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Issues: Whether an unregistered agreement to sell immovable property, coupled with possession alleged to be under part performance, is a valid defence to a suit for ejectment, and whether the defendant's proper remedy was to seek specific performance and a stay of the ejectment action.
Analysis: Under Section 54 of the Transfer of Property Act, a contract for sale of immovable property does not itself create any interest in or charge on the property, and a transfer of tangible immovable property of the requisite value can be made only by a registered instrument. The English equitable doctrine of part performance could not be used to create, without registration, an interest which the Indian statute required to be created only by registered conveyance. Where the contract remained enforceable, the defendant's proper course was to seek specific performance and a stay of the ejectment suit so that the plaintiff would not obtain an immediately ineffective decree. But once the contract became unenforceable, the defendant could not rely on it, even with alleged possession under it, as a defence to ejectment. The later statutory insertion of Section 53A of the Transfer of Property Act did not govern the case, as it was prospective.
Conclusion: The agreement to sell and the alleged part performance did not furnish a defence to ejectment. The defendant was not entitled to resist the plaintiff's claim on that basis.
Final Conclusion: The plaintiff's title and right to possession prevailed, and the appeal failed.
Ratio Decidendi: Before the insertion of Section 53A, an unregistered contract for sale of immovable property did not create any enforceable interest or defence to ejectment in India, and part performance could not override the statutory requirement of registration.