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First Rent Appeal No. 843 of 1984, decided on 6th November, 1985.

‑‑‑S. 54‑‑Sale of immovable property‑‑Validity‑‑Sale of immovable property of value of Rs.100 and upward, held, could be made only by registered instrument and mere contract of sale by itself would not create any interest in or charge on such property.

Bachu Bai F.E. Dinshaw v. Commissioner of Income‑tax P L D 1967 Kar. 372 ref.

‑‑‑Ss. 2(f)(j), 14 & 21‑‑Transfer of Property Act (IV of 1882), Ss.53‑A & 54‑‑Agreement of sale of rented premises‑‑Relationship of landlord and tenant‑‑In absence of any express or implied stipulation in agreement of sale between landlord and tenant in respect of premises already in occupation of tenant, that henceforth occupation of tenant would not be as tenant but as vendee, such tenant, held, would continue to be tenant unless and until relationship between parties be determined by agreement, or by decree of Court or by operation of law.

Kalimuddin Ansari v. Director, Excise and Taxation, Karachi and another P L D 1971 SC 114 and Bachu Bai F.E. Dinshaw v. Commissioner of Income‑tax P L D 1967 Kar. 372 ref.

‑‑‑S. 53‑A‑‑Doctrine of part performance of contract‑‑Requirements and application of‑‑Agreement of sale executed between landlord and tenant in respect of property already in occupation of tenant did not show either expressly or impliedly that tenant would continue to be in possession of premises in part performance of contract‑‑Agreement also did not provide that from date of agreement of sale, tenant would cease to pay rent‑‑Essential conditions for application of doctrine of part performance of contract as contained in S.53‑A having not been fulfilled, by entering into agreement of sale, tenant, held, neither had acquired any title to rented property nor doctrine of part performance would apply in circumstances of case.

Haji Jan Muhammad v. Ghulam Ghous and 2 others 1976 SCMR 143; Kalimuddin Ansari v. Director, Excise and Taxation P L D 1971 SC 114 and Bapuji and others v. Kukap and others A I R 1954 MB 128 ref .

M.M. Mahmoodi for Appellant.

Muhammad Zia Karim for Respondent.

Date of hearing: 5th November. 1985

This appeal under section 21 of the Sind Rented Premises Ordinance, 1979, is from the order of the Controller, dated 24‑7‑1984, whereby, he dismissed the application under section 14 of the Sindh Rented Premises Ordinance, 1979, filed by the appellant for eviction of the respondent accepting his plea that there is no relationship of landlord and tenant between the parties.

2. The facts briefly stated, are that the appellant filed an application on the ground of requirement of the premises for his personal occupation stating that he was Government servant and retired from service with effect from 20th November, 1980 and consequently the official accommodation in which he was living was required to be vacated due to his retirement.

3. The appellant in paragraph 1 of the application stated that he is the owner of the Bungalow bearing No. E/17, Block F, North Nazimabad, Karachi, and the respondent is the tenant in respect of the northern portion of the bungalow.

4. In the written statement, the respondent admitted that he was the tenant of the appellant in respect of the premises but pleaded that he was the tenant prior to 3‑2‑1979, when the appellant had delivered the possession of the premises to him under an agreement of sale, dated 3‑2‑1979, and he, therefore, denied the relationship of landlord and tenant.

5. The agreement of sale of the premises is not in dispute and receipt of Rs.85,000 as part payment out of the sale consideration of Rs.3,75,000 is also admitted.

6. However, considering evidence produced by the parties the Controller decided the issue of relationship between landlord and tenant between the parties against the appellant for the reasons, which I quote herein below in the words of the Controller:‑

"The applicant in his cross‑examination has admitted the sale agreement in favour of the opponent and such civil suit filed by the opponent in the Hon'ble High Court is also admittedly pending between the parties. Therefore, in these circumstances I am of the opinion that as the applicant has admittedly executed sale agreement in favour of the opponent and the opponent is living in the premises in question as owner and sale agreement is in his favour, therefore, it is held that there exists no relationship of landlord and tenant between the parties."

7. I heard the learned counsel for the parties. Mr. M. M. Mahmoodi, the learned counsel for the appellant submitted that the finding that the respondents are living in the premises as owners is not according to law for no sale‑deed was executed and the suit for specific performance of the contract was pending in this Court.

8. The stand of Mr. M.M. Mahmoodi is correct for under section 54 of the Transfer of Property Act, 1882, sale of immovable property of the value of Rs.100 and upwards can be made only by a registered instrument and a contract of sale by itself does not create any interest in or charge on such property. It may be of advantage, if I quote the provisions of section 54 here for ready reference, which read;---

"54.‑‑ 'Sale' is a transfer of ownership in exchange for price paid or promised or part paid and part promised.

Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.

In the case of tangible immovable property, of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.

Delivery of tangible immovable property takes places when the seller places the buyer, or such person as he directs, in possession of the property.

A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.

It does not, of itself create any interest in or charge on such property."

9. Reference may also be made to the following observations of Waheeduddin Ahmed, J., in the Division Bench judgment of this Court in Bachu Bai F.E. Dinshaw v. Commissioner of Income‑Tax P L D 1967 Kar. 372:‑---

"To put it differently section 53‑A does not create any title in favour of the transferee but the title still continues to vest in the transferor and on equitable principle the transferee's right of possession is only protected as against the transferor or person claiming through him."

10. In reply however, it was submitted by Mr. Muhammad Zia Karim learned counsel for the respondent that the respondent is in possession of the premises as purchaser from the date of agreement of sale and his possession is protected under section 53‑A of the Transfer of Property Act. Therefore, the further point that requires determination in this case is, whether the occupation of the premises by the respondent is under the agreement of sale, dated 3rd February, 1979, and is protected under section 53‑A of the Transfer of Property Act.

11. In this regard it may be stated that the appellant was inducted in the house as a tenant, therefore, the further question is whether his tenancy was determined on entering into the agreement of sale. To find the answer to it I have to refer to the terms of the agreement, which read:‑--------

"(1) That the vendor shall sell and purchaser shall purchase all that half piece and parcel of land bearing Plot No. E/17, Block 'F', North Nazimabad with all the buildings and construction thereon and which when partitioned shall measure on or about 750 sq. yds. (seven hundred and fifty) as bifurcated by the K.D.A. and abutted and bounded as follows:‑---

On the north by: E/16

On the South by: Other half of the portion of Plot No.

E/17, Block 'F' North Nazimabad,

On the East by: E/24.

On the West by: 50 ft. wide road.

(2) That the sale will be free from encumbrances.

(3) The price of the said one unit will be Rs.3,75,000 (Rs. Three lacs and seventy‑five thousand only) of which Rs.85,000 (Rupees Eighty‑five thousand only) has been paid by way of Earnest money to the vendor (the' receipt of which sum the vendor hereby acknowledges) and the balance shall be paid in the manner stated hereunder:‑----

(a) Rs.1,00,000 (Rs. one lac only) on or before 28th day of February, 1979.

(b) Balance of Rs.1,90,000 (Rs. one lac, ninety thousand only) at the time of registration of the sale‑deed or before that as mutually agreed by the parties heretofore.

(4) The property is believed and shall be taken to be correctly described and is sold subject to all outgoings easements, restrictions and rights affecting the same and if any error, misstatement or omission shall be discovered the same shall not annul the sale nor shall any compensation be allowed in respect thereof.

(5) That the vendor undertakes to get the plot bifurcated by the K.D.A. as per rules to get the separate electric meter from the K.E.S.C. and get separate water connection and sewerage frog the K.M.C. for this portion of the house which is subject‑mattes of the sale and the purchaser agrees to reimburse to the vendor the fees and the Government charges which shall be payable to the K.D.A., K.E.S.C., and K.M.C., in this regard.

(6) That the vendor undertakes to complete all the necessary formalities as required in para. 5.above as soon as possible and the purchaser hereby undertakes that within 90 days of the completion of the formalities he shall complete the execution o1 the sale‑deed and pay the balance of the price.

(7) That it is clearly agreed that the specific performance on the part of the vendor is the essence of this agreement.

(8) That all the expenses for preparation of the sale‑deed and the cost of the same and registration charges shall be borne by the purchaser.

12. A perusal of the above terms shows that it does not determine the relationship of landlord and tenant between the parties for neither it says that the respondent shall not pay the rent from the date of entering into the agreement nor does it expressly or impliedly provide that the possession of the premises from the date of the agreement shall be considered to be possession in part performance of the contract.

13. Mr. Zia Karim learned counsel for the respondent however, relied on the following recital:‑--

"Whereas the vendor owns a house consisting of two portion standing on Plot No. E/17, on or about 1,500 sq. yds, and he is absolute owner thereof without any let or hindrance and whereas the purchaser is desirous of purchasing one unit of the said house which is already in occupation of the vendee, the parties hereto mutually agree as under:"

14. In the recital reproduced above, he has pointed out that it is stated that the respondent is already in occupation of the premises. But the statement relied upon in the recital neither expressly states that the occupation of the house of the respondent henceforth will be not as tenant but as vendee nor can it be held to be so impliedly in view of the terms agreed upon.

15. I am, therefore, of the view that the respondent continues to be the tenant unless and until the relationship is determined by agreement, or by decree of the Court, or by operation of law. Learned counsel for the respondent relied in respect of his contention on two decisions namely Kalimuddin Ansari v. Director, Excise and Taxation, Karachi and another P L D 1971 SC 114 and Bachu Bai F.E. Dinshaw v. Commissioner of Income‑‑tax P L D 1967 Kar. 372. In the first named case the doctrine of the part performance of the contract was considered and on the facts of that case, it was held that the doctrine I would afford a valid defence against ejectment in ejectment proceedings. I quote the relevant observations herein below:‑--------

"In any proceeding for ejectment section 53‑A of the Transfer of Property Act would afford a valid defence against the ejectment. The agreements clearly show that the Government has intended to divest itself and to vest the lands in the sub‑licensees, but the latter have apparently mala fide omitted to execute the lease as they were required to do under the terms of the agreement."

15‑A. It was found as a fact that under the agreement in that case, the Government had intended to divest itself and to sell the land to the sub‑licensee but no such intention could be gathered from the terms of the agreement in the present case. Therefore, this case has no application to the facts of the present case.

16. It may however, be mentioned there cannot be any cavil with the above interpretation of section 53‑A (ibid) by the learned Judges. However, the question is whether this doctrine is applicable to the facts of the present case. In order to apply the provision of section 53‑A of the Act, the transferee has to prove that he has in part performance of the contract taken possession of the property agreed to be transferred by the transferor or any part thereof or the transferee being already in possession continues to be in possession in part performance of the contract.

I may quote the relevant provision of section 53‑A (ibid):

"(iii) the transferee has, in part performance of the contract, taken possession of the property agreed to be transferred by the transferor or any part thereof or the transferee, being already in possession continues in possession in part performance of the contract ; "

17. This is one of the essential conditions for application of the doctrine of part performance as contained in section 53‑A of the Transfer of Property Act, and as stated above it is not possible to hold that the respondents had taken possession of the property agreed to be transferred by the appellant in part performance of the contract as he was already in possession thereof as tenant. Now, the agreement produced in this case, also does not show, as stated earlier that the respondent continues to be in possession in part performance of the contract for no such intention is expressed in the agreement or can be inferred from the terms of the contract. Nor does the agreement provide that from the date of the agreement the respondent shall cease to pay the rent. It will be of advantage, if I here refer the decision of the Supreme Court in Haji Jan Muhammad v. Ghulam Ghous and 2 others 1976 S C M R 143 to which reference was made by Mr. M.M. Mahmoodi learned counsel for the appellant, wherein a similar contention was considered and repelled. It may be pointed out that the case of Kaleemuddin Ansari which has been relied by the learned counsel for the respondents was cited before the Supreme Court in this case and it was held it had no relevancy and I quote:‑-----

"Lastly, learned counsel tried to challenge the finding of the High Court on the non‑applicability of section 53‑A of the Transfer of Property Act which embodies the principle of part performance. In support of his plea of part performance, learned counsel raised a novel argument that his client's continued occupation of the premises coupled with the admitted non‑payment of rent, which constituted the ground of petitioner's ejectment, were the two overt acts on his part towards part performance of the contract. As observed earlier, agreement of sale, EXh.R.l which formed the sheet anchor of the petitioner's case did not exempt him from payment of rent and, therefore, his continued occupation of the premises in violation of the law could hardly be put forth as a defence or a step towards part performance when admittedly the petitioner had never paid the consideration. The authority relied upon in this behalf by the learned counsel namely, Kalimuddin Ansari v. Director, Excise and Taxation P L D 1971 SC 114 has, therefore, no relevancy as it proceeds on entirely different and distinguishable facts."

18. I may also here refer to Bapuji and others v. Kukaji and others A I R 1954 M.B. 128, wherein requirement for applicability of section 53‑A (ibid) in similar situation has been stated and I quote:--

"Section 53‑A in my opinion lays down that the transferee must show that in part performance of the contract some overt or rather express act has been done. When the usufructuary mortgagees were already in possession of the house, they are bound to show two things in such matters; first, that some overt or rather express act had been done in furtherance of the sale, and secondly, that the vendee for consideration had notice of the contract or of the part performance thereof. The defendants failed to establish both these things."

19. I, therefore, hold that by entering into the agreement of sale, the respondent did not acquire any title to the property nor does the doctrine of part performance as contained in section 53‑A of the Transfer of Property Act apply on the facts and circumstances of this case.

20. Accordingly, I allow the appeal and remand the case to decide the same on merits according to law.

21. Under these circumstances of the case, leave the parties to bear their own costs.

H . B . T . /5028/ K Appeal allowed

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