Section 51 TPA

 Section 51 Improvements made by bona fide holders under defective titles.— When the transferee of immoveable property makes any improvement on the property, believing in good faith that he is absolutely entitled thereto, and he subsequently evicted therefrom by any person having a better title, the transferee has a right to require the person causing the eviction either to have the value of the improvement estimated and paid or secured to the transferee, or to sell interest in the property to the transferee at the then market value thereof, irrespective of the value of such improvement. The amount to be paid or secured in respect of such improvement shall be the estimated value thereof at the time of the eviction. When, under the circumstances aforesaid, the transferee has planted or sown on the property crops which are growing when he is evicted therefrom, he is entitled to such crops and to free ingress and egress to gather and carry them.

INTRODUCTION

This section is an application of the equitable maxim that he who seeks equity must do equity. This section gives relief to a transferee who makes improvements in good faith on the land held by him and in being evicted subsequently by a person having better title. Thus, if it is just and equitable that a person having better title is entitled to have possession of a property, it is also just and equitable that a bonafide transferee can be compensated for his bonafide investments in making improvements and who is now being evicted without any fault on his part.

• It is significant to note that a person claiming eviction of a bonafide purchaser who made improvements, must be estopped from refusing to pay the compensation because his own acquiescence (silence) was responsible for those improvements. Therefore, in some cases the rule laid down in this section has been regarded as an extension of the doctrine of estoppel.

Inspite of a superficial similarity, the two cases rest on totally different principles of foundation.

This Section is thus based on the maxim of equity rather than on the doctrine of estoppels and there can be no question of waiver where both the parties are in error of rights .

Doctrine of Estoppel by acquiescence occurs when the person having title knows a fact unknown to the other persons acting in violation of the right which that fact gives, and does not inform them about it, but lies by and lets them run into a trap.

This was held in the case of

Case Law :- Russel V. Watts1

The distinction between this class of case and section 51 is as follows:-

1. Estoppel by acquiescence looks to the conduct of the prospective evictor, while this section 51 looks to the conduct of the person evicted.

2. To invoke the concept of estoppel, defendant has to plead each act or omission that constitutes representation from the plaintiff and consequential acts by the defendant and prove them. However, section 51 can be invoked when the defendant who is found to have made improvements on the property is neither a trespasser, nor has he pleaded and established estoppel.

Scope of this Section

This section applies only to transfers of absolute interest

Sale,

Gif

Exchange.

Thus the word transferee does not cover lesee, Mortgagee,trespasser.

• Lesee:- A lesee cannot be regarded as a transferee under this section and he cannot claim compensation for any improvements made by him.The lesee’s interest is not absolute and he cannot claim compensation even though the lease is a permanent lease.

• Mortgagee:- Similarly the mortgagee also cannot claim compensation for the improvements made by him on the property as he also do not have absolute interest.

• Trespasser:- Trespasser do not have a legal title on the property thus he also cannot be regarded as a transferee.

Case Law :- Emerald Valley Vs Estate Ltd. Badaguli.2

In this case a person trespassed into Government property. He was fully aware that it did not belong to him. Kerala HC held that on eviction from the land he was not entitled to benefit of compensation for the improvements made by him on the government property.

Ingredients of section 51

• Transferee of immovable property

• Makes any improvement (substantial ones which enhances the value of property) on the property

• Believing in good faith that he is absolutely entitled thereto this belief may be mistaken belief or may be negligent but it must not be dishonest intention.

• He is subsequently evicted therefrom by any person having better title.

• The word transferee does not refer to lessee, mortgager or tespasser.

• Nature of relief to transferee – the option is with the person who evicts the transferee. The transferee has to select any one of the reliefs given to him by the evictor. Transferee cannot compel the evictor to give any particular relief to him.

• Valuation of compensation

Case law :- Narayana Rao V. Basavarayappa3

Sc in this landmark case held that the amount of compensation is based on the Market value at the time of eviction .

Case law:- Harilal Vs Gordhan 4

In this case the owner of the property was the minor and that property was transferred to the third part by the guardian. The Third person bought the property in good faith and made improvements on that property.

Later when the minor became major he got the sale declared as null and void.

It was held in this case that the transferee was entitled to get the benefit of this section.

Good Faith.

As this section is based on the principle of equity. Equity cannot help anyone whose own conduct is unjust, therefore this section does not apply where transferee’s own conduct is mala fide It is important that the transferee had made improvements believing in good faith that he was entitled to make the improvements.

Such Bona Fide belief may be mistake or negligent but it should not be dishonest intention.

CASE LAW :- Sayed Ali Moosa Raza Vs Razia Begum 5

The plaintiff had title on a land and defendant made construction on the land in belief of bona fide that he had valid title over that land. Court held that he can get the benefit of section 51 but the onus of proving good faith lies on the transferee.

CASE LAW :- Durga devi Vs Baint Prasad 6

The respondent who was in possession raised unauthorized constructions on part of land owned by the appellant despite her objections.

Held Owner cannot be debarred from from recovering the possession by any plea the raising of the construction was not done in the good faith.Thus section 51 was not applicable.

IMPROVEMENTS

Improvements be such which increases the value of the property permanently.

Example :- manuring of the field cannot be termed as improvement.

Repairs made on the house are not considered as improvements.

Crops

Where for example the transferee has planted crops on the property that are growing at the time of him being evicted he is entitled to such crops provided that he had grown the crops with a bona fide intention and for that purpose the transferee will have a right to have free movement in and out of the property.

Nature of Relief To Transferee

The transferee may get anyone of the following reliefs.

a) He may get compensation for the improvements,

b) He may require the evictor to sell the property to him.

BUT the option is with the person who evicts the transferee, the transferee cannot compel the evictor to give any particular relief to him. Normally the person having a better title would give the cost of improvements but if he is too poor to pay the transferee he would choose the option to sell his property to the transferee.

Valuation of the Compensation

Where the transferee is getting the compensation for the improvements,he can claim the market value of the improvements made by him.The evictor cannot insist the transferee to accept only the actual money expended by him on making the the improvements that he made at the time of making the improvements.However the market value of the improvements to which the transferee is entitled is determined and awarded by the court.

Under this section the value of the compensation to be awarded to the transferee is as on the date of the eviction and not on the date when the option was made by the evictor or the date when transferee selects his relief