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2010 (3) Supreme 162
SUPREME COURT OF INDIA
R.V. Raveendran and R.M. Lodha, JJ.
S. Kaladevi — Appellant
versus
V.R. Somasundaram & Ors. — Respondents
Civil Appeal No. 3192 of 2010
[Arising out of SLP (C) No. 1451 of 2009]
Decided on : 12-04-2010
IMPORTANT POINT
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 in
evidence making an endorsement that it is received only as evidence of an oral
agreement of sale under the proviso to Section 49 of Registration Act,1908.
Subject: Contract Law - Specific Performance
unregistered sale deed - admissibility in evidence - specific performance - Registration Act, 1908 -
Specific Relief Act, 1963 - collateral transaction - contract - oral agreement
Act Referred :ANDHRA PRADESH RULES FRAMED UNDER REGISTRATION ACT : S.49
TRANSFER OF PROPERTY ACT : .
Registration Act,1908- Section 49 -Unregistered sale deed in a suit for specific performance of the
Contract-Admissibility of - The main provision in Section 49 provides that any document which is
required to be registered, if not registered, shall not affect any immovable property comprised
therein nor such document shall be received as evidence of any transaction affecting such property-
Proviso, however, shows that an unregistered document affecting immovable property and required
by 1908 Act or the Transfer of Property Act, 1882 to be registered may be received as an evidence to
the contract in a suit for specific performance or as evidence of any collateral transaction not
required to be effected by registered instrument- By virtue of proviso, therefore, an unregistered sale
deed of an immovable property of the value of Rs. 100/- and more could be admitted inevidence as
evidence of a contract in a suit for specific performance of the contract- Such an unregistered sale
deed can also be admitted in evidence as an evidence of any collateral transaction not required to be
effected by registered document- 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 in
evidence making an endorsement that it is received only as evidence of an oral agreement of sale
Page No. 1 of 6
under the proviso to Section 49 of 1908 Act- Impugned orders of High Court and that of trial court
set aside- Appeal allowed. (Paras 11, 15 to 17)
Facts of the Case :
Short question that arose for consideration in present appeal was one of admissibility of an
unregistered sale deed in a suit for specific performance of the contract.
Findings of the Court :
The Court held that the main provision in Section 49 provides that any document which is
required to be registered, if not registered, shall not affect any immovable property comprised
therein nor such document shall be received as evidence of any transaction affecting such property.
Proviso, however, shows that an unregistered document affecting immovable property and required
by 1908 Act or the Transfer of Property Act, 1882 to be registered may be received as an evidence to
the contract in a suit for specific performance or as evidence of any collateral transaction not
required to be effected by registered instrument. By virtue of proviso, therefore, an unregistered sale
deed of an immovable property of the value of Rs. 100/- and more could be admitted inevidence as
evidence of a contract in a suit for specific performance of the contract. Such an unregistered sale
deed can also be admitted in evidence as an evidence of any collateral transaction not required to be
effected by registered document.
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 in evidence making an endorsement
that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of
1908 Act. Impugned orders of High Court and that of trial court were set aside. Appeal was
allowed.
Cases Referred:
K.B. Saha and Sons Private Limited v. Development Consultant Limited (2008) 8 SCC 564, ,
Relied. (Para 12) - Relied
Kalavakurti Venkata Subbaiah v. Bala GurappagariGuruvi Reddy, (1999) 7 SCC 114, , Relied.
(Para 13) - Relied
Advocates Appeared:
For the Appellants : K.V. Vishwanathan , Sr. Adv. , B. Rajunath , Vijay Kumar , Advs. , with him
for the Appellants.
For the Respondents : T.S.R. Venkatramana , G.S. Mani , R. Satish , Advs. , for the Respondents.
JUDGMENT
R.M. Lodha, J. —
Leave granted.
2.The short question is one of admissibility of an unregistered sale deed in a suit for specific
performance of the contract.
3.The appellant and the respondents are plaintiff and defendant nos. 1, 2 and 3 respectively in the
suit presented in the Court of Subordinate Judge, Gobichettipalayam. The plaintiff in thesuit
claimed for the reliefs of directing the defendants to execute a fresh sale deed with regard to the suit
property in pursuance of an agreement for sale dated 27.02.2006 on or before the date that may be
fixed by the court and failing which execution of the sale deed by the court. She also prayed for
grant of permanent injunction restraining the defendants from disturbing with her peaceful
possession and enjoyment of the suit property.
Page No. 2 of 6
4.According to the plaintiff, 1st defendant for himself, as the guardian father of 3rd defendant and
2nd defendant jointly entered into an oral agreement with her on 27.02.2006 to sell the suit property
for a consideration of Rs. 1,83,000/-. It was agreed that the sale deed, in pursuance of the oral
agreement for sale, would be executed and registered on the same day. The plaintiff purchased the
stamp papers; paid the entire sale consideration to the defendants; the defendants put the plaintiff in
possession of the suit property and also executed a sale deed in her favour. On 27.02.2006 itself, the
said sale deed was taken to the Sub- Registrar’s office. The Sub-Registrar, however, informed that in
view of an order of attachment of the suit property the sale deed could not be registered. The sale
deed, thus, could not be registered. The defendant nos. 1 and 2 then promised the plaintiff that they
would amicably settle the matter with the concerned party who had obtained attachment of the suit
property and get the sale deed registered no sooner the attachment was raised. The plaintiff averred
that she called upon the defendants to get the sale deed registered, but the defendants avoided the
same by putting forth the reason that attachment in respect of the suit property was subsisting. On
04.02.2007 however, the plaintiff called upon defendant nos. 1 and 2 to cooperate in getting the sale
deed registered, but instead of doing that the defendants attempted to interfere with her possession
and enjoyment of the suit property necessitating action by way of suit.
5.The 1st defendant filed written statement and traversed plaintiff’s case. He denied having entered
into an oral agreement for sale with the plaintiff for himself and as a guardian father of 3rd
defendant and the 2nd defendant jointly on 27.02.2006 as alleged. He also denied having delivered
physical possession of the suit property to the plaintiff. The 1st defendant set up the defence that he
had taken loan from one Subramaniam and when Subramaniam demanded the repayment thereof,
he approached plaintiff and requested her to lend Rs. 1,75,000/- as loan. Upon plaintiff’s insistence
that 1st defendant should execute an agreement for sale in her favour, he and the 2nd defendant
signed the document believing that to be agreement for sale on 27.02.2006 and went to the office of
Sub-Registrar for getting the agreement for sale registered. However, when the Sub-Registrar asked
the 1st defendant whether the consideration has been received and sale deed could be registered, he
and the 2nd defendant learnt that plaintiff had fraudulently obtained the signatures on sale deed by
falsely stating that it was only an agreement for sale and hence they went away refusing to agree for
the registration of the said document.
6.On the basis of the pleadings of the parties, the issues were struck. It appears that on 05.12.2007 at
the time of examination of PW. 1, the unregistered sale deed dated 27.02.2006 was tendered for
being marked. The counsel for the defendants objected to the said document being admitted in
evidence being an unregistered sale deed. The trial court by its order dated 11.12.2007 sustained the
objection and refused to admit the sale deed in evidence.
7.The plaintiff unsuccessfully challenged the order of the trial court dated 11.12.2007 by filing
revision petition before the High Court and hence this appeal by special leave.
8.After having heard Mr. K. V. Vishwanathan, learned senior counsel for the appellant and Mr.
T.S.R. Venkatramana, learned counsel for the respondents, we are of the opinion that having regard
to the proviso to Section 49 of the Registration Act, 1908 (for short, ‘1908 Act’), the trial court erred
in not admitting the unregistered sale deed dated 27.02.2006 in evidence and the High Court ought
to have corrected the said error by setting aside the order of the trial court.
9.Mr. T.S.R. Venkatramana, learned counsel for the respondents, however, strenuously urged that
1908 Act is a complete code by itself and is a special law and, therefore, any dispute regarding the
registration, including the refusal to register by any party, is covered by the provisions of that Act
and the remedy can be worked out under it only. He referred to Sections 71 to 77 of the 1908 Act
and submitted that refusal to register a document by a party is exhaustively dealt with by the said
provisions and the provisions of the Specific Relief Act, 1963 (for short, ‘1963 Act’) cannot be and
should not be invoked in a case of failure to register a document which is complete in other respects,
Page No. 3 of 6
except for want of registration. Learned counsel for the respondents submitted that the defendants
refused to admit execution of the said document before the concerned Sub- Registrar because of the
fraud played by the appellant (plaintiff) inasmuch as instead of writing an agreement to sell, she got
executed a full fledged sale deed contrary to the agreement and understanding. The defendants
accordingly walked out of the office of Sub-Registrar without admitting the execution of the sale
deed and under these circumstances the only remedy available to the appellant was to get an
endorsement “registration refused” and then file an application before the Registrar under Section
73 of the 1908 Act. He also referred to Section 3 of 1963 Act and submitted that the provisions of
1963 Act would not override the provisions of 1908 Act.
10.Section 17 of 1908 Act is a disabling section. The documents defined in clauses (a) to (e) therein
require registration compulsorily. Accordingly, sale of immovable property of the value of Rs. 100/-
and more requires compulsory registration. Part X of the 1908 Act deals with the effects of
registration and non- registration. Section 49 gives teeth to Section 17 by providing effect of non-
registration of documents required to be registered. Section 49 reads thus:
“S.49.- Effect of non-registration 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.”
11.The main provision in Section 49 provides that any document which is required to be registered,
if not registered, shall not affect any immovable property comprised therein nor such document
shall be received as evidence of any transaction affecting such property. Proviso, however, would
show that an unregistered document affecting immovable property and required by 1908 Act or the
Transfer of Property Act, 1882 to be registered may be received as an evidence to the contract in a
suit for specific performance or as evidence of any collateral transaction not required to be effected
by registered instrument. By virtue of proviso, therefore, an unregistered sale deed of an immovable
property of the value of Rs. 100/- and more could be admitted in evidence as evidence of a contract
in a suit for specific performance of the contract. Such an unregistered sale deed can also be
admitted in evidence as an evidence of any collateral transaction not required to be effected by
registered document. 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 in evidence
making an endorsement that it is received only as evidence of an oral agreement of sale under the
proviso to Section 49 of 1908 Act.
12.Recently in the case of K.B. Saha and Sons Private Limited v. Development Consultant
Limited,1 (2008) 8 SCC 564. this Court noticed the following statement of Mulla in his Indian
Registration Act, 7th Edition, at page 189:-
“......The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur,
Pepsu, Rajasthan, Orissa, Rangoon and Jammu & Kashmir; the former Chief Court of Oudh; the
Judicial Commissioner’s Court at Peshawar, Ajmer and Himachal Pradesh and the Supreme Court
Page No. 4 of 6
have held that a document which requires registration under Section 17 and which is not admissible
for want of registration to prove a gift or mortgage or sale or lease is nevertheless admissible to
prove the character of the possession of the person who holds under it......” This Court then culled
out the following principles:-
“1. A document required to be registered, if unregistered is not admissible into evidence under
Section 49 of the Registration Act.
2. Such unregistered document can however be used as an evidence of collateral purpose as provided
in the proviso to Section 49 of the Registration Act.
3. A collateral transaction must be independent of, or divisible from, the transaction to effect which
the law required registration.
4. A collateral transaction must be a transaction not itself required to be effected by a registered
document, that is, a transaction creating, etc. any right, title or interest in immovable property of
the value of one hundred rupees and upwards.
5. If a document is inadmissible in evidence for want of registration, none of its terms can be
admitted in evidence and that to use a document for the purpose of proving an important clause
would not be using it as a collateral purpose.”
To the aforesaid principles, one more principle may be added, namely, that a document required to
be registered, if unregistered, can be admitted in evidence as evidence of a contract in a suit for
specific performance.
13.In Kalavakurti Venkata Subbaiah v. Bala Gurappagari Guruvi Reddy,2 (1999) 7 SCC 114. the
question presented before this Court was whether a decree to enforce the registration of sale deed
could be granted. That was a case where respondent therein filed a suit for specific performance
seeking a direction to register the sale deed. The contention of the appellant, however, was that
decree for specific performance based on unregistered sale deed could not be granted. This Court
noticed the provisions contained in Part XII of 1908 Act, particularly Section 77, and difference of
opinion between the various High Courts on the aspect and observed:-
“The difference of opinion amongst the various High Courts on this aspect of the matter is that
Section 77 of the Act is a complete code in itself providing for the enforcement of a right to get a
document registered by filing a civil suit which but for the special provision of that section could not
be maintainable. Several difficulties have been considered in these decisions, such as, when the time
has expired since the date of the execution of the document whether there could be a decree to direct
the Sub-Registrar to register the document. On the other hand, it has also been noticed that an
agreement for transfer of property implies a contract not only to execute the deed of transfer but
also to appear before the registering officer and to admit execution thereby facilitating the
registration of the document wherever it is compulsory. The provisions of the Specific Relief Act and
the Registration Act may to a certain extent cover the same field but so that one will not supersede
the other. Where the stage indicated in Section 77 of the Act has reached and no other relief except a
direction for registration of the document is really asked for, Section 77 of the Act may be an
exclusive remedy. However, in other cases it has no application, inasmuch as a suit for specific
performance is of a wider amplitude and is primarily one for enforcement of a contract and other
consequential or further relief. If a party is seeking not merely the registration of a sale deed, but
also recovery of possession and mesne profits or damages, a suit under Section 77 of the Act is not
an adequate remedy.”
14.This Court then held that the first appellate court rightly took the view that under Section 49 of
the 1908 Act, unregistered sale deed could be received in evidence to prove the agreement between
Page No. 5 of 6
the parties though it may not itself constitute a contract to transfer the property. It was held:
“......The document has not been presented by the respondent to the Sub-Registrar at all for
registration although the sale deed is stated to have been executed by the appellant as he refuses to
cooperate with him in that regard. Therefore, various stages contemplated under Section 77 of the
Act have not arisen in the present case at all. We do not think, in such a case when the vendor
declines to appear before the Sub-Registrar, the situation contemplated under Section 77 of the Act
would arise. It is only on presentation of a document the other circumstances would arise. The first
appellate court rightly took the view that under Section 49 of the Act the sale deed could be received
in evidence to prove the agreement between the parties though it may not itself constitute a contract
to transfer the property..... “.
15.The issue before us is only with regard to the admissibility of unregistered sale deed dated
27.2.2006 in evidence and, therefore, it is neither appropriate nor necessary for us to consider the
contention raised by learned counsel for the respondents about the maintainability of suit as framed
by the plaintiff or the circumstances in which the sale deed was executed. If any issue in that regard
has been struck by the trial court, obviously, such issue would be decided in accordance with law.
Suffice, however, to say that looking to the nature of the suit, which happens to be a suit for specific
performance, the trial court was not justified in refusing to admit the unregistered sale deed dated
27.2.2006 tendered by the plaintiff in evidence.
16.The argument of learned counsel for the respondents with regard to Section 3(b) of 1963 Act is
noted to be rejected. We fail to understand how the said provision helps the respondents as the said
provision provides that nothing in 1963 Act shall be deemed to affect the operation of 1908 Act, on
documents. By admission of an unregistered sale deed in evidence in a suit for specific performance
a s evidence of contract, none of the provisions of 1908 Act is affected; rather court acts in
consonance with proviso appended to Section 49 of 1908 Act.
17.The result is that appeal is allowed, the order of the High Court dated 13.11.2008 and that of the
trial court dated 11.12.2007 are set aside. The trial court shall mark the unregistered sale deed dated
27.2.2006 tendered by the plaintiff in her evidence and proceed with the suit accordingly. The parties
shall bear their own costs.
***********
Page No. 6 of 6
