The Supreme Court has categorically held that a transferee cannot claim protection under Section 53-A of the Transfer of Property Act, 1882, unless they conclusively prove the existence and terms of a valid sale agreement. The decision was delivered by a bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan in the case of Giriyappa & Anr. vs. Kamalamma & Ors. (Special Leave Petition (Civil) No. 30804 of 2024), where the petitioners’ plea was dismissed for lack of evidence.
Case Background
The dispute originated in 1988 when the respondents, Kamalamma and others (original plaintiffs), filed Original Suit No. 364/1988 in a Karnataka trial court. They sought a declaration of ownership and recovery of possession of a parcel of land measuring 2 guntas in Survey No. 24/9.
The petitioners, Giriyappa and another (original defendants), countered that they had taken possession of the property based on a sale agreement dated November 25, 1968, which allegedly promised a transfer of the land for ₹850. They claimed protection under Section 53-A, arguing that they were in lawful possession due to part-performance of the contract.
The trial court ruled in favor of the respondents, holding that the defendants had failed to prove the existence of a valid sale agreement. This decision was upheld by the First Appellate Court and later by the High Court of Karnataka in Regular Second Appeal No. 1740/2008, prompting the petitioners to approach the Supreme Court.
Legal Issues
The Supreme Court examined two primary legal questions:
1. Whether the petitioners could invoke Section 53-A of the Transfer of Property Act based on the alleged sale agreement.
2. Whether the lower courts’ findings regarding the absence of credible evidence to support the petitioners’ claims were legally correct.
Supreme Court’s Decision
The Supreme Court upheld the findings of the lower courts and dismissed the petition. The bench observed that the petitioners failed to provide sufficient evidence to substantiate their claims under Section 53-A.
In its decision, the Court stated:
“When the defendant has failed to prove that the plaintiff executed the Sale Agreement dated 25.11.1968 agreeing to sell 2 gunta out of Survey No. 24/9, and he came in possession and occupation of the suit-scheduled property by virtue of the same, the question of providing protection under Section 53-A of the T.P. Act does not arise.”
The bench also emphasized the stringent requirements of Section 53-A, which demands:
– A written and signed contract that clearly outlines the terms of transfer.
– Evidence that the transferee took possession of the property as part-performance of the contract.
– Proof that the transferee was ready and willing to perform their obligations under the agreement.
“No error, not to speak of any error of law, could be said to have been committed by the High Court in passing the impugned judgment and order,” the bench noted.
The Court further clarified that Section 53-A is an exception to the strict requirements of the Transfer of Property Act and the Registration Act, meant to protect transferees who act in good faith. However, the exception must be strictly construed, and in this case, the petitioners failed to meet the necessary conditions.
Key Observations
The Court quoted earlier judgments to reinforce its stance:
– Section 53-A was introduced “to protect transferees who take possession or spend money in improvements relying on documents that are legally ineffective.”
– The section provides a defense mechanism but does not create ownership rights in favor of the transferee unless all statutory conditions are met.
Counsel for the Parties
The petitioners were represented by Senior Advocate Anand Sanjay M. Nuli, while the respondents were defended by their legal team.
