An unregistered agreement to sell is admissible as evidence in a specific-performance suit.

The plaintiffs alleged that they executed a registered sale deed dated 5 March 2015 in favour of the defendant as security for a loan, and that the parties simultaneously entered into an unregistered resale agreement requiring repayment within three years.

They further claimed that an endorsement dated 25 February 2018 extended the time by one year, and that they later tendered the balance consideration of ₹19,00,000.

The defendant denied the resale agreement and endorsement, asserted that the sale deed was an absolute sale, and pleaded forgery and limitation.

The trial court decreed specific performance but declined permanent injunction; the defendant appealed.

1. Whether the suit was bad for non-joinder of Arivalagan.

2. Whether the sale deed dated 5 March 2015 had been acted upon as an absolute sale.

3. Whether the resale agreement and its extension endorsement were forged, and whether the defendant proved forgery.

4. Whether the unregistered resale agreement was admissible in evidence in the specific-performance suit.

5. Whether the suit was barred by limitation.

6. Whether the trial court’s decree was sustainable and the appeal should be allowed.

Under Section 49 of the Registration Act, an unregistered instrument may be received as evidence of a contract in a suit for specific performance, although it cannot operate as a completed conveyance; the Court relied on S. Kaladevi v. V.R. Somasundaram, R. Hemalatha v. Kashthuri, and Muruganandam v. Muniyandi.

Section 17(1-A) of the Registration Act concerns registration of contracts relied upon for protection under Section 53-A of the Transfer of Property Act; the Court distinguished that context from admissibility in a specific-performance suit.

Under Section 103 of the Evidence Act, the party alleging forgery bears the burden of proving it; the Court also referred to Sections 45 and 73 concerning expert opinion and comparison of signatures.

Article 54 of the Limitation Act provides a three-year limitation period, running from the date fixed for performance or, where no date is fixed, from notice of refusal.

The Court also applied the principle that a purchaser need not produce the purchase money to establish readiness and willingness, relying on A. Kanthamani v. Nasreen Ahmed.

The Court held that Arivalagan’s non-joinder and non-examination were not fatal because the defendant did not specifically dispute his relationship to the fifth plaintiff or the parties’ connection with the society.

It found that the defendant had not established an absolute sale or the alleged oral lease, while the circumstances and pleadings supported the plaintiffs’ account that the sale deed was security for the loan.

The Court construed the written statement as admitting the resale agreement, and found the attesting witness’s evidence supported the extension endorsement; the defendant produced no expert evidence or other material proving forgery.

Applying Section 49’s proviso, it held the unregistered agreement and endorsement admissible as evidence of the contract, rather than as instruments effecting a transfer.

Since the extension expired on 25 February 2019 and the suit was filed on 29 October 2021, the suit was within three years; the plaintiffs’ notice and deposit of the balance consideration also supported readiness and willingness.

It dismissed the appeal and confirmed the trial court’s decree for specific performance; there was no order as to costs, and the connected civil miscellaneous petition was closed.