Part Performance and Specific Performance
Doctrine of Part Performance & Specific Performance of Contract: Agreement to Sell, Sale Deed and the Formality of Registration
It is a settled proposition of law that, an agreement of sale comes into existence when the vendor agrees to sell and the purchaser agrees to purchase, for an agreed consideration on agreed terms. It can be oral. It can be by exchange of communications which may or may not be signed. It may be by a single document signed by both parties. It can also be by a document in two parts, each party signing one copy and then exchanging the signed copy as a consequence of which the purchaser has the copy signed by the vendor and a vendor has a copy signed by the purchaser. It can also be by the vendor executing the document and delivering it to the purchaser who accepts it.
An agreement for sale and purchase simpliciter is a reciprocal arrangement imposing obligations and benefits on both parties and is enforceable at the instance of either. The interpretation of such a contract would be governed by the laws of contract relating to the performance of reciprocal promises. Where under an agreement an option to a vendor is reserved for repurchasing the property sold by him, the option is in the nature of a concession or privilege and it may be exercised on strict fulfillment of the conditions on the fulfillment of which it is made exercisable.
It is important to note that: (a) Execution of sale deed does not need any attesting witness like gift deed which requires at least two attesting witnesses at the time of its execution as per Section 123 of the Transfer of Property Act, 1882; and, (b) Section 68 of the Indian Evidence Act, 1872 which deals with examination of attesting witness to prove the execution of document, does not apply to sale deed which is governed by Section 54 of the Transfer of Property Act, 1882. Moreover, it is intrinsic to note the difference between ‘sale’ and ‘exchange’ of property. If a property is transferred in exchange for something other than money, such a transaction would be called an ‘exchange’; the difference between a sale and an exchange is that, in the former, the price is paid in money, while in the latter it is paid in goods, by way of barter.