Oral Agreement Under Transfer of Property Act: Is it Legal?
The Transfer of Property Act, 1882 is a legislation that guides the process of transferring property in India. The Act has specific provisions regarding the transfer of immovable property, which includes land, buildings and any structures attached to the land. Amongst the many provisions of the Act, one of the most debated issues is the validity of an oral agreement for the transfer of a property.
An oral agreement is an agreement that is not reduced to writing. It is an agreement that is made verbally between the parties and not documented in any written form. The question is whether an oral agreement is legally valid under the Transfer of Property Act, and if so, what are its implications.
Under the Transfer of Property Act, Section 54 provides that a transfer of property can only be made by a registered instrument. This means that any oral agreement for the transfer of property is not valid. However, there is an exception to this rule, and that is Section 53A of the Act.
Section 53A of the Transfer of Property Act, also known as the part-performance doctrine, provides for rights of the transferee in an oral agreement. According to this section, if a person enters into an oral agreement for the transfer of immovable property and, in part-performance of that agreement, takes possession of the property or any part of it, then the transferee has a right to enforce the agreement in a court of law.
In simpler terms, if you have taken possession of a property based on an oral agreement, you have the right to enforce that agreement in a court of law, even if the agreement is not reduced to writing or registered.
The part-performance doctrine provides protection to the parties to an oral agreement, particularly the transferee, who has invested time, money and effort in part-performance of the agreement. However, it is important to note that this doctrine applies only if the transferee has taken possession of the property or any part of it. In the absence of possession, the transferee has no right to enforce the oral agreement under Section 53A.
It is also important to note that the part-performance doctrine is not applicable in all cases of oral agreements. For instance, if the agreement is for the transfer of ownership rights of a property, it cannot be enforced under Section 53A. Similarly, if the agreement is for the transfer of movable property, it cannot be enforced under this section.
In conclusion, while an oral agreement for the transfer of immovable property is not legally valid under the Transfer of Property Act, the part-performance doctrine provides some protection to the parties to such an agreement. To ensure legal compliance and avoid potential disputes, it is always advisable to have any agreement related to the transfer of property reduced to writing and registered. This will provide legal validity and protection to all parties involved in the transaction.