner  and  the    subsequent  conduct  of     the
mortgagor 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 reference  was also    made to     Thota China
Subba Rao  and    Ors.  v.  Matapelli  Raju  and    Ors(2)    That
decision is  hardly of    any importance    because     an  extreme
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  argument     was
repelled by  the Court on the observation that the mortgagee
had never  been in possession and the contention that he was
always in constructive possession could hardly assist him.
215
In Jahangir  Begum v.  Gulam Ali  Ahmed,(1) the     Court after
holding 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 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
possession his    house with  B. Subsequently A sold the house
to 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   under  a      registered  sale  deed.  sued     for
redemption.  relied   on  the  equitable  doctrine  of    part
performance in    defence.  Negativing  the  defence  of    part
performance the Court held that as 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   continuance     in   possession  would     not
constitute part     performance. The  case is  very near to the
facts disclosed     in the     case under  discussion. There is an
understandable and  noteworthy difference  in the  probative
value of  entering into     possession for     the first  time and
continuing  in     possession  with   a  claim  of  change  in
character. Where person claiming benefit of part performance
of a  contract    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 possession 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 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-l  the  sale     deed,    even
according to  the  mortgagee  it  was  agreed  that  he     had
retained  an   amount  of   Rs.     17,735     out  of  the  total
consideration  of  Rs.    50,000    for  payment  to  the  other
creditors of the mortgagor. Barring a
216
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 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
position. But  the more     inequitous conduct of the mortgagee
is that he had not made the slightest attempt to contact any
of the    creditors 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
Ghasilal,  Kajodimal,    Motilal     Bhagirath  and     Kanhaiyalal
Chagganlal. Further  shifting stand of mortgagee to suit his
convenience is    discernible 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’.  In  his  evidence
mortgagee states  that this  recital is     incorrect  and     the
correct position  according to him is that the amount of Rs.
17,735 from  total consideration payable by him was retained
to pay to other creditors of mortgagor. According to him the
only amount  due to  him from mortgagor outside the mortgage
transaction 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     of 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 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 transaction. But
the defendant  mortgagee made  unilateral attempt to get the
sale deed  registered by  offering 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 has    not stated anything in his examination-in-chief that
he made any attempt to pay that amount to the mortgagor. Add
to this     his failure  to return the discharged mortgage deed
and his     further averment  that     he  used  to  maintain     the
mortgage account
217
even after  October 10,     1950. 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 evaluated in the facts
and circumstances of the case cannot be upheld.
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 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  possession is  of no  consequence in this case
because the  mortgage was  not discharged and was subsisting
and the     mortgage  being  a  mortgage  with  possession     the
mortgagee was  entitled to  retain possession. 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 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 transaction, 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
consistent with this case.
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 proceedings against the Ist plaintiff mortgagor for
misusing the  stamp 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 furtherance     of the     contract, continued
retention of  possession being    a  circumstance     of  neutral
character in the facts and circumstances of
218
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.
On     the   conclusions  hereby   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 CA  1145/69. First a synopsis of the facts relevant to
the dispute raised by appellant Motilal. Motilal filed Civil
Suit No. 243/47 on November 3, 1947, for recovering his debt
from mortgagor    Govindrao Mahadik.  In 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 15, 1951. On March 27, 1951, execution
application No    216 of 1951 was made 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 Court directed 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 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.
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 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
219
his favour  in the  amount of  Rs.  500     with  interest     and
proportionate costs was passed.
Motilal made an application on April 2, 1962 purporting
to be  under order  XXII, rule    10  of    the  Code  of  Civil
Procedure 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 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 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 aware  of the  suit in 1961 and that on the ground of
gross delay  the application was liable 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 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 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 realisation or deposit as
the case  may be  either from  the  appellant  or  from     the
mortgagor or  subsequent purchaser,  as the case may be, and
that there  shall be  a charge    on the suit property for the
aforementioned amount which shall be enforceable at the
220
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  Ist  plaintiff
mortgagor contended  that the  High Court  was in  error  in
allowing the  application of  Motilal to  be impleaded    as a
party because according to Mr. Ray Motilal could not be said
to be  claiming under  the mortgagor and that, therefore, he
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 a  person of  any action  who acquires    any interest
either by  assignment, creation     or  devolution     during     the
pendency  of   suit,  with   the  leave     of  the  court.  In
ascertaining whether  Motilal can  maintain the     application
his 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  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 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 controverted
on behalf  of the  original  mortgagor    and  the  subsequent
purchaser contending  that much     before the  confirmation of
the sale on September 23, 1952, the subsequent purchaser had
purchased 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 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 27,  1951, and  no reattachment  was necessary.  These
facts are  incontrovertible but     one aspect of law has to be
examined as to what is
221
the effect  of the  judgment of     The appellate    court in the
appeal filed  by original  mortgagor Govindrao    Mahadik, the
decree obtained     by Motilal,  to wit, the appeal was allowed
and Motilal’s  suit was dismissed 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  September 23,
1952, the  sale was  confirmed and  the sale certificate was
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 10. The question whether he has 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 more than a mere semblance of
title which this Court will have to investigate. And even if
stricto 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  maintain     the
application (See  Smt. Saila  Bala  Desai  v.  Smt.  Nirmala
Sundai    Dassai    and  another,  at  1291,  referred  to    with
approval in Shew Bux Mohata & Ors. v. Bengal Breweries Ltd &
Ors. Undoubtedly  the High  Court was  reluctant to overlook
the 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 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 redeption  in
favour of the subsequent purcharser under the sale deed 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
222
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 mortgage
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 him
under sale  deed Ext.  P-l 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
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     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.  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
effect of an order of attachment before judgment in a suit.
Order XXXVIII,  rule  5,  enables    the  Court  to    levy
attachment before judgment at the instance of a plaintiff if
the conditions therein prescribed are satisfied. What is the
nature of  attachment levied  in this case is not made known
save and  except saying     that the suit property was attached
and the     sale proclamation  mentioned therein the subsisting
mortgage. Taking the best view in favour of Motilal,
223
One can     say that  what     was  attached    was  the  equity  of
redemption. The     attachment  was  levied  and  continued  to
subsist till  the date    of the    decree. It would, therefore,
not be necessary to reattach the 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 to
dispose of  the whole or any part of his property. Or (b) is
about to  remove the  whole or any part of his property from
the local  limits of the jurisdiction of the Court. The sole
object behind  the order  levying attachment before judgment
is to  give an assurance to the plaintiff that his decree if
made would be satisfied. It is a sort of a guarantee against
decree becoming     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 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  the  1st  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 XXXIII, C.P.C. 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 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  attachment  of
necessity must    fail.  There  should  be  no  difficulty  in
reaching this conclusion.
The  question,  however,  is  what     happens  if  at  an
intermediate state pursuant to the decree of the trial court
the attached pro-
224
perty is  sold at a court auction ? How would the rights and
obligations 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
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  purchaser  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 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 decree 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 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  irreversible 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     the
property, to  wit, in  this case  for a final decree for Rs.
500,  Motilal    purchased  the    property  for  Rs.  300,  an
atrocious situation,  and yet  by a technicality he wants to
protect himself. To such an
225
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 Singh and Anr. This Court
made a pertinent observation which may be extracted:
“The policy of the legislature seems to to be that
unless  a     stranger  auction  purchaser  is  protected
against the  vicissitudes of  the fortunes of the suit,
sales in  execution would    not attract customers and it
would be  to the  detriment  of  the  interest  of     the
borrower and  the creditor     alike 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 annum and proportionate costs
could be  styled as  manifestly equitable. However the Court
cannot overlook     the  conduct  of  the    mortgagor  Govindrao
Mahadik, his  subsequent purchaser  Gyarsilal and  even     the
original mortgagee Devi Sahai in not paying a small debt and
allowing the property to be auctioned and forcing Motilal to
the logical  end of litigation and yet without the slightest
recompense to  go on  investing into  this bottomless pit of
unending litigation.  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 payment 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    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  looking to     the
conduct of all the parties, we direct that 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
226
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 are  set aside    and those of the trial court
are restored with costs throughout.
Civil  Appeal  No.     1145/69  preferred  by     Motilal  is
disposed  of   in  accordance  with  direction    herein-above
indicated with    no order  as to     costs. CMP  9004/80 and CMP
10593/80 for substitution are allowed.
P.B.R.                        Appeals allowed.
227

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