Full Judgment Text
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 18377 OF 2017
AMEER MINHAJ …..Appellant(s)
:Versus:
DIERDRE ELIZABETH (WRIGHT) ISSAR
AND ORS. ....Respondent(s)
J U D G M E N T
A.M. Khanwilkar, J.
This appeal emanates from the decision of the High Court
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nd
dated 2 December, 2016 allowing the application preferred
by respondent Nos.1 & 2 (defendant Nos.3 & 4) whereby the
admissibility of the documents produced by the appellant
(plaintiff) in the suit filed by him for relief of specific
Signature Not Verified
Digitally signed by
SUBHASH CHANDER
Date: 2018.07.04
13:35:20 IST
Reason:
performance of contract with alternative relief of refund of
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advance amount and permanent injunction against the
defendants was questioned.
2. The appellant filed a suit in the Court of District Judge of
the Nilgiris at Udhagamandalam, being O.S. No.23 of 2010,
against Mr. Charles Thomas Orme Alford Wright who died
during the pendency of the suit whereafter respondent Nos.1
& 2 herein (defendant Nos.3 & 4) were brought on record as
his heirs and legal representatives. It was asserted in the suit
that the original defendant No.1 was the absolute owner of
4.80 acres of land in Survey No.H48A in R.S. No.332/1 of
Coonoor Rural Village. He had entered into an agreement of
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sale with respondent No.3 (defendant No.2) on 12 November,
1995 agreeing to sell the said property either to the second
defendant or its nominees. It is further asserted by the
appellant (plaintiff) that in furtherance of the said agreement
to sell the second defendant was put in possession of the
property agreed to be sold, in part performance of the
agreement of sale and that fact has been recited in the
agreement of sale itself. The agreement also authorized the
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second defendant, at its discretion, to develop the property by
constructing dwelling units thereon for which the predecessor
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in title of respondent Nos.1 & 2 (namely the original 1
defendant) was to cooperate and give consent, whenever and
wherever necessary, for the unhindered development of the
property. It was then asserted by the appellant (plaintiff) that
to effectuate the stated agreement to sell, a registered Power of
Attorney was executed in favour of the second defendant
(respondent No.3) by the owner (original first defendant). That
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Power of Attorney was registered on 2 May, 1996 in the office
of Sub Registrar, Coonoor. It was then stated that since
respondent No.3 (defendant No.2) was unable to develop the
said property due to unavoidable situation, he requested the
appellant (plaintiff) to execute the project of developing the suit
property into building sites for dwelling units and to sell it to
prospective purchasers. The appellant (plaintiff) accepted the
said offer after doing due diligence and resultantly, an
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agreement of sale came to be executed on 9 July, 2003 by the
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1 defendant the original owner of the suit property namely
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the predecessor in title of respondent Nos.1 & 2 in favour of
the appellant (plaintiff) through his Power of Attorney holder,
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namely, respondent No.3 (2 defendant) for a consideration of
Rs.1 crore. Earnest money of Rs.25 lakh was paid at the time
of the execution of agreement of sale and the balance was to
be paid within a period of 12 months, subject to certain
stipulations. The appellant (plaintiff) was put in possession of
the suit property upon execution of the agreement of sale
th st
dated 9 July, 2003. The 1 defendant did not fulfill his
obligation within the stipulated period as a result of which a
suit for specific performance, permanent injunction and
alternative relief of refund of the advance amount came to be
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filed on 2 August, 2010.
th
3. Admittedly, neither the agreement to sell dated 12
November, 1995 executed in favour of defendant No.2
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(respondent No.3) nor the agreement to sell dated 9 July,
2003 executed in favour of the appellant (plaintiff) has been
registered. The Power of Attorney in favour of respondent No.3
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(defendant No.2) dated 2 May, 1996 has been registered but
executed on a stamp paper of Rs.100/ only.
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The defendants filed their written statement to counter the
claim set up in the plaint by the appellant. It is not necessary
to dilate on the factual matrix as the issue to be answered in
the present appeal/proceedings is very limited.
Suffice it to observe that the contesting defendants have
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asserted that the Power of Attorney executed in favour of
respondent No.3 (defendant No.2) by the original owner of the
suit property (defendant No.1) and predecessor in title of
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respondent Nos.1 & 2) has been cancelled on 2 January,
2002. As a result, respondent No.3 (defendant No.2) could not
have executed the agreement to sell in favour of the appellant
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(plaintiff) on 9 July, 2003.
Be that as it may, respondent Nos.1 & 2 (defendant Nos.3
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& 4) moved a formal application for deciding the admissibility
of unregistered agreements to sell and also to impound the
Power of Attorney for having been executed upon payment of
insufficient stamp duty and to impose suitable penalty before
proceeding with the trial. That application was rejected by the
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Trial Court on 20 June, 2011 against which the original
defendant No.1 and defendant No.3 (respondent No.1) filed a
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revision petition before the High Court of Judicature at
Madras, being CRP (MD) No.3422/2011. They were
unsuccessful as the High Court dismissed the revision petition
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on 30 September, 2011 holding that the question of payment
of stamp duty or the admissibility of the document could be
decided only when the stated documents were sought to be
marked through witnesses and not at that stage. Therefore,
after the plaintiff filed an affidavit of evidence and sought to
rely on the said three documents, defendant Nos.3 & 4
(respondent Nos.1 & 2) who were brought on record as legal
heirs of original defendant No.1, filed a joint application, being
I.A. No.26/2013, for deciding the question whether the three
documents could be received as evidence. That application
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was decided by the Trial Court on 1 June, 2016 partly in
favour of defendant Nos.3 & 4. The Trial Court essentially
answered the question with reference to the mandate of
Section 17(1A) of the Registration Act, 1908 (for short, “1908
Act”) which was inserted by Act 48 of 2001 with effect from
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24 September, 2001. The Trial Court took the view that the
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agreement to sell dated 12 November, 1995, having been
executed prior to the cutoff date, was admissible and could be
marked as an Exhibit. As regards the Power of Attorney
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executed in favour of respondent No.3 (defendant No.2) on 2
May, 1996, the Trial Court opined that since it was a
registered document, there was legal presumption about the
correctness of the valuation of the document for the purpose of
stamp duty. Further, the document was only a General Power
of Attorney deed and did not refer to any consideration
amount. Further, it only authorized respondent No.3
(defendant No.2) to act in terms of the Power of Attorney and
therefore, it could not be construed as a document of
conveyance. Accordingly, the Trial Court rejected the objection
of respondent Nos.1 & 2 (defendant Nos.3 & 4) for receiving
the said document as evidence. However, with regard to the
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third document, being an agreement to sell dated 9 July,
2003, the Trial Court opined that since the same was executed
after coming into force of Section 17(1A) of the 1908 Act, it
was required to be registered. But then, considering the
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purport of the said provision, the document could still be
exhibited and even if exhibited, the prayer in respect of relief of
protection of possession in terms of Section 53A of the
Transfer of Property Act, 1882 (for short, “1882 Act”) could not
be granted. In the ultimate analysis, the Trial Court opined
that all the three documents could be marked and received as
evidence. The Trial Court, however, made it clear that it was
not examining any other contention regarding the
genuineness, validity and binding nature of the documents or
whether they were hit by the provisions of the Indian Stamp
Act, 1899 (for short, “1899 Act”) and 1882 Act. The documents
were marked and merely exhibited subject to proof and
relevancy.
6. Being aggrieved by the said decision, respondent Nos.1 &
2 (defendant Nos.3 & 4) preferred a civil revision petition
before the High Court of Judicature at Madras being CRP
(P.D.) No.1700/2016. The High Court reversed the decision of
the Trial Court. The High Court interpreted the General Power
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of Attorney dated 2 May, 1996 and construed it as having
been given for consideration in furtherance of the agreement to
9
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sell dated 12 November, 1995. The High Court noted that
since the said General Power of Attorney refers to the
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agreement to sell dated 12 November, 1995, the terms and
conditions specified in the latter document would get
incorporated into the Power of Attorney, meaning thereby it
was given for consideration, and therefore, it would attract
stamp duty applicable to a deed of conveyance. It could not
have been executed on the stamp paper of Rs.100/. Hence,
the document was inadmissible and could not be received as
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evidence. As regards the agreement to sell dated 9 July,
2003, the High Court opined that the same was required to be
registered compulsorily and the Trial Court was not correct in
making an observation that there was no need for registration
thereof. The High Court, accordingly, allowed the civil revision
petition and was pleased to set aside the order passed by the
Trial Court and instead allowed the application filed by
respondent Nos.1 & 2 (defendant Nos.3 & 4), by holding that
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the General Power of Attorney dated 2 May, 1996 was given
for consideration as it was in furtherance of the agreement of
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th
sale dated 12 November, 1995. Further, the sale agreement
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dated 9 July, 2003 was inadmissible as evidence for the
purpose of part performance of contract in view of the
statutory bar in terms of Section 17(1A) read with Section 49
of the 1908 Act.
7. We have heard Mr. B. Karunakaran, learned counsel
appearing for the appellant and Mr. Jayant Bhushan, learned
senior counsel appearing for the contesting respondents.
8. The limited issue, as considered by the Trial Court and
High Court at the instance of respondent Nos.1 & 2 (defendant
Nos.3 & 4), was about receiving the three documents produced
by the appellant (plaintiff) as evidence. The Trial Court had
examined the issue with reference to the provisions of the
Registration Act only and had left open all other questions
regarding the validity, genuineness and binding nature of the
said documents, including whether the same were hit by the
provisions of the 1899 Act and the 1882 Act. The Trial Court
opined that those aspects could be decided on the basis of
evidence, both oral and documentary, to be adduced by the
parties.
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9. In other words, the core issue to be answered in the
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present appeal is whether the suit agreement dated 9 July
2003, on the basis of which relief of specific performance has
been claimed, could be received as evidence as it is not a
registered document. Section 17(1A) of the 1908 Act came into
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force with effect from 24 September, 2001. Whereas, the suit
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agreement was executed subsequently on 9 July, 2003.
Section 17 (1A) of the 1908 Act reads thus:
“17. Documents of which registration is compulsory (1)
The following documents shall be registered, if the property
to which they relate is situate in a district in which, and if
they have been executed on or after the date on which, Act
No. XVI of 1864, or the Indian Registration Act, 1866, or the
Indian Registration Act, 1871, or the Indian Registration Act,
1877, or this Act came or comes into force, namely:
XXX XXX XXX
(1A) The documents containing contracts to transfer for
consideration, any immovable property for the purpose of
section 53A of the Transfer of Property Act, 1882 (4 of 1882)
shall be registered if they have been executed on or after the
commencement of the Registration and Other Related laws
(Amendment) Act, 2001 and if such documents are not
registered on or after such commencement, then, they shall
have no effect for the purposes of the said section 53A.
XXX XXX XXX”
10. On a plain reading of this provision, it is amply clear that
the document containing contract to transfer the right, title or
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interest in an immovable property for consideration is required
to be registered, if the party wants to rely on the same for the
purposes of Section 53A of the 1882 Act to protect its
possession over the stated property. If it is not a registered
document, the only consequence provided in this provision is
to declare that such document shall have no effect for the
purposes of the said Section 53A of the 1882 Act. The issue, in
our opinion, is no more res integra . In S. Kaladevi Vs. V.R.
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, this Court has restated the legal
Somasundaram and Ors.
position that when an unregistered sale deed is tendered in
evidence, not as evidence of a completed sale, but as proof of
an oral agreement of sale, the deed can be received as evidence
making an endorsement that it is received only as evidence of
an oral agreement of sale under the proviso to Section 49 of
the 1908 Act. Section 49 of the 1908 Act reads thus:
“49. Effect of nonregistration of documents required to
be registered. No document required by section 17 [or by
any provision of the Transfer of Property Act, 1882 (4 of
1882)], to be registered shall
(a) affect any immovable property comprised
therein, or
1
(2010) 5 SCC 401
13
(b) confer any power to adopt, or
(c) be received as evidence of any transaction
affecting such property or conferring such power,
unless it has been registered:
Provided that an unregistered document affecting
immovable property and required by this Act or the Transfer
of Property Act, 1882 (4 of 1882), 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
(3 of 1877), or as evidence of any collateral transaction not
required to be effected by registered instrument.”
11. In the reported decision, this Court has adverted to the
principles delineated in K.B. Saha and Sons Private Limited
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, and has added one
Vs. Development Consultant Limited
more principle thereto that a document is required to be
registered, but if unregistered, can still be admitted as
evidence of a contract in a suit for specific performance. In
view of this exposition, the conclusion recorded by the High
Court in the impugned judgment that the sale agreement
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dated 9 July, 2003 is inadmissible in evidence, will have to
be understood to mean that the document though exhibited,
will bear an endorsement that it is admissible only as evidence
of the agreement to sell under the proviso to Section 49 of the
2
(2008) 8 SCC 564
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1908 Act and shall not have any effect for the purposes of
Section 53A of the 1882 Act. In that, it is received as evidence
of a contract in a suit for specific performance and nothing
more. The genuineness, validity and binding nature of the
document or the fact that it is hit by the provisions of the
1882 Act or the 1899 Act, as the case may be, will have to be
adjudicated at the appropriate stage as noted by the Trial
Court after the parties adduce oral and documentary evidence.
12. Reverting to the registered General Power of Attorney, the
same has been executed by the original defendant No.1
predecessor in title of respondent Nos.1 & 2 (defendant Nos.3
& 4), in favour of respondent No.3 (defendant No.2). Being a
registered document, in our opinion, the Trial Court was
justified in observing that there is a legal, rebuttable
presumption that the same has been duly stamped. As
observed by the Trial Court, the question as to whether the
document is hit by the provisions of the 1882 Act or the 1899
Act can be decided after the parties adduce oral and
documentary evidence. The High Court, in our opinion,
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therefore, should have stopped at that instead of analysing the
said instrument by invoking the principle of incorporation by
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reference to the agreement to sell dated 12 November, 1995.
For, the appellant (plaintiff) is not a party to the said
document. Indeed, the executor of the document – original
defendant No.1 and the defendant No.2 in whose favour the
same has been executed, are parties to the present suit. The
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principal document, namely, the agreement to sell dated 12
November, 1995, as rightly noticed by the Courts below, was
executed prior to coming into force of Section 17(1A) of the
1908 Act. That provision has been made applicable
prospectively. Hence, the same was not required to be
compulsorily registered at the time of its execution. Even if it
was required to be registered, keeping in view the purport of
Section 49 read with Section 17(1A) of the 1908 Act, the same
could be received as evidence for a limited purpose, without
having any effect for the purposes of Section 53A of 1882 Act.
13. As a result, the Trial Court was right in overturning the
objection regarding marking and exhibiting these documents
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as urged by respondent Nos.1 & 2 (defendant Nos.3 & 4), while
making it clear that the question regarding the genuineness,
validity and binding nature of the documents, including as to
whether it is hit by the provisions of 1882 Act or the 1899 Act,
as the case may be, would be decided at the appropriate stage.
14. The High Court has adverted to the decision in
Avinash
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Kumar Chauhan Vs. Vijay Krishna Mishra , which,
however, deals with the power of the Court to impound
insufficiently stamped instruments in exercise of its power
under Section 35 of the 1899 Act. That issue will have to be
considered by the Trial Court at the appropriate stage which
has already been kept open.
Accordingly, this appeal ought to succeed by restoring
15.
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the order of the Trial Court dated 1 June, 2016 in the above
terms. The Trial Court shall decide all other issues concerning
the validity, genuineness, applicability and binding nature of
the documents including whether it is hit by the provisions of
the 1882 Act or the 1899 Act on its own merits and
3
(2009) 2 SCC 532
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uninfluenced by the observations made by it or by the High
Court.
16. The appeal is allowed in the above terms. There shall be
no order as to costs.
17. As the suit is pending since 2010, we direct the Trial
Court to dispose of the same as expeditiously as possible,
preferably within a period of six months from the date of
receipt of a copy of this judgment.
.………………………….CJI.
(Dipak Misra)
…………………………..….J.
(A.M. Khanwilkar)
…………………………..….J.
(Dr. D.Y. Chandrachud)
New Delhi;
July 04, 2018.