In C.A. No. 2535/2023-SC- Unregistered document affecting immovable property may be received as evidence of contract in suit for specific performance in terms of proviso to Sec.49 of Registration Act: SC
Justices M.R. Shah & Krishna Murari [10-04-2023]

Read  Judgment: R. HEMALATHA v. KASHTHURI 

Tulip Kanth

New Delhi, April 17, 2023: In a matter pertaining to Section 49 of the Registration Act, the Supreme Court has upheld the view of the Madras High Court that the unregistered Agreement to Sell in question shall be admissible in evidence in a suit for specific performance and the proviso is exception to the first part of Section 49.

The Division Bench of Justice M.R. Shah and Justice Krishna Murari clarified, “On and after the Tamil Nadu Amendment Act, 2012, as per Section 17(1) (g), instrument of agreement relating to sale of immovable property of the value of Rs.100/- and upwards is required to be registered compulsorily”.

However, despite the fact that the explanation to sub-section (2) of Section 17 has been omitted, there is no corresponding amendment made to Section 49 of the Registration Act, the Bench added.

The factual scenario of this case was such that the respondent-original plaintiff instituted a civil suit for specific performance of the Agreement to Sell. After the chief-examination of the plaintiff, on the application filed by the appellant – original defendant, a preliminary issue was framed by the Trial Court on the admissibility of the Agreement in evidence. 

The Trial Court held the preliminary issue in favour of the defendant and against the plaintiff by observing that the unregistered Agreement shall not be admissible in evidence.

The plaintiff preferred the Revision Application before the High Court against this Order and by the impugned judgment, the High Court allowed the petition and directed that the agreement in question be received in evidence considering the fact that the suit in question is a suit for specific performance, which falls within the first exception carved out in the proviso to Section 49.

This judgment passed by the High Court directing to receive the unregistered Agreement to Sell in evidence in a suit for specific performance was challenged before the Apex  Court by the original defendant.

Referring to section 49, the Bench said, “Thus, as per proviso to Section 49, an unregistered document affecting the immovable property and required by Registration Act to be registered may be received as evidence of a contract in a suit for specific performance under Chapter-II of the Specific Relief Act, 1877, or as evidence of any collateral transaction not required to be effected by registered document.”

Regarding the amendment, the Bench observed that proviso to Section 49 came to be inserted in 1929 and thereafter, Section 17(1A) came to be inserted with effect from September 24, 2001 by which the documents containing contracts to transfer or consideration any immovable property for the purpose of Section 53 of the Transfer of Properties Act is made compulsorily to be registered if they have been executed on or after 2001 and if such documents are not registered on or after such commencement, then there shall have no effect for the purposes of said Section 53A. 

“So, the exception to the proviso to Section 49 is provided under Section 17(1A) of the Registration Act. Otherwise, the proviso to Section 49 with respect to the documents other than referred to in Section 17(1A) shall be applicable”, the Top Court held.

Not only this but the Bench also held that as per proviso to Section 49 of the Registration Act, an unregistered document affecting immovable property and required by Registration Act or the Transfer of Property Act to be registered, may be received as evidence of a contract in a suit for specific performance under Chapter-II of the Specific Relief Act, 1877, or as evidence of any collateral transaction not required to be effected by registered instrument, however, subject to Section 17(1A) of the Registration Act.

With such observations, the Bench dismissed the appeal.