Friday, 31 January 2025

Imp. Rulings - Travel beyond Pleadings

 Imp. Rulings - Travel beyond Pleadings

Index;

  1. NCLT Kolkata (2024.02.08) in Urban Infraprojects Private Limited Vs. EDCL Infrastructure Limited  [I.A. (IB) No. 2105/KB/2023 In CP (IB) No. 106/KB/2023]

  2. SCI (2008.09.23) in Bachhaj Nahar vs Nilima Mandal & Ors [Civil Appeal Nos.5798-5799 OF 2008 (Arising out of SLP ) Nos.23766-67 of 2005]

  3. SCI (1987.04.08) in Ram Sarup Gupta (Dead) By Lrs Vs Bishun Narain Inter College & Ors  [Civil Appeal No. 638 of 1980.]


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1). NCLT Kolkata (2024.02.08) in Urban Infraprojects Private Limited Vs. EDCL Infrastructure Limited  [I.A. (IB) No. 2105/KB/2023 In CP (IB) No. 106/KB/2023] held that;

  • # 35. The Hon’ble Apex Court in Union of India vs Ibrahim Uddin reported in (2012) 8 SCC 148, has held that no relief can be granted based on grounds outside the pleadings of the parties. No party can be permitted to travel beyond its pleading. In other words, it is not a matter of right that an argument made outside the pleadings should be considered. In this context we would refer the judgment rendered by the Hon’ble Apex Court in Ram Sarup Gupta (Dead) by Lrs. vs. Bishun Narain Inter College and Ors. reported in (1987) 2 SCC 555 that:

  • “6.  . . . . . . The question which falls for consideration is whether the respondents in their written statement have raised the necessary pleading that the license was irrevocable as contemplated by Section 60(b) of the Act and, if so, is there any evidence on record to support that plea. It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and material facts should be pleaded by the party in  support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet.”

  • (Emphasis Added)

  • # 36. Further, the Hon’ble Apex Court in Bachhaj Nahar v. Nilima Mandal, reported in (2008) 17 SCC 491 held that a case not specifically pleaded can be considered by the court unless the pleadings in substance contain the necessary averments to make out a particular case and issue has been framed on the point. In absence of pleadings, the court cannot make out a case not pleaded, suo motu. The relevant para of the judgment is reproduced in verbatim:

  • “12. It is thus clear that a case not specifically pleaded can be considered by the court only where the pleadings in substance, though not in specific terms, contains the necessary averments to make out a particular case and the issues framed also generally cover the question involved and the parties proceed on the basis that such case was at issue and had led evidence thereon. As the very requirements indicate, this should be only in exceptional cases where the court is fully satisfied that the pleadings and issues generally cover the case subsequently put forward and that the parties being conscious of the issue, had led evidence on such issue. But where the court is not satisfied that such case was at issue, the question of resorting to the exception to the general rule does not arise. The principles laid down in Bhagwati Prasad and Ram Sarup Gupta (supra) referred to above and several other decisions of this Court following the same cannot be construed as diluting the well settled principle that without pleadings and issues, evidence cannot be considered to make out a new case which is not pleaded. Another aspect to be noticed, is that the court can consider such a case not specifically pleaded, only when one of the parties raises the same at the stage of arguments by contending that the pleadings and issues are sufficient to make out a particular case and that the parties proceeded on that basis and had led evidence on that case. Where neither party puts forth such a contention, the court cannot obviously make out such a case not pleaded, suo moto.”

  • (Emphasis Added)

[ Link Synopsis ]

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2).  SCI (2008.09.23) in Bachhaj Nahar vs Nilima Mandal & Ors [Civil Appeal Nos.5798-5799 OF 2008 (Arising out of SLP ) Nos.23766-67 of 2005] held that;.

[ Link Synopsis ]

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3). SCI (1987.04.08) in Ram Sarup Gupta (Dead) By Lrs Vs Bishun Narain Inter College & Ors  [Civil Appeal No. 638 of 1980.] held that;.

  • The question which falls for consideration is whether the respondents in their written statement have raised the necessary pleading that the license was irrevocable as contemplated by Section 60(b) of the Act and, if so, is there any evidence on record to support that plea. It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and mate- rial facts should be pleaded by the party in support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet.

  • To allow one party to reply upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence,  would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another.

[ Link Synopsis ]

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Bachhaj Nahar vs Nilima Mandal & Ors - The principles laid down in Bhagwati Prasad and Ram Sarup Gupta (supra) referred to above and several other decisions of this Court following the same cannot be construed as diluting the well settled principle that without pleadings and issues, evidence cannot be considered to make out a new case which is not pleaded.

 SCI (2008.09.23) in Bachhaj Nahar vs Nilima Mandal & Ors [Civil Appeal Nos.5798-5799 OF 2008 (Arising out of SLP ) Nos.23766-67 of 2005] held that;.


Excerpts of the Order;

# 10. The object of issues is to identify from the pleadings the questions or points required to be decided by the courts so as to enable parties to let in evidence thereon. When the facts necessary to make out a particular claim, or to seek a particular relief, are not found in the plaint, the court cannot focus the attention of the parties, or its own attention on that claim or relief, by framing an appropriate issue. As a result the defendant does not get an opportunity to place the facts and contentions necessary to repudiate or challenge such a claim or relief. Therefore, the court cannot, on finding that the plaintiff has not made out the case put forth by him, grant some other relief. The question before a court is not whether there is some material on the basis of which some relief can be granted. The question is whether any relief can be granted, when the defendant had no opportunity to show that the relief proposed by the court could not be granted. When there is no prayer for a particular relief and no pleadings to support such a relief, and when defendant has no opportunity to resist or oppose such a relief, if the court considers and grants such a relief, it will lead to miscarriage of justice. Thus it is said that no amount of evidence, on a plea that is not put forward in the pleadings, can be looked into to grant any relief.


# 11. The High Court has ignored the aforesaid principles relating to the object and necessity of pleadings. Even though right of easement was not pleaded or claimed by the plaintiffs, and even though parties were at issue only in regard to title and possession, it made out for the first time in second appeal, a case of easement and granted relief based on an easementary right. For this purpose, it relied upon the following observations of this Court in Nedunuri Kameswaramma v. Sampati Subba Rao [AIR 1963 SC 884]:

  • "No doubt, no issue was framed, and the one, which was framed, could have been more elaborate, but since the parties went to trial fully knowing the rival case and led all the evidence not only in support of their contentions but in refutation of those of the other side, it cannot be said that the absence of an issue was fatal to the case, or that there was that mistrial which vitiates proceedings. We are, therefore, of opinion that the suit could not be dismissed on this narrow ground, and also that there is no need for a remit, as the evidence which has been led in the case is sufficient to reach the right conclusion."


But the said observations were made in the context of absence of an issue, and not absence of pleadings. The relevant principle relating to circumstances in which the deficiency in, or absence of, pleadings could be ignored, was stated by a Constitution Bench of this Court in Bhagwati Prasad vs. Shri Chandramaul - AIR 1966 SC 735 :

  • "If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matter relating to the title of both parties to the suit was touched, tough indirectly or even obscurely in the issues, and evidence has been led about them then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is : did the parties know that the matter in question was involved in the trial, and did they lead evidence about it? If it appears that the parties did not know that the matter was in issue at the trial and one of them has had no opportunity to lead evidence in respect of it, that undoubtedly would be a different matter. To allow one party to rely upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence, would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another." (emphasis supplied) 


The principle was reiterated by this Court in Ram Sarup Gupta (dead) by LRs., vs. Bishun Narain Inter College [AIR 1987 SC 1242]:

  • "It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and material facts should be pleaded by the party in support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet. In order to have a fair trial it is imperative that the party should state the essential material facts so that other party may not be taken by surprise. The pleadings however should receive a liberal construction, no pedantic approach should be adopted to defeat justice on hair splitting technicalities. Sometimes, pleadings are expressed in words which may not expressly make out a case in accordance with strict interpretation of law, in such a case it is the duty of the court to ascertain the substance if the pleadings to determine the question. It is not desirable to place undue emphasis on form, instead the substance of the pleadings should be considered. Whenever the question about lack of pleading is raised the enquiry should not be so much about the form of pleadings, instead the court must find out whether in substance the parties knew the case and the issues upon which they went to trial. Once it is found that in spite of deficiency in the pleadings, parties knew the case and they proceeded to trial on those issue by producing evidence, in that event it would not be open to a party to raise the question of absence of pleadings in appeal."   [emphasis supplied]


# 12. It is thus clear that a case not specifically pleaded can be considered by the court only where the pleadings in substance, though not in specific terms, contains the necessary averments to make out a particular case and the issues framed also generally cover the question involved and the parties proceed on the basis that such case was at issue and had led evidence thereon. As the very requirements indicate, this should be only in exceptional cases where the court is fully satisfied that the pleadings and issues generally cover the case subsequently put forward and that the parties being conscious of the issue, had led evidence on such issue. But where the court is not satisfied that such case was at issue, the question of resorting to the exception to the general rule does not arise. The principles laid down in Bhagwati Prasad and Ram Sarup Gupta (supra) referred to above and several other decisions of this Court following the same cannot be construed as diluting the well settled principle that without pleadings and issues, evidence cannot be considered to make out a new case which is not pleaded. Another aspect to be noticed, is that the court can consider such a case not specifically pleaded, only when one of the parties raises the same at the stage of arguments by contending that the pleadings and issues are sufficient to make out a particular case and that the parties proceeded on that basis and had led evidence on that case. Where neither party puts forth such a contention, the court cannot obviously make out such a case not pleaded, suo moto.

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Ram Sarup Gupta (Dead) By Lrs Vs Bishun Narain Inter College & Ors - The question which falls for consideration is whether the respondents in their written statement have raised the necessary pleading that the license was irrevocable as contemplated by Section 60(b) of the Act and, if so, is there any evidence on record to support that plea. It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and mate- rial facts should be pleaded by the party in support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet.

 SCI (1987.04.08) in Ram Sarup Gupta (Dead) By Lrs Vs Bishun Narain Inter College & Ors  [Civil Appeal No. 638 of 1980.] held that;.

  • The question which falls for consideration is whether the respondents in their written statement have raised the necessary pleading that the license was irrevocable as contemplated by Section 60(b) of the Act and, if so, is there any evidence on record to support that plea. It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and mate- rial facts should be pleaded by the party in support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet.

  • To allow one party to reply upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence,  would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another.


Excerpts of the Order;

# 6. Sh. S.N. Kacker, learned counsel for the appellant contended that the trial court as well as the High Court both erred in holding that the license was irrevocable under section 60(b) of the Indian Easement Act. He urged that the defendants had failed to raise necessary pleadings on the question, no issue was framed and no evidence was produced by them. In the absence of requisite pleadings and issues it was not open to the trial court and the High Court to make out a new case for the defendants, holding the license irrevocable. He urged that the defendants had failed to produce any evidence to prove the terms and conditions of the license. In order to hold the license irrevocable, it was necessary to plead and further to prove that the defend- ants had made construction, "acting upon the terms of the license". Shri Kackar further urged that Raja Ram Kumar Bhargava being Karta of joint family, could not alienate the, property permanently to the detriment of the minor co-sharers. Sri. U.R. Lalit, appearing on behalf of the defendant-respondents supported the findings recorded by the trial court and the High Court and urged that both the courts have recorded findings of facts on appreciation of evidence on record that the license granted by Raja Ram Kumar Bhargava was irrevocable and that acting upon the license the school had made construction for the purposes of running the school and the license was irrevocable. He took us through the record to show that necessary pleadings had been raised by the defendants and there was sufficient evidence in support of the pleadings. The question which falls for consideration is whether the respondents in their written statement have raised the necessary pleading that the license was irrevocable as contemplated by Section 60(b) of the Act and, if so, is there any evidence on record to support that plea. It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and mate- rial facts should be pleaded by the party in support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet. In order to have a fair trial it is imperative that the party should state the essential material facts so that other party may not be taken by surprise. The pleadings however should receive a liberal construction, no pedantic approach should be adopted to defeat justice on hair split- ting technicalities. Sometimes, pleadings are expressed in words which may not expressly make out a case in accordance with strict interpretation of law, in such a case it is the duty of the Court to ascertain the substance of the plead- ings to determine the question. It is not desirable to place undue emphasis on form, instead the substance of the plead- ings should be considered. Whenever the question about lack of pleading is raised the enquiry should not be so much about the form of the pleadings, instead; the court must find out whether in substance the parties knew the case and the issues upon which they went to trial. Once it is found that in spite of deficiency in the pleadings parties knew the case and they proceeded to trial on those issues by producing evidence, in that event it would not be open to a party to raise the question of absence of pleadings in appeal. In Bhagwati Prasad v. Shri Chandramaul, [1956] 1 SCR 286 a Constitution Bench of this Court considering this question observed:

  • "If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon if it is satisfactori- ly proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it? If it appears that the parties did not know that the matter was in issue at the trial and one of them has had no opportunity to lead evidence in respect of it, that undoubtedly would be a different matter. To allow one party to reply upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence,  would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another."


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Sunday, 26 January 2025

Bangalore Electricity Supply Co. Ltd. Vs. Hirehalli Solar Power Project LLP - It held that Sections 32 and 56 of the Indian Contract Act, 1872 govern the law on force majeure. When the contract contains an express or implied force majeure clause, it is governed under Chapter III of the Contract Act, specifically Section 32. In such cases, the ‘doctrine of frustration’ in Section 56 does not apply and the court must interpret the force majeure clause contained in the contract. It held that a force majeure clause must be narrowly construed.

 SCI  (2024.08.27) in Bangalore Electricity Supply Co. Ltd. Vs. Hirehalli Solar Power Project LLP [Neutral Citation - 2024 INSC 631, (2025) 1 SCC 435, Civil Appeal No. 7595 of 2021] held that;.

  • It held that Sections 32 and 56 of the Indian Contract Act, 1872 govern the law on force majeure. When the contract contains an express or implied force majeure clause, it is governed under Chapter III of the Contract Act, specifically Section 32. In such cases, the ‘doctrine of frustration’ in Section 56 does not apply and the court must interpret the force majeure clause contained in the contract. It held that a force majeure clause must be narrowly construed.

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Section 32 reads:

  • 32. Enforcement of contracts contingent on an event happening.—Contingent contracts to do or not to do anything if an uncertain future event happens, cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void.”

Section 56 reads:

  • 56. Agreement to do impossible act.—An agreement to do an act impossible in itself is void. 

  • Contract to do act afterwards becoming impossible or unlawful.—A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

  • Compensation for loss through non-performance of act known to be impossible or unlawful.— Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise.


Excerpts of the Order;

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# 10. Re: Applicability of the force majeure clause: The primary issue for our consideration is whether the delay in this case is due to a force majeure event as defined under Article 8.3, and consequently whether the respondents were entitled to an extension of time under Article 2.5. If the answer to these questions is affirmative, the tariff cannot be lowered under Article 5.1 and liquidated damages cannot be imposed under Articles 2.2 and 2.5.7.


10.1 The law on force majeure, specifically in the context of PPAs, has been comprehensively dealt with by this Court in Energy Watchdog v. Central Electricity Regulatory Commission. The Court delved into contractual jurisprudence on force majeure clauses and frustration of contracts. It held that Sections 32 and 56 of the Indian Contract Act, 1872 govern the law on force majeure. When the contract contains an express or implied force majeure clause, it is governed under Chapter III of the Contract Act, specifically Section 32. In such cases, the ‘doctrine of frustration’ in Section 56 does not apply and the court must interpret the force majeure clause contained in the contract. It held that a force majeure clause must be narrowly construed.


10.2 The present case is clearly one where the PPA contains an explicit force majeure clause in Article 8.3, which has already been extracted above. The question is whether the delay in commissioning falls within the ambit of this clause. Article 8.3(a)(vi) is the most relevant force majeure event that would apply to the facts here. It reads: 

  • vi. Inability despite complying with all legal requirements to obtain, renew or maintain required licenses or Legal Approvals” 

Article 8.3(b)(iv) disentitles a party from claiming force majeure when the event was caused by its own negligence, intentional act, or omission. It reads:

  • b) The availability of the above item (a) to excuse a Party's obligations under this Agreement due to a Force Majeure Event shall be subject to the following limitations and restrictions:

  • (iv) The Force Majeure Event was not caused by the non performing Party's negligent or intentional acts, errors or omissions, or by its negligence/failure to comply with any material Law, or by any material breach or default under this Agreement…”


10.3 When these clauses are read together, it is clear that the SPD would be entitled to the benefit of Article 8.3(a)(vi) when it is unable to secure the necessary approvals and licenses required under the PPA, provided that there is no negligence or intentional act or omission on its part that caused this situation.


10.4 The entire dispute before the KERC and the APTEL revolves on a question of fact – whether the respondents were negligent or not diligent in securing approvals and hence, is the delay in commissioning attributable to them. The KERC’s appreciation of the evidence has led it to the conclusion that the delay in commissioning was due to the respondents’ delay in making the applications, despite the approval of the PPA. However, the APTEL has taken note of certain additional factors affecting the time taken to secure the approvals that were not considered by the KERC. These include the time taken by the government to provide the PTCL that is required for approval of land conversion, and the delay caused by the authority in evacuation approval. Considering these additional factors, the APTEL has reappreciated the evidence to find that the delay was not attributable to the respondents but to the government bodies and relevant authorities. We find that there is no error in the APTEL’s approach, and it is reasonable in its reappreciation of evidence.


10.5 Further, the APTEL also correctly took note of the fact that a large number of SPDs have raised similar issues, and the government has responded to the same by requiring DISCOMs to set-up committees to look into these cases. The large number of cases that raise similar grounds and the government’s response show that the delay was not faced by the respondents alone, and hence cannot be entirely blamed on them. The government has itself acknowledged that the land use conversion process is a long and arduous one, which led it to deem conversion for solar power projects under the present scheme. However, due to lapses in the implementation of the deemed conversion, the SPDs were unable to avail the same. The APTEL has rightly appreciated these facts to hold that the respondents acted diligently and with care and caution to secure approvals, and hence their claims cannot be rejected through recourse to Article 8.3(b)(iv). 


# 11. Finally, we have also considered the letter by the appellant dated 02.03.2017 that granted a 6-month extension to the respondents after considering its individual facts and circumstances. This grant of extension must be seen in light of the government’s direction to DISCOMs dated 24.11.2016 to set up 3- member committees to consider each request for extension. This shows that the appellant, after considering the specific case of the respondents, has itself accepted that they are entitled to the benefit of Article 2.5 read with Article 8.3 of the PPA. Even before the KERC, the appellant did not challenge the respondents’ contentions. Therefore, at the appellate stage before the APTEL and this Court, they cannot be permitted to take a contrary stance and raise the plea that the delay was attributable to the respondents and not covered by the force majeure clause or that there was non-compliance with the notice requirement under Article 8.3(b)(i). We therefore reject the contentions of the appellant that force majeure does not apply in this case.


# 12. In light of the above findings of fact by the APTEL that the delay is not attributable to the respondents and that the force majeure clause is applicable, it rightly held that the extension of time under Article 2.5 is warranted and the commissioning of the project on 24.08.2017 is within the extended period of 24 months. Consequently, the APTEL also rightly held that there is no occasion for the imposition of liquidated damages under Articles 2.2 and 2.5.7 or for the reduction of tariff under Article 5.1 of the PPA.

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Friday, 24 January 2025

Doctrines in Property Transactions.

 Guiding Principles for Fairness, Justice, and Legal Integrity in Property Transactions.


S. No.

Doctrine

Explanation 

Legal Provision


Doctrine of Escheat

Property of a deceased person reverts to the State if there are no legal heirs to inherit it.

Under the Indian Succession Act, 1925, the property of a person who dies intestate and without heirs escheats to the government


If a person dies without a will or legal heirs, their property is taken over by the government for public use.


Doctrine of Eminent Domain

in The government has the power to acquire private property for public use, with fair compensation to the owner.

Governed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013.


Land is acquired to construct a national highway, and fair compensation is provided to the owner.


Doctrine of Lis Pendens

Prevents parties from transferring or dealing with property under litigation to protect the rights of the opposing party

Under Section 52 of the Transfer of Property Act, 1882, property under dispute cannot be transferred without affecting the litigating parties' rights.


A property being sold during a court dispute over ownership remains subject to the court's final decision.


Doctrine of Part Performance

Protects a person who has acted upon an incomplete contract if possession has been delivered or part payment has been made.

Section 53A of the Transfer of Property Act, 1882, provides protection for possession under an unregistered agreement.


A buyer who has paid part of the price and taken possession can defend their rights despite incomplete documentation.


Doctrine of Election

Prevents a person from simultaneously enjoying and rejecting different parts of a single transaction or instrument.

Section 35 of the Transfer of Property Act, 1882, mandates that beneficiaries choose between conflicting benefits in a transaction.


A beneficiary must decide between keeping a gifted property or retaining another conflicting benefit under a will.


Doctrine of Fixtures

Anything permanently attached to the land becomes part of the land and cannot be removed without the owner's consent.

Under Section 108 of the Transfer of Property Act, 1882, fixtures attached during tenancy become part of the land.


A tenant planting trees or constructing a shed cannot remove them upon lease termination without consent.


Doctrine of Accretion

Section 4 of the Indian Easements Act, 1882, allows landowners to claim naturally deposited land over time.

A farmer gains additional land along a riverbank due to consistent soil deposits over the years.


Doctrine of Bona Fide Purchaser

Protects the rights of a buyer who has purchased property in good faith and without notice of any defect or prior claim

A bona fide purchaser's rights are upheld in various jurisdictions, even if prior unregistered claims exist.


A person buys a piece of land, believing the seller has full ownership, unaware of an earlier unregistered agreement*. If the buyer acted in good faith and without knowledge, their ownership is protected.


Doctrine of Priority

In case of competing interests in the same property, the first in time generally prevails.

Section 48 of the Transfer of Property Act, 1882, states that earlier registered interests take precedence.


If Person A mortgages a house to Bank X in January and later mortgages the same house to Bank Y in March, Bank X’s claim will be satisfied first since their mortgage was registered earlier


Doctrine of Marshalling

Allows subsequent mortgagees to claim property not exclusively charged in favor of the prior mortgagee.

Section 81 of the Transfer of Property Act, 1882, ensures subsequent creditors can claim unsatisfied property.


If a person mortgages two houses (House A and House B) to one lender and later mortgages only House B to a second lender, the second lender can claim House A if the debt is not fully recovered from House B.


*An unregistered agreement refers to a contract or document related to property, such as a sale agreement, mortgage, or lease, that has not been formally recorded with the appropriate government authority or registrar. 

In the context of the example mentioned, the earlier unregistered agreement could be something like a contract in which the seller had promised to sell the property to someone else or had mortgaged it to a bank, but that agreement was not registered with the relevant authorities. Because it wasn't registered, it might not be visible in public records.