Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2535/2023
(@SLP (C) No. 14884/2022)
R. HEMALATHA ...APPELLANT(S)
VERSUS
KASHTHURI …RESPONDENT(S)
J U D G M E N T
M. R. Shah, J.
1. Leave granted.
2. Feeling aggrieved and dissatisfied with the
impugned judgment and order passed by the
High Court of Judicature at Madras at
Madurai passed in Revision Application
Signature Not Verified
Digitally signed by R
Natarajan
Date: 2023.04.10
16:38:20 IST
Reason:
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No.1877 of 2017 dated 01.02.2022 by which
the High Court has allowed the said revision
application preferred by the respondent herein
by quashing and setting aside the order passed
by the learned Trial Court passed in I.A.
No.159 of 2017 in O.S. No.199 of 2014 by
further directing that the document in
question shall be received in evidence in the
suit for specific performance, the original
defendant has preferred the present appeal.
3. The facts leading to the present appeal in nut
shell are as under:
2.1 That the respondent herein is an original
plaintiff (hereinafter referred to as “original
plaintiff”) instituted civil suit being O.S. No.199
of 2014 for specific performance of the
Agreement to Sell dated 10.09.2013. After the
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chiefexamination of the plaintiff as PW1, on
the application filed by the appellant – original
defendant, a preliminary issue was framed by
the learned Trial Court on the admissibility of
the Agreement dated 10.09.2013 in evidence. It
was the case on behalf of the defendant that in
view of the Tamil Nadu Amendment Act No.29
of 2012 to the Indian Registration Act, under
which the instruments of agreement relating to
sale of immovable property of the value of
Rs.100/ and upwards is compulsorily
required to be registered, the said unregistered
document shall be inadmissible in evidence.
On the other hand, relying upon Section 49(a)
and (c) of the Act, it was submitted that an
unregistered Agreement to Sell can be admitted
as evidence of a contract in a suit for specific
performance. The learned Trial Court held the
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preliminary issue in favour of the defendant
and against the plaintiff by observing that the
unregistered Agreement dated 10.09.2013
shall not be admissible in evidence.
2.2 Feeling aggrieved and dissatisfied with the
order of the learned Trial Court, the plaintiff
preferred the present revision application
before the High Court. By the impugned
judgment and order, the High Court has
allowed the revision petition relying upon
Section 49 of the Registration Act by setting
aside the order passed by the learned Trial
Court 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
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first exception carved out in the proviso to
Section 49.
2.3 The impugned judgment and order passed by
the High Court directing to receive the
unregistered Agreement to Sell in evidence in
a suit for specific performance, the original
defendant has preferred the present appeal.
3. Learned counsel appearing on behalf of the
appellant herein – original defendant has
vehemently submitted that in the facts and
circumstances of the case, the High Court has
materially erred in directing to receive the
unregistered agreement in evidence.
3.1 It is submitted that it is an admitted position
that the Agreement to Sell dated 10.09.2013
which is the foundation or basis of the suit is
an unregistered Agreement to Sell and
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therefore cannot be exhibited in evidence for
the main purpose in the suit, in view of the
Tamil Nadu Amendment to Section 17 of the
Registration Act making an Agreement to Sell
to be compulsorily registered with effect from
01.12.2012.
3.2 It is submitted that the “explanation” attached
to subclause (2) of Section 17 which also
relates to Agreement to Sell has been omitted.
It is submitted that said explanation was
inserted by Amendment Act, 1927, to
overcome the judgment of the Privy Council in
the case of Dayal Singh vs. Indar Singh,
(1926) 24 LW 396 . It is submitted that in that
case, an advance paid under an Agreement to
Sell being a charge on the property as per
Section 55(6)(v) of the Transfer of Property Act
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was held to create an interest and hence,
unregistered Agreement to Sell cannot be
admitted in evidence. The explanation
remedied the situation and save the
Agreement to Sell from the requirement of
compulsory registration.
3.3 It is submitted that Section 54 of the Transfer
of Property Act states that an Agreement to
Sell by itself does not create any interest in or
charge on the property. As per Section 17(2)(v)
of the Registration Act with reference to
Section 1(b) and (c), that an
agreement/document simplicitor merely
creating a right to obtain another document,
was saved from compulsory registration. It is
submitted that thus prior to the amendment
of 2012 and after the amendment, an
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Agreement to Sell simplicitor or reciting
payment of earnest money was not required to
be registered. For these savings, an Agreement
to Sell would also have required registration,
as it is a document affecting immovable
property. It is submitted that now after the
2012 amendment, an Agreement to Sell for
Rs.100/ or upwards is to be compulsorily
registered. An agreement recital for payment of
advance is also to be compulsorily registered
as the “explanation” in Section 17(2)
introduced by 1927 amendment after Dayal
, has been omitted by the present
Singh’s case
amendment. The advance amount and sale
consideration are part and parcel of the
transactions between the parties.
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3.4 It is submitted that as per Section 49(a) and
(c) of the Registration Act, a document
requires to be registered, if not registered shall
not affect the immovable property comprised
therein and shall not be received as evidence
of any transaction affecting such property. It
is submitted that prior to 2012 amendment,
when an Agreement to Sell was not required to
be registered, Section 49(a) and (c) had no
operation in relation to an Agreement to Sell.
So an unregistered Agreement to Sell had no
restriction in being received as evidence of any
transaction affecting such immovable property
or affecting immovable property as such.
Thus, the terms of the document and the
transaction embodied in it could be relied on
in its entirety in any proceeding in the pre
amendment era. It is submitted that however
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now after the amendment, Section 49(a) and
(c) of the Registration Act which are both
substantive law and rule of evidence, apply to
an unregistered Agreement to Sell and it shall
not affect immovable property and shall not be
received as evidence of transaction affecting
immovable property.
3.5 It is further submitted by the learned counsel
for the defendant that if the interpretation of
the Hon’ble High Court given in the impugned
order is followed, then the same would render
the Amendment Act, 2012 otiose and
meaningless, simply because the situation
before the said amendment was exactly as has
been laid down in the impugned order. The
legislative intent behind making an Agreement
to Sell, a compulsorily registrable document
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has been completely ignored by the Hon’ble
High Court.
3.6 It is submitted that after introduction of a
specific provision relating to Agreement to Sell
in Section 17(1)(g) of the Act, and in the
absence of any amendment in Section 17(2) to
include clause (g) also within its fold, Section
17(2)(v) will only operate in relation to
documents covered under the general
provision of Clauses (b) and (c) of subsection
(1). it is submitted that in that sense Section
17(2)(v) will apply to all other agreements to
mortgage, to lease, to release, to exchange etc.
but will not apply to an Agreement to Sell.
3.7 Making above submissions, it is prayed to
allow the present appeal and quash and set
aside the impugned order passed by the
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Hon’ble High Court and to restore the order
passed by the learned Trial Court.
4. While opposing the present appeal, learned
counsel appearing on behalf of original
plaintiff has heavily relied upon the proviso to
Section 49 of the Registration Act which
specifically provides that an unregistered
document affecting the immovable property
and required by the Registration Act to be
registered may be received as evidence of a
contract in a suit for specific performance
under ChapterII of the Specific Relief Act or
as evidence of any collateral transaction not
required to be affected by registered
instrument.
4.1 It is submitted that as rightly observed and
held by the Hon’ble High Court though Section
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17(1) of the Registration Act has been
amended by the Tamil Nadu Act, 2012 by
inserting Section 17(1)(g), making the
Agreement to Sell/ Agreement affecting any
immovable property compulsorily required to
be registered, there is no corresponding
amendment to Section 49 more particularly
proviso to Section 49 of the Registration Act.
4.2 It is further submitted that even the object
and purpose of Tamil Nadu Amendment Act,
2012 more particularly inserting Section 17(1)
(g) is required to be considered which has
been elaborately dealt with and considered by
the Hon’ble High Court in the impugned
judgment and order. It is submitted that a
perusal of statement of objects and reasons to
the Act No.29 of 2012 would suggest that
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primarily the amendment has been introduced
by the State of Tamil Nadu by reason of the
fact that instruments of agreement relating to
sale of immovable property, instruments of
power of attorney relating to immovable
property and instruments evidencing
agreement of deposit of title deeds, which were
not registrable were resulting in loss to the
exchequer as the public were executing these
documents on white paper or on stamp paper
of nominal value.
4.3 With the above submissions and heavily
relying upon the proviso to Section 49 of the
Registration Act, it is prayed to dismiss the
present appeal.
5. We have heard the learned counsel appearing
on behalf of respective parties at length. The
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short question posed for the consideration of
this Court is effect of Section 17(1)(g) of the
Registration Act applicable to the State of
Tamil Nadu by which Section 17(1)(g) of the
Registration Act has been inserted and
instruments of agreement relating to sale of
immovable property of the value of Rs.100/
and upwards is made compulsorily registrable
and whether such unregistered agreement
relating to sale of immovable property can be
received in evidence in a suit for specific
performance?
6. While answering the aforesaid issues and
appreciating the submissions made by learned
counsel appearing on behalf of the respective
parties, Section 17 of the Registration Act,
1908, as applicable prior to the Registration
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(Tamil Nadu Amendment) Act, 2012 and
Section 17 post Amendment Act, 2012, are
required to be referred to which are as under.
7. Section 17 of the Registration Act, 1908, post
Tamil Nadu Amendment Act, 2012 reads as
under :
“17. Documents of which registration is
.—(1) The following documents shall be
compulsory
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:—
(a) instruments of gift of immovable property;
(b) other nontestamentary instruments which
purport or operate to create, declare, assign, limit or
extinguish, whether in present or in future, any
right, title or interest, whether vested or contingent,
of the value of one hundred rupees and upwards,
to or in immovable property;
(c) nontestamentary instruments which
acknowledge the receipt or payment of any
consideration on account of the creation,
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declaration, assignment, limitation or extinction of
any such right, title or interest; and
(d) leases of immovable property from year to year,
or for any term exceeding one year, or reserving a
yearly rent;
[(e) nontestamentary instruments transferring or
assigning any decree or order of a Court or any
award when such decree or order or award
purports or operates to create, declare, assign, limit
or extinguish, whether in present or in future, any
right, title or interest, whether vested or contingent,
of the value of one hundred rupees and upwards,
to or in immovable property:]
Provided that the [State Government] may, by order
published in the [Official Gazette], exempt from the
operation of this subsection any lease executed in
any district, or part of a district, the terms granted
by which do not exceed five years and the annual
rents reserved by which do not exceed fifty rupees.
[(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 (48 of 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.]
(2) Nothing in clauses (b) and (c) of subsection (1)
applies to—
(i) any composition deed; or
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(ii) any instrument relating to shares in a joint stock
Company, notwithstanding that the assets of such
Company consist in whole or in part of immovable
property; or
(iii) any debenture issued by any such Company
and not creating, declaring, assigning, limiting or
extinguishing any right, title or interest, to or in
immovable property except in so far as it entitles
the holder to the security afforded by a registered
instrument whereby the Company has mortgaged,
conveyed or otherwise transferred the whole or part
of its immovable property or any interest therein to
trustees upon trust for the benefit of the holders of
such debentures; or
(iv) any endorsement upon or transfer of any
debenture issued by any such Company; or
(v) [any document other than the documents
specified in subsection (1A)] not itself creating,
declaring, assigning, limiting or extinguishing any
right, title or interest of the value of one hundred
rupees and upwards to or in immovable property,
but merely creating a right to obtain another
document which will, when executed, create,
declare, assign, limit or extinguish any such right,
title or interest; or
(vi) any decree or order of a Court [except a decree
or order expressed to be made on a compromise
and comprising immovable property other than that
which is the subjectmatter of the suit or
proceeding]; or
(vii) any grant of immovable property by
[Government]; or
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(viii) any instrument of partition made by a
RevenueOfficer; or
(ix) any order granting a loan or instrument of
collateral security granted under the Land
Improvement Act, 1871, or the Land Improvement
Loans Act, 1883; or
(x) any order granting a loan under the
Agriculturists, Loans Act, 1884, or instrument for
securing the repayment of a loan made under that
Act; or
[(xa) any order made under the Charitable
Endowments Act, 1890 (6 of 1890), vesting any
property in a Treasurer of Charitable Endowments
or divesting any such Treasurer of any property; or]
(xi) any endorsement on a mortgagedeed
acknowledging the payment of the whole or any
part of the mortgagemoney, and any other receipt
for payment of money due under a mortgage when
the receipt does not purport to extinguish the
mortgage; or
(xii) any certificate of sale granted to the purchaser
of any property sold by public auction by a Civil or
RevenueOfficer.
[Explanation.—A document purporting or operating
to effect a contract for the sale of immovable
property shall not be deemed to require or ever to
have required registration by reason only of the fact
that such document contains a recital of the
payment of any earnest money or of the whole or
any part of the purchase money.]”
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8. By Tamil Nadu Amendment Act, 2012, Section
17(1)(g) has been inserted and “explanation” to
Section 17(2) has been omitted. Section 17(1)
(g) as inserted by Tamil Nadu Amendment Act,
2012, reads as under :
“ 17(1)(g) instruments of agreement relating to sale
of immovable property of the value of one hundred
rupees and upwards.”
9. Thus, 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 same and
despite the “explanation” to subsection (2) of
Section 17 has been omitted, there is no
corresponding amendment made to Section 49
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of the Registration Act. Section 49 of the
Registration Act is as under :
“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
(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.]”
10. Thus, as per proviso to Section 49, an
unregistered document affecting the
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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 ChapterII of the
Specific Relief Act, 1877, or as evidence of any
collateral transaction not required to be
effected by registered document.
11. At this stage, the primary statement of objects
and reasons to the Tamil Nadu Amendment
Act, 2012, is also required to be referred to and
considered. The primary statement of objects
and reasons seem to suggest that amendment
has been introduced by the State of Tamil
Nadu bearing in mind the loss to the
exchequer as public were executing the
documents relating to sale of immovable
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property etc. on white paper or on stamp paper
of nominal value.
12. At this stage, it is required to be noted that the
proviso to Section 49 came to be inserted vide
Act No.21 of 1929 and thereafter, Section
17(1A) came to be inserted by Act No. 48 of
2001 with effect from 24.09.2001 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
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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.
13. Under the circumstances, 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 ChapterII
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. It is not the case on behalf of either of the
parties that the document/ Agreement to Sell
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in question would fall under the category of
document as per Section 17(1A) of the
Registration Act. Therefore, in the facts and
circumstances of the case, the High Court has
rightly observed and held relying upon proviso
to Section 49 of the Registration Act that the
unregistered document in question namely
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.
14. In view of the above and for the reasons stated
above, the present appeal fails and the same
deserves to be dismissed. It is accordingly
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dismissed. There shall be no orders as to
costs.
…………………………………J.
(M. R. SHAH)
…………………………………J.
(KRISHNA MURARI)
New Delhi,
April 10, 2023
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