1. Appeal No, 281 of 1925 is by the defendant. The suit corresponding was O.S. No. 29 of 1924 and asked for possession of A and B schedule lands and for a declaration that the plaintiffs are entitled to lands in schedules A, A-I and B. The defendant was in possession of A and B scheduled properties and the, suit was decreed. Appeal No. 196 of 1926 is by the plaintiff (defendant in O.S. No. 29 of 1924) corresponding to Suit No. 61 of 1924 which was for recovery of A-I schedule properties of which possession had been awarded to plaintiffs (in O.S. No. 29 of 1924) by an order under Section 145 of the Criminal Procedure Code. This was dismissed.
2. Civil Revision Petition No. 626 of 1925 corresponds to O.S. No. 1 of 1925 which was a suit under Section 9, Specific Relief Act, for possession of A and B schedule properties. The plaintiff was defendant in O.S. No. 29 of 1924, and the suit was dismissed. Hence the defendant in O.S. No. 29 of 1924 is the appellant in both the Appeals and the petitioner in the Civil Revision Petition before us.
3. Appeal No. 281 of 1925 (O.S. No. 29 of 1924) has been argued as the main appeal. In the plaint the plaintiffs alleged trespass by the defendant on A schedule lands in April 1916. Prior to that date plaintiffs bad been in possession of all lands in schedules A, A-I and B. In 1918 1st defendant forged a sale-deed which purported to convey all lands in schedules A, A-I and B to himself. There were registration proceedings in connection with this document (which will have to be referred to in detail later on) and while these were pending the; defendant had had possession awarded to him on B schedule lands by an order under Section 145, Criminal Procedure Code. There was a similar order with regard to A schedule lands. In the written statement the 1st defendant alleges that the plaintiffs agreed to sell A and A-I schedule lands for Rs. 21,000 and on 24th April, 1916, put the 1st defendant in possession of same, that money was required to pay plaintiff's creditors and when it was found that the debts exceeded Rs. 21,000 there was a fresh agreement whereby the lands in A, A-I and B schedules were sold ito 1st defendant and B schedule lands were delivered over to him. It should here be noted that the agreement to sell A and A-I schedule lands is in writing (Ex.I) and is dated 24th April, 1916. The 1st defendant sets up an oral agreement to sell B schedule lands, whereas the plaintiff alleges that what was agreed to as regards B schedule was only to mortgage them for Rs. 8,000. In any case, the result seems to have been that 1st defendant got into possession of B schedule lands also during the registration proceedings. These proceedings arose from the presentation of the document Ex. A-2 for registration which was refused by the District Registrar, First defendant appellant then brought a suit O.S. No. 17 of 1920 for its compulsory registration under Section 77, Registration Act, which was decreed. On appeal to the High Court a Division Bench differed, Phillips, J., holding the suit should be decreed and Devadoss, J., that it should be dismissed. The Letters Patent Appeal came before a Bench of three Judges and is reported as Bolla Grouvayya v. Cherukuri Venkala-rathnam : AIR1924Mad810 . The allegation was that a valid sale-deed for A and A-1 schedule properties had been incorporated with the mortgage of B schedule propertier, the signature and attestations preserved and part of the rest treated as a palimpsest, i.e., the original writing obliterated and a fresh writing superimposed thereon. The character of the alterations and the appearance of the document were commented on by the learned Chief Justice in the report. The Letters Patent Bench decided that all that the Registrar had to do was to look at the form and not the substance of the document and that in a suit under Section 77 of the Registration Act, the same considerations should guide the Court which guide the Registrar. The Chief Justice further says that the inference that the alterations in Ex. A-2 were made after the execution of the document in its original state by the defendants 'is almost irresistible.' I interpolate this expression of opinion by the learned Chief Justice here because it may have a bearing on the question hereafter to be considered though it is no part of my duty in this case to enquire whether the 1st defendant had in fact forged Ex. A 2. To return to the written statement of the defendant in O.S. No. 29 of 1924 it was filed on 4th October, 1921 after, it is said, the decree in the District Court in O.S. No. 17 of 1920 in favour of the defendant. There is no doubt that in the written statement the 1st defendant takes his stand on the sale deed.
4. After the decision in the Letters Patent Appeal which was given on 10th April, 1924, the 1st defendant filed an additional written statement of 28th October, 1924, in which he contended that the plaintiffs had put him in possession of the suit lands in pursuance of the 'agreements recited in para. 3 of the written statement previously filed' referring to the agreement as to A and A-I schedules and the 'fresh agreement' whereby B was also sold. He pleaded that by virtu of this possession the plaintiffs are' not entitled to claim it from him. In their reply the plaintiffs deny the 'fresh agreement', i.e. to sell B lands, and delivery of possession to plaintiffs in pursuance of it. They set out the agreement to mortgage B schedule lands to 1st defendant for Rs. 8,000 and assert that on 17th October, 1918, two separate documents were executed by plaintiffs in favour of 1st defendant: (a) sale-deed for Rs. 26,600 in pursuance of agreement (Ex. I) and (6) a simple mortgage bond for Rg. 8,000.
5. Issues were framed and the parties went to trial. The learned Subordinate Judge has so far only decided as a preliminary issue, issue No. 2 of the amended issues raised, viz, whether 1st defendant can invoke the doctrine of part performance in answer to plaintiff's claim for possession of the suit lands to any and what extent He held, that it was unnecessary to decide if 1st defendant took possession as he took his stand on the sale-deed (A-2), that there was merger of the contract or contracts to sell in the sale-deed, to which the rules in the Transfer of Property Act must apply, and that 1st defendant could it fallback on the contracts which had thus become merged in the sale. He also held that a Court in equity would not and should not afford its assistance to one in defendant's position and decreed the suit.
6. There has been a very long argument before us on the law and the position requires careful examination. The appellant contends that his possession together with the agreement (Ex. 1) gives him an equitable title which he can rely on not only in defence but also in attack (as he is plaintiff in O.S. No. 61 of 1924). If he has thus an equitable title, is it liable to be defeated by his failure to get Ex. A-2 registered? Can any relief be given to a party who may not have a right to specific performance
7. The doctrine of part performance does not permit a party to plead the Statute of Fraud in certain cases after a part performance by the other party to an agreement. The reason is that where one party has stood by and allowed the other to perform his part of the contract, it would be fraudulent to allow him to plead the Statute. In England, at any rate, it is clear that, the doctrine is confined to contracts falling with the jurisdiction to decree specific performance and so has no application to contracts of service for more than one year or to contracts of guarantee. Further, acts of part performance can only be relied upon if they are such as to be referable to no other title than such a contract as is alleged and such acts must further be of such a nature and done in such circumstances as to render it a fraud by the other party to refuse performance of the contract; hence the other party must have been aware that they were being done on the faith of the existence of a contract. The doctrine has only lately been judicially recognised in this Court. It was held by the Full Bench in Kurri Veerareddi v. Kurri Bapireddi 29 M. 336 : 1 M.L.T. 153 : 16 M.L.J. 395, that in the face of the provisions of Section 54 of the Transfer of Property Act which were imperative there was no room for importing the provisions of English Equity. In Ramanathan Chetty v. Ranganathan Chetty : (1917)33MLJ252 a Letters Patent Appeal, an unregistered deed of exchange was in question. Possession was taken under it and defendant began to expend money on his plot and completed a building on it. Plaintiff then brought a suit to recover possession. The majority held he was entitled to do so owing to the absence of a registered deed of exchange Wallis, C.J., held the plaintiff estopped by his acquiescence. Seshagiri Ayyar, J., differed on the ground that when the law says that title can be acquired only in a particular way, there is no room for the application of the doctrine of estoppel. On the Letters Patent Appeal, Abdur Rahim, J., agreed with the Chief Justice, while Sadasiva Ayyar and Napier, JJ. agreed with Seshagiri Ayyar, J. Napier, J. held that a defence based on acquiescence could not prevail and as to the doctrine of part performance, the contract was executed and that accordingly a total performance of an executed contract was alleged to operate to create legal rights in violation of a Statute and that there was no room for the application of the English doctrine of part performance in this country.
8. The matter has, however, been decided as far as we as a Bench are concerned by a Full Bench ruling in Vizagapatam Sugar Development Co. v. Muthuramareddi 76 Ind Cas. 886 : 46 M. 919 : 1924 45 M.L.J. 528 : A.I.R. 1924 Mad. 271 : 33 M.L.T. 53. The only judgment delivered (that of Schwabe, C.J.,) is very short and if one may say so with respect, not explicit as to the limits of the doctrine. It is clear, however, that he founds his opinion on the 'tread of opinion' of the Privy Council in Venkayydmma Rao v. Venkatanaraaimha Appi Rao : (1916)18BOMLR651 and Mahomed Musa v. Aghore Kumar Ganguli : (1915)17BOMLR420 and on the fact that all the other High Courts in India have taken an opposite view to that hitherto taken in Madras, The Full Bench overruled Ramanathan Chetty v. Ranganathan Chetty : (1917)33MLJ252 and Kurri Veerareddi v. Kurri Bapireddi 29 M. 336 : 1 M.L.T. 153 : 16 M.L.J. 395. The learned Chief Justice points out that the Transfer of Property Act recognises unregistered contracts for the sale of land but that they create no interest in the land itself, but leave their contractual effect as between the parties unimpairad. Further the Division Bench on receipt of the Full Bench opinion decided that the application of the doctrine of part performance in this country is not limited to cases where the right of specific performance is not barred. Under these circumstances, it is obviously useless to canvass the decision of the Full Bench or examine the judgments in Kurri Veerareddi v. Kurri Bapireddi 29 M. 336 : 1 M.L.T. 153 : 16 M.L.J. 395 and Ramanathan Chetty v. Ranganathan Chetty : (1917)33MLJ252 to show that the law ought to be applied as there laid down--the Full Bench has decided they are wrong. We are, therefore, left with these facts--some of them assumed or admitted--since no evidence except certain documents has so far been taken. The plaintiff made an agreement (Ex. I) for sale of A, A-I schedule lands; and tendered a sale deed duly executed to 1st defendant to whom they delivered possession. According to the plaintiffs they further tendered him a simple mortgage-deed. These two now appear compounded as A-2. The defendant says that the mortgage was a sale and that a fresh agreement was entered into whereby all the mortgage properties A and A I and B were sold to him. He first relies on the sale-deed A-2 which he has finally failed to get registered; he next relies on the agreement (Ex. I) (possibly coupled with an alleged oral agreement to sell B schedule lands) plus his possession. Is he entitled under these circumstances to rely on the doctrine of part performance? Has he been defrauded? The two learned Judges who heard the appeal in O.S. No. 17 of 1920 in the first instance were divided as to the amount of purchase money paid; the respondent here says only Rs. 2,000 was paid. The Subordinate Judge has not decided the matter but has referred defendant to a separate suit after delivery to plaintiff of the property has taken place. We are, therefore, not in a position to say that the defendant has paid the whole consideration to plaintiff who according to him is now trying dishonestly to recover what he had practically already sold. Further, the English doctrine clearly excludes payment of consideration as one of the grounds for its application, of per Lord Justice Cotton in Britain v. Rossiter (1859) 11 Q.B.D.123 : 48 L.J.Ex. 362 : 40 L.T. 240 : 27 W.R. 482 and no Indian authority has been shown to us to the contrary. A number of cases have been cited to us--not all of them relevant after the Full Bench ruling--but some must be shortly referred to. In the leading case of Maddison v. Alderson (1883) 8 A.C. 467 : 52 L.J.Q.B. 737 : 49 L.T. 303 : 31 W.R. 820 : 47 J.P. 821 Lord Selborne said at page 476 'In a suit founded on such part performance, the defendant is really 'charged' upon the equities resulting from the acts done in execution of the contract, and not (within the meaning of the Statute) upon the contract itself. If such equities were excluded, injustice of a kind which the Statute cannot be thought to have had in contemplation would follow. Let the case be supposed of a parol contract to sell land, completely performed on both sides, as to everything except conveyance; the whole purchase money paid; the purchaser put into possession; expenditure by him (say in costly, buildings) upon the property; leases granted by him to tenants. The contract is not a nullity; there is nothing in the Statute to estop any Court which may have to (exercise jurisdiction in the matter from inquiring into and taking notice of the truth of the facts. All the acts done must be referred to the actual contract, which is the measure and test of their legal and equitable character and consequences. If, therefore, in such a case a conveyance were refused, and an action of ejectment brought by the vendor or his heir against the purchaser, nothing could be done towards ascertaining and adjusting the equitable rights and liabilities of the parties, without taking the contract into account. The matter has advanced beyond the stage of contract; and the equities which arise out of the stage which it has reached cannot be administered unless the contract is regarded.' It seems to be the fact that the foundation of the doctrine is there regarded as a contract not completed by conveyance. So in Rawlinson v. Ames (1925) Ch. 96 : 94 L.J. Ch. 113 : 132 L.T. 370 : 69 S.J. 142. Romer, J., quoting the passage from Maddison v. Alderson (1883) 8 A.C. 467 : 52 L.J.Q.B. 737 : 49 L.T. 303 : 31 W.R. 820 : 47 J.P. 821 set out above and Fry on Specific Performance, 6th Edition, page 276, holds that the acts of part performance on the part of the plaintiff in altering her flat were solely referable to a contract of letting and also that they weresuch it would be a fraud in the defendant to take advantage of, the contract not being in writing, after the plaintiff had altered her position for the worse. It is very difficult to see how the appellant here has altered his position for the worse (apart from the question of payment of consideration) or has been defrauded. His attempt to get the saledeed tenderd to him by the other side registered has finally failed. Can he be heard to say under the circumstances that he has a right to invoke the doctrine of part performance? Mr. Ch. Raghava Rao, his Advocate, contends that he is entitled to wholly disregard the registration proceedings and to treat them as if they had never taken place and to say that by having taken possession under the agreement the appellant has acquired not only equitable rights but a good equitable title to the property only inferior to a full title of ownership under the Transfer of Property Act and this equitable title has been recognised in India and various cases are quoted to substantiate this proposition. I confess I had always understood that one of the main objects of the Indian Law was to abolish as far as possible the distinction which prevails in English Law between legal and equitable ownership, of the Privy Council in Webb v. Mae-pherson 31 C. 57 : 8 C.W.N. 41 : 5 Bom. L.R. 838 : 13 M.L.J. 389 : 30 I.A. 238 : 8 Sar. P.C.J. 554. where they say 'the Law of India, speaking broadly, knows nothing of the distinction between legal and equitable property in the sense in which that was understood when equity was administered by the Court of Chancery in England.' It is perfectly true that in the Transfer of Property Act there are imbedded certain equitable doctrines and principles and in fact a Full Bench of this Court in Vizaga-patam Sugar Development Co. v. Mut Kuramareddi 76 Ind, Cas. 886 : 46 M. 919 : 1924 45 M.L.J. 528 : A.I.R. 1924 Mad. 271 : 33 M.L.T. 53. bases its decision partly on the fact that contracts for the sale of land are recognised by the Transfer of Property Act. Reference may also be made to the doctrines of priority.marshalling and contribution.and to the Specific Relief Act where the equitable rules speaking generally as to specific performance are codified so far as they are to be applied in this country. It is contended that Section 3, illustration (g) illustrations to Section 13 and Section 27 (b) are examples of equitable titles recognised by the Specific Relief Act which was enacted in 1877. In the Trusts Act we have Section 91 corresponding to illustrations (g) and (h) of Section 3 of the Specific Relief Act. In the Transfer of Property Act we have Section 40, rights available against the transferor previous to the transfer; Section 55 (4) (a) which enacts that the seller takes rents and profits till ownership passes to the buyer, i.e., under Section 54; Section 55 (1)(e) the seller is bound to take care of the property till delivery to the buyer; Section 55 (5) (a) where ownership has passed, the buyer bears the loss. There are many differences between the rights and duties of the buyer and seller after the contract for sale has been entered into in the Indian and English Laws. Cf, Dart on Vendors and Purchasers, 7th Edition, Ch.--page 287. But under the Indian Law it is 'observed that the buyer takes no risk till the ownership has passed and is entitled to no rents till the ownership has passed. He is not liable for charges etc. on the property until the ownership has passed. The following group of cases were quoted on one side or the other in connection with this contention as to equitable title. Karalia Nanu-bhai v. Mansukhram 24 B. 400 : 2 Bom.L.R. 220 in which before the case was decided in the Court of first instance the title had been perfected by conveyance and was clearly a case under Section 91 of the Trusts Act coupled with Sections 40 and 55 (b) of the Transfer of Property Act. Furthermore the case is explained in Lalchand v. Lakshman 28 B. 466 : 6 Bom. L.R. 510 as not going the length of saying that a registered deed of conveyance is not necessary to pass ownership to the vendee and in this case Lalchand v. Lakshman 28 B. 466 : 6 Bom. L.R. 510 the Court held there was no equity in the defendant's favour, for he could have got the deed registered, the plaintiff having executed it. The learned Judges then go on to decide that part performance cannot be admitted in face of the provisions of the Transfer of Property Act and as to this part of the case its auth rity is no doubt no longer law. Salamat uz zamani Begam v. Masha Allah Khan 43 Ind. Cas. 845 : 40 A. 187 : 16 A.L.J. 98 a case of exchange with no deed but long possession the Court held that the trasac-tion was binding relying, on the Privy Council decision in Mahomed Musa v. Aghore Kumar Ganguli : (1915)17BOMLR420 . The Court; felt no doubt it would be inequitable or perhaps fraudulent to disturb the transaction which was a very long standing one. Everything had been done in that case as regards the property in suit and the shop, which it was agreed to exchange for it, as though the exchange had been formally carried out. The exchange ought to have been effected by a registered instrument. One of the learned Judges Piggott, J., held that the Privy Council decision Mahomed Musa v. Aghore Kumar Ganguli : (1915)17BOMLR420 could not be applied to the facts of that case but that the parties were bound by their contract so far as it was carried into effect and by the equities arising from their own acts.
9. In Desaibhai Jorabhai v. Ishwar Jeshing 57 Ind. Cas. 447 : 44 B. 586 : 22 Bom. L.R. 764 it was held that a registered title could not prevail over a prior oral sale after payment of price and delivery of possession with notice to the subsequent buyer. No law is cited in the judgment, In my opinion it is a case which can be explained by the application of Section 91 of the Trusts Act and Section 40 of the Transfer of Property Act Syamkishore Dev. Umesh Chandra Bhatta-charjee 55 Ind. Cas. 154 : 31 Cri.L.J. 75: 24 C.W.N. 463. was a case of fraud as the transferee was said to have been 'lulled into security by the transaction that had taken place.
10. Under these circumstances I find it very difficult to hold that a party in the position of the appellant can give the complete go by to the existence of the document A 2 and is entitled to rely as an innocent and practically defrauded party on his possession under the agreement Ex. I. It is not contended that he fails within any of the sections or illustrations of the Specific Relief Act, Trust Act or Transfer of Property Act to which reference has been made.
11. Though I assume that the doctrine is incorporated from the English Law and must be taken subject to its conditions and limitations as they are applied, the only reference to such limitations that I can find in the cases that have been cited to us is in Deb Lal Jha v; Baldeo Jha 56 Ind. Cas. 277 : 2 U.P.L. Pat. 100 : 1 P.L.T. 354 : 1920 Pat. 337 a case from the High Court of Patna where the learned Judges say that the essential conditions are (1) final engagementand (2) actings unequivocally referable to the agreement. The other two limitations already quoted supra from Fry on Specific Performance are not referred to by the learned Judges; but I assume that they exist or that at least there must be some fraud in the sense of some unjustifiable conduct in seeking to upset a transaction where the other party has on faith of the agreement altered his position for the worse. It seems to me that in this case the respondent has done all that he could be required to do. There is no standing by until the appellant altered his position for the worse and then seeking to take advantage of the Statute of Frauds or the Registration Act to upset the transaction. It may also be observed that there is no question here of a fresh document when the respondent has done everything in his power to convey the legal ownership to the appellant. Venkata-sami y. Kristayya 16 M. 341 : 3 M.L.J. 162. is a case where the plaintiff had a complete remedy under the Eegistration Act and not having chosen to follow it had 'only himself to blame' that the efficacy of the document has not been completed by registration. The Court held he was not entitled to decree for compulsory registration. This was followed in Thayarammal v. Lakshmi Ammal : (1920)39MLJ181 where Oldfield, J,, said: 'It is true that Courts of Equity would assist a plaintiff to effectuate an incomplete title, if the default is due to act of God or conduct amounting to fraud on the part of the executant. But here no default is attributable to the 1st defendant. On the other hand.it is the default of the plaintiff in not paying the consideration that led to the document remaining unregistered.' They further held that an unregistered deed cannot be treated as an agreement to sell, Cf. Subbaray Pillai v. Devasahayam Pillai y. See also the remarks of V.V. Srinivasa Aiyangar, J. in Kup-puswami Goundan v. Chinnaswami Goundan y. In this connection I may also cite the remarks of Coutts Trotter, C.J., in Ko mirisetti Satyanarayana v. Yeeran ki China Venkatarao : AIR1926Mad530 . 'and it must be remembered that although in this country the remedy of specific performance is a statutory remedy, it nevertheless is simply a crystallization into statutory form of an equitable remedy to which laches was, as it is to all equitable claims, an answer. How can it be said that a man who is given an express statutory remedy by an Act of Legislature under Section 77 of the Registration Act and has failed to take advantage of it, has not been guilty of laches and is entirely free from blame, passes my comprehension.'
12. Mr. Raghava Rao attempted to strengthen his case by contending that there was a fiduciary relationship between the respondent and his clients as to the sale of this land. For our purpose it comes very near to the requisites for the application of the doctrine of part performance. As so often stated the latter doctrine is applied because there is some unfairness or fraud on the part of the party who insists on the voidability of the contract. Equity will not allow him to take advantage of the Statute under certain circumstances. It acts in fact in personam as it always does and on the conscience of the party affected. So also in fiduciary relationships there is the same unfairness or conscientious deal ing which equity will take hold of and will correct. The Full Bench case in Bapu Appaji v. Kashinath Sadoba 39 Ind. Cas. 103 : 41 B. 438 : 19 Bom. L.R. 100 was cited which sums up the equitable doctrines to be found in the Indian Statutes and which I have set out at some length already. In that case Scott, C.J., said 'once it is recognised that the plaintiff is violating his fiduciary obligation, it is clear that the Court cannot grant him the relief which he seeks, for it will not aid him in committing a breach of trust and his suit must fail.' Venkatesh Damodar v. Mal-lappa Bhimappa : (1922)24BOMLR242 decided that even if the remedy of specific performance was no longer open to the defendants the Court would in a proper case come to their assistance. A case in the Privy Council on appeal from the Federated Malay States Loke Yew v. Port Swettenham 'Rubber Co. (1913) A.C. 491 : 82 L.J.P.C. 89 : 108 L.T. 467 obviously contained an element of fraud and the equitable doctrine applied by the Court was in fact enacted in one of the Colonial Statutes.
13. To sum up it appears to me that a person in the position of the appellant is not entitled to any relief by the application of the doctrine of part performance. There is nothing in the conscience of the respondent who has done all that he was required to do to carry out his part of the transaction. The appellant has failed to carry out in failing to get, either through some fault or misfortune of his own, the document A-2 registered. Under these circumstances he is not entitled to claim to be put in the same position as if A-2 had never existed and to insist on the application of the doctrine of part performance in his favour. I am equally clear that he has no equities, nor has he an equitable title such as is recognised by any of the Indian Statutes or Case Law. He obviously cannot sue for specific performance and it is impossible on the authority and on the assumption that the respondent is outside what I may call the statutory equities already referred to, to hold that he has an equitable title only less than full ownership to this property. The same remarks apply to his contention that the respondent is a bare trustee for him. The learned Subordinate Judge found that there had been merger, i.e, that this agreement Ex. I had merged in the sale-deed. The cases quoted above in Venkatasami v.Kristayya 16 M. 341 : 3 M.L.J. 162. and Thayar-ammal v. Lakshmi Ammal 59 Ind. Cas 417 : 43 M. 822 : 12 L.W. 161 seem to support this and the latter case is authority for saying that an agreement for sale cannot be spelt out of the unregistered sale deed. Here, of course, we have an actual agreement to sell Ex. I. How its force can be revived when it has become transformed into a regular conveyance I fail to see.
14. For these reasons I have come to the conclusion that the Subordinate Judge was right in his conclusion and it must be upheld. It is unnecessary for me to approve all the reasons given by him for his opinion, The two appeals must be dismissed with costs, The Civil Revision Petition will be dismissed with costs.
15. Curgenven, J.--These are respectively two appeals and one civil revision petition arising out of three suits tried together by the Additional Subordinate Judge of Kistna at Masulipatam and relating to properties described as the A, A-I and B schedule properties. The appellant in the appeals and petitioner in the revision petition is one Cherukuri Venkatarat nam, whom I will refer to throughout as the appellant. The 1st respondent in the three proceedings is one Bolla Guravayya.
16. In March, 1916, the 1st respondent, according to his version of the facts, wished to buy certain lands in Kottapalle village, and to obtain funds agreed to sell to the appellant the A and A-I schedule lands for a sum of Rs. 21,000. The agreement which he executed on 24th April, 1906, is Ex. I, and he confesses to having received a sum of Rs. 2,000 but no more, as advance payment. Thereafter nothing was done until 1918, when, after a re-measurement, the price of the lands was settled at Rs. 26,600 and odd. The 1st respondent wanted an additional sum of Rs. 8,000 as he had some debts to pay, and it was agreed that the appellant should furnish this amount upon a mortgage to him of some other property of 1st respondent's the B schedule lands. Accordingly on 7th April, 1918, the 1st respondent executed two documents, (1) a sale-deed of lands A, A-I and (2) a simple mortgage-deed in respect of land B. After execution, these documents were handed over to the appellant. According to the 1st respondent, the appellant made use of these two deeds, by combining them and erasing some of the script and substituting other writing, to forge a sale-deed (Ex. A-2) for all the three properties. This impugned document is dated 10th June, 1918, and is for a sum of Rs. 30,000 it being recited that the whole amount had been paid. Upon being asked to co-operate in the registration of this document the Ist respondent denounced it as a forgery. When the appellant presented it for compulsory registration, the Sub-Registrar refused to register it, and an appeal to the District Registrar of Kistna, who held an inquiry under the Act, was dimissed on 26th February 1920. The appellant then filed a suit (O.S. No. 17 of 1920) in the District Court under Section 77 of the Act for a decree directing the registration of the deed. He obtained such a decree on 29th September, 1921, and the document was in pursuance of it, registered on 15th October. The respondents preferred an appeal (A.S. No. 300 of 1921) to this Court. The learned Judges who heard it differed in opinion. The appeal was accordingly dismissed but in a Letters Patent Appeal, reported as Bolla Grouvayya v. Charu-kuri Venkatarathvam : AIR1924Mad810 and decided by the Chief Justice and Ramesamand Wallace, J.J., this decision was reversad, and the registration of the document was ordered to be cancelled.
17. Meanwhile on 18th April, 1921, while the suit to compel registration was pending in the District Court, the respondents filed O.S. No. 21 of 1921 in the same Court for a declaration of their title to all the three properties, and for possession of the A and B schedule properties, alleging that upon certain false averments the appellant had obtained possession of them in proceedings under Section 145 of the Criminal Procedure Code. The plaint did not mention the agreement to sell, Ex. 1, but characterised the appellant's sale deed as a forgery. The latter, in his written statement, which was filed a few days after the District Judge gave him a decree in the registration suit, relied upon this decision as making the genuineness of the sale-deed res judicata, and, apart from that, asserted its genuineness. He further pleaded that he had been put in possession of the A, A-I lands under Ex, I, and of the B lands under the sale-deed. Issues upon these pleadings were framed on 4th October l921, and the suit was subsequently transferred to the file of the Additional Subordinate Judge, being re-numbered as O.S. No. 29 of 1924. While it was still pending trial, both the appeal and the Letters Patent Appeal were heard in the High Court, with the results already noted. In consequence of the different situation created by the decision in the Letters Patent Appeal, the appellant applied for and obtained permission to file an additional written statement. This, dated 28th October, 1924, contended that, apart from any question relating to the sale-deed, the respondents had put the appellants in possession of the suit lands in pursuance of agreements to sell, and that that circumstance together with payment in full of the purchase monies, gave him a valid defence against the claims for a declaration and to recover possession.
18. Of the other two suits now before us, O.S. No. 61 of 1924 was filed by the appellant to recover possession of the A-1 schedule land, while O.-S. No. 1 of 1925, by the same plaintiff, was under Section 9 of the Specific Relief Act for the possession of the A and B schedule properties. The averments in these suits were similar in character to those in the respondents' suit.
19. The learned Additional Sub-Judge has decided the three suits in the respondents' favour, decreeing O.S. No. 29 of l924 and dismissing the other two. His view is that the decision in the Letters Patent Appeal is binding upon the appellant, and that it amounts to a finding that he fabricated the sale-deed; and that in such circumstances it is not open to him to fall back upon the argee-ments coupled with possession under them as an equitable defence against the respondents' legal title. As I read the judgment, the learned Additional Subordinate Judge has sought to apply two separate principles, the one that the appellant, not having come with clean hands, is not entitled to the equitable relief prayed for, the other that since upon his own showing matters had gone so far as the execution of a sale-deed, his only remedy lay in enforcing the provisions of the Transfer of Property and Registration Acts.
20. With regard to the former of these two grounds, it is important to note, in the first place, that a Registrar holding an inquiry under Section 74 et seq of the Registration Act has only to find, with regard to genuineness, whether the document has been executed'. His decision is not in the printed papers furnished to us; but presumably the onus was cast upon the appellant, and it was found that he had not discharged it, The sole issue tried in the suit ran thus:
Was the document dated 10th June, 1918 executed by defendants Nos. 1 and 2 for themselves and by the 1st defendant as the guardian of minor defendants Nos. 3 to 5?
21. The District Judge answered this question in the affirmative. Phillips, J., agreed in so answering it Devadoss, J., consider' ed that the document had not been proved to have been executed by the defendants; The learned Judges who decided the Letters Patent Appeal certainly went no further than this. The learned Chief Justice with whom the other two learned Judges concurred, observes, indeed, that ' the document bears the most apparent traces of having been tampered with,' and the 'inference that these alterations were made after the execution of the document in its original state by the defendant is almost irresistible.' But he goes on to point out that in a suit under Section 77 the same considerations should guide the Court which should guide the Registrar in considering his duty to register or to refuse registration and that the Registrar has to ask himself merely this: 'Is this document now tendered to me to be registered actually in the state in which it was executed by the parties to it'? It need scarcely be added that a finding that the evidence will not support an affirmative answer to this question is not equivalent, as the Additional Subordinate Judge appears to think, to a finding that the document was forged by the appellants. In fact, the only relevance of these proceedings is to show that the appellants made an attempt, which the respondent successfully resisted, to get registered a document which he put forward as a genuine sale-deed relating to the suit properties, and that it was found that the document was not registrable, Without further enquiry, therefore, the lower Court was not justified in concluding that the appellant had forged the sale-deed.
22. There remains for consideration whether, leaving open the question of the appellant's conduct in relation to the sale deed, he has an equitable defence against the respondents' claim to recover lands A and B, and an equitable right to be restored to the possession of land A-1. Since the lower Court has decided this question without taking any evidence, we must proceed upon the averments in the written statements and assume that there was a valid agreement to sell land B--in the case of lands A and A-I, this is not disputed--and that the appellant was permitted to enter in pursuance of the agreements. We may assume too, if necessary, that the purchase money was paid in full.
23. The application of equitable doctrines to cases where there is an agreement to sell followed by delivery of possession but not by a registered conveyance may be considered from two fairly distinct points of view. These may be termed respectively the doctrines of a fiduciary relationship and; of part performance. It has been contended that according to each of these lines of reasoning the appellant is entitled to resist dispossession.
24. The doctrine of a fiduciary relationship differs from that of part performance in that while the latter has been imported into India direct from English cases in equity, the former may be deduced from various Of our statutory provisions, although indeed these are, perhaps necessarily, of an equitable character. There is a very clear exposition of this principle in a Bombay case decided by a Full Bench of five learned Judges Bapu Appaji v. Kashinath Sadoba 39 Ind. Cas. 103 : 41 B. 438 : 19 Bom. L.R. 100, and I cannot do better than outline the course which the reasoning takes there.
25. According to Section 54 of the Transfer of Property Act sale is a transfer of ownership in exchange for a price paid or promieed or part paid and part promised, and such a transfer in the case of immoveable property of the value of one hunded rupees and upwards can be made only by a registered instrument; a contract for sale of immoveable property does not, of itself, create any interest in or charge on such property, Those provisions do not, however, exhaust the relations which flow from a contract for sale of immoveable property according to Indian Statute Law. Though an agreement to sell creates no interest in the land it imposes an obligation upon the legal owner; and it is this obligation, which gives rise to such equitable rights as the other party may possess. As against a transferee with notice, or a gratuitous transferee, from the legal owner these rights are declared in three separate enactments; in Section 40 of the Transfer of Property Act, in Section 91 of the Trusts Act, and in illustration (g) to Section 3 of the Specific Belief Act, under the definition of 'trustee'. The last named runs thus:
A buys certain land with notice that B has already contracted to buy it, At is a trustee, within the meaning of this Act, for B, of the land so bought.
26. This is in different terms the same proposition as is contained in Section 91 of the Trusts Act, that the transferee with notice must hold the property for the benefit [of the person who has contracted to buy it, to the extent necessary to give effect to the contract. And Section 95 of the same Act lays down that a person so holding property 'must, so far as may be, perform the same duties, and is subject, so far as may be, to the same liabilities and disabilities, as if he were a trustee of the property for the person for whose benefit he holds it.'
27. Now it is clear that whatever rights may be enforceable against a transferee with notice, as a trustee, must be enforceable against his vendor, so that we reach the conclusion that a person who has contracted to sell immoveable property is a trustee of his promise. 'Where, then, a vendor who has contracted to sell immoveable property and has under the contract put the prospective vendee in possession, sues the latter in ejectment, he repudiates, if the vendee is willing to complete the purchase, the fiduciary obligation arising out of the contract; and annexed to the ownership of the property, and seeks to treat the vendee as a trespasser. Once it is recognised that the plaintiff is violating his fiduciary obligation, it is clear that the Court cannot grant him the relief which he seeks, for it will not aid him in committing a breach of trust and his suit must fail; the defendant is no trespasser, but is in possession under the contract which the plaintiff has bound himself to carry out': Bapu Appajiv, Kash-inath Sadoba 39 Ind. Cas. 103 : 41 B. 438 : 19 Bom. L.R. 100.
28. This doctrine, so stated, would appear to be unassailable and it has received recognition by the Judicial Committee in the case Loke Yew v. Port Swettenham Rubber Co. (1913) A.C. 491 : 82 L.J.P.C. 89 : 108 L.T. 467, arising from the Federated Malay States, where the law applicable is in effect the same as here. A different view has been at times taken both by this Court and elsewhere. The Full Bench in Kurri Vesrareddi v. Kurri Bapireddi 29 M. 336 : 1 M.L.T. 153 : 16 M.L.J. 395, held that an equitable defence oim this nature offended against the provisions of Section 54 of the Transfer of Property Act. Sir Arnold White, C.J. thought that it infringed 'the strict letter of the law', and Subramania Ayyar. J. considered that 'to hold otherwise would be to ascribe to the contract the very effect (that it should create an interest in the property) denied to it by the Statute in the most explicit terms.' So too in Lalchand v. Lakshman 28 B. 466 : 6 Bom. L.R. 510, it was held that the circumstance that 'the Transfer of Property Act...says that no title of ownership can be created to immoveable property of Rs. 100 and upwards in any other manner than by a registered conveyance excludes all considerations of equity based on part or whole performance and makes the law laid down in the Act applicable whether the vendee is suing or is sued.'
29. The alternative view is that the 'Strict letter' of Section 54 does not exclude such considerations. 'Sale is defined as a 'transfer of ownership', and 'such transfer' can be made only by a registered instrument. Only, therefore, if recognition of these equitable rights entailed the conclusion that a transfer of ownership had taken place could it be said, in strictness, that this provision would be thereby violated. But it is not so. Ex hypothesi the 'trustee' whether he be the party to the contract to sell or a transferee with notice, remains legal owner of the property. There has been no 'transfer of ownership',--if there had been such a transfer, not even a subsequent transferee without notice would be protected. It is clear that the party in possession has no legal title, only the rights of cestui que trust. The be rights, I conceive, are not negatived by the further provision in Section 54 that a contract for the sale of immoveable property does not, of itself, create any interest in or charge on such property. It is true that in this respect Indian Law differs from English Law and that under English Law it may not be necessary to have recourse to such doctrines as those of a fiduciary relationship or of part performance. But although a contract of sale with us creates no interest in the property, it creates a right in per-sonam, and it is as correlative to this right that the obligation arises not to go back upon the agreement so long as the other party is willing to complete.
30. This latter qualification raises the question of the limits of the theory of a fiduciary relationship. Such a relationship of trustee and cestui que trusty it is apparent, can endure only so long as some obligation remains undischarged by the trustee. A trust is extinguished when its purpose is completely fulfilled or when the fulfilment of its purpose becomes impossible (cf. Section 77 of the Trusts Act). Accordingly the relationship ends when a registered instrument comes into existence. It also ends as soon as the promisee does something, or something occurs, to absolve the promisor from his promise. To turn now to the facts of the present case, the appellant has put forward as genuine a sale-deed in respect of all three properties. According to his own showing, therefore, the 1st respondent has acquitted himself of his duty to execute a sale deed, and the only duty remaining would be to collaborate in its registration. But in a suit between the parties it has already been found that registration cannot be effected, and it is not contended that that finding will not be res judicata between the parties. The effect of that decision was clearly to declare that the 1st respondent was under no obligation to assent to registration, and since no other obligation remains, the fiduciary relationship ceases and with the termination of that relationship disappears the equitable right of the appellant to retain possession. He has become a mere trespasser.
31. We come then to the alternative defence put forward, based upon the equitable doctrine of part performance. The question whether, in view of the terms of Section 54 of the Transfer of Property Act, there is room in this country for the doctrine of part performance, has given rise to much difference of judicial opinion, especially in this Court. I need only refer again to the Full Bench case Kurri Veerareddi v. Kurri Bapireddi 29 M. 336 : 1 M.L.T. 153 : 16 M.L.J. 395 which has been regarded as a decision upon this subject, and in which it was held, as already noted, that the provisions of the Statute are imperative and cannot be disregarded on equitable grounds and to the Letters Patent Appeal, Ramana-than Chetty v. Ranganathan Chetty : (1917)33MLJ252 , where of a Bench of three learned Judges two refused to recognise the principle, while the third was prepared to act upon equities arising out of the parties' conduct. Both these cases came under the consideration of a Full Bench in Vizagapatam Sugar Development Co. v. Muthuramareddi 76 Ind, Cas. 886 : 46 M. 919 : 1924 45 M.L.J. 528 : A.I.R. 1924 Mad. 271 : 33 M.L.T. 53., upon a qestion referred in the following terms:
Do the provisions of the Transfer of Property Act or of the Registration Act preclude the application of the doctrine of part performance laid down by the Privy Council in Mahomed Musa v. Aghore Kumar Ganguli : (1915)17BOMLR420 and Venkayyamma Rao v. Ven-katanarasimha Appa Rao : (1916)18BOMLR651
32. An answer was returned in the negative, the learned Judges intimating that this opinion was fortified by two considerations, the one that the two rulings of the Privy Council mentioned in the reference indicated the trend of their Lordships' opinion, the other that every other Court in India had taken the opposite view to that adopted in the two Madras cases cited above, which were accordingly held to have been wrongly decided. It will be observed that the question put, and the answer given, were in perfectly general terms.
33. Basing ourselves, therefore, upon the terms of this decision, the point that arises is whether in the particular circumstances of this case the plea of part performance should be allowed to prevail. We have heard an instructive argument as to the nature of the doctrine, and the limits within which it should be applied, considered both in England in relation to the Statute of Frauds and in India in its relation to the Transfer of Property and Registration Acts.
34. The law in England is thus stated in Fry on Specific Performance, 6th Edition, page 276:
35. In order thus to withdraw a contract from the operation of the Statute, several circumstances must concur; 1st, the acts of part performance must be such as not only to be referable to a contract such as that alleged, but to be referable to no other title; secondly, they must be such as to tender it a fraud in the defendant to take advantage of the contract not being in writing; thirdly, the contract to which they refer must be such as in its own nature is enforceable by the Court; and fourthly, there must be proper parol evidence of the contract which is let in by the acts of part performance. (It will be convenient to take this statement as a basis in considering the conditions in which the doctrine should be applied in this country).
36. The 1st condition appears to me not to arise under our Statutes. Under the 4th section of the Statute of Frauds, no action may be brought on any contract for the sale of lands unless the agreement upon which the action is brought is in writing. The cases in which equitable considerations have permitted a departure from this rule have been cases of parol agreements to convey followed by possession; and no such departure has been allowed unless the possession has been unequivocally refer-rable to the contract. The reason for this rule is explained in the judgment of Lord Selbeurne, L.C. in Maddison v. Aldersbn (1883) 8 A.C. 467 : 52 L.J.Q.B. 737 : 49 L.T. 303 : 31 W.R. 820 : 47 J.P. 821. The Statute of Frauds does not avoid parol contracts, but only bars the legal remedies by which they might otherwise have been enforced. The object is to prevent fraud by requiring that an agreement to be enforceable, should be written and signed. 'Courts of Equity will not permit the Statute to be made an instrument of fraud.' Accordingly they will not furnish an opportunity for fraud by admitting evidence of the alleged connexion between an equivocal act and an antecedent contract. 'As to the acts done in performance', says Lord Hardwicke, quoted by Lord Selborne, 'they must be such as could be done with no other view or design than to perform the agreement.' The acts, in fact, must presuppose a contract of the kind setup, and no other. It is probably upon this ground that the payment of purchase money, in itself an equivocal act, is not enough to constitute part performance of the contract. In India, however, it is not necessary that an agreement to sell, to be enforceable, should be in writing, and I draw the inference that no such reason, therefore, would exist for excluding evidence where it was doubtful to which of the alleged contracts possession should be referred. And upon the same considerations. I conclude that the 4th condition named in Fry is not in terms applicable, although it is of course necessary to prove the agreement under which part performance has taken place.
37. Of the remaining two conditions, the 2nd and the 3rd I would deal with the latter first. It should be noted that it stipulates that the contract must be such as 'in its own nature is enforceable by the Court'. This is not the same thing as to say that the defendant must possess a subsisting right to sue for specific performance. It refers rather to the nature of the contract. Both in England and in India it has been held that the doctrine is confined to transfers of immoveable property, though in England Kay, J, in McManus v. Cooke (1887) 35 Ch.D. 681 : 56 L.J.Ch. 662 : 56 L.T. 9OO; 35 W.R. 754 : 51 J.P. 708 was inclined to go a little further and to hold that it applied 'to all cases in which a Court of Equity would entertain a suit for specific performance if the alleged contract had been in writing.' It is of course necessary that the contract should be one which the promisor is capable of executing--where for instance, as in Gajendra Nath Dey v. Ashraf Hussain : AIR1923Cal130 a mutwalli who could only grant a lease for a term not exceeding five years granted one for ten years with a covenant to renew, it was held that specific performance could not be decreed, and it would equally follow, I think, that the defence of part performance could not be successfully set up. It has been further urged before us that the Tight to enforce specific performance must be actually subsisting, but it seems impossible on general principles to maintain that when the bar of limitation arises any such change takes place in the equitable relationship between the parties as would bar the defence. The point arose in Venkatesh Da-modar v. Mallappa Bhimappa : (1922)24BOMLR242 and was decided in favour of the defendant upon the principles adopted in the Pull Bench case, Bapu Appaji v. Kashinath Sadoba 39 Ind. Cas. 103 : 41 B. 438 : 19 Bom. L.R. 100. Reference may also be made to Laxman Mankar Kasar v. Ravji Dhansing Patil : AIR1924Bom150 and Meher All Khan v. Aroatannessa Bibi 67 Ind. Cas.167 : 25 C.W.N. 905 and it may further be noted, although the point is not discussed, that the facts of the Privy Council case, Mahomed Musa v. Aghore Kumar Ganguli : (1915)17BOMLR420 were such that the remedy of enforcing specific performance must long have been barred. Indeed may it not be said that the longer possession has lasted the stronger the equities have become in the defendant's favour.
38. A more debatable question is whether the defence may be set up after a conveyance has been executed and where registration has not been effected. Difference of opinion has arisen whether in such circumstances a suit for specific performance would lie. In Syamkishore De v. Umesh Chandra Bhattacharjee 55 Ind. Cas. 154 : 31 Ci.L.J. 75: 24 C.W.N. 463. and-Akli v.Daho y ability so to sue appears to have been found and adopted as a ground for accepting an equitable defence against dispossession. A contrary view was however been taken, as regards the maintainability of a suit for specific performance in such circumstances, in a series of decisions in this Court--Venkatasami v. Kristayya 16 M. 341 : 3 M.L.J. 162. Thayarammal v. Lakshmi Ammal 59 Ind. Cas 417 : 43 M. 822 : 12 L.W. 161 and Kami-risetii Satyanarayana v. Yeeranki China Venkatarao : AIR1926Mad530 . The reasoning followed is that to permit a person who holds an un-. registered conveyance to sue for specific performance would be to permit him to evade the provisions of the Registration Act, which supplies him with the special remedy of enforcing registration upon special terms as regards limitation. In the case last cited, the learned Chief Justice has given reasons for his disagreement with decisions to the contrary, which 'take upon themselves by a side wind to get rid of the period of limitation strictly imposed by the express words of the Statute.' I would add that the remedy given by the Registration Act is in itself a special mode of enforcing specific performance, and that where a special mode is prescribed the general mode is by implication excluded. It does not necessarily follow, however, that even upon this view of the law a de fence of part performance may not be maintained by one who holds an unregistered conveyance. There appears to have been no decision upon the point, so that I rely upon analogical reasoning. The objection that, since the defendant might have sued to enforce registration and so complete his title, and that therefore equity will not protect him, seems to me to have little if no greater force than it has where the tranaction has not reached the state Of; a sale deed, because there too the defendant could have sued for specific performance If in the latter circumstances omission , to sue, and allowing the claim to become barred, do not bar the defence, I am unable to see how in the former circumstances the equities are differently affected. I think accordingly that the mere fact that the appellant here had a sale-deed, and even the further fact that he did endeavour to get it registered through the machinery of the Registration Act, do not of themselves destroy such equities as may exist in his favour.
39. Coming now to the second condition stated in Fry, vis., that 'the acts of part performance must be such as to render it a fraud in the defendant to take advantage of the contract not being in writing' we may replace the last words by 'to take advantage of the absence of a registered deed of conveyance,' to bring the proposition into accordance with our law of transfer. For the leading English case which applies this test we have to go again to the judgment of Lord Selborne in Maddison v, Alderson (1883) 8 A.C. 467 : 52 L.J.Q.B. 737 : 49 L.T. 303 : 31 W.R. 820 : 47 J.P. 821. 'In a suit founded on such part performance,' he observes, 'the defendant is really 'charged' (the word is taken from Section 4 of the Statute of Frauds) upon the equities resulting from the acts done in execution of the contract, and not (within the meaning of the Statute) upon the contract itself. If such equities were excluded, injustice of a kind which the Statute cannot be thought to have had in contemplation would follow.' This passage with others from the same judgment, are cited by Romer, J, in Rawlinson v. Ames (1925) Ch. 96 : 94 L.J. Ch. 113 : 132 L.T. 370 : 69 S.J. 142. which was an action brought for specific performance upon an oral contract to lease a flat in pursuance of which the plaintiff undertook extensive alterations to suit the taste of the proposed lessee. The defendant set up the Statute of Frauds as a defence, and the learned Judge had to consider therefore 'whether there are here sufficient acts of part performance to take the case out of the Statute.' The judgment contains an instructive review of earlier decisions, undertaken for the purpose of ascertaining the principles upon which the doctrine really rests. As to this, it is sufficient to say that the conclusion is reached that the law stands as laid down in Fry; and as to the special fasts of the case the learned Judge says:
It only remains to consider whether the acts of the plaintiff were such as to render it a fraud in the defendant to take advantage of the contract not being in writing. As to this I can feel no doubt. I am satisfied that had the plaintiff laid out the flat in the manner that she herself wished, it would, when constructed, have differed materially from what it is at present, As a result of acceding to the requests and suggestions of the defendant she is now possessed of a flat which is not likely to, commend itself to tenants. It would cost her a sum of about 177 to alter the flat to a condition in which it would be possible for her to let it to other persons. She has therefore, in carryings out her part of the contract, materially changed her position for the worse.
40. I do not think that the Indian Courts have applied the doctrine otherwise than in accordance with these principles. In the Privy Council case, Mahomed Musa v. Aghore Kumar Ganguli : (1915)17BOMLR420 already referred to, which may be said to have established the rule in this country, their Lordships quote with approval Lord Selborne in [Maddison v, Alderson (1883) 8 A.C. 467 : 52 L.J.Q.B. 737 : 49 L.T. 303 : 31 W.R. 820 , where he dwells upon the injustice which would be brought if the equities were excluded. In most of the cases decided by the High Courts in India, some of them before this Privy Council judgment, the question has been whether the doctrine is applicable at all rather than whether the circumstances justify its application--see for example Salamat-us-za-mani Begamv. Masha Allah Khan 43 Ind. Cas. 645 : 40 A 187 : 16 A.L.J. 98. and Lalchand v. Lakshman 28 B. 466 : 6 Bom. L.R. 510. A marked feature of many of these cases is that comparatively rarely is the expression ' part performance ' used at all, and equity, in its quest for a basis, has wavered between that principle and the principle of a fiduciary relationship.
41. The truth seems to be, as that circumstance would suggest.thatthe two principles are really in essence identical. It is a condition of the application of each that the promisee should be ready to complete the contract, that the promisor should resist or neglect its completion, and that some wrong--whether its description be as fraud, breach of faith, injustice or unfairness--is thereby occasioned to the promisor. A necessary condition of this is that a trust should subsist between the parties; and having found that this condition is here absent, the foundation goes for a defence of part performance, equally with a defence based upon a fiduciary relationship.
42. To save the appellant from the consequences of this conclusion Mr. Raghava Rao has fallen back upon the theory of an equitable title or equitable estate. As soon as the appellant was put in possession under the agreements to sell, he argues, he acquired an equitable title to the property, and nothing that he might have done afterwards--even to the foregoing of asale-deedcould divest him of it. The contention is of course based upon the English principle that a contract for the sale of land creates such a title, which differs from our law, that such a contract does not of itself create any interest in the land.
43. This difference declares itself in the rules embodied in g. 55 of the Transfer of Property Act with respect to the rights and obligations of seller and purchaser up to the date of sale--rules which discountenance the theory of an equitable ownership in existence before that date. ' The law of India'' say their Lordships of the Privy Council in Webb v. Macpherson 31 C. 57 : 8 C.W.N. 41 : 5 Bom. L.R. 838 : 13 M.L.J. 389 : 30 I.A. 238 : 8 Sar. P.C.J. 554., 'speaking broadly, knows nothing of the distinction between legal and equitable property in the sense in which that was understood when equity was administered by the Court of Chancery in England.' In Sandu Valji v. Bhikchand Surajmal : AIR1923Bom473 , where the question of part performance arose, Fawcett, J. was able to concede the validity of that defence while holding that the English rule, that a contract for the sale of real property makes the purchaser the owner in equity of the estate, is clearly opposed to the express provisions of Section 54. For the latter proposition he referred to another Privy Council judgment Maung Shwe Goh v. Mung Inn : (1917)19BOMLR179 . The citation of further authority is unnecessary. The equitable rights arising out of an agreement to sell, even when followed by possession, are rights in personam, and it is as such and not otherwise that a Court applying principles of equity will enforce them.
44. I agree accordingly that the appeals should be dismissed with costs, and that the civil revision petition should be dismissed without costs.